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Project Management Work Book and Pmp®/Capm® Exam Study Guide, Tenth Edition by Frank P. Saladis, Harold Kerzner

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Chapter 19. CONTRACT MANAGEMENT

Note

Determining what items or resources must be obtained or acquired to successfully complete project deliverables and then negotiating the contracts that will guide the buyer and seller through the execution process can be very challenging regardless of the size or complexity of a project. In the contract and procurement environment there are two views, the buyer and the seller. These two views are often opposing and require effective negotiation to achieve mutually agreeable terms and conditions.

The Project Contract Management process includes the activities that will be used to determine what to purchase, how to purchase materials or resources, the preparation of documents that will be used in the process including RFPs (requests for proposal), selecting the appropriate suppliers, completing the contract and managing the contract, and closing or terminating the contract.

Contracts create legal obligations for the buyer and seller. These obligations include risks that must be considered before contractual terms are agreed upon. The risks for the buyer may be different than those of the seller depending on the type of contract that has been developed. Contract types are selected based on the needs of the buyer, the amount of detailed information that is available about the project, the deliverables that must be produced, the environmental factors that may affect the project, and the ability of the supplier to meet the needs of the buyer. A significant ...

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