TOPIC: Procurement Closure (Control Procurement vs. Close Project/Phase)

I'm finding it hard to differentiate between the Close Project or Phase process and procurement closure. As procurements are closed in (M & C process group as per PMBOK 6) and the deliverables from the seller are accepted by the customer (buyer) in close project or phase process.

How does a close project or phase process (where deliverables are accepted by buyer) is performed FIRST and then procurements are closed in monitoring and controlling process group LATER?
Isn't monitoring and controlling process should be done prior to close process group?

Hi Abdullah,

Let me use an example, and hopefully this will answer your question:

The project I am managing is to host a bachelor party for my brother.

Since I am not going to make everything from scratch, I am going to procure 3 things:
1. House rental - No one can offer their home for the party, therefore I am going to rent an AirBnB to host all the guests
2. Food - I am going to get service from a meal catering company
3. Entertainment - since all of our guests like ballet dancing, we asked a group of dancer to fly over from Russia to perform for us.

Before the party:
- Suddenly a friend offers us his mansion for us to party, therefore we have no need for the AirBnB. I run the close procurement process to terminate the AirBnB booking for convenience.

During the party:
- The food arrives hot and tasty, every guest is satisfied. I pay the food caterer in full and close the procurement
- Due to schedule conflict, only half the dance crew arrives. I dispute the contractual terms with them, they offer 50% off in payment as resolution. I then perform the close procurement process.
(At the same time, the dance crew can perform their Close Project process, because all the scope (Practice, get on plane, perform) have been completed and I (as the client) confirm all the deliverable have been accepted.)

Now that all the activities in my party are done, brother is happy, and I can finally close my own project.

I hope this gives you a better understanding of the processes, cheers
Joe

Joe Pang wrote: Hi Abdullah,

During the party:
- The food arrives hot and tasty, every guest is satisfied. I pay the food caterer in full and close the procurement

Hello Joe,

Thank you for your valuable feedback.
I would like to know when exactly are you accepting (final acceptance) the deliverable (in this case food)?
In closing process group? Because that's what pmbok says. "Confirming the delivery and formal acceptance of deliverables by the customer is done in close project or phase process".

And if, the final acceptance of the product to is done in closing, how come we come back to M & C process group to close procurement?

Let's dive deeper into the food example:

After the dinner. The chef (vendor) approached me and says "we have delivered the exact food items you order, and in the exact amount specified, I am wondering if you are happy with the meal?"

Me (the client): "We enjoyed the meal very much, they are served hot and fresh" (acceptance of deliverable). *Proceed to pay the chef*

At this very instance, the chef can now close his 'food delivery' project because I accepted his deliverable (food)
Meanwhile, in my own project (Party hosting), I am still in my M&C stage because not all the activities have been completed yet (still waiting for the dance performance)

Of course this example doesn't do very well on showcasing the 'Confirmation of the deliverable and formal acceptance' part. In a professional setting, it will involve the client signing off and acknowledging that the deliverables have been accepted.

I am here to answer more questions until you have fully understood the concept, cheers!
Joe

Could you please give any big construction project example?
Appreciate it.

In the Close Project process, The primary task is to ensure the customer accepts the final project deliverables, so that you can continue with other tasks like transfer of ownership and to archive project documents.

Eg. You perform a walk-around with your client, then he/she perform a final inspection of the building. Client is satisfied with the deliverables, as they meet the specification stated in your project plan. This is your Accepted Deliverables, an input to the Close Project process

He/she then confirms the acceptance in writing. This would complete Task 1 in the PMI Exam Outline for the Closing Domain

Hope this helps,
Joe

Thank you, Joe, for your explanation. I really appreciate it.
But, I still find it difficult to understand how is it that we enter in closing process group first for accepting the deliverable and once it is accepted, we go back to monitoring and controlling process group to close procurement
It would be a great help if could share a flow of procurements (flow chart) which explains how, where and when.

Regards.

In the close project process, the accepted deliverable is only an input. The actual acceptance is done under validate scope, see PMBOK 6, 5.5.3.1 page 166.
The close procurements then are done after, if you want to look at this in a numbered sequence.
Then all your procurement docs, along with your accepted deliverable are used as the input in closing, which results in a final product.

Hi Abdullah,

I borrowed this explanation from the Rita book that may be helpful to you, it's in page 165 of the Exam Prep v9:

"The Close Project or Phase process involves getting the final, formal acceptance of the project or phase as a whole from the customer, whereas the Validate Scope process in scope management ( a M&C process) involves getting formal acceptance from the customer for interim deliverables. The project needs both processes."

Hope this helps.

I think Close Procurement vs Close Project is one of the most misleading concept in PMP Exam.

According to the PMBOK Guide
“Close procurement is the process of completing each procurement.

"Close project or phase is the process of finalizing all activities across all of the project management process groups to formally complete the project or phase.”

The definition clearly tells you that the close project or close phase is performed when the project or phase is finally completed and deliverables are accepted. The close procurement process must happen before the close project or close phase process.

There is a good resource which explains the difference between close procurement and close project

Hi Joe,

I was also looking for a confirmation of relation between these 2 processes. This completely resolves my doubt. So my understanding with this is -- Close procurement is done by a buyer and close project or phase done at seller end and Procurement closing is one of the mandatory requirement for closing a project or phase.

Thanks for very good example and clarification.

Regards,
Vivek

Hi! This is to inquire who is responsible for procurement close-out/purchase order close-out? Is it the Project Manager or Procurement Officer? Thank you.