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.Far too often, projects donot get the "respect" they deserve within their own company.Amazing.Interdivisional work are the procurements made within a singlecompany by one operating unit (the project) with another operating unit(the performing organization).These procurements sometimes resultfrom having a unique capability within the company which will enhancethe performance of a project.However, at other times, the projectmanager may have little say in the matter and senior executives insist onthe project work being kept within the company, even when a betterprice or better product might be available from an outside supplier.Sometimes, the most compelling justification for interdivisional work issimply the "availability" of a company workforce, or facilities, 20 Project Procurement Managementor capability, etc.The project managers are called on by executives to helpwith "our company problem."Controlling interdivisional work can be a nightmare for the project.Why? Because the internal procedures covering interdivisional costtransfers are typically created by the company accountants who areprimarily concerned with the orderly allocation and the recovery of allincurred costs.Contrast these goals with the project manager whoinvariably wants value added for all dollars spent.However, theaccountants will always win this issue, and project dollars will betransferred without regard to the value of the work performed.Projectmanagers often have difficulty shutting off interdivisional costs.One problem with interdivisional work is the organizational rela-tionship of the project to the performing group.The project manager'smost senior executive are typically at the same corporate organizationallevel as the most senior executive with the organization performing thework.Neither executive has much clout over the other executive, andneither executive wants to do battle with the other because next month thatsame person "could be my boss!" Interdivisional procurements rarelyenjoy the senior executive support that are given to critical procurementsunder teaming arrangements, where the senior executives will demandharmony and cooperation.or else!Another problem for the projects can be the United StatesGovernment's attitude toward interdivisional work.In somewhat of a self-serving way the Government may treat such work as either as "make"work or as "buy" work, depending on the point they are stressing.On theone hand the Government will insist on all interdivisional work beingclassified as "make" work, no matter where in the company such effort isassigned.In this scenario, the Government considers everything done inone company as make work.It doesn't matter if the project or theperforming division are on the opposite sides of the world, have neverworked together, it is all one company and thus "make" work.However, the Government also expects that interdivisional pro-curements be conducted as if each were done under an "arms-length"arrangement, following all of the same purchasing procedures as with anyexternal "buy." The Government wants to pay the lowest price for all workdone under their contracts and will often insist on a formal Placing Procurements into Generic Categories 21solicitation, formal evaluation, source selection, and a documentedcompetitive procurement process.They will often insist that externalcompetition be held.When things go right at the performing division, as they sometimesdo, that division wants its fair share of the project's profits.After all itdid perform the job in a responsible way, as any other outside supplierwould have performed that same work.However, when things gowrong, as they sometimes do, perhaps experiencing cost overruns,schedule slips, poor workmanship, etc., that same performing divisionnow expects to be treated not as an outside supplier, but as part of "ourbig family".The early identification of many of interdivisional procurements istypically not critical for the project, unless such work involves thecreation of something new, a Category (1) major complex buy.In thesecases such procurements need to be identified early to start the planningeffort [ Pobierz całość w formacie PDF ]
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.Far too often, projects donot get the "respect" they deserve within their own company.Amazing.Interdivisional work are the procurements made within a singlecompany by one operating unit (the project) with another operating unit(the performing organization).These procurements sometimes resultfrom having a unique capability within the company which will enhancethe performance of a project.However, at other times, the projectmanager may have little say in the matter and senior executives insist onthe project work being kept within the company, even when a betterprice or better product might be available from an outside supplier.Sometimes, the most compelling justification for interdivisional work issimply the "availability" of a company workforce, or facilities, 20 Project Procurement Managementor capability, etc.The project managers are called on by executives to helpwith "our company problem."Controlling interdivisional work can be a nightmare for the project.Why? Because the internal procedures covering interdivisional costtransfers are typically created by the company accountants who areprimarily concerned with the orderly allocation and the recovery of allincurred costs.Contrast these goals with the project manager whoinvariably wants value added for all dollars spent.However, theaccountants will always win this issue, and project dollars will betransferred without regard to the value of the work performed.Projectmanagers often have difficulty shutting off interdivisional costs.One problem with interdivisional work is the organizational rela-tionship of the project to the performing group.The project manager'smost senior executive are typically at the same corporate organizationallevel as the most senior executive with the organization performing thework.Neither executive has much clout over the other executive, andneither executive wants to do battle with the other because next month thatsame person "could be my boss!" Interdivisional procurements rarelyenjoy the senior executive support that are given to critical procurementsunder teaming arrangements, where the senior executives will demandharmony and cooperation.or else!Another problem for the projects can be the United StatesGovernment's attitude toward interdivisional work.In somewhat of a self-serving way the Government may treat such work as either as "make"work or as "buy" work, depending on the point they are stressing.On theone hand the Government will insist on all interdivisional work beingclassified as "make" work, no matter where in the company such effort isassigned.In this scenario, the Government considers everything done inone company as make work.It doesn't matter if the project or theperforming division are on the opposite sides of the world, have neverworked together, it is all one company and thus "make" work.However, the Government also expects that interdivisional pro-curements be conducted as if each were done under an "arms-length"arrangement, following all of the same purchasing procedures as with anyexternal "buy." The Government wants to pay the lowest price for all workdone under their contracts and will often insist on a formal Placing Procurements into Generic Categories 21solicitation, formal evaluation, source selection, and a documentedcompetitive procurement process.They will often insist that externalcompetition be held.When things go right at the performing division, as they sometimesdo, that division wants its fair share of the project's profits.After all itdid perform the job in a responsible way, as any other outside supplierwould have performed that same work.However, when things gowrong, as they sometimes do, perhaps experiencing cost overruns,schedule slips, poor workmanship, etc., that same performing divisionnow expects to be treated not as an outside supplier, but as part of "ourbig family".The early identification of many of interdivisional procurements istypically not critical for the project, unless such work involves thecreation of something new, a Category (1) major complex buy.In thesecases such procurements need to be identified early to start the planningeffort [ Pobierz całość w formacie PDF ]