This last chapter of the book deals with the third parties that provide products and services to the project, be those freelancers or other external suppliers.

The need for hiring external providers to execute part of the work or leverage the use of materials or equipment to make possible the execution of project activities is very common in many projects.

The first steps in this procurement process are focused on the make-or-buy decisions.

When we decide to do ourselves something that could be procured to external sources, this work becomes part of our project scope. But when we decide to obtain it from outside suppliers, the scope of work belongs to the external supplier and we play the role of clients for that particular scope. This decision is not always easy and it causes a direct impact on the project risks, budget, and deadlines. A detailed analysis must be made before making any decision.

As these external suppliers are not necessarily under our control, we must make certain they will be capable of delivering what has been agreed. The responsibility to deliver the project will always be ours, after all.

The decision to develop a product or service inside the executing organization needs to take into account a guarantee that the work is adequately included in the project scope.

Availability, internal competence, price, confidentiality and expertise in the technology are among the main factors to be evaluated in a make-or-buy decision.

Elaborating a contract is not only a legal task, it is also used very often to minimize risks and make sure that the components of the plan will be fully delivered.

The type of contract chosen for a provider has a direct influence on the associated risks for those who procure and those who sell the products and services.

The more precise the scope of work, the more adequate it will be to use firm fixed-price contracts, since the job to be done is well known and can therefore be priced.

On the other hand, the less precise the scope, the more adequate it will be to use cost reimbursement contracts. In this cases, a firm fixed price would incur a lot of additional costs for potential additional work, which represent a danger to the project.

When procuring goods and services, pay attention to prices clearly below the market offer. Your joy will not last long.