What is Procurement Contract?
A procurement contract is basically a formal agreement between a buyer and a seller about buying stuff. It’s like a shopping list with all the important details written down: what’s being bought, how much it costs, when it’ll be delivered, and how it’ll be paid for. It’s a way to make sure everyone involved knows what they’re getting and what they’re supposed to do.
What is Procurement Contract in Project Management?
A procurement contract is an approved agreement between a buyer (the organization or person undertaking the project) and a seller (vendor or supplier) in which the buyer acquires supplies. These are essential contracts for projects that involve external sources, expertise, or materials. Many kinds of procurement contracts possess their particular attributes. For example: A fixed-price Contract, where the company is paid to construct an office building worth five million dollars for a fixed total price amount. The contract states that the constructor must complete the project under the specified scope and any extra incurred expenses are the responsibility of the contractor.
Table of Content
- Key Elements of Procurement Contract
- Types of Procurement Contract
- Advantages of Procurement Contracts
- Disadvantages of Procurement Contract
- Conclusion
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