Can the contract be awarded for the entire project if the Project Board only approves the funding on a stage-by-stage basis? One approach is for the contract to cover the whole project, with purchase orders and milestone payments aligned to each management stage.
Such an approach encourages the organizations to consider what will happen in the circumstance where the project is no longer viable for either party and is closed prematurely.
It is prudent procurement and sales management to ensure there are break-points in contracts for both sides.
The customer has a choice as to how to manage the procurement activities - either manage them as part of the initiation stage (and consider using the Controlling a Stage and Managing Product Delivery processes to manage them), or add a procurement stage after initiation.
Managing the procurement within the initiation stage will reduce the uncertainty in the plans.
However, there may not be adequate controls in place if the procurement activities are expensive and time-consuming.
PRINCE2® assumes that Work Packages are agreed between the Project Manager and the Team Manager and that any Team Plan is optional.
The Team Plan may be private to the supplier as it may contain other information such as dependencies to or from other client projects, subcontractor costs etc.
The Team Manager’s Checkpoint Report, containing progress against the milestones agreed in the Work Package, should be sufficient for the Project Manager to maintain the Stage Plan.
PRINCE2® is a Registered Trade Mark of the Office of Government Commerce in the United Kingdom and other countries.