Free Procurement Plan Template — Word Download

01 — Template Sections

What's in the Template — All 7 Sections

The procurement plan covers the full procurement lifecycle — from defining what needs to be bought through to the contractual provisions that protect the project after award. It should be completed before any sourcing activity begins so that all decisions are documented and defensible.

Procurement Objectives

Four pre-written procurement objectives covering value for money, specification compliance, supplier relationship management and on-time delivery. Customise to match your project's specific procurement priorities.

Procurement Items

A row-per-item table: description of what is needed, estimated value and the date by which it must be in place to support the project schedule. Every item the project needs from external suppliers should be listed here — not just the big ones.

Procurement Methods

A four-tier table linking spend levels to sourcing methods: Direct Award for low-value items, RFQ for three-quote comparisons, ITT for formal tender, and Open Tender for the highest-value or most strategic procurements. Fill in your organisation's actual spend thresholds — the defaults are starting points only.

Supplier Evaluation Criteria

Five weighted criteria with percentage scores that sum to 100%: Technical Capability, Price/Value, Experience and References, Delivery Timeline, and Financial Stability. The weighting fields are customisable — adjust to reflect what matters most for your specific procurement. Defined before the process starts so evaluation is objective.

Contract Types

Plain-English explanations of Fixed-Price, Time and Materials, and Cost-Reimbursable contracts — when to use each and who bears cost risk. Helps PMs and procurement leads choose the right contract structure for each purchase.

Key Contract Clauses

Six standard clauses that every project contract should include: payment terms and milestones, acceptance criteria and sign-off, penalties and incentives, IP and data ownership, termination for convenience, and dispute resolution. A checklist for legal review before any contract is signed.

Procurement Milestones

Six key dates from requirements confirmation through to delivery: requirements confirmed, RFQ/ITT issued, responses due, evaluation complete, contract awarded and delivery/go-live. These dates must align with the project schedule — procurement delays are one of the most common causes of project timeline overruns.

02 — Sourcing Methods

The Four Procurement Methods — When to Use Each

Section 3 of the template uses a four-tier structure that links spend value to sourcing method. The thresholds shown are typical starting points — your organisation may have different policies. What matters is that the thresholds are defined before the project starts and applied consistently across all procurements.

Under $10,000

Direct Award

Single supplier engaged without competition. Used for low-value routine items, sole-source requirements (only one supplier exists), or items already covered by an existing framework agreement. Requires PM approval only.

$10K–$50K

Request for Quotation (RFQ)

Minimum three competitive quotes from known or shortlisted suppliers. Suitable for straightforward goods or services with a clear specification. Faster than formal tender but still competitive. Evaluation is typically price-led.

$50K–$250K

Invitation to Tender (ITT)

Formal competitive process with a detailed specification, evaluation criteria and weighted scoring. Invited to a pre-qualified or longlist of suppliers. Responses are evaluated against published criteria. Requires procurement or commercial support.

Over $250K

Open Tender

Publicly advertised and open to any qualifying supplier. Used for the highest-value or most strategically important procurements. May be legally required in public sector. Longest lead time — typically 8–16 weeks from advertisement to award.

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Build procurement lead times into your schedule. The most common procurement mistake in project planning is underestimating how long procurement takes. An ITT process typically takes 8–12 weeks from specification to contract signature. An open tender can take 12–20 weeks. If a critical delivery depends on a supplier being on contract by Week 6 of the project, procurement must start at or before project initiation — not after planning is complete.

03 — Contract Types

Choosing the Right Contract Type

Contract type is one of the most consequential procurement decisions. The wrong contract structure exposes the project to cost risk, schedule risk or relationship risk that could have been avoided. The three standard types in the template cover the vast majority of project procurement scenarios.

Fixed-Price (Lump Sum)

Fixed-Price Contract

Use when: Scope is well-defined and stable

A single price for a defined scope of work. The supplier cannot charge more unless the scope changes. Provides cost certainty for the buyer but requires a complete and stable specification before award. Any scope change requires a formal change request.

Cost risk: Supplier bears it

Time & Materials

T&M Contract

Use when: Scope is uncertain or evolving

The buyer pays for actual time worked and materials used at agreed rates. Flexible when scope is uncertain — additional work can be authorised without a new contract. Requires strong contract management: without governance, T&M contracts routinely overrun.

Cost risk: Buyer bears it

Cost-Reimbursable

Use when: Scope cannot be defined upfront

The buyer reimburses actual costs plus an agreed fee (fixed, incentive or award). Used for R&D, complex technical work or novel projects. Motivates quality delivery when fee is tied to performance outcomes but requires transparent cost reporting from the supplier.

Cost risk: Shared, fee-dependent

T&M Warning: Always Set a Ceiling

Time and Materials contracts without a Not-to-Exceed (NTE) ceiling are one of the most common sources of project budget overruns. Always include a defined ceiling — the maximum the buyer will pay under the contract — even on T&M engagements. If the supplier expects to exceed the ceiling, they must seek authorisation before doing so. This one clause prevents the most damaging T&M overruns.

04 — Supplier Evaluation

Supplier Evaluation Criteria and Weighting

Section 4 of the template defines how suppliers will be scored. The criteria and weightings must be agreed and documented before any supplier responses are received. Changing criteria after evaluation begins — even subtly — compromises the integrity of the process and exposes the organisation to challenge.

Criterion	What to Assess	Typical Weight
Technical Capability	Skills, methodology, tools, team CVs, approach to the specific requirement	30%
Price / Value	Total cost of ownership — not just day rate. Include implementation, licensing and ongoing support.	25%
Experience & References	Directly comparable past projects, referenceable clients, case studies with measurable outcomes	20%
Delivery Timeline	Proposed schedule, resource plan, mobilisation speed, risk to project milestones	15%
Financial Stability	Company accounts, credit check, size relative to contract value, key person risk	10%
Total		100%

Adjust weightings to reflect your project's priorities. For a highly complex technical delivery, Technical Capability might be 40%. For a commodity purchase where quality is standardised, Price might be 50%. The template's defaults are a starting point — the weights should reflect what actually matters most for your specific procurement.

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PMP exam note: In PMBOK, procurement is covered in the Project Procurement Management knowledge area (Chapter 12). The exam tests: make-or-buy decisions, contract types and risk allocation, source selection criteria, the difference between RFP (Request for Proposal), RFQ (Request for Quotation) and IFB (Invitation for Bid), and the role of procurement documents in controlling sellers. Contract type risk allocation (who bears cost risk) is particularly heavily tested. See our 200 PMP practice questions for procurement-specific scenario questions.

05 — FAQ

Procurement Plan — 4 Common Questions

A procurement plan defines how a project will acquire goods, services and resources it cannot produce internally. It specifies what needs to be procured, when, from what type of supplier, using what sourcing method and under what contract type. It also defines supplier evaluation criteria and key contractual provisions. In PMBOK, the procurement management plan is a subsidiary of the project management plan, produced during the Planning process group as an output of the Plan Procurement Management process.

The four main methods are: Direct Award — single supplier without competition, for low-value or sole-source requirements. Request for Quotation (RFQ) — competitive quotes from a shortlist of known suppliers, typically three minimum. Invitation to Tender (ITT) — formal competitive process with detailed specification and weighted scoring, used for higher-value requirements. Open Tender — publicly advertised and open to all qualifying suppliers, used for the highest-value or most strategic procurements, often legally required in the public sector. Most organisations define spend thresholds that determine which method applies.

A fixed-price contract sets a defined price for a defined scope. The supplier bears cost risk — if the work takes longer or costs more, the supplier absorbs the difference. Best used when scope is well-defined and stable. A time-and-materials contract pays the supplier for actual time and materials at agreed rates. The buyer bears cost risk. Best used when scope is uncertain or evolving. T&M requires strong contract management to control costs — always include a Not-to-Exceed (NTE) ceiling. Cost-reimbursable contracts reimburse actual costs plus a fee, used for R&D or complex technical work where scope cannot be defined upfront.

Supplier evaluation criteria should be defined before the sourcing process starts and documented in the procurement plan. Standard criteria include: technical capability and methodology, price and total cost of ownership, relevant experience and references, proposed delivery timeline, and financial stability. Each criterion should have a defined weighting (percentages summing to 100%) so the overall score reflects the relative importance of each factor. Criteria and weightings must be agreed before any supplier responses are received — changing them afterwards compromises the integrity of the process and exposes the organisation to challenge.

Free Procurement Plan Template Word Download