Inputs to Conduct Procurement

April 17, 2010
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Introduction

A large set of documents are needed as input help define what is to be procured, how to procure them and how to close the process by using a particular type of contract. Organizational process assets moderate and define what exactly to be done. These documents contain the sum total of the organization’s collective experience collective over time.

Inputs, Inputs and more inputs

This process is so crucial that it can make or break a project quite easily. Thus whatever input documentation helps define the things to be procured, how to procure them and most importantly exactly how to select a vendor is welcome. Project management Plan is, like always, the source document. This is the reference against which everything needs to be decided. Make-or-buy decision document lets you decide what to focus on when trying to conduct procurement. This will contain a list of items/services/ products to be procured. These will also include performance bonds or insurance that may be sought from vendors. These then constitute a starting point. The project management plan is a iterative document anyway. Depending on what happens elsewhere this document may need to be modified.

Project documents that need to be taken into consideration include the risk register and the risk related contract decisions. The risk register contains a listing of risks identified up to this point. Conducting procurement many a times must make compromises between cost, time schedules and of course risks. Thus the entries in the risk register are open to changes at this stage. Risk related contract decisions also thus may need to be changed. In any case, it is good to consult these when drawing up the procurement contracts. The risk related contract clauses often cover issues related to insurance, bonding, services and other items to specify responsibilities of byer and seller.

Teaming agreements govern how the team should act when joint procurements are to be made. Here the seller may have been working under a teaming agreement and the procurements are to be jointly decided. These teams, joint ventures may have already been formed to address some specific projects.

Then comes the actual procurement related documents that must be taken in as inputs. Procurement documents such as the RFI, RFP, PFQ and such are to be considered. An organization may have standards related to such documents. These will help getting responses from qualified sellers. Source selection criteria includes inputs as to the supplier’s required capabilities, capacity, delivery dates, product costs and life cycle costs, technical expertise and the approach to the contract.

Qualified Seller list is a list of pre-qualified vendors. Based on their capabilities and past experience with them these vendors would be on the qualified supplier list. The procurements specific to their expertise area then could be directed to them without going through the complete process. They may be asked to submit a bid directly, for example.

The proposals received from the initially qualified vendors that they provide in response to the document package sent by the buyer can be used as the basis of making a short list for the final round. The information supplied, often in a questionnaire format suggested by the buyer is used for evaluation. Typically an evaluation committee will go through a scoring process to arrive at a few potential suppliers. Negotiations of cost of acquisitions and draft contract terms & conditions then help narrow down to the final contractor.

Elements of the organizational process assets that are relevant to the conduct procurement process are, at a minimum, list of previous and prospective qualified sellers as well as information on relevant past experiences with sellers. Both good and bad experiences recorded could be a useful guide.

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