Conducting Procurement Tools & Techniques

April 18, 2010
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Introduction

There are some standard techniques an organization can use to bring a closure to the conduct procurement process. Typically what happens in this phase is that you need to locate some potential sellers, seek to find if some of them are interested in bidding, getting bids, evaluating them, creating a short list of suppliers and then finally narrow it down to a vendor and awarding a contract to him.

Complete Chain of Events

The whole thing starts with the list of things to be procured. For each item to be procured you need to find potential sellers for the product, service or whatever. So the tools you need to use are advertising. Depending on what kind of audience these should be addressed to you should select the media for the advertising. Whether it is local media or on a larger scale is decided based on which is likely to get you the results you desire. Internet search today provides effective tools that can help you locate likely candidates for the procurement action.

Once this field of potential candidates are decided you would seek information through procurement documents like RFI to get preliminary interest and details about these prospective sellers. Bidders’ conference is a tool that helps clarify issues with all the potential candidates. They ask questions and seek clarifications. To be fair the details are circulated to all the potential bidders. The candidates then submit detailed proposal. Sometime they are required to submit a technical and a commercial proposal separately. That enables technical/capability evaluation to be done independent from pricing considerations.

Proposal evaluation techniques are to be very clearly set up. There usually a scoring system which is used very commonly and a questionnaire in the proposals submitted by the vendors are used to come up with the overall scores. The scoring would be done by a committee. Once a very short list of qualified vendors is made you need to make the assessment of acquisition costs. This is often against a benchmark. This cost benchmark is arrived at by independent estimates. The estimates can be arrived at by in-house experts or you can arrive at the estimate by external experts.

Procurement negotiations let the project team to arrive at the final contract terms. Usually a draft contract is provided to the seller so that he can have his comments entered officially. The buyer and seller negotiate the final terms from these changes needed by the seller. The negotiated terms are then incorporated into the final contract. Right through the process expert judgments need to used whenever needed. The process gets completed when the contract is awarded to the finalist seller.

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