The ABC of procurement projects

Getting the right supplier and right solution through a tender is sometimes tricky. Unless you figure out what you need, you will most likely never acquire it. Without preparation, you risk ending up tendering for solutions that are not yet offered in the market or not be available from more than one supplier. Therefore, doing the necessary ground work is essential.  

Step 1 - adressing business needs and scoping your procurement

Why are we doing this and how much time and effort are we willing to spend on our tender? These are crutial questions that need to be answered by the relevant stakeholders before scoping and planning the procurement project.

Step 2 - converting business needs to requirements

Will the market be able to cater to our needs? How do we translate our business goals into the wording needed in our requirement specification and contract? This is when the architect should make room for the procurement engineer. With the proper tools, the procurement engineer can build a transparent and efficient evaluation model that represent what is "need to have" through minimum requirements and what is "nice to have" through competitive requirements as exemplified below.

evaluation modelJPG

Step 3 - constantly aligning requirements with business needs.

During the writing of the tender documents the procurement engineer should continually ensure that the procurement project is fully aligned with the business goals. For instance, are we sure that the business goals sufficiently covered by the following minimum requirement?

minimum requirementJPG

Are we able to identify the best supplier and the solution using the following competative requriement?

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Sted 4 - tendering
During the tendering proces the suppliers should be able to comment on send questions to the tender material. This proces enables valuable rethinks of the tender material and enables the suppliers to better understand the tender material and to make changes to the tender materiel if needed. A number of procurement portals are available and are recommended. The portals ensure the necessary document handling and traceability during the tender.  

Step 5 - evaluation and feedback

In order to identify the supplier that achieves the best alignment with business needs a lot of work often has to be done. Applying an evaluation support tool will ensure transparancy and enable you to give suppliers feedback on where improvements could be made in their revised bids. Here a mathematical approach is simply not enough. Clarifications and negotiation are much more efficient in reaching common ground between the contracting parties. Using relevant negotiation themes and methods will enhance the results.

Mathematical computation will nevertheless be a necessary prerequisite for choosing the right supplier and giving other suppliers relevant feedback. Sometimes the winner is easily identified and sometimes not. Usually, you have to dig deep into the proposed solutions in order to identify the winner. Here is an example of some clear evaluation results that were achieved on one of the critierias used in a recent tender.

evaluation resultsJPG Step 6 - contract preparations and signature

Contract preparations is in most cases a simple proces of updating the contract documents with whatever has been agreed during question and answering sessions or negotiations. Sometimes the preparations might require further meeting and involvement of legal or technical counciling.

In my experience good preparations, good methods and good tools tend to leave very few issues remaing for the contract preparation and signature phase.  

Need some procurement assistance? Feel free to contact me.