Do Your Procurement Processes Make The Grade?

High-quality procurement processes result in effective engagement with prospective vendors/proponents and promote the organization’s brand. Poorly implemented procurement mechanisms may result in wasted time, unsatisfactory outcomes, and negative impacts on the organization’s reputation.

Procurement processes can be broadly categorized as competitive and non-competitive. Competitive procurement involves open tendering for bids to realize the best value for money. Non-competitive procurement (sometimes referred to as single/sole source procurement) occurs when a purchaser identifies one vendor to provide the product/service. (It should be noted that there are variations of these two approaches.) Some organizations use both types of procurement depending on the dollar amount of the product/service required. If the product/service is over a specified threshold amount, competitive procurement may be used; however, if the organization believes there is only one supplier of the product/service, or if the cost is below the threshold amount, non-competitive procurement may be adopted.

There are pros and cons of both types of procurement. But the main advantages of competitive procurements are that they allow any vendor that can provide the product/service an opportunity to submit a bid, thereby increasing the likelihood of the buyer choosing the best combination of quality and cost. If conducted appropriately, this type of procurement can also promote transparency of the procurement process.

Some readers may well have seen them ─ carelessly developed tender documents (e.g., Requests for Proposals) that contain errors, inconsistencies, and vague/confusing information. This is unhelpful for prospective vendors and does nothing positive for a purchasing organization’s reputation.

Most organizations design their procurement processes in accordance with governmental and/or organizational guidelines. Following is some basic advice in support of creating quality tender documents.

• Write the tender document in well-organized, clear language, using a template that has been vetted through legal and procurement services.
• Present contextual information, data, and deliverables in sufficient detail that potential vendors have a thorough understanding of the requirements.
• Provide sufficient time for proponents to develop well-conceived, thorough proposals.
• Provide time, relatively early in the tendering period, for questions from vendors and answers from the client.
• Make available all questions and answers to proponents in a timely fashion.
• Consider hosting a bidders’ conference (face-to-face or virtual meeting) early on to engage proponents in a dialogue.
• Establish a bidders’ secure, virtual “data room” where proponents can access information, if there is a large amount of attendant data/information.
• Consider breaking up the procurement into two or more scopes, if the tender is large and complex.
• Involve subject matter experts, who may be external to the organization but not involved in the bidding process, in providing the background information and requirements/deliverables related to their respective areas of expertise.
• Implement a careful draft review process (take the time necessary to create a quality tender document).
• Ensure that clear, defensible criteria for judging the proposals are communicated to proponents.
• Inform proponents of the outcome of the tender process in a timely, transparent way. (Stakeholders, particularly the vendor community, need to be confident that competitive procurements are open, fair, and unbiased.)

RMJ Assessment has been commissioned to provide advice on procurement processes, including effective ways of providing key information to proponents, streamlining the competitive process, and generating innovative approaches. If you believe your organization may profit from a review of your procurement processes, or you would like some ideas for alternative, innovative approaches, we can help. Please visit our website at https://www.rmjassessment.com, or call (647) 234-5346.