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Adding Value To The Process

Professional purchasers, particularly in the public sector, receive specific training in the area of RFP development and evaluation, for the express purpose of ensuring best value in addition to fairness and accountability. Many procurement people have done a poor job in educating senior management about the value of the procurement function. Some senior managers and politicians still regard procurement people as buyers, or order takers. These stakeholders don’t understand the value that procurement people add to the process. 

In many organizations, the procurement people are the guardians of public policy. They are the ones who ensure that the process is fair and open. Scandalous behavior in procurement matters is news. And in most cases, the scandal deals with senior management or politicians having abused the procurement process. It is rare that professional procurement people are involved.

The next time your job is reviewed, consider proposing this list as part of your job description. This list was developed many years ago by Marlene Knight, Manager, Materiel Management, City of Mississauga, Ontario.

Professional Procurement: A Checklist of Important Tasks

Needs Definition Phase

  • Assists in defining the requirements.
  • Provides advice on alternative products/services.
  • Recommends different procurement approaches (e.g., obtaining the equipment and related maintenance services in the same RFP).
  • Advises on quality assurance alternatives.
  • Provides information on corporate standards, priorities, policies and in ?house resources.

Planning Phase

  • Provides advice on the time and nature of work required to conduct market research, research existing contracts, co-ordinate procurement with other users, source potential vendors, investigate solutions at other companies, prepare and issue the RFP, evaluate proposals, negotiate contracts, secure all internal approvals.
  • Build in process steps to ensure fairness and acceptability.

Research Phase

  • Assesses economic and political environment to determine any impact on the planned procurement. For example, are tax laws changing? Is the value of the dollar rising? What are the transportation logistics?
  • Assesses internal information to determine if there have been vendor performance problems experienced by others.
  • Assesses external information in the industry to determine what opportunities exist, and degree of competitiveness in the marketplace.
  • Determines the organization's relative position of strength and the factors that will maintain this, and considers the potential risks in the procurement.
  • Devises alternative acquisition methods when a creative solution is required and recommends a method consistent with policies, by-laws, best practices, etc.
  • Recommends changes to the plan to reflect market and internal conditions which may affect the results.

Sourcing Phase

  • Assembles or creates suitable terms, conditions, instructions and special provisions which reflect the best approach after considering the research information. Considers life ?cycle and cost/benefit in determining price schedules.
  • Secures acceptance of all participants (other departments or co ?operative partners) of the solicitation package and process.
  • Develops a list of potential bidders and issues and receives all public documents.
  • Receives and documents enquiries during the RFP or negotiations process, arranges vendor briefings as required and co ?ordinates technical enquiries through the client.
  • Plans and conducts negotiations in accordance with standards for professional procurement.
  • Assesses critical information items for documenting in the corporate record in the event of a dispute or litigation.

Analysis Phase

  • Conducts independent public openings and documents all official bid results.
  • Reviews all proposals received for irregularities and develops spreadsheets of bid amounts, irregularities, and pertinent information for consideration by client. Also monitors results for compliance with internal and external policies and the Competition Act.
  • Conducts evaluation or provides assistance, determines treatment of irregularities and requests for additional information outside of the official process. For example, pricing after the fact for missed items.
  • Co-ordinates all the parties and seeks consensus on the recommended vendor(s).

Awards Phase

  • Regularly updates a standard award report form for senior management and prepares final reports for corporate-wide procurements or assists client in this.
  • Notifies unsuccessful bidders, conducts debriefings, and handles bid protests in accordance with standard policy and procedures.
  • Creates and communicates corporate standards for contracting utilizing the solicitation terms, conditions, as amended during contract negotiations.
  • Develops implementation and performance monitoring strategies and ensures expectations of both parties (client and vendor) are clear and that vendor delivery and billings are acceptable.
  • Implements automatic payments and payment discount procedures.

Contract Management Phase

  • Handles performance disputes between client and vendor and takes appropriate action including holdbacks and other remedies to discharge the contract.
  • Establishes and maintains tickler files to begin new acquisition cycle upon expiry of established contracts.

This article is an excerpt from The Request for Proposal Handbook (Third Edition) by Michael Asner, who is a procurement consultant based in White Rock, BC and a former columnist for Summit magazine.

© 2005 Michael Asner Consulting Inc. Reprinted by permission.

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