As a specialist on procurement and tendering, critically discuss the procurement process

Form Procurement Team

The procurement team will typically involve:

• Procurement
• The budget holder
• Others involved in managing the contract
• Possibly representatives from health and safety, human resources, quality management etc.

TIP: The higher the value of the contract, the bigger the procurement team – often involving senior management. Also, the tendering process becomes more drawn out. The same applies to high-profile purchases.

For example, a very high-value contract, or one that involves contracting out for the first time, will often involve a large team (including directors). And it will have a full tender process (as shown in the chart). Conversely, smaller contracts may have a much simpler tender procurement process. You see this in the public sector. High-value contracts must be advertised as EU / OJEU tenders. Smaller jobs can be let via a mini-tender.

STEPS OF PROCUREMENT PROCESS

1.Pre Qualification Questionnaire (PQQ) or Tender Long-List

This is an initial selection process to help sift potential suppliers for suitability. It is used to draw a long-list of bidders to be invited to tender. This stage of the tender process might be by invitation or open to everyone (e.g. OJEU tenders).

The qualification stage might take the form of an approved supplier list, an initial screening interview or a formal PQQ (questionnaire to assess against minimum requirements). Some tenders incorporate aspects of the PQQ within the tender therefore eliminating this stage.

2.Issue Tender

The invitation to tender (ITT) is issued to the long-list of selected bidders. The ITT can involve a set of questions to answer along with a pricing matrix. Alternatively it could be less formal – simply asking the bidder to submit a proposal and a price.

3.Tender Briefing Meeting

It is not uncommon for the tender procurement panel to hold supplier briefing meetings (pre-tender meetings). They help clarify the tender and answer any bidders’ questions.

4.Initial Evaluation

The tender panel marks each bid against the agreed evaluation matrix. This results in a league table of the highest and lowest bidders’ scores.

5.Tender Short-list

The evaluation is used to select a short-list of potential suppliers. The number of bidders in a short-list will depend on the nature of the contract. For example, a framework agreement has several suppliers. Another tender might only have one winner.

6.Presentations, Interviews & Visits

Short-listed bidders are sometimes subject to further evaluation. This can be a tender short-list presentation or a question and answer session. And possibly a visit to supplier’s premises and/or meeting some of their customers.

Again, the tender panel will assess this against their pre-determined evaluation criteria.

7.Selection

Whatever the tender procurement process, the tender panel will arrive at its final scores. These are used to select the best performers and award contract(s).

8.Negotiations

The limit of tender negotiations depend on the nature of each individual tender procurement process. A formal tender may not offer any scope for negotiation.

Others will allow small negotiations. This can include:

• Some aspects of price (e.g. additional items)
• Contract wording and specification (e.g. items that don’t affect the overall service)

It is unlikely that there will be opportunity for any major negotiation. Certainly not on the overall price.

9.Contract Award

Once everything in the tender procurement process is finalised, contract(s) are awarded.

High-value EU tenders have a minimum 10-day standstill period (Alcatel). This is to allow unsuccessful bidders to challenge the tender procurement process if they feel it was flawed. Contracts are not be issued until this has been completed.

Unsuccessful bidders should have a chance to get feedback on tenders. This helps to gain a better understanding on how to improve future bids.

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