Let us tour through Procurement Management life cycle...
(1) Guidance :: We need guidance for acquiring goods and Services from outside performing organizations
- "Make-or-Buy Analysis" so that we know exactly when to buy and when to make ourselves.
- When to buy?
- When to make?
- How to formulate Procurement Statement of work:
- Scope to be outsourced
- Quantity Desired
- Quality Levels
- Performance Measurement through Metrics
- List of Sellers and Source Selection Criterion:
- Source:: List of potential sellers from whom we can buy the product
- Sellers' Technical Capability
- Sellers' Technical approach to build our product and the cost involved
- Sellers' Financial Stability and their Management commitment to mitigate issues or risks
- Seller's past performance and success rate
- Overall Life cycle cost
- Warranty
- Intellectual Property rights && Proprietary rights
- How to formulate guidelines for Change control Board so that change requests can be implemented.
- Form & Format of Procurement Documents:
- Invitation for Bid (IFB)- When the buyer requests consolidated price for all the work to be done (eg. This is what I need, tell me how much do you charge?). Usually issued during Fixed Price contracts.
- Request For Proposal (RFP):: Scope is defined either at high level (incase of CP contracts) and detailed level (incase of FP contracts). Sellers are expected to provide their technical approach and corresponding details. But mostly we see RFPs incase of Cost Reimbursement contracts as the scope defined is generally defined at high level to start with.
- Request For Quotation (RFQ) :: Buyer expects quotes for resources, work, material only.. Buyer takes the managing the resources task. This is done Time and Material contracts especially during staff augmentation kinds of works.
- Request for Information (RFI) :: Seek help from Vendors so that you can collate and have the information available
- Tender Notice :: Incase of Public properties, Government publishes Tender Notices where Government informs the need for procurement and its scope. Vendors are going to respond with RFP, RFQ etc.
- Invitation for Negotiation :: To ensure that vendors understand buyer's intent, quality bar clearly. Please note it is not about negotiating the price.
- Contractor Initial Response :: Initial response from Contractor on our Procurement Statement of Work.
(2) Conduct Procurements :: Process of obtaining Seller responses, Selecting a seller and awarding a contract. It provides alignment of internal and external stakeholder expectations through established agreements.
- Selected Sellers for each of the needed Procurement
- Agreement detailing scope of procurement, approach, costs, payment terms. and Terms & Conditions for completing or cancelling the contract, CR Approval Process with the help of Change Control Board.
(3) Control Procurements - Ensures that both seller and buyer's performance meet procurement requirements according to Terms and Conditions of legal agreement.
(4) Close Procurement - Complete each Procurements and archive documentation for future purpose.
(1) Guidance :: We need guidance for acquiring goods and Services from outside performing organizations
- "Make-or-Buy Analysis" so that we know exactly when to buy and when to make ourselves.
- When to buy?
- When to make?
- How to formulate Procurement Statement of work:
- Scope to be outsourced
- Quantity Desired
- Quality Levels
- Performance Measurement through Metrics
- List of Sellers and Source Selection Criterion:
- Source:: List of potential sellers from whom we can buy the product
- Sellers' Technical Capability
- Sellers' Technical approach to build our product and the cost involved
- Sellers' Financial Stability and their Management commitment to mitigate issues or risks
- Seller's past performance and success rate
- Overall Life cycle cost
- Warranty
- Intellectual Property rights && Proprietary rights
- How to formulate guidelines for Change control Board so that change requests can be implemented.
- Form & Format of Procurement Documents:
- Invitation for Bid (IFB)- When the buyer requests consolidated price for all the work to be done (eg. This is what I need, tell me how much do you charge?). Usually issued during Fixed Price contracts.
- Request For Proposal (RFP):: Scope is defined either at high level (incase of CP contracts) and detailed level (incase of FP contracts). Sellers are expected to provide their technical approach and corresponding details. But mostly we see RFPs incase of Cost Reimbursement contracts as the scope defined is generally defined at high level to start with.
- Request For Quotation (RFQ) :: Buyer expects quotes for resources, work, material only.. Buyer takes the managing the resources task. This is done Time and Material contracts especially during staff augmentation kinds of works.
- Request for Information (RFI) :: Seek help from Vendors so that you can collate and have the information available
- Tender Notice :: Incase of Public properties, Government publishes Tender Notices where Government informs the need for procurement and its scope. Vendors are going to respond with RFP, RFQ etc.
- Invitation for Negotiation :: To ensure that vendors understand buyer's intent, quality bar clearly. Please note it is not about negotiating the price.
- Contractor Initial Response :: Initial response from Contractor on our Procurement Statement of Work.
(2) Conduct Procurements :: Process of obtaining Seller responses, Selecting a seller and awarding a contract. It provides alignment of internal and external stakeholder expectations through established agreements.
- Selected Sellers for each of the needed Procurement
- Agreement detailing scope of procurement, approach, costs, payment terms. and Terms & Conditions for completing or cancelling the contract, CR Approval Process with the help of Change Control Board.
(3) Control Procurements - Ensures that both seller and buyer's performance meet procurement requirements according to Terms and Conditions of legal agreement.
(4) Close Procurement - Complete each Procurements and archive documentation for future purpose.