Hallmarks of procurement excellence

by Caroline Boot, managing director, Clever Buying and Plan A.

It’s Plan A’s Monday morning business meeting where our team of bid writers from all over the country (as well as one in Australia and one in Europe) is busy planning and coordinating our latest week input on 31 current tenders.

Those RFx documents have been put together by procurement staff from a huge range of government organisations, both here and in other countries. They’re for services which cover just about every industry that supplies government – from major construction projects to travel and social services. All these procurement projects, supposedly, share one common goal – to achieve best value for money, but a review of the range of approaches is alarmingly wide.

Some are clearly worded, well-structured, with relevant questions and clear scoring systems. These will most likely be more straightforward to respond to, and will encourage thoughtful, well-designed solutions that will make best use of public money.

Others have been hastily thrown together with scant attention, or effort, put into determining what each project’s drivers for value may be. When suppliers have the luxury of choice on which tenders they respond to, these are the tenders that repel quality suppliers and result in poor solutions and or poor use of funds.

So in a nutshell, what are the hallmarks of excellence in procurement processes and how do high-performing procurement professionals manage the process of government procurement to deliver the best value for money in the suppliers that are selected through the process?

We have interviewed scores of procurement managers through the process of training and assessing them for their NZQA qualifications. For most, the process of planning a procurement is an exercise that takes several months (or longer). Ideally, it involves a team that bring together both technical and procurement skills. The indicators of sound procurement processes are generally:

  1. The tender evaluation team (not an independent consultant or an administrator) takes responsibility for full procurement planning. They front-load their insights and intelligence into the design of the procurement process and the tools that are used, rather than having those imposed on them after the responses are received.
  2. Procurement planning involves detailed consideration of the project’s place within strategic programmes of work; the critical risks to project success; opportunities for innovation; and the potential effect of the procurement on social and environmental outcomes as well as economic considerations.
  3. The supplier market is carefully considered within planning, including the potential effect of the procurement on maintaining a healthy market and meeting broader strategic objectives for regional economic outcomes. Unsuitable suppliers are eliminated early on a pass/fail basis to reduce costs of tendering for all.
  4. The tender evaluation method, attributes and weightings (if applied) are chosen to align to the risks and opportunities inherent in that specific project. Attribute weightings are tested to confirm that the client would be prepared to pay an appropriate premium for a higher quality supplier.
  5. The evaluation team determines and agrees on an objective scoring system before they review the responses, using facts and figures rather than subjective descriptions to define scoring bands. When individual evaluations, moderation to determine agreed scores, and tenderer debriefs take place, this scoring scale is used to support the rationale for scoring.

The second part of our review looked at the RFx documents that are at the coalface of tendering. Based on our analysis, this is a list of the qualities of outstanding tender documents that attract the best suppliers and deliver the right decisions.

  1. The RFx document has a clear description of the project that includes details of what the client thinks are the most important drivers for value. That description has been generated for this project only – it’s not a cut-and-paste!
  2. There is a mechanism for identifying the factors that will eliminate unsuitable suppliers (e.g. preconditions, supplier panels, prequalification status or an EOI with pass/fail attributes defined)
  3. The information sought to differentiate the remaining suppliers is structured soundly and is clearly 100 percent focused on the drivers for value. There are no generic or irrelevant questions, duplications or confused instructions.
  4. The evaluation method and weightings (if applicable) are clearly stated; and there is a definition within each attribute category of what will satisfy the requirement and/ or what constitutes a ‘fail’.
  5. Instructions to tenderers for their submissions are unambiguous and have been carefully reviewed. The closing date, time and format is specified; and a client contact person is named and their contact details given. The time given for responses is in line with government Rules of Sourcing (should typically be 20–25 clear business days for a RFT or RFP).

There are significant financial benefits gained by following these simple Best Practice procurement guidelines. The process is clear to all, the responses are faster and easier to score, and the responses to quality RFx documents are high quality proposals. It’s cost-efficient for both clients and suppliers because it eliminates unsuitable suppliers early, then it targets only the factors that are critical to project success.

With solid planning and clear scoring methods that align to project priorities for Value, there is minimal chance of legal challenge. What’s more, our suppliers are more likely to engage when they see unbiased, fair, fit-for-purpose procurement methods that don’t waste their time on irrelevant activity.

Author: ContrafedPublishing

Account manager at Contrafed Publishing - look after advertising and digital media/marketing for the company's suite of magazines.

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