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Procurement Planning and the Procurement Plan: Why are they Important?

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Procurement planning is the process of deciding what to buy, when and from what source. During the procurement planning process the procurement method is assigned and the expectations for fulfillment of procurement requirements determined.

Procurement Planning is important because:

1.  It helps to decide what to buy, when and from what sources.

2.  It allows planners to determine if expectations are realistic; particularly the expectations of the requesting entities, which usually expect their requirements met on short notice and over a shorter period than the application of the corresponding procurement method allows.

3.  It is an opportunity for all stakeholders involved in the processes to meet in order to discuss particular procurement requirements. These stakeholders could be the requesting entity, end users, procurement department, technical experts, and even vendors to give relevant inputs on specific requirements.

4.  It permits the creation of a procurement strategy for procuring each requirement that will be included in the procurement plan. Such strategy includes a market survey and determining the applicable procurement method given the requirement and the circumstances.

5.  Planners can estimate the time required to complete the procurement process and award contract for each requirement libido-portugal.com/. This is valuable information as it serves to confirm if the requirement can be fulfilled within the period expected, or required, by the requesting entity.

6.  The need for technical expertise to develop technical specifications and/or scope of work for certain requirements can be assessed, especially where in-house technical capacity is not available or is non-existent.

7.  Planners can assess feasibility of combining or dividing procurement requirements into different contract packages.

The Procurement Plan is the product of the procurement planning process. It can be developed for a particular requirement, a specific project, or for a number of requirements for one or many entities in the public or private sectors.

The Procurement Plan is important because:

1.  It lists all requirements expected to be procured over a period of time.

2.  From it the procurement schedule is developed, which establishes the timelines for carrying out each step in the procurement process up to contract award and the fulfillment of the requirement.

3.  It allows for the consolidation of similar requirements under one contract or the division of a requirement into several contract packages for economies of scale.

4.  From the number of requirements on the procurement plan, the procuring entity can determine beforehand any need for additional staffing, including external assistance for the purpose of completing all procurement requirements listed on the procurement plan.

5.  It allows for the monitoring of the procuring process to determine how actual performance compares with planned activities, and thus to alert the pertinent departments and adjust the procurement plan accordingly.

6.  It enhances the transparency and predictability of the procurement process.

How about you, any other reason why procurement planning and the procurement plan are important?

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Importance of Keeping Procurement and Contract Records

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Procurement and contract records are important because they serve as an audit trail of how the process was carried out.

Procurement and contract records are the evidence of all actions taken to award contracts, and of the results of the monitoring and oversight of contract implementation sverige-ed.com.

Procurement and contract records are the basis for internal and external audits, and are needed to determine compliance with the procurement legal and institutional framework.

Maintaining procurement and contract records should be mandated by law given the use of public funds and the need for transparency and accountability.

For what other reasons are procurement and contract records important?

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Guaranteeing Quality of Goods in the Bid Evaluation Process

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Is it possible to guarantee quality based on documentation received in response to an invitation for bids?

While preparing to brief an evaluation panel, the chair reserved for me was a bit wobbly so I decided not to sit on it. Comments were made about the quality of the chair because it had been purchased a year ago, and there had been problems with the furniture from a particular supplier.

One of my colleagues raised an interesting question: Is it possible to guarantee quality goods during the bid evaluation process based only on documentation received from bidders?

The truth is, quality cannot be determined solely based on documents received in response to an invitation for bids. And the buyer has the right to verify information submitted by bidders at any staged in the bid evaluation process.

The evaluation and selection process is designed to review bids using stipulated evaluation criteria to determine to what extent bids received meet the technical requirements stipulated in the bidding documents cz-lekarna.com.

The evaluation panel concludes the evaluation process with a recommendation. If the recommendation is to award a contract and it is approved, a contract is signed with the recommended firm.

Goods may be inspected prior to shipment and also during the receiving process. These inspections are for the purpose of confirming quality and detecting any defects or damage to the goods. If any defects or damage is detected, a remedy can be sought based on the terms and conditions of the contract.

Also, after goods have been inspected and received, any defects covered under the warranty agreed in the contract would necessarily be the responsibility of the supplier with which the contract was signed, and in some cases the manufacturer if clearly stipulated in the contract.

Warranties and guaranties are mechanisms available in procurement to assure quality or to seek remedy. They are established for a period of time after receiving the goods, and have stipulated conditions under which either can be put to use if the product is found defective for reasons stipulated in contract.

So, although it’s not possible to determine quality solely based on the content of bids received in response to invitation for bids, appropriate mechanisms must be put in place to insure that the quality is verified prior to contract award, during the receiving process and after contract award.

How about you? What are your thoughts on this? Leave a comment.

Who is Responsible for Contract Administration?

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To be effective, contract administration should be a joint effort and not the responsibility of only one entity. The goal of the procurement process is to award contracts in order to fulfill the requirements of the requesting entities. Goods and services are procured to satisfy the needs of an organization libido-portugal.com/. The procuring entity processes requests for goods and services, and before the contract is awarded, consideration must be given to, and preparations made for, contract administration in order to reduce the risk of failure to successfully complete the contract and to fulfill the corresponding need.

Given that, to be effective, the procurement process needs the collaboration of many sectors and departments (requesting entity, finance, technical capabilities for developing the specifications, sometimes engineering know-how), the administration of the resulting contract should also be a combined effort of many departments/entities (procurement, requesting entity, user, finance, etc.) to see to it that the risks of substandard performance and unsatisfactory completion is minimized.

The bulk of contract administration (overseeing performance) responsibility should be with the entity that is closest to where the contract is executed, because it is there that the opportunity exists for early detection of any breach of contract or substandard performance of goods received or services rendered.

Rather than expect any one entity, such as procurement, to be responsible for contract administration, it is preferable to have all the entities (including procurement) involved, and the extent of their participation should be commensurate with the value they can add to the process, given the importance of their expertise to the effective administration of the contract.

To effectively determine this, it is necessary to develop a comprehensive contract administration plan with the participation and buy-in of all entities involved and a thorough understanding of the responsibilities that each has in the administration of the contract.

What’s your opinion? Leave a comment below.

Contract Administration

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Contract administration is one of the most neglected areas in public contracting. The majority of the focus is placed on the procurement process, although this is usually a comparatively shorter period than the implementation of the contract itself cz-lekarna.com. This is not to lessen the importance of the procurement process in getting the contract awarded, but it is after the contract is awarded that the real benefits of undertaken the procurement process can be obtained, so more attention needs to be placed on ensuring that the contract is implemented as intended and agreed.

Contract award marks the beginning of the contract administration phase. Contract administration deals primarily with the management of risks in the post award period, and its main purpose is to monitor performance to ensure the objectives of the contract are met on time and within budget, and also to detect anything that might go wrong and find a remedy (including suspension or termination of the contract) before it’s too late.

It is misleading and risky to believe that only procurement practitioners (through the procuring entity) are responsible for contract administration. In fact, once a contract is awarded, the procuring entity is too far removed from where the actual implementation of the contract takes place to effectively monitor the performance of suppliers, contractors and service providers.

It is therefore important to determine, already during the procurement phase, the entity or entities responsible for contract administration.

Nine Important Things to Consider in Procurement Planning

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1.  Begin with the desired outcome in mind

2 impotenzastop.it.  From the initial identification of requirements, engage the assistance of a knowledgeable procurement practitioner

3.  Compose a multi-departmental team of individuals relevant to the procurement requirements

4.  Ensure budget allocation

5.  Determine need for technical assistance to develop technical specifications or terms of reference 

6.  Identify dependent procurement requirements

7.  Determine market availability

8.  Seek opportunities to consolidate similar requirements

9.  Be realistic about expected contract award dates, by early determination of procurement methods