Procurement Planning

We all know that a plan is just a guess, because we don’t have control over the future. So why do we plan? To have an idea of how something will work out in the future, and although things hardly ever work out exactly as planned, when they do we are happy, and when they don’t we are sad cheska-lekarna.com.

With procurement planning it’s similar. We plan procurements for the coming period knowing that it’s just a best case scenario. We try to plan for uncertainties, but when it doesn’t work out it gives us an indication of how we’ve performed and we can use this to improve our future planning exercise. During execution, the closer we get to original plan, the better.

How about you, any thoughts on procurement planning?

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?

Leave a comment.

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

Procurement plans can be prepared in many different formats. The important thing to remember is the content. The procurement plan should cover all the different steps in the process with the expected date of initiation of each milestone. When this is the case, the procurement plan merges with the procurement schedule. And, ideally, it should then contemplate all the steps in the process, including contract administration and close-out. But is this practical?

The procurement plan should begin at the beginning, and this beginning depends on the entity that has the control over the action. Ideally, the beginning should be with the preparation of the specifications (for goods and works) and terms of reference (for services). This is really the beginning of the process and should be calculated in such a manner that the completion of this stage can be determined.

The preparation of specifications and terms of reference is crucial and sometimes presents a bottleneck because only someone with experience can ideally estimate the time it will take to prepare the specifications or terms of reference of a particular requirement due to its complexity and uniqueness. This is important because if this period is not calculated correctly the whole plan can be thrown off. So we want to carefully calculate this period such that it encompasses the commencement and completion of the specifications and terms of reference.

Another period that is usually outside the control of the procurement entity is the bid/proposal evaluation period given that evaluation panel members can come from entities that are not under the control of the procurement entity. So the use of their time has to be negotiated. Thus, the evaluation period must be carefully calculated so as to ensure that the evaluation can actually take place within a set timeframe. The number of bids/proposals received also has an impact on the duration of the evaluation process.

Contract negotiations can also be a potential bottleneck, so sufficient time needs to be considered for this when it’s required.

We know that very seldom are plans carried out strictly according to what was foreseen. And procurement plans are no exception. This is primarily because when planning we are actually guessing how much time things will take based on past experience and, given that there are uncertainties, any missed milestones can result in delays in the plan cz-lekarna.com.

It’s important to keep delays in the execution of the procurement plan to a minimum, because such delays can have an impact on contract award and completion, which directly affects service delivery. That’s why the periodic update of procurement plans cannot be overstated.

A public procurement plan should be divided into the principal procurement categories: goods, services and works, and should list all the requirements within those categories that are expected to be procured over the period covered by the procurement plan (usually one year)

What should a procurement plan include?

As a minimum, a procurement plan should include:

1. A reference number,
2. a brief description of the requirement,
3. the estimated value of the requirement,
4. the procurement method, and
5. the expected award date.

Some procurement plans also include,

6. the need for review of procurement actions (usually for donor-funded procurements),
7. the expected offer (bid/proposal) submission date, and
8. the expected duration of each procurement activity.

Some procurement plans can be a bit more elaborate in that they include elements of the procurement schedule which is much more detailed and addresses all the key milestones on the procurement process of each requirement from the preparation of the specifications and scope of work, up to the commencement of the contract.

Procurement scheduling will be addressed in a separate post libido-portugal.com/.