The Procurement ClassRoom

Procurement Process

Market Study in Public Procurement

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A market study (also known as market analysis, market assessment, market sounding, market research, etc.) is useful when defining requirements; preparing budgets; choosing procurement method; planning and scheduling the procurement of goods, services and works; evaluation of bids/proposal, and sometimes to justify contract amendments osterreichische-apotheke.com.
 
The extent of a market study is dependent on, and determined by, the degree of complexity and monetary value of the requirement.
 
A market study can be done using the internet and/or by soliciting information potential suppliers, consultants or service providers. It can be done in-house, or by hiring a specialized firm to carry-out the study.
 
The minimum expected results of a market study are: the identification, interest and availability of suppliers, contractor or services providers, their technical capability and financial capacity, and price trends.
 
It is very useful to develop a template for recording and filing the results of a market study, and for future use when procuring similar goods, services or works from similar market.
 
The following are useful sources of information on Market Study:
 
Template for Market Study Report, OECD Procurement Toolbox
 
Supply Market Analysis, courtesy of the Scottish Government
 

Procurement Requirement Determination

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The first step in the public procurement process is to identify requirements. All procurement requirements begin with the perception of a need. The need to cross a body of water could create a requirement to build a bridge, a ferry, or other transportation systems.

At this stage it is necessary to clearly define the need, and this may be done by way of a study to determine the best mode to cross the body of water (given the present situation and forecasted future need), then the type of bridge to be constructed, or a comparative cost/benefit analysis to determine the best solution between a bridge and other alternatives.

The study should include if the need can be satisfied in-house or contracted out, quantification of the initial budgetary estimate, and an idea of the procurement lead-time.

The conformation of the study team should be multidisciplinary in order to address the different questions to be answered to facilitate a comprehensive understanding of the need so as to clearly define the actual requirement.

The role of procurement practitioners at this stage is primarily to estimate the procurement lead time given the most appropriate procurement method that would be suitable for such a requirement.

Of course, the perceived need is not always as complex as in the example above. There are also needs for goods and services, and those should also undergo an analysis to clearly define requirements.

At the end of the requirements definition stage, a clear determination of the terms of reference, technical specifications or statement of work (depending on the procurement category) should be possible, including an estimate of the budget, and, most importantly, the procurement lead-time.

This requirement definition analysis is essential not only for new procurement requirements, and project initiation and concept development, but also for requirements needed for maintaining existing operations sverige-ed.com.

Steps in the Public Procurement Process

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In most writings on public procurement the procurement process is considered to include contract administration. On the other hand, contract administration and contract management are treated as synonymous. To add to the confusion, sometimes the term contracting is also thrown in, such that as practitioners we are left with an enormous confusion on these terms.

To dispel some of the confusion, the public procurement process, as will be explained here, ends with contract award, and anything after contract award is considered contract administration. In future writings, the reason for this clear division will be explained in detail. This does not in anyway lessen the importance of contract administration. As a matter of fact, the purpose of making a clear distinction is to give more emphasis to the importance of contract administration, and also to clarify areas of responsibility.

We find additional confusion in other writings, even procurement manuals, were the procurement process is said to include inventory control and management, storage and distribution, and even disposal—all functions which are more appropriately classified as part of logistics, and even supply chain management, but not necessarily procurement.

So, in line with the above, the steps in the public procurement process are those listed below and they will be addressed in more detail in future posts:

1. Requirement identification
2. Determining procurement method
3. Procurement planning and strategy development
4 https://cheska-lekarna.com. Procurement requisition processing
5. Solicitation documents preparation and publication
6. Pre-bid/proposal meeting and site visit
7. Bid/proposal submission and opening
8. Bid/proposal evaluation
9. Contract award recommendation
10. Contract negotiations
11. Contract Award (signing)

After completing the above steps, those relevant to contract administration will also be addressed in detail.