Guest post today by Rusty Joerin of Woodsgift Enterprises
This month, I am sharing this edition of Better Value Procurements with a number of public sector suppliers.
I design request for proposals (RFPs) to deliver best value, not necessarily lowest possible cost, although I have often found a strong correlation between these two factors. I recommend the buying organization plan their response analysis when drafting the RFP. This aids in clarifying expectations and serves to reduce procurement risk.
In my experience, there are three main categories into which criteria for proposal analysis are sorted: vendor experience, product specification and total cost. Of these three, product specification can be the most problematic when drafting the RFP. Typically the buyer wants to procure a product to a known requirement or is seeking a solution to a complex problem. The buyer’s challenge is to present specifications in such a manner that provide clarity to respondents, invite creative competition and provide differentiation factors that can be analyzed. Time spent developing the specifications and a statement of desired outcome is critical for both the buying organization and those considering responding.
Analyzing vendor experience will require asking for references, CV of key personnel and may include requests for additional information to consider. Typically the greater the relevant experience detailed in the response, the better the ranking.
Total cost should be defined and a statement of how it will be analyzed given in the RFP. For maximum fairness, I use a formula that assigns points relative to cost differentiation, not on a first second, third etc. basis.
The weighting given to each criterion should reflect the buying organization’s goals for the procurement and will indicate to respondents where to spend the most effort in formulating their response. Better RFP’s yield better responses, more competition and deliver better value.
If you are a supplier and have read this far and want to receive future editions of this document, send an e-mail to me requesting to subscribe. Thanks for reading!
Rusty James Joerin, SCMP is a Supply Chain Management Professional and accredited by the Purchasing Management Association of Canada. He offers procurement services primarily to public sector organizations that do not have a professional supply manager on staff and provides additional capacity to assist with project related supply for those organizations with purchasing specialists on staff.
Information about his experience and qualifications may be found at:www.woodsgift.com
1 comment:
In my experience, the value proposition has evolved to consider the Corporate Strength/Vision/Mission as well as the other 3 items noted in Rusty's article.
With the past economic downtown + recovery and emphasis on Sustainable procurement, buying organizations need to remember past performance is not an indicator of future performance, AND experience alone does not dictate whether the vendor will 'fit' your vision of the project.
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