10/26/2019

Purchasing and Procurement

Management
Sharfuddin Lisan
BBA,BA(Hons)English, DSC,DHRM,MA, MHRM(DU),
PGDSCM, MBA(SCM)-Canada
Coordinator-SCM-BIHRM
lisan@bihrm.org ,lisanbd@ymail.com,
01731822888

Learning Objectives
As a result of this training participants will be able to:

• Identify purchasing and procurement needs and outcomes

• Describe the importance of communicating need within the
agency
• Identify scope, timeline, requirements and vendors as part
of the planning process
• Discuss how to evaluate and select a vendor
• Apply the purchasing and procurement planning phases

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Purchasing vs. Procurement

 Purchasing - the process of obtaining goods and services.

 Procurement - the combined functions of identifying
needs, initiating a procurement project, selecting a vendor,
contracting with a vendor, purchasing of the goods or
services, managing the resulting contract.

Importance
• Cost Reduction.
• Maximize profit.
• Effective time & material management.
• Use of exact needed resources.
• Ensure success of business mission.
• Cost leadership in the market.
• Source of competitive advantage.
• Good Relationship with Supplier.

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Procurement Steps
1. Identify the Need and Outcomes

2. Communicate Need Within Agency

Planning Phase
3. Identify Scope, Timeline and Requirements

4. Identify Vendors

5. Define Scope and/or Statement of Work

6. Communicate Formal Need With Vendors

& Selection
Solicitation

7. Evaluate Vendors

8. Select Vendor
Procurement

9. Negotiate Contract
Final

10. Contract Execution and Management

Collaboration and Planning

Collaboration is important – Work with

Business Owners, Subject Matter Experts and
Stakeholders

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Identify the Need and Outcomes

Step 1

Why does your agency purchase goods and

services?

Identify the Need and Outcomes

Step 1
Critical Thinking & Outcomes of a Purchase or
Procurement

Identify Identify
Outcomes Need

Identify
Evaluate &
Alternatives
Analyze
Available

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Communicate Agency Need

Step 2

2. Engage
4. Determine
SMEs,
1. Initiate 3. Conduct checkpoints
business
planning independent and
owner and
process research delegated
other
authority
stakeholders

Identify Scope, Requirements and

Timeline
Step 3
Identify and define the scope and overall
contract timeline

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Identify Scope, Requirements and

Timeline
Step 3

High-level Contract
Contract Contractor
Functional Responsibilities Phases &
Purpose
Areas Timeline

What is
NOT in
Scope?

Identify Scope, Requirements and

Timeline
Step 3
Common Pitfalls in Scope of
Work/Requirements Writing

• Too strict and rigid

• Not enough details
• Written to a certain vendor or solution
• Outdated or obsolete requirements

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Identify Vendors
Step 4

2. Knowledge of
1. Vendor Lists Vendor
Marketplace

3. Vendor Pre-
Bid 4. Other Sources
Communication

Define Scope and/or Statement of

Work
Step 5

Scope or Work vs. Statement of Work

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• Scope of Work - A detailed, written description of the conceptual

requirements for the project contained within a competitive solicitation
document. The scope of work should establish a clear understanding of
what is required by the vendor.
• On the other hand, if the procurement is a Request for Qualifications, a
Request for Quotes and Qualifications or a sole source, the scope has
already been determined and a statement of work is required.

• Statement of Work: The response from the vendor, if conducting an RFP,

outlining very specifically how they propose to complete the work as
outlined in the scope of work. If not conducting an RFP, the statement of
work is determined by the agency and included in the contract document. It
defines what will be done, how, by whom, and cost factors.
• The procurement method will determine whether or not the agency defines
the statement of work, or the vendor. The statement of work can be
modified in contract negotiations, regardless of the procurement method,
but not the scope of work.

Define Statement of Work

Step 5
Requirements &
Specifications

Performance Project
Standards History &
Objectives

Statement of
Work
Reporting
Requirements Deliverables

Schedule Milestones

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Communicate Formal Need With Vendors

Evaluate Vendors
Select Vendor

SOLICITATION AND SELECTION

Procurement Steps
1. Identify the Need and Outcomes

2. Communicate Need Within Agency

Planning Phase

3. Identify Scope, Timeline and Requirements

4. Identify Vendors

5. Define Scope and/or Statement of Work

6. Communicate Formal Need With Vendors

& Selection
Solicitation

7. Evaluate Vendors

8. Select Vendor
Procurement

9. Negotiate Contract
Post

10. Contract Execution and Management

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Communicate Formal Need to Vendors

Step 6
Request For
Quote
/Quotation
OR
Qualifications
(RFQ)

Request For
Communicate Proposal
(RFP)/Request for
Bids (RFB)

Request For
Qualifications
and Quotation
(RFQQ)

• Request For Quote/Quotation OR Request for Qualifications (RFQ)

• Request For Qualifications and Quote/Quotation (RFQQ)
• Request For Proposal (RFP)/Request for Bids (RFB)

1. RFQ Examples: Language translation, document storage, equipment rental,

paper shredding services, steam cleaning services, pest/weed control
services, copy paper, etc. Cost is the highest weighted factor - primarily looking
for best price from among multiple qualified vendors.
2. RFQQ Examples: Grant writing, quality assurance, appraisal services, economic
analysis, paper stock for warrants, maintenance services, child support check
printing, etc.
3. RFB/RFP Examples: Design and implementation of an information technology
system to solve a complex business problem or need; Major business process
analysis and assessment within an agency or major program of an agency; Major
assessment and testing processes Research services related to major health or
scientific policy development; Environmental products related to mitigation of
hazardous waste.

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Communicate Formal Need with

Vendors
Step 6
Solicitation Need RFQ RFQQ RFP/RFB
Standard, Ongoing Purchase X X
Many Vendors Offer This X X
Cost is the Most Important Factor X
Vendor Qualifications and Performance
X X
Important in Addition to Cost
Vendor Specialization / Few Offer This X
Complex Project Needs X
Solution Required to Meet Need X

Communicate Formal Need with

Vendors
Step 6

Assign Procurement Draft Solicitation Issue Solicitation Receive Bids

Coordinator Content

•Define list of •Requirements •Use WEBS •Document

potential vendors tailored to level of •Post Amendments date/time
•Encourage WEBS complexity on WEBS •Maintain
registration confidentiality

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Communicate Formal Need with

Vendors
Step 6

Evaluate Costs Award Post Results Negotiate &

/Rates Award Contract

• Conduct
• Rank based on • Lowest cost, Debriefings
lowest cost or responsive • Notify
successful & • Negotiate &
rate bidder
unsuccessful award the
Bidders contract

Communicate Formal Need with

Vendors - Step 6

Select Team Draft RFP/RFB Finalize and Post Release

Content Release Activities
RFP/RFB

•Establish Team Roles •Project approach and •Stakeholders review •Respond to Bidder
•Write Specifications methodology draft RFP questions
•Identify RFP/RFB •Finalize Scope of Work •Finalize RFP for •Draft amendments
Coordinator for the •Outcomes and release or addendums
project Performance Measures •Post and publish RFP
•Score and rank Bids •Deliverables and
milestones
•Management and
staffing plan
•Bidder responses
format
•Cost response format
Evaluation
Process
(Step 7)

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Communicate Formal Need w/

Vendors - Cost Sheets
Step 6
Vendor Name Cost Vendor Name Deliverable
Cost
Time
Deliverable A
Materials Deliverable B
Total: Deliverable C
Total:

Vendor Hourly Rate Hours Total

Name
Staff level
Total:

Evaluate Vendors
Step 7
Evaluation Objectives

 Provide clear direction and guidance

 Ensure integrity of fair evaluation process
 Create a documented process
 Recommend for contract award

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Evaluate Vendors
Step 7
Evaluation Step Considerations

• Confidentiality and Security

• Conflict of Interest
• Evaluation Milestones
• Evaluator Availability?

Evaluate Vendors
Step 7
Evaluation Roles include ….

Procurement Evaluation Executive

Coordinator Committee Sponsorship

• Ensure • Evaluate • Supports &

Adherence • Score Authorizes
• Prepare & • Controls
Distribute Expenditures

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Evaluate Vendors
Step 7
• Initial Screening
Phase 1

• Evaluation of Technical and

Phase 2 Management Response

• Oral Presentations (if applicable)

Phase 3

• Evaluation of Cost Proposals

Phase 4

• Best and Final Offers

(BAFO)
Phase 5

• Ranking of
Proposals
Phase 6

Evaluate Vendors
Step 7
Technical Evaluation
Points (Weighted
Technical Evaluation Criteria Score)
1 Executive Summary (75 points max) and 100
Vendor Identifying Information (25 points max)
2 Qualifications of Firm (300 points max) 300
3 Approach to Scope of Work (300 points max) 300
4 Qualifications of Proposed Key Personnel 200
(200 points max)
5 Corporate References (100 points max) 100
6 Total Weighted Score 1000

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Evaluate Vendors
Step 7
Cost Evaluations

Vendor Name Cost

Vendor A $150,000
Vendor B $175,000
Vendor C $180,000

Select Vendor
Step 8
Once the evaluation is complete

Award to Highest Scoring Bidder

OR
Reject all Bids or Re-Issue the Solicitation

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Select Vendor
Step 8

Once all bidders have been notified, conduct

debriefings if requested.

Following the award, as you get ready to

negotiate and establish a contract make sure the
solicitation files are complete.

Procurement Steps
1. Identify the Need and Outcomes

2. Communicate Need Within Agency

Planning Phase

3. Identify Scope, Timeline and Requirements

4. Identify Vendors

5. Define Scope and/or Statement of Work

6. Communicate Formal Need With Vendors

& Selection
Solicitation

7. Evaluate Vendors

8. Select Vendor
Procurement

9. Negotiate Contract
Post

10. Contract Execution and Management

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Negotiate Contract
Step 9

Conduct Edit Finalize

Baseline contract and Route Contract
Contract based on for Starts
Review proposal Signatures

Contract Execution and Management

Transition
Step 10

Contract Project
Contract Initial Kick-off
Management
Execution Meeting Management
Framework

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Contract Execution and Management

Transition
Step 10
Compliance
with T&C Approve
Risk Contractor
Mitigation Invoices

Schedule
Monitoring

Ongoing Contract
Management

Summary & Key Points

• Identified purchasing and procurement needs
and outcomes
• Described the importance of communicating
need within the agency
• Identified scope, requirements and timeline, and
vendors as part of the planning process
• Discussed how to evaluate and select a vendor
• Applied the purchasing and procurement
planning phases

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QUESTIONS

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