Agile 4 Step Procurement Methodology, developed through decades of experience, delivers practical and sustainable results. It is a method our clients find valuable and one we use internally for our projects, too. Practice what you preach!
Imagine you have a competitive bid to run. You have completed your planning and research, gathered your requirements, performed a marketplace assessment and determined your sourcing strategy. You are ready to move forward with the competitive bid. With so much to do, how do you stay organized and what are the next steps?
Project Plan
At this point, it is critical to create a detailed project plan. You may have already begun one earlier in the project, and if you have, great! If not, now is the time. The project plan will outline your project’s essential elements and activities. Assign realistic dates and timelines to each activity and determine who is responsible for each. Internally, review any conflicts within the organization such as staffing issues, blackout dates, holidays, other conflicting projects, etc. Confirm key project members have reviewed the timelines and approved them before moving forward. Your project plan will keep you on track and focused.
Determine Evaluation Criteria
How will you evaluate the suppliers’ responses to your competitive bid? This should be completed BEFORE you launch the competitive bid or, at the very least, before responses are due back.
There are multiple reasons for this approach. First, you want to ensure you have outlined what is most important to your organization. What are you looking for in a response that will determine the success of a supplier’s response?
Set up evaluations so they can be scored easily. For instance, use a rating scale of 1 – 5 and determine for each question what kind of response would warrant a 1 vs. a 3 vs. a 5, etc. Ideally, set up questions that can be answered with a yes/no or a drop-down selection and assign weights to each of those. If done correctly, most responses will be scored mathematically and quickly.
Second, by determining the evaluation criteria and scoring ahead of time you ensure a fair and unbiased process that can be audited. Should an unsuccessful supplier question the outcome of your competitive bid, you will have the information to back up your results and prove there was no bias.
Do not wait for responses to come back before determining your evaluation criteria! This is poor procurement practice and may lead to a lawsuit if you are questioned by a participant.
Finally, determine who is evaluating which parts of the competitive bid and confirm they are committed to doing so when the time comes. Technical aspects should be evaluated by your technical lead, financial by the finance lead, etc. Subject matter experts (SMEs), such as cyber security, may be called in for their specific expertise.
Procurement is the quarterback responsible for overseeing that all players are performing their critical role. In some cases, the pricing provided for each supplier may be held back and only reviewed once the other parts of the responses have been reviewed and scored. This safeguards against being swayed by the pricing of any given supplier. It’s up to the procurement lead to determine the best approach for the event.
Manage the RFx (Competitive Bid)
Now you are ready to assemble your competitive bid and send it out! The procurement lead should manage this step to guarantee a fair process. During this time, stakeholders should not communicate with any of the participating suppliers. All communication should go through the procurement lead.
Typically, at ProcurePro we include major sections in our bid documents such as corporate overview, requirements, legal terms and conditions, pricing, etc. We also include questions and sub-sections within each of those sections.
Depending on the type of event, you may consider adding a copy of your agreement for the suppliers to review and provide redlines as part of their response. You may ask for a completed statement of work or implementation plan as well as resumes or profiles of any contingent labor they may be providing.
Within your bid documents, outline a schedule of events for all major deadlines. This is usually its own section and is typically one of the first sections the suppliers should review. Your key stakeholders should review the bid documents and sign-off on them before you distribute them to suppliers. Confirm everyone is aligned and understands what is being included in the package being sent to suppliers.
Whether using a sourcing tool or launching manually, the competitive bid should become available to all participating suppliers on the same day and time. You should also give advance notice of when they can expect it.
Following the launch, confirm that it has been received and suppliers can access all information accordingly. You may want to request that suppliers provide their intent to participate after they have reviewed the documents so you know from whom you should expect responses.
You will also want to provide suppliers an opportunity to ask questions. Suppliers should be asked to submit all questions in writing on the same date and time. The procurement lead will consolidate all questions and facilitate having key stakeholders provide answers. Consolidated questions and answers should be anonymized (scrubbed clean of any supplier names) and sent back to all suppliers at the same time, again to guarantee a fair process.
When you set up deadlines for the competitive bid, do not assume suppliers will work weekends and holidays. Leave enough time (based on the length and detail you are requesting) for suppliers to respond. If you rush the process, suppliers may drop out or provide sub par responses. Remember, your objective is to find the best overall solution, not a fast response.
Finally, some suppliers may request extensions to your submission deadline for any number of reasons. Generally, an extension is only granted if more than one supplier has requested it (that may indicate you have not granted them enough time), for a valid reason and if asked early in the process. An extension should not be considered if a supplier is asking a few days before responses are due. To remain fair, extensions must be granted to all suppliers.
Again, remember the intent is the best solution. Consider carefully if the extension is warranted. Take into account that other suppliers have put in their best efforts to hit the deadline.
Supplier Workshops or Presentations
You would have determined in the project planning phase whether your team felt supplier workshops or presentations were necessary. Key dates for these would have been listed in the competitive bid to suppliers and dates should have been held internally (and rooms booked) for key stakeholders who would need to attend.
Supplier workshops and presentations are useful for many reasons. Both give your organization a chance to meet with the supplier you may potentially select. Ask, where possible, that suppliers bring key personnel with them for their presentations so the project team can get a sense of personalities and determine whether they have the right “fit” for their organization. It also gives you an opportunity to ask the suppliers additional questions, go through parts of their response in detail, or see a demo of their product or service. It also provides suppliers with an opportunity to ask you questions.
The difference between a workshop and a presentation is that the workshop is intended to be more collaborative and iterative. It may lead to a revised proposal or improved solution now that the supplier has had a chance to “workshop” with the client. Normally, it is only used when a complex solution is needed and can ultimately save you time.
You never want to get to an award only to discover the supplier missed the mark completely and you need to fall back on another supplier or be forced to start from square one. It happens more often than you think.
Always set an agenda in advance and give suppliers ample time to prep. Be clear on what you would like to see from suppliers. All suppliers invited to participate should be given the same amount of time and all key stakeholders from your organization should be available for all sessions with all vendors. They cannot pick and choose which to attend.
Workshops and presentations should be evaluated, and all suppliers should be assessed on the same criteria (again, determined in advance). Complete scoring during or immediately following the sessions. As a best practice, each person scoring must submit their scores before the next session occurs.
Supplier Recommendation
Once all sessions are complete and final submissions (in the case of a workshop) are received, it is time to pull all the information together in a final recommendation.
In a formalized recommendation, outline your journey to this point, e.g., dates, suppliers, key decisions that were made along the way, selection criteria, final evaluations for each supplier and their presentations, as well as what your final recommendation is and why. Show the math that supports your recommendation, highlight key differentiators between the successful supplier and those that did not make the cut. This deck tells a story — where you started and how you got to the final decision.
If your organization is ever audited or your process called into question, you will have this consolidated deck which outlines the entire project and how you arrived at the final recommendation.
Go/No Go Decision
This is a critical final step and an opportunity to bring the project team, stakeholders and executives back together to summarize the results from the competitive bid (see above).
Do you have enough information to make a decision? Is everyone aligned? At this point you will want to gain some formal acknowledgment on the decision to either move forward (GO!), end the project (NO GO!) or go back for further information.
I hope you have found this article helpful and that these tips can serve as a road map for your next competitive bid.
