Sometimes, work is awarded to a company without competition. The situations include:
Project manager is under extreme pressure
Seller has unique qualifications
There is only one seller who can provide goods and services
Seller holds patent for the items you need
Other mechanisms exist to ensure sellers prices are reasonable
Non-competitive procurements may include:
A contact is established directly with a preferred seller without going through the procurement process.
In this type of procurement, there is only one source.
Conduct procurements process involves getting the procurement documents to the sellers, answering sellers queries, having them prepare responses, reviewing the responses to select the seller. To initiate the process, it is important to attract the sellers, it is done using various methods, such as
An advertisement is placed in newspapers, magazines, internet, etc to attract sellers.
Qualified Seller List
If a buyer purchases the same type of services often, the procurement team should find, investigate, and check the credentials of prospective sellers in advance.
The bidder conference is an opportunity for the buyer to discover anything missing in the procurement documents. A bidder conference can be key to making sure the pricing in the sellers response matches the work that needs to be completed and is, therefore, the lowest price.
A seller proposal is a response to the RFP (Request For Proposal), RFQ (Request For Quotation) or an IFB (Invitation For Bid).
After receiving the proposal, the buyer uses the source selection criteria identified in the Plan Procurement process to assess the potential sellers ability and willingness to provide requested products or services.
The seller proposals are usually reviewed, compared, or selected by the evaluation committee using one or a combination of the formal, structured processes.
This allows the buyers evaluation committee to select a seller by weighting the source selection criteria according to the evaluation criteria.
The buyer may compare the sellers proposed cost with an estimated created in-house or with outside assistance.
A screening system eliminates sellers who do not meet the minimum requirements of the source selection criteria.
Past Performance History
The buyer may consider their past history with the prospective sellers in determining which seller to award the procurement to.
Some sellers may be asked to make presentations of their proposals to the buyer so the buyer can select the most appropriate seller.
The objective of negotiations is to obtain a fair and reasonable price and develop a good relationship with the seller.
Some of the negotiation tactics are:
Attacks; If your organization cannot provide the right details for the bid, perhaps it should have not sent a response to our RFP!
Personal insults; If you cannot perform even after 10 months of being in the organization, you should leave!
Good guy/bad guy; one person is helpful to the other side, while the other is difficult to deal with.
Deadline; We need the closure of this task by 4:30 pm today.
Lying; Lying may be hidden. It may also be obvious.
Limited authority; limited authority statements may or may not be true.
Missing man; act as if the decision maker is not available and the current options are better.
Fair and reasonable; being impartial and practical
Delay; delay the point, discussion or decision to a later date.
Extreme demands; these demands are not appropriate for the given contract.
Withdrawal; lessening of interest shown by emotional or physical withdrawal.
Fait accompli; this is a done deal.
Scope, schedule and price are the main items to negotiate in the contract. Other than these, other items include responsibility, authority, applicable law, project management process, payment schedule, among others.