The most common input documents in the procurement industry as mentioned by Garrett in his book are, request for proposal (RFP), request for tender (RFT), request for quotation (RFQ), invitation to bid (ITB), invitation for bids (IFB), and invitation for negotiations (IFN), while, the output documents are the proposals and the bids. For the purpose of this essay I am going to focus on the RFP, ITB, and RFQ as input documents on the buyers step three, solicitation. On the output documents I also want to add quotes, which were not mentioned by the author but in my personal experience they are invaluable when procuring goods and services. Additionally, I want to talk about the risk management aspect of the RFP from the buyers and sellers …show more content…
In response to your RFQ your prospective vendors provide you quotes (output document for RFQ). After receiving all the quotes, you choose the vendor with lowest price because the selection is cost driven. RFQ and quotes are most of the time informal and there is no binding associated with these documents.
In the other hand, when you do an ITB you go to a formal competitive solicitation. I found on my research that companies and government agencies have a dollar amount threshold to decide between a RFQ and ITB. The source selection decision of the commodities or services to be procured are price driven; therefore, the lowest bidder that meets the minimum criteria gets the contract. ITBs go in depth details to ensure that there is no deviation from the requirements. A business case I found online; University of Florida publishes an ITB for a janitorial contract for the new School of Medicine in Orlando Florida. The statement of work is very specific on what, how and when everything needs to be done. The response for the ITB are bids from potential vendors. This document is useful when the cost uncertainty is low.
The RFPs are used when there is a level of complexity associated with a requested service or goods. Garrett mentions on Chapter 7 that is “generally used when nonfinancial considerations, such as technical skills or approach, are paramount.”
RFPs allow from early stages of the procurement that the buyer and the seller are engaged in
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Pricing strategy: When bidding for the government contracts, the A&D companies have to assess and anticipate how other competitors will respond to the Request for Proposal (RFP), which contains the details of the technical and non-technical requirements. In the lowest price, technically acceptable or LPTA contract, companies bid as lowest price as possible while maintaining the acceptable profit margin threshold for their operations. In order to determine the lowest price point that qualifies a company to win the contract and produces the highest profit as possible at the same time, not only does a company has to know its own profitable price point, it has to also anticipating how low other companies will bid the contract. For example, Company A has been trying to break into cybersecurity space in the past few years. However, it hasn’t been successfully in any of the previous bids. Contract XYZ is a large cybersecurity contract that will allow Company A to start gaining recognition as a prime
Peter Bremner, general manager for Northern Drilling Inc. (Northern) was looking over the RFP for an upcoming exploration contract for one of Canada’s largest mining companies, Mond Nickel Company (Mond). The RFP consisted of 2 projects, a Deep/Complex job (3,000m holes) and an Intermediate/Routine job (1,800m holes). The proposal was due in 3 weeks and Peter had to make a decision whether to send a proposal on either Deep or Intermediate jobs, both jobs, or whether to bid at all.
A basic definition for the procurement is “the way the building is realised” and “involves assembling and organising the skills and services of a team of construction professionals”. (the Construction Round Table, 1995). More precisely, the construction industry describes procurement as “a system that establishes the roles and relationships which make up a project organisation”; hence the overall organisation and communication structure for the management, administration and control of a project is established by the procurement system. (D.C.H Coles, 2010)
The Truth in Negotiations Act was passed on December 1, 1962 requiring government contractors to submit cost or pricing data if the procurement met specific requirements in order to establish that the offer is fair and reasonable. The history of The Truth in Negotiations Act will set the stage for its significance in the twenty-first century. Prior to World War II, the United States government conducted its bidding process for procurement in an open bid environment. What was required for a bid was a complete description of the requirement, two or more suppliers capable and willing to complete the requirement, a selection based on price competition and sufficient time to prepare a complete statement of the government’s needs and terms.
10. Prepare pricing and scoring schedules and have project team members meet to discuss the scores and agree. Also, confirm the strengths and weaknesses of each proposal. No more than three vendors should still be involved in this process.
Ruhling can proceed with the bidding by meeting all specific criteria established to determine which best process will offer the lowest product pricing on motors products that meet the technical requirements, financial and operational capacity to perform on the contract, product performance specifications, and product warranties
Part 15 of the Federal Acquisition Regulations (FAR) “prescribes [the] policies and procedures governing competitive and noncompetitive negotiated acquisitions.” One component of negotiated acquisitions that occurs early in the acquisition process is the solicitation of proposals. FAR 15.201, titled, “Exchanges with Industry before Receipt of Proposals,” regulates the type and manner of communications, also sometimes referred to as exchanges, which can – and cannot – take place between the Government and potential suppliers prior to the receipt of a potential supplier’s proposal and the subsequent award of a contract.
Simultaneously I would contact the other vendors (if any, depending on the Single source reason) and find out if they are interested in participate on the solicitation. Also, find out what was the reason/s of them not biding or not participate.
I had tried to incorporate most of the RFI document content, but there are a number of new clauses and content statements that are related to this type of procurement transaction which have not been used before. A pair of fresh eyes are needed. plus, I would appreciated it if you could review the new clauses and statements (Please see the purple text enclosed). to ensure they are clear and concise.
Procurement intends to explore supply market opportunities and to implement resourcing strategies that deliver the best possible supply outcome to the organization, its stakeholders and clients (Kidd, 2005). Therefore, construction procurement exists to purchase a construction project as requirement of firms or organizational entities to achieve its goals. However, the choice to use external resources is the part of firms’ decision-making
* Identify the number of vendors that you will select to provide the services to be
To implement an RFP policy that is effective, it will need to be a repeatable, well-defined process. Following the analysis of the current policies surrounding purchasing, an outline proposing a process based on the
In the modern businesses, selecting the qualified suppliers becomes more and more important activities for the companies. Lots of companies use the method of competitive bidding, which is commonly used for selecting suppliers. Transparent procurement method in which bids from competing contractors, suppliers, or vendors are invited by openly advertising the scope, specifications, and terms and conditions of the proposed contract as well as the criteria by which the bids will be evaluated . In this essay, I will try to explain the reason and the advantage of the companies using competitive bidding.
OJEU Regulations provide four choices of procurement procedure: open, restricted, competitive dialogue and negotiated; following this, public authorities have an option to choose between the open and restricted procedures (OGC, 2008). WHG has a pre-qualification requirement for contractors with experience in working with housing associations and building affordable housing units. In
Procurement in general industry is the term given to the process/structure of purchasing goods or services. Within the construction and built environment industry, there are six main different routes by which the design and construction of a project can be procured. The selected method depends on the nature of the project and other factors including client requirements and timescales. The method selected should meet these specific needs the most efficiently.