Procurement refers to the process of acquiring goods, services, or works from an external source, usually through a formal purchasing process. This can involve activities such as identifying suppliers, requesting and evaluating bids or proposals, negotiating contracts, and managing relationships with vendors. Procurement can be carried out by organisations in the public or private sector, and it is an important function for ensuring that the organisation has the resources it needs to carry out its operations effectively. 

Effective procurement can help organisations to obtain goods and services at competitive prices, reduce costs, and manage risks associated with the acquisition process.

The key steps in procurement include:

• Identifying the need: The first step is to identify the need for goods, services or works, and determine the requirements for these.
• Developing a procurement plan: Based on the identified need, a procurement plan is developed which outlines the procurement objectives, timelines, budget, and evaluation criteria.
• Conducting market research: This involves researching the market to identify potential suppliers who can provide the required goods, services or works.
• Preparing and issuing a Request for Proposal (RFP) or Request for Quotation (RFQ): The RFP or RFQ is a document that outlines the organisation’s requirements and invites potential suppliers to submit proposals or quotes.
• Evaluating bids and proposals: The organisation evaluates the bids or proposals received from potential suppliers based on the evaluation criteria outlined in the RFP/RFQ.
• Negotiating contracts: The organisation negotiates with the selected supplier(s) to finalise the terms of the contract, including the scope of work, price, payment terms, delivery timelines, warranties, and other terms and conditions.
• Contract management: Once the contract is signed, the organization manages the supplier relationship, monitors performance, and ensures compliance with the terms and conditions of the contract.
• Closing the procurement process: At the end of the procurement process, the organisation completes all necessary paperwork and documentation and closes out the procurement process.
• Overall, effective procurement requires careful planning, clear communication, and attention to detail throughout the entire process. 

1. Business has an Idea/Opportunity/Obligation
2. Business Creates a Request for Quotation “RFQ” or a Statement of Work “SOW”
3. Procurement Determines Suppliers to include in the Competitive Tender process
4. Procurement Sends Tender Documents to Suppliers
5. Suppliers Receive Tender Documents
6. Suppliers Seek any clarifications
7. Business/Procurement may update Tender Documents
8. Suppliers Provide Quotations
9. Procurement Tracks status of responses
10. Procurement Closes the Tender
11. Business/Procurement review responses
12. Business/Procurement and Suppliers exchange questions, answers, ancillary documents
13. Business/Procurement selects successful Supplier
14. Business/Procurement notifies successful & unsuccessful Suppliers
15. Procurement issue Purchase Order to Supplier
16. Procurement Upload purchase/services documentation for signature
17. Business obtains goods or services
18. Supplier Paid

For further information on the procurement cycle please refer to the Chartered Institute of Procurement & Supply Website. 

1. Handle more tenders with the same people. Therefore lower internal costs.
2. Your suppliers will know they are competing and offer the same terms as new customers.
3. Shorten the procurement cycle to get your goods and services faster.
4. Include more suppliers to get better prices, delivery times and T&Cs
5. Reduce errors and miscommunications.
6. Meet compliance and audit standards.
7. All members of the procurement team see the same information
8. Redundancy when team members are absent or resign.
9. Real time dashboards to proactively manage the procurement process
10. Data downloads to identify best and worst performing suppliers
11. Seamlessly work across regions and timezones. 

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Summary 

In today’s fast-paced and highly competitive business environment, time and cost savings are more important than ever. Competitive tendering is a procurement process that can help organisations to achieve both. By soliciting bids from multiple suppliers and selecting the supplier that offers the best value for money, organisations save money compared to selecting a supplier based on a single quote.

Competitive tendering encourages suppliers to propose innovative and efficient solutions that can lead to significant time savings and enable organisations to achieve their objectives more quickly, giving them a competitive advantage in their industry.

By embracing competitive tendering, organisations can not only achieve cost and time savings but also access new and creative solutions to complex problems, drive innovation, and promote transparency and fairness in the procurement process. Overall, competitive tendering is a powerful tool that can help organisations to optimise their resources, improve their bottom line, and stay ahead of the competition.

Explanation

Competitive tendering is a procurement process used by organisations to solicit bids from multiple vendors or suppliers for a particular project, contract, or purchase. It is a formal, transparent, and competitive bidding process that is often used in government procurement, construction projects, and other industries where contracts are awarded based on competitive bidding.

In competitive tendering, the organisation that is looking to purchase goods or services creates a detailed request for proposal (RFP) or invitation to tender (ITT) that outlines the requirements for the project or contract. This document is then distributed to potential suppliers, who are invited to submit their proposals.

Once the proposals have been received, the organisation evaluates them based on a set of criteria that are outlined in the RFP or ITT. The evaluation process may include factors such as price, quality, experience, technical capabilities, and delivery time.

The organisation then selects the supplier that offers the best value for money and meets all the requirements of the RFP or ITT. The selected supplier is then awarded the contract or project, and work can begin.

Overall, competitive tendering helps to ensure that organisations get the best value for money and that suppliers are selected based on their ability to meet the organisation’s requirements. It also helps to promote transparency and fairness in the procurement process.  

• Better value for money: By inviting multiple suppliers to bid, organisations can compare prices and select the supplier that offers the best value for money.
• Increased competition: Competitive tendering encourages more suppliers to participate, which can lead to increased competition and better quality proposals.
• Transparency and fairness: The process of competitive tendering is transparent, open, and fair, which helps to promote trust and confidence in the procurement process.
• Improved supplier selection: By evaluating proposals based on a set of criteria, organisations can ensure that the selected supplier is capable of meeting their requirements and delivering high-quality goods or services.
• Mitigation of risk: Competitive tendering reduces the risk of selecting an unsuitable supplier, as multiple suppliers are evaluated based on their capabilities, experience, and technical expertise.
• Standardisation: Competitive tendering encourages standardisation in the procurement process, which can help to simplify the process and reduce costs over time.
• Stimulating innovation: By inviting multiple suppliers to bid, organisations can encourage innovation and creativity in the proposals, leading to new and innovative solutions.  

Summary

Innovation is crucial for organisations that want to stay ahead of the competition and meet the ever-changing needs of their customers. Innovation leads to improved quality, increased efficiency, and ultimately better outcomes for both organisations and their customers.

Competitive tendering stimulates innovation by creating a competitive environment that encourages suppliers to propose new and innovative ideas, collaborate with organisations, and invest in research and development. Competitive tendering provides an opportunity to attract new suppliers to the market and create incentives for existing suppliers to invest in innovation.

Competitive tendering can help organisations find new and creative solutions to complex problems by challenging suppliers to think differently.

Explanation

Competitive tendering stimulates innovation in several ways:

1. Encouraging suppliers to propose new and innovative ideas: When suppliers are aware that they are competing against other suppliers, they may be more likely to propose new and innovative ideas to differentiate themselves and stand out from the competition.
2. Promoting collaboration between suppliers and organisations: In some cases, the procurement process may involve a collaborative approach, where suppliers work together with the organisation to develop innovative solutions that meet their needs.
3. Encouraging new entrants to the market: Competitive tendering can attract new suppliers to the market who may have innovative solutions to offer. This increased competition can drive innovation and new ideas.
4. Creating incentives for suppliers to invest in research and development: Suppliers may be more likely to invest in research and development to create new and innovative products or services if they know that they will have the opportunity to showcase these ideas in the competitive tendering process