Scalability of Interactive Procurement Processes

Interactive procurement processes open up the channels of communication between supplier and buyer. They enable both sides to get a better understanding of the requirements and the solution that allows better deals to be brokered, bigger pies to be baked if you like. They also allow the gap between what the customer thinks they are getting and what the supplier is able to give to be narrowed. But often these processes are seen as complex and expensive exercises that require extended periods to execute. What if they could be adapted to allow any size procurement benefit from improved communication between the buyer and the seller.

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The real cost of low integrity procurement

Last year I noted two significant cases, amongst many others, of poor procurement practices resulting court cases and the payment of damages. Envoy Relocation Services successfully sued the Canadian Government for unfair treatment during successive procurement processes. The court awarded Envoy $30 million in lost profits and also directed the Government to pay Envoys $10 million legal costs; in another case, a major retailer sued a Central NSW coast council in Australia over a faulty process, resulting in damages of around $2 million being awarded to the retailer. The council later appealed and won, but the court, delays and internal staff costs must have been significant. While these commercial horror stories will capture the headlines and provide great examples for frightening clients during probity briefings, are the fines the only damage suffered by organisations through poor procurement practices resulting in low integrity procurement.

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Qld State Government – New Tender and Contract Templates

As a key component of their goal of making it easier and more efficient for suppliers and agencies  to do business with each other, in February this year the Procurement Transformation Division launched a new set of goods and services procurement invitation and contractual frameworks for use by all Government Agencies. If you are a supplier to or a buyer for the Queensland State Government  and you haven't familiarised yourself with them yet, then it is high time you did. So what is new and what do we need to know about this new framework?

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What is so bad about single sourcing?

Proponents of single sourcing will identify value for money in the close working relationship, saved time through removal of ramp up requirements and extensive knowledge of the organisation. So why do procurement professionals frown upon single sourcing to the point of implementing policies and extended approvals in an attempt to deter it?

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Weightings or no weightings, that is the question

Establishing a detailed and concise set of response criteria not only facilitates the extraction of key information in vendors responses, helping to align their solution with the actual requirements, it also allows easier evaluation and scoring of those responses, but not all criteria has equal importance. This is where applying a method of weighting the criteria provides the ability to define which criterion will have the greatest benefit to delivering the requirement and is therefore more important. But the question is, should the weighting be published as part of the invitation for offer, or should it be for internal information only?

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Establish and Maintain Competitive Tension in Procurement Processes

Establishing and maintaining competitive tension in your procurement processes is the easiest and most effective method of driving value for money outcomes. So what is competitive tension? The most elegant description I have seen is that a proponent perceives a creditable threat to their ability to win the bid. The three key words are "perceives" and "credible threat".

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Contractors and Commercial in Confidence

What risks are involved and how can you manage contractors and commercial in confidence issues when you need to bring extra capacity into your organisation. Contractors, contracted resources, consultants, there are many names for the warm body we bring in to the business under contract to provide extra or specialist capacity. For this blog I'll just refer to them as "contractors".

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