Buying goods can be deceptive. On the one hand, it is relatively easy to buy goods. You source the goods, you pay for them and you hopefully get the right items, at the right time, in the right place, at the right quality and price (the five rights). This is however a fairly shallow process and lacks strategy. While it may well suit occasional, low-value purchasing, the more an organisation spends, the less appropriate this is as a process.
Organisations like public sector bodies or bodies in receipt of public funding like publicly funded not for profit organisations also have regulatory compliance considerations. This means that the often need to comply with procurement and other regulation and laws when engaging with potential suppliers of goods.
The following considerations will help your organisation buy goods in a structured and clear way.
Develop clear, detailed requirements
Clearly define the specifications, quantity, quality, and any other relevant details for the goods you are procuring. Make sure that all potential bidders understand the requirements to ensure fair competition. Some things you may factor in include:
- Does the product have to be a specific colour?
- Does the product have to be a minimum, exact or maximum size?
- Does the product have to be a minimum, exact or maximum weight?
- Does the product have to be compatible with any other item?
- Does the product have to fit in a specific space?
- Does the product have to produce a certain level of output per period of time?
- Does the product have a minimum time period that it has to last?
The above are some of the obvious questions. There are others that should always be asked too. Buyers should take the time to build this list out further and add / amend it as required for different types of goods.
Determine the criteria that will be used to evaluate the different options received from possible suppliers. Normally the criteria break down as follows:
- Compliance requirements – have they provided everything that was requested? This may or may not result in exclusion from the process.
- Technical criteria – does the proposal meet the technical requirements for the products (goods) in question? This may or may not result in exclusion from the process.
- Selection criteria – does the organisation meet your requirements for suppliers? This normally means that they provide evidence they are solvent and financially robust, compliant with tax and employment law, hold insurances and have delivered similar requirements previously.
- Award criteria – this will include things like how they will deliver the requirements, a timeline, details on service management if relevant, risk & issue management, communications with the buyer and the pricing / commercial proposition.
Transparency and Fairness
It is important to run any tender process with the end in mind. If you want a successful outcome, suppliers have to have faith in the integrity of the tender process. Being open, clear in the documents published and treating all suppliers equally in the process is central to this. Conflicts of interest should be managed rigorously and bias should always be avoided.
Put time and effort into thinking about what the documents are for. They are neither a test, an exam nor the basis for splitting an atom. KEEP IT SIMPLE! The documents used should be no more complicated than they need to be.
As already mentioned. KEEP THE END OBJECTIVE IN MIND.
You should seek the information you need to make an informed decision. That is what tender documents are meant to facilitate. In our view, your documentation will likely comprise the following documents:
- A request for tender document (RFT) containing information on your organisation, your rules for the tender process and details on what you want from your target suppliers
- A contract to govern what you buy. It is worth noting, for goods supply you are often a receiver of terms rather than a dictator of terms but a contract of some kind will be a feature.
- A response document. We recommend using standard documents as these make comparisons easier. Sometimes the technical submission, qualitative submission and commercial submission are separate documents.
Tender process to buy goods
The next decision point is deciding what process is going to be used to buy goods. For goods, it’s normally a single stage, open process. However, sometimes, pre-qualifying suppliers can be efficient and allow an organisation focus on the suppliers most likely to meet their requirements. Where this is done, the technical criteria and selection criteria are often used to shortlist the best suppliers.
The tender process is normally sent out via an open platform if it is public sector. For the private sector, a list of prospective suppliers is developed and they are contacted with a view to obtaining responses from them.
The documents and portals are normally used to communicate the process and the deadline for the bid submission.
Closing out the process to buy goods
The evaluators review the tender submissions against the criteria and obtain whatever clarifications they need to make their decision. Once that is done, contracts are agreed and the contracts are awarded. Suppliers are given feedback on their proposals. Detailed records should be maintained on the end to end process for auditors and other interested stakeholders.
Remember that the specific requirements of a tender process for goods can vary based on factors such as the nature of the goods, the industry, and local regulations. It’s important to tailor your approach accordingly while adhering to best practices for transparency, fairness, and efficiency.