This process consists of getting the procurement documents into the hands of sellers, answering the sellers’ questions and the sellers preparing the proposals.
In order to maintain the integrity of the procurement and to make sure all sellers are bidding or proposing on the same work with the same knowledge, the buyer will control who can talk to the prospective sellers and what can be said.
To make sure all the sellers’ questions are answered, the buyer invites the sellers to attend a meeting where they can tour the buyer’s facilities (if relevant to the project) and ask questions about the procurement. The questions and answers are written down and sent to all prospective bidders to make sure all prospective sellers have the same information.
The questions and answers are also added to the procurement documents as addenda.
Getting answers to questions can be important because many procurement documents will include a provision that says by submitting the bid or proposal, the seller warrants that the bid covers all the work. This meeting is also an opportunity for the buyer to discover anything that is missing.
A bidder conference can be the key to making sure the pricing in the seller’s response matches the work that needs to be done and is therefore the lowest price. Bidder conferences benefit both the buyer and seller. Many project managers do not attend these meetings or realize their importance. The exam often asks what things the project manager must watch out for in a bidder conference:
To attract additional sellers, an advertisement may be placed in newspapers, magazines and other places. Note: The U.S. government is required to advertise most of its procurements.
Qualified Seller List (or pre-qualified seller list)
The process of finding prospective sellers can take months. Another option, especially if a buyer purchases the same type of service often, is to find, investigate and check the credentials of prospective sellers in advance. This will speed up the purchase and help make sure the sellers’ qualifications are well researched before they are awarded contracts. This information may be a part of organizational process assets, or can be developed by the project team.
The procurement documents for specific projects would then be sent only to the pre-qualified sellers.
Proposal (or Bid)
This is what the seller’s response to the procurement document is called. A proposal is usually the response to a request for proposal (RFP), a price quote is usually the response to a request for quote (RFQ), and a bid is usually the response to an invitation for bid (IFB). The proposal represents an official offer from the seller. Here is what takes time. Sellers may have many RFPs or IFBs sent to them.
They need time to review them and determine which are worth responding to. If you are looking for the best sellers to be interested, the procurement documents should be as complete and straightforward as possible.
Once the seller decides they will respond, they need to form a team, evaluate the buyer’s needs, attend the bidder conference and create a response. This can sometimes take as long as a month. The buyer’s project manager should plan for this time and the time for the rest of the procurement process in the project schedule.
Request seller responses and select sellers (see next topic) will be included on your exam score sheet as part of Implement the Procurement of Project Resources).
This process consists of receiving and reviewing the proposals and selecting a seller. The evaluation criteria identified in the plan contracting process are used to assess the potential sellers’ ability and willingness to provide the requested products or services. Because they are measurable, the criteria provide a basis for quantitatively evaluating proposals to minimize the influence of personal prejudices.
In this process:
The choice of methods depends on the importance of the procurement, the number of interested sellers and the type of work to be performed.
The sellers’ proposals may be reviewed, compared or selected by any one of the following:
Weighting System Weighting the evaluation criteria according to your priorities, and comparing sellers to choose the one who best meets your criteria.
Independent Estimate Comparing the cost to an estimate created in-house or with outside assistance. This allows the discovery of significant differences between what the buyer and seller intend in the contract statement of work. The buyer must have his or her own estimates to check reasonableness and cannot rely solely on the seller’s cost estimates.
Screening System Eliminating sellers that do not meet minimum requirements of the evaluation criteria.
Past Performance History Looking at the seller’s past history with the buyer.
Presentations In many cases, some of the sellers will be asked to make presentations of their proposals to the buyer so the buyer can pick the most appropriate seller. This is often a formal meeting of the buyer’s and seller’s teams. It provides the seller with an opportunity to present their proposal, team and approach to completing the work. Buyers get a chance to see the team they may hire and ask questions to assess competency, knowledge and ability.
Presentations are used most often when a cost reimbursable contract is used, but they can be used in other situations (there is more to assess, and how the seller is going to do the work is of prime importance).
Pass Your PMP Exam At First Try HERE!