Getting what you want not wanting what you get

Procurement (the process of buying goods and services) goes hand in hand with project management. Every procurement project has to be project manage and a lot of projects require some sort of procurement.

Every year New Zealand organisations do billions of dollars worth of procurement. From what I see, most of it is done really poorly.

What does this mean?

In most cases, the buyer is not getting the optimal value for money.

So what? Well, in a lot of cases, that is tax payer or rate payer’s money – maybe your money.

I am constantly appalled at the quality of RFPs and tenders I see.

When you are running an RFP/Tender, your key job is to:

  • attract the best suppliers
  • choose the right one (or in the case of a panel, the right ones)
  • do this as efficiently as possible.

The three questions a supplier should ask themselves before they respond to an RFP/Tender are:

  • What will it cost to respond?
  • What are our odds of success?
  • What do we get if we win?

The other one I ask is:

  • Are the RFP/Tender documents well written?

Responding to RFPs/Tenders is an expensive and time consuming process. So I will only respond if it stacks up and the documents are well written. Why? If they can’t write a good RFP/Tender document then I have little or no faith they will choose the right supplier (me).

So I might as well go and put my hard-earned money on a horse, or go and work for someone that knows what they are doing. This ultimately means buyers end up with the dregs in terms of suppliers and/or paying too much.

I have a number of pet hates in this area. Here are some of the reasons why Request for Proposals (RFPs) or tenders I read end up in the bin, and what you can do about it.

Pet hates

What can we do about it?
  • Cost outweighs the rewards
  •  Use the right approach to market
  • Unclear or insensitive requirements
  • Get expert advice
  • Be clear with what you want
  • Faceless, no name, non-contactable
  • Be transparent and contactable
  • Too many questions and they don’t align with the evaluation criteria
  • Only use questions that directly relate to the criteria and as few as possible
  • No concept of what it is like to respond to an RFP/Tender
  • Try doing a few in your spare time

 

Old Paradigm

New Paradigm
  • Waste our time with dumb processes and dumb questions
  •  Value the supplier’s time
  • Rude, bullying , one-sided, and arrogant
  •  Be courteous, fair and balanced
  • Too price focused
  • Do a proper needs and wants analysis and ranking exercise with key stakeholders to correctly weight price (Part of the Right Track Workshop)

So have a think about this and have a go at shifting.

If you are prepared to change and you want help, give us a call on (04) 914-2873

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