Understanding the Procurement Cycle: From Need Identification to Contract Closure

Quoting Scottie from the original ‘Star Trek’ series: “The RRRRight tool, for the RRRRight Job”.

This means selecting the right procurement tool. Here is how I determine the right one.

If it is material or product, and I only want one evaluation criteria to be used, which is the lowest bidder, I issue a Request for Quote (RFQ) or Request for Tender (RFT).

If I have a procurement that will be seeking a solution from the vendors or suppliers, and I have multiple evaluation criteria, I will use a Request for Proposal (RFP). The purpose of this article is to outline the RFP process.

This is a very condensed process for this article as depicted in the 6 steps including proposed timelines as listed in the following image:

STEP 1

Determine what you need by creating a Statement of Requirements (SOR)

1. Functional Specs

Defines the high-level task, function, system integrations and desired result of the service. Allows suppliers to provide different solutions to the defined expected result.

2. Performance Specs

Describes and defines the result. Should be as detailed as possible. This is what project deliverables and timelines will use for development in the RFP Scope of Work.

3. Technical Specs

Is the physical characteristics or measurements/size of a product/service. It is a description of the purpose, design details, features, colours, material composition and properties. 

1. Functional	2. Performance	3. Technical
EXAMPLE: Janitorial or Cleaning Services – Janitorial and cleaning services for an executive office building.	EXAMPLE: Janitorial and cleaning services for a building that has: Offices Open areas meeting rooms lunchrooms All rooms are to be free of debris, windows clear and streak free, Vacuumed regularly. Board rooms are to be cleaned daily. Rugs will be cleaned twice a year with cleaning solution. Garbage cans will be empty and free of odours. Quality of cleaning services and products shall meet the Government of Alberta Standards of Workmanship.	EXAMPLE: Janitorial and cleaning services for a building that is: 20,000 sq ft Has two floors- 2 sets of stairs 12′ high double pane windows brass handrails on stairs kitchen facilities-18 cu ft fridge with freezer, electric stove with 4 burners and oven, 3 microwaves 1.8 cu size

Incorporate the SOR into the Scope of Work (SOW)

Components of the SOW should include:

1. Introduction – include answers to who, what, where, when, why- not how. The Vendor (or Supplier) should tell you how they will do the work. Write your description in English and at a level a 7th grader would understand; avoid technical jargon. Include what the project work does and does not cover.
2. When and where the services are required. Specific dates of contract start and end date. Example: 3 years with 2 one-year options based on satisfactory performance.
3. Constraints on the Supplier-access to building hours, security, WCB regs.
4. Owner’s responsibility- what you will provide to the supplier during the term of the contract.
5. Reporting requirements- how often, format and to who will it be sent to at your organization.

STEP 2 AND 3

1. Supplier Evaluations/Performance/bid responses

Sample Table

Category Description	Weighting%
Corporate Strength, experience	20
Financial-lowest overall cost	30
Performance/Quality of Service	40
Other-ESG Policies/Environmentally Friendly	10
Total	100

Include a section for your team evaluators to sign off indicating their understanding of their legal obligations for a Conflict-of-Interest Declaration and a Confidentiality – Non-Disclosure statement. This also will identify who will be evaluating the RFP responses. Team members should include procurement, finance, legal, and subject matter experts.

1. Contract type – fixed price per month.
2. Payment Terms – Net 30 or 2% Net 15. The latter saves you money. Check with your AP department first to see if they can process other payment terms.
3. Final Terms Negotiations – what will be negotiated with the short-listed vendor under Contract A. Possible areas may be “Performance milestones and timelines”, and “Contract cancellation options”.
4. Closing date and time of your RFP. I usually include a draft of the proposed contract including all the terms and conditions for the RFP.

The SOR and the SOW should form your Request for Proposal document. These are legal contract obligations. Avoid using ‘must have’. That is a mandatory requirement and if the Supplier or Vendor cannot meet the requirement 100%, then their RFP response is deemed non-compliant and cannot be evaluated. There are also numerous other items that should be included in the SOW such as; Special Conditions, Contractor/Supplier liability, Terms and Conditions of the Bid Process, Regulatory compliance requirements, Standard owner/vendor terms, conditions and legal clauses and Glossary of Terms/Definitions.

STEP 4 

Publish your RFP! – Post on BC Bid  (https://www2.gov.bc.ca/gov/content/bc-procurement-resources/buy-for-government/solicitation-processes-and-templates#solicitation)  (or Alberta Purchasing Connection (APC) (https://purchasing.alberta.ca/search) or send to an approved Vendor list. BC Bid.

STEP 5 

Evaluate the responses by:

1. Checking each vendor’s response for compliance to RFP mandatory requirements.
2. Read each response beginning to end. Then apply the evaluation criteria to each vendor’s response.
3. Evaluate only one vendor at a time then move onto the next one. Do not compare one vendor against another. Your evaluations will reveal the winner(s)
4. Finalize contract terms/final negotiations
5. Summarize your results. 
6. Meet with your evaluation team and develop consensus. 
7. Finalize and prepare results.

STEP 6 

1. Develop Approval for Award memo for sign off.
2. Finalize contract terms and fully execute-obtain signatures.
3.  Issue Contract award notice to successful Vendor. Post award notice on sites and/or send email notice to short-listed vendors. Include debriefing opportunity timelines.

This is a list of the basics. The most important are the SOR and the SOW. Those are the components that will form part of the RFP and contract obligations. 

There are lots of examples of RFPs on the internet. Be careful to only select Canadian ones due to our Competitive Bidding Laws and Trade Agreement obligations for the public sector. BC Bid has templates as well as the Government of New Zealand Procurement. (https://www.procurement.govt.nz/templates/)

Even though we find ourselves facing uncertain economic times ahead, staying the course and sticking to tried-and-true processes that have withstood the test of time and legal challenges will help.

Public Procurement In Canada:

Procurement professionals play a pivotal role in the public procurement world. These experts are well-equipped with the knowledge and skills needed to navigate the intricacies of procurement processes. Whether you’re looking to enhance your procurement acumen through procurement management courses or seeking valuable insights through procurement webinars, the landscape for public procurement offers many opportunities to explore.

The Procurement School encompasses a wide range of activities aimed at achieving the best value for taxpayer money. Procurement service providers work closely with public sector procurement consultants to streamline processes, maintain transparency, and uphold ethical standards. This collaborative effort ensures that the procurement landscape remains fair, competitive, and cost-effective.

Obtaining a procurement certification or a purchasing certificate can be a wise decision for those aspiring to excel in public procurement. These certifications validate your expertise and demonstrate your commitment to professionalism in the procurement arena. Procurement professionals are highly regarded for their ability to make informed decisions that benefit both the public and the government agencies they serve.

Public procurement is not just about acquiring goods and services; it’s about contributing to the well-being of communities and the country. The individuals in this field understand the significance of their roles and strive to uphold the highest standards of ethics and accountability.

Whether you’re a seasoned procurement professional or just starting your journey, the public procurement landscape offers a wealth of opportunities for growth and development. From procurement management courses to ongoing procurement webinars, resources are available to help you stay informed and up-to-date with the ever-evolving world of procurement.

Written by: Helen Doucette

Helen Doucette writes articles for us based on her industry experience and is one of our newest subject matter experts.