Tendering and procurement best practice
Tendering and procurement can be complicated, write the team at SIGNMANAGER; particularly if you are working with a product or service you haven’t had any experience with. The below list of best practices for tendering and procurement will hopefully be helpful when tackling your next project.
Before you do anything, you need to determine what you want. We know this sounds simple and obvious, but the first step of any tendering project needs to be a thorough research phase. Investing time now will save you time later.
Considerations during the research phase
- Speak to stakeholders: Speak to all the stakeholders, both internally and externally, who are involved and affected by the project. If you are unsure of who the stakeholders are, ask each department if the service/product you are buying affects them. You may be surprised to find a few key stakeholders that have needs you haven’t considered. Before you set out your scope of works, it is important to have an understanding of their needs. It is always good to get everyone on the same page before you invest time, resources and money.
- What can you spend? There is no point looking at options you cannot afford; it is a waste of time and is frustrating for everyone involved. Be sure to get a rough estimate of the budget you have to spend before you go any further.
- Review competitors: Where relevant, consider taking a look at what your competitors are doing. Can you learn something from what they have done right or wrong?
- Talk to industry experts: If your project is complicated, costly, high risk or large, or you haven’t had any experience with the product or service, it may be worth having a chat to an industry expert. Getting advice from the relevant industry association is a good place to start.
- Google it: These days the internet is a wealth of information. So, head online, visit forums and read white papers. You may find reassurance that you are on the right track or a new solution.
- Talk to your peers: Your peers are a great source of information, as they have most likely faced a similar challenge. Developing a network with your peers can create an ongoing source of support for you. They will also be a great sounding board to brainstorm future ideas.
- New technologies: Where relevant, consider if there is a new technology you could use. Possibly something environmentally friendly or time-saving. Even if you don’t plan to upgrade at this time, it is still good to know what’s trending in your industry.
DEFINING A SCOPE OF WORKS
Once the research phase is complete, it is time to narrow down your options and determine the scope of works. Developing an extensive scope of works document that covers specifications, planning and contingencies is priceless. Not only will this keep your project on track, but it will also save your internal resources time and money.
Considerations when determining the scope of works
- Prototyping: Where relevant, it may be useful to build a prototype or create a three-dimensional model or virtual tour animation. This can be helpful when you are trying to decide between two options or if you need to get stakeholders to understand a difficult concept.
- Test/experiment: If it’s relevant, it is a good idea to experiment and test concepts. Again, get your stakeholders involved.
- Finalise specifications: Once you have finished prototyping and testing, it’s time to finalise your specifications. It is important to ensure you specify the complete end-to-end service required. Ensure you specify a brand and product for each part of the specification. Leaving general terms in a specification will lead to failure points in the quality of the product/service you are buying.
- Create a plan: Now that you know what you want, it is time to create a plan. At this point, it is a good idea to set out your expectations, assign tasks and responsibilities, plan a desired timeframe and consider the criteria you will use to measure the success of the project.
- Plan for contingencies: While creating your plan it may be beneficial to factor in contingences and plan for any potential setbacks.
- The scope of works document: Take the information you have gathered and develop a scope of works document. Creating an extensive document will reduce stress and keep your project on track. Keep your budget in mind when compiling the scope of works and, if relevant, include your budget.
- Eliminate areas of risk: Identify the key points of possible failure of the project. Ensure you understand legal, statutory and occupational health and safety (OH&S) compliance requirements for the project and that you have these requirements covered in your scope.
Armed with your scope of works document, you can now tender the project. But, before you do, it is important to consider how you can ensure the procurement process will be efficient and work for you, your team and the business.
Considerations prior to procurement
- Local or overseas: Have you considered all your procurement options – including staying local or going overseas? You may find savings in bulk procurement, or you may find it cost-effective to use localised suppliers, cutting out freight costs.
- Time management: When deciding which team member will be the project manager, consider if they have enough time to adequately manage the project. If this is a large-scale or time-consuming project, consider whether hiring an external consultancy will free up your project manager’s time and if they will be more efficient in managing the project overall rather than micro-managing. No doubt your team is already busy, so is managing this project core business, or more of a distraction from your goals?
- Internal capabilities: If this is a difficult project or it involves products your team hasn’t had experience with, will you have the internal capabilities and knowledge to effectively manage and deal with issues that arise? If you feel you need extra help, again consider if a specialised consultant could add value to the project.
- Project management systems: Large-scale projects may benefit from incorporating technology. You may find it easier to keep track of a project’s progress, resources and assets through using an online management system. Before procurement be sure to consider if your project could benefit from incorporating technology.
Considerations during procurement
- Apples versus oranges: Make sure you stick to your scope of works document. This will ensure all parties tender against the same specifications and you receive competitive pricing.
- Communication is key: Be sure to keep all stakeholders updated throughout the entire project. Effective communication is the key to a project running smoothly. Consider sending a weekly wrap-up email, or schedule a fortnightly or monthly meeting. If you decide to schedule a regular meeting, be sure to specify attendance in the planning section of the scope of works.
- Be available: During the tendering and procurement process be sure that a team member is available to answer questions and clarify issues brought up by tenderers and the winning contractor. They will be looking to do the best thing by you, so it is important you can give them immediate answers to keep the project on track.
The best practices outlined in this article share a common theme – spend time now, to save time later. To ensure your next tendering and procurement project is a success, take on board our final thoughts:
- Engage in a thorough research phrase – have a clear idea of what you want
- Invest time in planning to develop an extensive scope of works document
- Have the best team in place, both inside and out, to manage the project, and
- Keep everyone in the loop – communication is key.