There are 5 fundamentals that you need to get right when buying goods (the 5 rights):
- The items themselves are the right ones you need
- At the right time
- In the right place
- To the right standard or quality
- At the right price
However, if you are part of a public sector body or a publicly funded not for profit organisation you also need to take heed of regulatory compliance considerations and laws.
Here are some guidelines to help you to buy goods for your organisation in a structured and clear way:
Develop clear, detailed requirements
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?
- These are just starter questions – you should extend this list to suit the goods you are buying.
Tender Criteria
Decide on the factors that will be used to evaluate the options received from respondants. The criteria could include:
- Compliance requirements: have they provided everything that was requested? Should the supplier be excluded if not?
- Technical criteria: does the proposal meet the technical requirements for the products (goods) in question? Should the supplier be excluded if not?
- 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.
Tender Documentation
Keep documents simple. The purpose of tender documents is simply to get the information you need from the supplier in order to make an informed choice. Documentation should be simple to complete and simple for you to evaluate. We have seen many cases of a client’s time and resources being wasted through over-complicated documentation.
Our recommended document list comprises:
- 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.
The Tender Process to Buy Goods
The purchase of goods is normally a single stage, open process.
You may consider, though, pre-qualifying suppliers – this can be more efficient as it allows 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.
Evaluation and contracting
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.
