I’m working on a Management question and need guidance to help me study.
Please respond to both POST1: and POST2: in at least 250 words each.
Original Post for this week:
- Why is it important to review the market for new suppliers, or options, to fulfill a procurement need?
- What role does legal and regulatory compliance play in project procurement?
- What criteria are used to evaluate bids?
- How are these criteria defined? E.g., others’ input, research, etc.
According to Goswami & Wettstein (2016), the importance of reviewing the market for the new options or suppliers when fulfilling a procurement need is this assessment may uncover obtainable options or suppliers in the market not first shown. These new options or suppliers may provide more quality supplies at further economical or reduced prices or possibly offer improved services for example more well-timed delivery options in comparison to existing suppliers. These more beneficial terms may reduce costs of setups or to annual spending budgets, refining proficiency which results in better operations. Overall, the review may reveal suppliers more willing to negotiate offers of discounts on bulk purchases or additional services (Goswami & Wettstein, 2016).
The legal and regulatory compliance represents a significant role in procurement as they ensure that no rights of either party to the procurement process are violated. Legal and regulatory compliance certifies transparency in the entire procurement process from bidding to granting contracts (PMI, 2017).
With consideration of these legal and regulatory compliance requirements, and existing market price the procurement committee sets a criteria of clearly defined (minimal) requirements and rules for selection acceptance to ensure that the bidding process is in line with the rules (Goswami & Wettstein, 2016). The criteria used during the evaluation of bids involve confirming compliance of bidders with set technical requests and comparison of proposed price to that of bids (Goswami & Wettstein, 2016). The proposal that has the lowest submission price and technically fulfills technical requirements is usually the one recommended for contract awarding.
Project Management Institute. (2017). “A guide to the project management body of knowledge” (PMBOK® Guide) (6th ed.). Newton Square, PA: PMI Publications
Goswami, M. P., & Wettstein, D. (2016). Rational bidding in a procurement auction with subjective evaluations. “International Journal of Industrial Organization”, 44, 60–67. https://doi.org/10.1016/j.ijindorg.2015.10.001
Market Review in Procurement
It is essential to review the market for new suppliers or to determine your options on supplies. Rushing into a decision can only increase the risk and costs. It can also play a significant role in reducing costs and time, as well as the quality of the product(s) (Grondys, Kott, Sukiennik, & Seroka-Stolka, 2015).
Legal and regulatory compliance plays a critical role in project procurement. Project Procurement needs to be aware of how laws and the breach of such laws can not only delay your process but can be costly in fines and penalties should they be broken. There are all kinds of regulatory requirements in place in the United States, as well as all other countries. Some can be social laws, environmental laws, or even economic laws (Legal Risk, n.d.). Not staying within the regulatory requirements can be dangerous.
All types of criteria can be used based on the goals of the organization. If you are a technical company, you may think that technical expertise or approach may be one. Just a simple delivery date could be one. Others may include:
- Specific relevant experience
- Key staff’s qualifications
- Management or financial stability and or/experience
- Product costs
Evaluation criteria are particular standards in which a bid is reviewed or evaluated (Cholopray, Junius, & Cholopray, 2019). They include mandatory criteria, weighted criteria, and weights with mandatory elements. Mandatory criteria are rated as pass or fail or comply to non-comply. Therefore, a specific requirement must be met. Weighted criteria are measured in terms of responsiveness degree. Specific categories within the project are weighted higher or lower than others. Weighted criteria with mandatory elements are a combination of the previous two evaluated (Cholopray, Junius, & Cholopray, 2019).
Cholopray, A. K. D., Junius, J. G., & Cholopray, A. (2019, March 26). The Bid Evaluation Process. Retrieved February 26, 2020, from https://procurementclassroom.com/the-bid-evaluatio…
Grondys, K., Kott, I., Sukiennik, K., & Seroka-Stolka, O. (2015). The Importance of Supplier Selection Process in Business Relationships. The Publications of the MultiScience – XXIX. MicroCAD International Scientific Conference. doi: 10.26649/musci.2015.036
Legal Risk. (n.d.). Retrieved February 26, 2020, from https://www.cips.org/en/knowledge/procurement-topi…
Project Management Institute (PMI). (2017). A guide to the project management body of knowledge (PMBOK® Guide) (6th ed.). Newton Square, PA: PMI Publications.