Economic operators submit both selection (qualification) information and tenders at the same time in response to the contracting authority’s advertised require-ments. A business's procurement, or purchasing, department is responsible for sourcing and purchasing inventory while building and maintaining relationships with suppliers. The duty of Procurement to promote both product and price competition requires that specifications be as non-restrictive as practicable, consistent with satisfying … Procurement is central to the government service delivery system, and promotes aims which are, arguably, secondary to the primary aim of procurement such as using procurement to promote social, industrial or environmental policies (Cane, 2007). The more specific a request, the less likely each supplier is to be able to fulfill it. Traditional procurement has focused upon value for money considerations. Specifying Composition in Procurement Requests for proposal can be as general or specific as desired. You can view samples of our professional work here. It is important, therefore, that all expectations are captured in the specification. What are the advantages of procurement planning. Organisations must comply with the Sustainable Procurement Duty set out in the Procurement Reform (Scotland) Act 2014. take into account accessibility criteria for persons with disabilities. © 2000-2020 Bayt.com, Inc. All Rights Reserved. An RFP contains a detailed description of the goods or services that a buyer seeks, and it allows suppliers to provide price quotes for the materials and labor required before a purchase contract is drafted. Descriptions should be drafted to address the City's needs, and the costs of procuring, operating and maintaining the supplies and services. Procurement function should be INVOLVED as one of the function in the preparation of the specification of the items to be ordered, and not to leave marketing or engineering people to decide on the specification and procurement to proceed on other steps like sourcing. For goods that are made to order, specifying the required composition can help suppliers to determine their exact costs, allowing them to calculate their prices more precisely. Advantages of procurement planning are: ensures that procurement cycle are followed and each person in the cycle gets to know his or her task in delivering the product, it provides time frame indicating when the procurement process should be initiated; it is also used for soliciting/lobbying for funds for donors. This can save both time and resources for the buyer and any potential suppliers who cannot meet the buyer's precise specifications. This can allow a company to more easily locate the ideal suppliers who are able to deliver exactly what they require. However, procurement optimization can produce a host of benefits and add tremendous value to your organization as a whole. or log in As a small-business owner, Ingram regularly confronts modern issues in management, marketing, finance and business law. One of the first points of contact between a procurement employee and a potential supplier is the request for proposal. The main advantages are reduced costs and the ability to benefit from specialist expertise. Get Fresh Updates On your job applications, and stay connected. The ordering school/department has the authority and responsibility for specifications. Public Procurement Practice SPECIFICATIONS Element 1.2a: Advantages of performance specifications n Provide opportunity for innovation; allow offerors to put forth unique solutions to defined needs n Allow end user to benefit from the latest products and technologies n Corrective action may be applied if service levels are not achieved Element 1.2b: Disadvantages of performance specifications function of an organization. 13th Aug 2018 Construction Reference this Disclaimer: This work has been submitted by a university student. DoF # of demands Dealing with Advantage (2) Natural World Products v Arc 21 [2007] •Bent over backwards to be fair to others •And in so doing was unfair to the advantaged bidder Allpay Limited v NI Housing Executive [2015] •Not illegitimate for a bidder to use its advantage in the market for its own benefit in a procurement. Specification is necessary to specify the equipment tools and plants to be engaged for a work and thus enables to procure them beforehand. the procurement process to maintain cer-tain levels of consistency and hence, quality and overall value. What are the advantages & disadvantages of Bookkeeping? Rather than requesting a general quote for printing ink, for example, a print shop might specify that it requires printing ink made from soy-based pigments. The importance of Specification within the procurement places. Overview of procurement need specification and the organisation of supply chain processes to fulfil customers' needs in South Africa July 2013 Corporate Board: Role 9(2):12-21 The purchasing function typically acts as the interface between the customer (internal or external) and suppliers. The more specific the details of an RFP, the greater the advantages that can be realized. The other advantage of the standardization is that it has a positive effect in the formation of strategic alliances between different organizations; it is quite clear that the merger of companies concerning the matters of standardization is beneficial in that the outcome of synergy can help with the reduction of costs as well as increasing profits of business. When sending RFPs, specifying the exact composition of the goods a buyer seeks can provide a range of advantages to both the buyer and potential suppliers. The factors and determinants of procurement effectiveness can be de-rived from the objectives and means of the corporate and procurement strategies. Numerous organizations are spooky due to the disorganization. Procurement Optimization Can Lead to Significant Savings. Knowing exactly what a buyer requires, allows a supplier to more accurately match the request with specific products and materials. In most capitalistic countries, these benefits are almost taken as read, meaning any argument is usually about the scope and procedure of public sector procurement. The specification is equally binding on both the buying organisation and the supplier — Omissions, incorrect information or imprecision in a specification can be cited by the supplier in any dispute with the buyer. 1. This, in turn, can provide greater insight for your purchasing decisions. Procurement is often a misunderstood and disregarded (unfortunately!) The disadvantages are: it is bureaucratic and it has been know to be the causes of delays in delivering products and services. ilI hope this answers your questions. Describe the Unique Challenges of Strategic Resource Management for a Manufacturing Company, Traditional Competitive Procurement Processes, The Concept of Supply & Its Uses in Business, TechSoup: An Overview of the RFP Process for Nonprofits, Charities, and Libraries, BusinessDictionary.com: Request for Proposals (RFP), An Inventory Control System RFP's Ethical Standards. He has earned a Bachelor of Arts in management from Walsh University. Cookie Policy. You're working on the procurement plan for the computer software program that? It can also be advantageous to those suppliers who can meet the specifications, because it allows them to stand out from their competitors. Specifying the required composition of materials or goods is a highly precise way to to obtain more-specific quotes from suppliers. Bayt.com is the leading job site in the Middle East and North Africa, connecting job seekers with employers looking to hire. Specifying your required composition in requests for proposal can help to narrow the field of potential suppliers quickly. Compared to conformance specification, performance specification has a number of ADVANTAGES such as; The specifications are easier to draft; The efficacy of specifications does not depend on technical knowledge of the buyer; Supplier can use their creativity to develop the products; Greater share of specification risk is borne by the supplier. When you take the time to specify the exact composition of materials you seek, it can help potential suppliers to understand your procurement needs and objectives more clearly. The main objective of the thesis was to create a procurement effectiveness reporting tool that the organisation could start using in practise. Such organizations struggle to manage purchases and place order according to the schedule. Again, a detailed discus-sion is beyond the scope of this article, but this author hopes to stimulate further dis-cussion on the topic of standards within the public procurement process. A rule of evidence is that words are construed against the party … cluding the specification and contract, to all economic operators that request to participate. You are the project manager for an upcoming outdoor concert event. This can be significantly lower when the length of a specification is short and the time taken in its preparation is reduced. Every day, thousands of new job vacancies are listed on the award-winning platform from the region's top employers. Advantages It throws the responsibility for a satisfactory product back to the seller. When undertaking procurement, value for money factors should be included in the specification and the evaluation criteria. Prior to 2002, public procurement in Kenya was geared towards large and established contractors. Filed Under Blog . Register now Procurement Chapter 4 - Specifications 4.1 Generally.. The purpose of the specification is to communicate the buyer's requirements and … You're working on the procurement plan for the computer software program? Public sector procurement is when public bodies choose and contract commercial companies to provide goods and services. There are so much advantage for procurement, but this a few of them. With a deeper understanding of your needs, suppliers may be able to identify and suggest alternative compositions that may meet your needs more effectively, reliably or efficiently. However, prior to release of a specification, as part of a solicitation, the buyer must be satisfied that its inclusion will result in a fair and equitable purchase. In both cases, suppliers have more information to work with when generating their quotes. Rather than requesting a quote for drywall, as another example, a building contractor might specify that it requires drywall made from at least 50 percent recycled materials. Since the purpose of a specification is to translate a user's need into the delivery of goods or services, the development of specifications must be a cooperative effort between the ordering department and Procurement. Term contracts and definite quantity scheduled purchases and standards of acceptability and recommended practices procuring, operating and maintaining with... Activity involved in a project are captured in the specification but not all! Been know to be engaged for a work and thus enables to procure them beforehand interface between the (... Submitted by a university student supplies and services precise way to to obtain more-specific quotes from suppliers buyer... For the computer software program that ability to benefit from specialist expertise has focused upon value for money should. 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