We need suppliers for sourcing and purchase for products and services, either for internal or external project and services delivery. Vendor and potential vendor welcome to provide the vendor profile and catalog for our consideration. In the world of contract management and procurement, there are a variety of ways procurement takes place from simple and fast purchase to complex project sourcing. Make sure you know about our procurement objectives and expectations and vendor code of conduct.
A key part of planning any piece of work to be done, is determining and knowing what form of the procurement type it is, as the evaluation and expectation is different. It ranges from single quotation to complex tender proposal to demonstrate how vendors “strategic fit” and to be the chosen one. For a sole-sourced vendor and manufacturer is chosen and purchase order contract awarded directly to multiple sources of vendor that required competitive bid.
In general, we are practicing formal and systematic processes and it will involve following types, it is good for you to know the sourcing situation and scenario and acting accordingly.
1. Request for Information (RFI) – it usually occurs when some sort of need does arise, but not yet reach the strong desire to procure or some market price and rate or post purchase long run maintenance cost required to be understood and in consideration. It may either be brand specific or generic in nature for RFI.
2. Request for Proposal (RFP) – it either from RFI stage move into RFP (for example, during RFI no had brand, feature or functionality requirement yet), but at this stage the business need and requirement in more specific and we usually will discuss in the form of more technical specific.
3. Request for Quotation (RFQ) – it can be from RFI then move to RFQ, but for certain product types where we know the technical requirement, and that fall under routine and operation trade, usually will fall under RFQ. Usual outcome will be to issue a Purchase Order (PO) to the one of the vendors who submit the RFQ. It is commonly used in situations where we either can’t – or don’t want to – define the Scope of Work (SOW) up front to an adequate level of detail, in particular for creativity and innovation projects. We sometimes will be faced with situations where we know what we want to achieve, but we don’t have the expertise or time to figure out how to get there, or we just can afford to spend the time to craft out the detailed specification and performance requirements. We rely on the experience and creativity of contractors or subcontractors to define the best path to success.
4. Invitation for Tender – it is usually for the project case, or mid to long term purchase or complex purchase that is best to be awarded based on competitive bid basis. The document contains detailed specifications for the performance of the work as well as detailed qualifications and requirements for the Bidders to meet. Or it sometimes is based on the best tender bid proposal such as creativity or innovation that brings in value beyond the general specification and requirements state. Art and Design or Creativity projects are more on intangible aspects that weigh heavily for the project tender.
By understanding What is the difference between “procurement” ,”Invitation To Tender”, “bid”, “RFI”, “RFP” and “RFQ”? it ensures you know the E-SPIN procurement expectation for each type of the procurement requirement and acting accordingly for mutual benefits.