Procurement officers and project managers – The synergy in a successful procurement

A few months ago, I was assigned to oversee the procurement for the creation of a panel of auditors. The aim was to create a pool of pre-qualified auditors in New South Wales ready for action.

The Project Manager knew that a Procurement needed to be undertaken to establish this panel. The anticipated duration of this contract was expected to be 2 years with a possible additional 2 year extension dependent on the performance of the suppliers.

The Project Manager knew what they needed from a pre-qualified auditor; however, the challenge was for procurement to ensure that these requirements were passed on and understood by the market and also reflected in the documents forming part of the contract.

One of the main challenges in procurement came when Procurement Officers and Project Managers worked as if they were in a relay-race: simply pass the baton and let the other party do the rest. Procurement needs to be seen as a team activity where there is not a baton, but a ball. The ball needs to be passed back and forth before scoring. Consultation and cooperation between Project Managers and Procurement Officers is key to creating the synergy that characterises a successful procurement.

To create this synergy, the groundwork needs to be done before the procurement officially hits the market. There areseveral questions that a procurement professional needs to be asking and discussing with the project manager. The most common ones are listed below:

How well do you know the supply market?

Project managers sometimes aim to obtain the best possible product or service they can from the market. However, we must understand that this approach might not be available, or may come at a higher cost. Know your market, know what products or services the market can deliver as standard and identify what would be considered as a premium service.

Do you know how much budget is available for the procurement?

Every requirement that we ask from the market comes at a cost. The more requirements a project has, the more sensitive the budget is to increase. It is important to learn how to differentiate a ‘must-have’ from a ‘nice-to-have’ requirement. Consider going out to market with the essentials needed for a successful project and make sure that, if there is a need for extras, these are flagged as optionals. In this way, it is easy to select any of them if necessary. Try and minimise the additional requirements and consider your suppliers as the preparation of a tender means a cost for a supplier as well.

Do you know exactly what you will be asking from the market?

I can’t emphasise how important this question is overall. A well-defined scope of services will avoid many future disagreements and possible disputes when managing an established contract. The scope of services sets the rules of the game and the market will base their proposals on it. When pressed for time, some project managers tend to develop a weak scope of services and will leave the details for after the supplier has been engaged and a contract signed. Doing this will increase the risk of variations to the contract, variations in time, scope and money. Be cautious of this. 

Do you know how you will be evaluating the tenderers?

A clear evaluation criteria is important when selecting potential suppliers. Defining and choosing the appropriate evaluation criteria should be carefully chosen on a project by project basis as sometimes some procurements might have specific requirements. Setting unnecessary or excessive evaluation criteria can create extra burdens for both the evaluation team and the tenderers whilst also potentially extending the timeframe of the evaluation process.

What documents will you use to tell the market what the engagement is about?

The tender documents need to contain enough information for the market to have sufficient insight about the engagement conditions. Among the standard tender documents, it is recommended to also include a clear scope of services, spell out the evaluation criteria, attach a draft contract and when applicable, panel rules and performance evaluation framework. When needed, a tender briefing session is a strong move to ensure the market understands the needs for the engagement and also offers an opportunity to clarify any questions the potential suppliers might have about the engagement. 

Depending on the risk and value of a procurement, these questions can be answered in more depth if necessary. It is important to remember that once a procurement is finalised and a contract is established, the management of the contract and success of the project will be influenced by how close a procurement officer and a project manager worked togetherand how well they created this synergy.