(This article will be published in the October 2018 edition of Purchasing B2B magazine.)
Getting what you need, on budget, on time, and by the rules is harder than it looks, especially when major public sector projects are involved. This article explains where to leverage business process improvement practices, project management principles, and procurement-centric technologies to guide your project teams with speed and precision through solicitation drafting, proposal evaluations, and contact award negotiations in the front-end of your procurement cycle.
Procurement departments need to take a procurement-centric approach to leveraging business process improvement practices, project management principles, and procurement-specific technologies. This means carefully considering every step of your front-end process and every interface between different project team members, to identify weak links, bottlenecks, and resource gaps. By realigning your procurement pipelines at the institutional level, your project teams will be in a better position to leverage project management principles and procurement-centric technologies at the project level.
To increase project success rates, procurement advisors need to embed themselves early with project teams to manage internal approvals, define roles, and develop solid project plans using the “95/5 rule” of procurement planning. The “95/5” rule recognizes that ninety-five percent of procurement failures are caused by the failure to properly address the five core design elements of project planning:
- scoping of requirements;
- pricing structures;
- evaluation criteria;
- contract format; and
- tendering format.
Failing to properly manage the gating process between design planning and solicitation drafting guarantees a suboptimal drafting process and greatly increases the likelihood of project failure. Project teams should therefore be required to correct any deficiencies in their design plans before getting the green light to proceed to solicitation drafting.
In an industry where a misplaced comma can result in a protracted lawsuit and where rushed time frames are standard operating procedure, razor-sharp drafting execution is a critical survival skill. To execute on a design plan, procurement advisors need to be stationed in the control room of a properly integrated solicitation drafting business process, which should be treated as its own project, with the proper application of project management disciplines. These design and drafting disciplines can be leveraged through procurement-centric technologies that are light years ahead of improvised manual drafting processes.
While most organizations have already automated their solicitation posting procedures, many remain mired in paper-based bid submissions and need to migrate to electronic bid submissions as quickly as possible for three reasons:
- paper-based bids require longer trade treaty posting periods and therefore waste precious time in your procurement cycle;
- paper-based bids block the significant downstream process improvements gained by using electronic bid evaluation tools to score proposals; and
- paper-based bids block the electronic reverse auction platforms which, if properly used, can cut 20% or more from traditional one-shot bid prices.
Most project team members lack the skill and experience required to properly manage evaluation complexities and meet evaluation due diligence standards. Control over evaluations should therefore reside with the team’s procurement advisors, who should apply enhanced consensus scoring techniques to streamline and improve the evaluation process. By focusing on outlier scores during group evaluation meetings, evaluation teams can avoid wasting time in redundant line-by-line reviews of scores that already fall within acceptable scoring ranges. While spreadsheets are typically used to deal with group evaluations, these antiquated applications are slow and prone to human error. Deploying procurement-centric bid evaluation platforms allows for the superior coordination and acceleration of group evaluations and creates better records for downstream negotiations, debriefings, audits, and bid-protest challenges.
Moving to contract awards, the proliferation of negotiated RFP formats has put a premium on procurement advisors who can lead project teams in closing complex commercial deals. To compress time frames while maximizing negotiated gains, project teams need to move beyond standard negotiation theory and leverage deeper strategic, tactical, and operational principles from game theory, sports analytics, and military strategy. Managing multiple rapidly moving pieces during contract award negotiations calls for a procurement-centric application of business improvement principles to avoid freestyling and coordinate the negotiation team within project management disciplines. Maximizing your returns during negotiations also requires the tight tactical use of scheduling and meeting platforms so you can connect purchaser and supplier negotiating teams across multiple time zones to quickly close your deals within the rapidly expanding global supply chain. Maximizing the speed and precision of the front-end procurement stages will help you hot launch project teams to higher levels of strategic execution while accelerating your tendering cycles.