Weighting Systems

Weighting System:

• ensure that the best seller is awarded the contract.
• assigned to the values of the proposals and each proposal is scored.
• The seller with the highest score is awarded the contract.

Steps in Contract Negotiation

Steps in Contract Negotiation:

1. Introduction
   
   All parties become acquainted and the overall attitude of the negotiation is established; this tone is largely set by the buyer's team leader and the person with authority to sign the contract will lead the contract negotiation team.
   
   
2. Probing
   
   Each side attempts to learn about the other's real position.
   
   
3. Bargaining
   
   Give-and-take discussions take place to arrive at the best possible agreement to all.
   
   
4. Closure
   
   The tentative agreement is revised and everyone has an opportunity to the tweak the results.
   
   
5. Agreement
   
   The team tries to ensure that all parties clearly understand and agree to all terms and conditions of the contract.
   
   

Selecting Sellers

Selecting Seller:

• is a process that consists of receiving and reviewing of proposals and selecting a seller.

What exactly is a Proposal?

Proposals are:

• Submitted by a potential seller.
• Demonstrated an understanding of the procurement need, describe the seller's ability to provide the service or product and the detail the price for delivering the desired goods and/or service.

What are the major activities in Request Seller Responses?

What are the major activities in Request Seller Responses?

Advertising

• A method of expanding the number of potential sellers by publicly announcing the solicitation in general circulation publications.
  
  

Bidder Conference Meetings

• allows the sellers to ask questions and get clarifications about the project and bidding requirements.
• are also called vendor conferences, pre-bid conference or contractor conference.
  
  

Qualified Seller List

• is part of organizational process assets.
• will be sent only the pre-qualified sellers.

Introducing Request Seller Responses

Request Seller Responses:

• When the project manager requests seller responses, he obtains quotations, bids, proposals, or estimations from potential suppliers of goods or services being procured.
  
  
• The potential sellers must prepare and submit proposals in response to your requst.

What are the Considerations in Evaluation Criteria?

What are the Considerations in Evaluation Criteria?

• Understanding of need
• Overall or lifecycle cost
• Technical ability
• Management approach
• Financial capacity
• Project Management ability

What are Evaluation Criteria in PMP?

Evaluation criteria:

• are the standards used to rate or score proposals, quotes or bids.
• are objective and can be readily demonstrated and measured.
• are subjective and open to different interpretations.

Request for Information (RFI)

Request for Information is:

• develop lists of qualified sellers
• gain more input for resources availability

Invitation for Bid (IFB)

What is Invitation for Bid?

• When deliverables are commodities for which there are clear specifications
• when the quantities are very large
• is usually advertised

Request for Proposal (RFP)

Request for Proposal (RFP):

• when deliverables are not well-defined
• offer suggestions and alternative approaches to meet the project goals
• is the most time-consuming for the vendor
• negotiation is expected

Request for Quotation (RFQ)

Request for Quotation (RFQ):

• when deliverables are commodities for which there are clear specifications
• when price will be the primary determining factor
• may allow for some negotiation of price

Request for Bid (RFB)

Request of Bid (RFB) is:

• Commonly used when deliverables are commodities for which there are clear specifications.
  
  
• Submitted to selected vendors.

What are Procurement Documents?

Procurement Documents are:

• documents submitted to prospective sellers to solicit proposals for work being procured.
• May include the following:
  
  Information for sellers
  Contract statement of work
  Proposal terms and conditions of the contract (legal and business)
  Non-Disclosure Agreement
  
  

Introduction to Contract Planning

Contract Planning is the process of documenting products and services, as well as their requirements and identifying potential procurement sources.

Contract Statement of Work in PMP

Design:

• Details what is required in terms of physical characteristics.
  
  

Performance

• Specifies measurable capabilities the end product must achieve in terms of operational characteristics.
  
  

Functional

• Defines what the deliverable is required to do but not necessarily how to do it. This allows the prospective sellers to offer different possible solutions for archiving the same end-use function.