Procurement Strategies for Different Purchasing Scenarios

ProcurementStrategies for Different Purchasing Scenarios

Scenario 1

The most suitable procurement strategy for this scenario iscompetitive negotiation. Its suitability in acquiring painting andre-carpeting services for a three-story office building is affirmedby various reasons. One such reason is the fact that thespecifications are few, well known and clear. The USG department mustbe well aware of the brand of paint and color. Specifications for thecarpet are also few and direct. In spite of the many sources,negotiations remain the most suitable because there are no definitecriteria for evaluating the proposals if the organization were to usethe sealed bid or the two-step sealed bid process (Bajari et al.,2014). The suitability of negotiations as the procurement strategyfor this scenario is also affirmed by the fact that the cost of thecontract cannot be accurately estimated and the organization would bewilling to grant the offeror a second chance to review their prices.The availability of a high number of suppliers to make the offeringrules out non-competitive negotiations for this scenario. Accordingto the Federal Acquisitions Regulations (FAR), negotiations in acompetitive environment are intended to minimize the complexity ofsolicitation, evaluation, and source selection decision (CCH, 2009,p.15.1, para 15.002(b)).

Scenario 2

Sealed bidding is the most appropriate purchasing strategy for thisscenario. The fact that inventory and other standard office supplyshall be made on a monthly basis implies that the overall cost of thecontract will be considerably high in the long run. Besides, it isimportant that the organization is informed of the price and otherprice-related factors of each of the items being supplied hence thetwo-step bidding strategy is inappropriate (Vrat, 2014). Pricingfactors form a key consideration in items of this caliber. Inacquiring office inventory, substantial discussions are notsignificant even if they are not entirely unnecessary. This isbecause individual firms mainly price the commodities based on themarket rates. Convincing the offerors to change their stances throughnegotiations may, therefore, fail to work. The FAR provides that forthe sealed bidding purchasing strategy to work effectively, ampletime is paramount because it provides for solicitation, submission,and evaluation of the bids (CCH, 2009, p. 6.4-1, para 6.401). Thisstrategy has, therefore, been recommended based on the assumptionthat the USG Department has ample time.

Scenario 3

The fact that the organization intends to purchase a new computersystem that has never been used before implies that it is impracticalto prepare a definite purchase description to support the award basedon prices. Moreover, it is considerably important for theorganization to ensure that the bidders explain how they would ensurethe system works before looking at the prices. This insinuates that atwo-step bidding procurement strategy should be adopted. Primarily,the key consideration should not be the price. It is only aftertechnical qualification that such bidders should be invited to quotetheir prices. The FAR provides that for the two-step bidder processto work, several technically qualified sources are necessary (CCH,2009, p.14.5-1, para 14.502). Otherwise, the organization may becompelled to offer the tender to the only bidder left after technicalevaluation even before proceeding to the second step financialevaluation. Such situations should be avoided because the bidders mayraise their prices, upon the recognition that they are the only oneswho qualified in the first step.

Scenario 4

For landscaping and snow removal, it is important that theorganization considers the price and the technical ability of thebidders at the same time and compares them in a one-off process. Thisis the sealed bidding process. The scenario requires a bidder whodoes not only provide the right services but also quotes the rightprice at the same time (Bajari et al., 2014). In other words,the contract is neither awarded to the bidder with the highesttechnical ability nor the one who offers their services at the lowestprice but to the lowest responsive and responsible bidder. Accordingto the FAR, the sealed bidding process is very important especiallywhen price and other price-related factors are a key consideration(CCH, 2009, p. 6.4-1, para 6.401). Negotiations may not form a goodprocurement method, in this case, because the bidder may easilycompromise the quality of services without the knowledge of theorganization. Negotiation, as a procurement strategy, is moresuitable for goods than it is for services.

Scenario 5

Negotiation is the most suitable procurement strategy for maintenanceof department-owned emergency power generation system. To be precise,sole source acquisition negotiations should be commenced with thesame bidder who was awarded the contract to supply the organizationwith the system. In the provision of services, as opposed to theprovision of goods, the best bidder in repair and maintenance remainsthe one who originally supplied them (Vrat, 2014). This is the casein scenario 5. Only one bidder has the potential to provide the bestservices thereby compelling the organization to undertake sole sourceacquisition procedures. The FAR recommends that, in this case, theorganization should request for proposals (RFP) from the sole sourcewith the intention to remove unnecessary information and requirements(CCH, 2009, p.15.1, para 15.002(b)).

Scenario 6

The goal of the organization should primarily be to get the bestT-shirts and hats. This is because, to a considerable extent,high-quality T-shirts and hats with logos affiliated to theorganization act as a form of advertisement. The two-step biddingprocess is, therefore, the most suitable procurement strategy forthis scenario. Bidders should be invited to place the bids with theirtechnical abilities first (Bajari et al., 2014). After gettingthe best from this group as a result of the first step, theorganization should then select the bidder who offers their servicesat an affordable price. This recommendation has been made with theassumption that the organization has ample time to complete the twobidding process. According to FAR, the two-step bidding process ishighly recommendable in technical purchases where the availablespecifications or purchase descriptions are less definite (CCH, 2009,p.14.5-1, para 14.502). This is the case with scenario six.

References

Bajari, P., Houghton, S., &amp Tadelis, S. (2014). Bidding forincomplete contracts: An empirical analysis of adaptation costs. TheAmerican economic review, 104(4), 1288-1319.

CCH Incorporated. (2009). Federal acquisition regulation: As ofJanuary 1, 2009. Chicago, IL: CCH.

Vrat, P. (2014). Purchasing: Policies and Processes. In MaterialsManagement (pp. 263-285). Springer India.