A procurement professional’s ability to run and complete a successful RFx evaluation is paramount to the role. The modern procurement professional is a far cry from the old school buyer who might have been focused on choosing the lowest cost option and leaving other members of the company to work with the chosen supplier.
1. Be consistent
When introducing a supplier submission evaluation process it is important to keep a consistent approach, this includes using the same evaluation criteria and the same evaluation team for each submission within a particular RFx.
You also need to ensure the process of evaluating the submissions and suppliers is fair by meeting probity guidelines and giving full disclosure and avoidance of any potential conflicts of interest.
2. Pick a team to fit the task
The number of people in an evaluation can vary depending upon the size of the project, level of complexity and number of touch points within the business. Lots of smaller projects will normally just be completed by a member of the procurement team. For larger projects a generic evaluation team could include a member of procurement as evaluation team leader, one or two key stakeholders for the goods or service in question, a member of the quality or operations team and a member of the finance team. There may be set rules within your business or public sector guidelines that put specifics around when an evaluation is run, who needs to be involved, and how the process should happen.
3. Understand the objectives
Ensure the evaluation team (if a team is required) fully understand and agree to what the RFx or project is looking to achieve. It can sometimes be easy to follow the wrong path with a supplier submission that is very professionally completed but does not meet the requirements set out in the original specification or business case. It is a good idea to keep this document handy throughout the evaluation to keep it fresh in people’s minds.
4. Use a PQQ to save time
If there has been an open RFx or there are a significant number of submissions it can take a large chunk of resources to review each one. It is important to quickly sort out the submissions and suppliers that meet your requirements. A good way to make this process easier is to send out a pre-qualification questionnaire with questions that will specifically answer any queries you have as to whether the supplier will meet your mandatory requirements. These can quickly be reviewed and a decision made on whether the submission needs to be fully evaluated or not.
5. It’s about more than just price
Do not just focus on cost, no matter how tempting those dollar signs look. Ensure you are evaluating a whole range of requirements. The actual areas to evaluate will vary immensely depending upon the type of goods or services you are looking at. You can still go back to a chosen supplier or short-list of suppliers and open up a round of cost negotiations later in the process, or if you are feeling really innovative you could run a reverse e-auction between the short-listed suppliers.
6. Define what ‘value for money’ really means
A standard term frequently used to define which supplier should be chosen during an evaluation, especially in the public sector, is ‘best value for money’. This term can be open to interpretation and that is why it is important to ensure the evaluation team fully understand what outcome is required to meet the needs of the project and do not go over and above those needs, in much the same way as to go under and not meet the requirements Generic areas to evaluate include:
c. Total acquisition cost (TAC) or financial benefit
d. Company financials
e. Management, including (i) importance of our business to the supplier, and (ii) service level commitments
f. Standard of submission
7. Product evaluation
If you are evaluating a product or a manufacturer you could add the following areas to evaluate:
a. Product design
b. Quality of product (historic performance, quality tests, certification)
d. Lead times
e. Manufacturing facilities
f. Production capacity
g. Technical capability
8. Services evaluation
If you are evaluating a service provider you could evaluate the following specific areas:
a. Service solution offered
b. Quality of service (historic performance/references/customer service/certification)
c. Service restrictions/scope of services available
d. Operational controls
9. Decide which elements are most important to you
Add weighting if required. You may decide that a ‘bullet proof’ quality of the product is of vital importance to the success of the project which is in a non-price sensitive market. Or you may decide that for an agreement to be made the TAC is the most important factor as this is a price driven market. If factors such as quality, lead time and least risk are the most important factors and you want to increase the weighting in these areas it is important that this does not mean you pick a supplier where the commercials or TAC do not meet your needs. To avoid this you could put a set limit within the mandatory requirements and make the suppliers aware of these requirements.
10. Be transparent about the selection
Make it clear how and why an evaluation decision was made. You do not want people within your business or the suppliers to think this process was not fair and question the results. The supplier does not have to see the results (I am sure the commercials would be treated as confidential) but they must see that this was a process in which all suppliers were equally evaluated. You may wish to advise the supplier about the areas of their submission which fell short, this could be via a quick phone debrief or an email.
11. Use technology to help
There are a number of supplier evaluation templates available online that will automatically create the final result based on the scores given for each section, including any weighting you added, or you could create your own in excel without too much trouble.
12. Give bidders the good (or bad) news
The final part of the evaluation once a supplier has been chosen and agreed upon is to tell all tenderers who have put forward submissions if they have been successful or not. It is up to you how much detail you go into as to why suppliers were not successful, but it is best to finish the process on good terms because you may like to use the supplier as a back-up if things do not work out with the chosen supplier or to participate in future RFxs.