Forms used by Purchasing Professionals

In order to manage the need to purchase supplies and services, purchasing professionals utilize certain forms to obtain the internally requested products or services.

When it comes to forms most used by purchasing professionals you may already be familiar with some of these standard forms. For example, the Request for Quotation; Request for Proposal; Invitation to Bid; and there are many others.

While most of these procurement forms are relatively straightforward, the Request for Proposal process is a tool that has continued to evolve since its first started to appear in the early ’80’s. Since then, RFP’s have become more prevalent, have continued to be refined and in some cases is the only form companies issue (not what we recommend!). Regardless, companies that purchase goods and services need procurement forms to help manage their business. These forms are used when your selection criteria might include factors other than price, like service capabilities or technical support.

Role players in an RFP / RFQ

Typically there are 3 or 4 role players in the RFP or RFQ process. There is a Tenderer aka Supplier / Offeror / Vendor / Bidder; then there is the Owner which is the parent company that pays the invoice  submitted by the Supplier — next the user or internal department which developed the scope of work or department that originally made the request — and last, the procurement officer who is the person managing the RFP / RFQ. There are others like the accounting department which will pay the Supplier and so on.

Supplier/Vendor:   A seller of materials and or supplies who submits a proposal or quotation on your requirements identified in the request for proposal (form).

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How you are governed in respect to bid procedures for any RFQ, Tender or RFP you issue will vary depending on whose dollars you are spending. If you are a purchasing professional working for a public organization and spending tax payer dollars, you are likely using a different set of guidelines then a buyer representing a privately owned organization. Each private or independently owned company’s bid procedures might differ depending on their size and spend.

In addition to their bid list, public purchasing agencies are often mandated by statute or regulation to advertise their bids in local newspapers  whereas private corporations usually draw bidders from an internal bid list only.

In a formal bid system, regardless of ownership structure or bidding guidelines, the bidder typically will be provided:

  1. Instructions to bidders – explains how, when, and where the response to the bid must be submitted;
  2. Specifications – a detailed specification which the item required must meet. This is often technical by nature and the RFQ might include pages of quality guidelines, engineering drawings and strict compliance requirements;
  3. Conditions – a set of legal, special and general conditions which must be met by the successful bidder;
  4. Bid Form – which your bidders will use to provide their cost and any other commercial terms.

For the opening and award component of your tender, this again will vary for the public purchaser when you compare practices to the private or corporate purchaser. The public purchaser is often required to open all bids in a public arena and will be required to disclose bid sums. Basically, they open the tender in front of anyone in attendance and post the sum to a white board. Many of the bidders will take part in the process just to see competitors bids. The private buyer is not required to follow this process and often has more flexibility when it comes to evaluating and awarding the bid.

The public buyer will have to justify and defend a selection if the lowest bidder is not awarded the tender. If the bidder meets all the criteria posted in the tender, RFP or RFQ and they are low bid often this is all that is required to be awarded the contract. For the selection criteria, more weight is put on unit cost whereas a private company might put more emphasis on service, warranty and quality.The public purchaser is under more scrutiny and the award process is much more transparent.

All out-going procurement documentation along with the bidding procedures are typically managed by the purchasing department. They are the keepers of the bid list or vendors in good standing, the issue and closing date of the bid and all other commercial aspects of the bid.

This is an excellent question and one that every Buyer would like the easy answer to. A RFP aka Request for Proposal are becoming more technical by nature and sometimes are even challenged in the legal arena. This issue alone is reason enough to  improve your content to

a) mitigate risks,

b) improve bid responses and

c) to simply provide clarity.

The easier your RFP is to understand the fewer vendor inquiries you will receive, the fewer vendor inquiries you receive the more efficient Read the rest of this entry

Welcome to our site and what we hope will be a portal which helps purchasing and sales personnel improve their personal development as well as improving their corporations bottom lines. No number or dollar value can be put on having trained staff that is both knowledgeable and efficient. If you are a manager then now it is your turn to give your staff the tools they need to succeed and do just that.

Visit our sales pages for our form bundles which will help you save time and money when it comes to preparing your out-going tenders if you are a purchasing professional and help you prepare formal bid responses if you are a supplier or sales professional.