Procurement Contracting Process Analysis

Procurement Contracting Process Analysis

Contract Resource Procurement Process

The contract resource procurement process will begin with selecting a contract approach. The team will determine the party that will take the most risk and the manageable level of risk in selecting the approach. The main types of procurement contracts are cost-plus, fixed-price, and time and materials contracts (Lysons & Farrington, 2020). The second step will be soliciting bids from potential suppliers. The procurement team will request a price and relevant supporting information from suppliers to vet their ability to supply the required resources. The third step will be requesting a quote and proposal from potential suppliers. The request for a quote will include the prices of the needed resources, the type of additional services offered, such as delivery services and costs, the quality of materials required, and the timeline for supplying the required resources. The request for proposal will include information on the schedule and quality of resources. The fourth step will be evaluating potential suppliers’ bids based on their quotes and proposals. The team will evaluate the total cost of contracting a supplier based on the price of their products, delivery and shipping costs, warranties, and additional services. The team will then select a supplier based on the value they add to the project

Significance of the Contract Resources Procurement Process in Negotiating the Best Purchase

The contract resource procurement process will assist Will in negotiating the best purchase by giving him different options to choose from. Will may view the terms of every supplier based on the information provided in the proposals and quotes to determine what to consider during negotiations, such as considering the price, delivery timeline, delivery costs, and quality. The process will also assist Will in negotiating the best purchase by helping him identify the best contract that minimizes his business’s risk.

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The Efficiency of the Procurement Process

The team believes that the process is efficient and achieves the desired results because it considers a contract approach to minimize Will’s business risk. It also helps identify various suppliers that can supply the required resources, giving Will alternative suppliers who can be contacted to supply required resources if the selected supplier fails to deliver them on time. The process also allows the team to evaluate the benefits and risks of contracting a specific supplier, thus increasing the chances of selecting suppliers that offer the best value for Will’s business.

Risks Associated With Procuring These Resources and the Role of Risk Management

The main risks associated with procuring the required resources are delays in the delivery of required resources and non-compliance with the procurement contract terms. Therefore, an efficient risk management process is needed to reduce the impact of these disruptions on business operations. Risk management will be implemented in designing approaches to mitigate these risks. Such approaches may include finding alternative suppliers to get supplies that may be urgently needed when there are delays and contract termination if a supplier fails to comply with the procurement contract terms. Risk management will also include assessing the procurement process to predict the likelihood of the risks occurring and preparing the procurement team to eliminate them or reduce their negative impact on the business.

Improvements

The procurement process may be improved by identifying vulnerabilities in the supply chain and designing appropriate measures to eliminate them. According to Ali (2015), supply chain vulnerabilities are the likelihood of the sources of risk and risks that cannot be mitigated with existing risk mitigation strategies, resulting in unfavorable results and reducing the supply chain’s ability to meet business and customer needs. The procurement team can mitigate the vulnerabilities by identifying and documenting them, creating a supply-chain risk management structure, monitoring them, and implementing risk governance and constant review.

Recommendations

The main recommendation that Will should consider to improve the procurement process is creating a procurement policy that the procurement team and selected suppliers should follow. The policy should include information on payment terms, expected delivery timelines, and inventory management. The second recommendation is to conduct a quality check on all supplied resources to ensure they meet Will’s quality standards. An expert not associated with the business or the supplier should conduct a quality check to avoid biased reports.

References

Ali, I. (2015). Managing supply chain risks and vulnerabilities through collaboration: Present and future scope.

Lysons, K., & Farrington, B. (2020). Procurement and supply chain management.

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Will Fence owns a 70-acre large timber and Christmas tree farm. The Christmas farm gets busy in August and September when Will identifies and flags the trees suitable for the Christmas season. Starting in October, the flagged trees will be cut, baled, and trucked to the storage yard, where they will stay until shipped.

The storage yard is situated in an area that offers shade and protection from the wind to maintain the freshness of the tree. The trees are stacked with the tops locked together to keep the sun and wind away from them. Will has just purchased an additional 40 acres and will need to expand his storage yard by 40,000 square feet. The budget for this expansion is $55,000. Will has hired your team to design a process to contract resources to expand the storage yard.

Cover the following as requested by Will:
A description of the contract resource procurement process (from start to closure)
An explanation of how the contract resources procurement process that was described will assist Will in negotiating the best purchase
An explanation to Will why the team believes the process is efficient and achieves the results desired
An identification of any risks associated with procuring these resources and an explanation of the role of risk management in this process
An explanation of how the process may be improved upon
Other recommendations the team may have for Will to consider

As a team, communicate the necessary information to Will in any way you see fit, whether that be a business report, written paper, visual presentation, video, etc.