Chapter 2 Flashcards
What is the definition of Value for Money?
The most advantageous combination of price and quality makes a product or service fit for purpose.
Value for Money is often descried as the 4 E’s:
Economy - price
Efficiency - use of time/ resource
Effectiveness - meeting objectives
Equity - fair/ transparent
Therefore, value for money is not about cheapest price
What is the definition of Value Mapping
Processes followed which reduce waste and increase operational efficiency
Public sector buying organisation must advertise sourcing events via the Official Journal of Economic Union
When the buyer places the advert, they will need to select which Common Procurement Vocabulary (CPV) code match it requirements. A supplier who registers on the site will register their product and services against CPVs. The system then advises supplier that the advertise project matches their credential and they can try to bid. CPV aims to standardise the classification used.
CIPS state two system examples of Sell2Wales & Public Contracts Scotland
Via OJEU, buyer can advertise a Prior Indicative Notice (PIN) which acts as a provisional advert so buyer can guage market interest.
Can you name the 4 key principles of Public Contracts and Procurement Regulations 2015?
Transparency in procurement processes
Equality in treatment of suppliers
Non discrimination - adverts are shared with all EU countries
Proportionality - the procurement process must be proportionate to the size and value of the project
Which is tender process is most common in public procurement?
Restricted Tender Process - two stage process of an initial pre qualification questionnaire (PQQ) to create a shortlist of suppliers. If short listed supplier meet minimum requirements they will then be invited to tender a.k.a. ITT
Under Public Contracts and Procurement Regulation 2015, supplier are to be given a minimum of 30 days to respond to a PQQ. Buyer must adhere to this for the process to be considered legal
Following public procurement regulation, PQQ etc, there are 5 tender processes a buyer can choose from. Can you name them?
Open tender process - this is a one stage process. IF supplier number are limited the buyer will immediately issue the RfP/ITT. It’s important to remember that this has no PQQ state!
Restricted tender process - following the submission of PQQs, suppliers are then shortlisted for selection. Those selected with be sent RfP
Competitive procedure with negotiation - same as restricted but after initial RfP submissions there are subsequent rounds of proposals and negotiations . No more is allowed after final submissions. This is obviously very time consuming.
Competitive dialogue - used for complex requirements where the spec may be updated during the process based on buyer understanding developing and supplier influencing scope. PQQ would take place to short list suppliers. Supplier are then expected to submit final proposals.
Innovative partnership structure - often used for unique items which do not exist on market. Rather than asking supplier to bid against a spec they are to bid against capacity to research and development, pre agreed level of performance and maximum cost. There is no negotiation after final bid.
The only option whereby buyer may negotiated after final bid is competitive dialogue
Another option is for buyer to use a pre established framework agreement, whereby another buying organisation has completed the selection stage. Same as a preferred supplier list. Buyer would need to advise the tandem use of a framework in any OJEU advert. Using a pre existing framework is quicker as buyer only have to call off a mini competition.
Other interesting aspects of OEJU adverts include:
adverts over a certain threshold must clearly detail to a supplier the selection and award criteria, the % weighting, the formula used to calculate score so supplier has chance to challenge it.
whether a supplier is successful or not the buyer must advise supplier of their scores against the winning supplier and provide detailed feedback.
The max length on contract under OJEU is 4 years!
Can you draw and explain merits of Mandelows Stakeholder Matrix (stakeholder mapping)?
The matrix is used to map a stakeholders power and interest in a project. Once mapped, the buyer can use it to decipher how best to communicate with that stakeholder
The Kubler-Ross curve helps procurement understand the changes that stakeholders pass through during a time of change. Mapping this can support the communications styles needed. Can you name the stages?
Shock - may avoid communication / taking part
Denial - may avoid communication / taking part
Frustration - fixation on small issue which cause delay
Depression - fixation on small issue which cause delay
Experiment -
Decision -
Integration - Need to increase communications
Which model should be used to analyse stakeholder conflict?
Kurt Lewins Force Field Analysis
Aim is to identify the driving forces and restraining forces for a procurement project. Change for better of worse occurs when their is an imbalance between driving and restraining forces. The forces can be illustrated with small vs large arrow or can have a numerical value added.
Procurement need to run this analysis to understand where the conflict lie and make plan of how to mitigate it.
Once this has been completed, the Thomas Kilmann Conflict Model can be used to select the correct conflict management style.
Can you explain the Thomas Kilmann Conflict Model, how it is used and explain each conflict management style?
Model should be used following Force Field Analysis. Force Field Analysis will identify what conflict exists and the Conflict Model will identify how to mitigate them.
Make sure you can draw the model.
Avoiding - low concern for self and others - objective to delay
Competing - High concern for self and low for others, A stakeholders own self concern is above all others - objective to win
Accommodating - low concern for self, but high for others. An element of self sacrifice - objective to yield
Collaborating - high concern for self and others. Example of expanding the pie - objective find win - win outcome
Compromise - occupies the middle of the quadrant. has elements of other styles and is general a position of reaching a middle ground of matters. it does not meet the needs of any one - objective find middle ground
What is the definition of Cross Organisational Teams?
Also known as steering group, cross functional teams etc. It bring together stakeholders from different department to gather different value adding skill sets. This can include supplier stakeholders too.
A disadvantage of this is that you run the risk of Group Think. This is when stakeholder agree with each other simply to avoid rocking the boat. This undermines the reason for the groups haring different skills and experiences and risks the problem solving ability thus effectiveness of group and project.
Can you describe the application of Tuckmans team and group development model? Can you name the stages too?
Tuckman believed that the same stages are inevitable for a team to grow to the point where is is functioning effectively and producing high quality out puts. Regardless of purpose, culture, departments etc, he suggests they all go through the same stages, albeit at different speeds per stage.
Forming - unlikely that all team members joining at the same time so stage is a staggered process. Characterized by uncertainty. Team members will be getting to know each others skills and competencies, forming hierarchies. This would be a good time to focus on team building activities. The focus for manager is to ensure everyone become familiar with each other. Manager needs to set clear objective for each person and the team so members know how they fit into the business outputs.
Storming - Alot of change occurs in this stage. Team members compete for status and acceptance of ideas. As a result, team performance declines. Competition leads to conflict as the more dominant members emerge.
Norming - This is the point that team performance increases as team members start to work together. they may even start to embrace differences and can on each other for their individual strengths. Team manager is less involved.
Performing - The team is performing and delivering benefits, hitting targets etc. Team is functioning at a high level and is motivated. Not all team can reach this level, some will stop at Norming. Is is possible for the team to regress back a stage or two. Any new team members risk this. A new team member will experience these stages on an individual basis too and they fit in.
This model can also be applied to development of cross functional teams.
What is the definition of Cost Modelling?
A process whereby buyer uses to understand cost that make up the supplier price.
Cost modelling will generally be undertaken based on spend located in the strategic quadrant of the Kraljic matrix as these supplier would be targeted for a partnership relations.
Cost modelling is not needed for every supplier purchase. Competitive tender of the strong procurement processes can suffice.
A cross functional team of internal stakeholders should be developed to as if with cost modelling. Supplier should be engaged by partnership relations and external stakeholder to the cross functional team.
What is the definition of Triangulate?
Statistical concept based on understanding whether data is valid by reviewing multiple data sources. Data is considered verified by two or more reliable sources of information.
