Explain three steps in the supplier selection process for a project

Question 1

Explain three steps in the supplier selection process for a project

Answer 1

• Research
• Tender
• Manage

Question 2

Research 1

Answer 2

Suppliers need to be researched. Doing research allows an organisation to start the process of narrowing their target market with the preliminary research, the number of organisations applying would perhaps be too great in volume.

Question 3

Research 2

Answer 3

The project manager and the project sponsor will assess all current market options to identify which external organisations have the capacity and capabilities to deliver the required product or service. If there are no suitable external organisations, an organisation may opt to make the product instead of procuring the services of another organisation to make the product.

Question 4

Research 3

Answer 4

Some organisations have lists of trusted/reputable suppliers who they frequently work with, so they do less research. Other organisations may work from approved lists of suppliers, so no research is needed.

Question 5

Tender 1

Answer 5

A tender is sent to all organisations that have met the assessment criteria, receipt of a tender means that organisations have been invited to tender (ITT), these organisations can then bid to win a contract.

Question 6

Tender 2

Answer 6

The supplier which meets the assessment criteria in the pre-qualification questionnaire and offers the most value may be awarded the contract, this is a competitive process

Question 7

Tender 3

Answer 7

The tendering process must be fair, and it must give each organisation a fair chance of winning the contract. Organisations treated unfairly can pursue legal action, so, a host organisation has to make sure that the tendering process is done fairly

Question 8

Manage 1

Answer 8

Once the contract is awarded it is important that the relationship between the project team and the supplier should be actively managed. It is beneficial for the project manager to treat the suppliers as part of the wider project team and communicate with the suppliers effectively.

Question 9

Manage 2

Answer 9

Active management of the relationship can help to mitigate any issues that may potentially arise. There can be difficulties in managing the relationships e.g., managing subcontracts or multiple contracts (multiple relationships), which can be more difficult to manage than a single relationship with a supplier.

Question 10

Manage 3

Answer 10

Therefore, if possible, it is best to have a single contract (single relationship). Having a single relationship makes it simpler to identify and define the roles, responsibilities, and accountabilities i.e., if an issue arises, the accountable party can be identified.