Procurement Flashcards
What type of things are included in the procurement strategy?
- Make or buy decision
- Supplier selection process
- Pricing structure
- Type of contract
What are the steps in a supplier selection process? Think vigilant trainer. Need to know three in and out.
Think Vigilant training provider
Research
Pre qualification
Tender
Analysis of tender
Award - enter into final negotiations
Management
Closure
What are the types of fixed pricing?
Well defined and no significant changes to scope expected:
- Fixed firm price - price set at outset and not subject to change unless scope changes
- Fixed price incentive fee - some flexibility with financial incentives tied to achieving targets
- Fixed price with economic price adjustments - special provision for predefined final adjustments such as inflation changes or cost increases/decreases - used when over a number of years
Name types of pricing?
- Fixed price - agreed at outset
- Target cost - savings or additional liabilities shared at the end
- Maximum cost - upper limit imposed with supplier
- time and materials - day rate (risk sits with me)
What are the types of contract?
- one comprehensive contract - simple, one supplier responsible for everything
- Sequential contracts - contracts set for each phase to limit risk
- Parallel contracts - using more than one supplier depending on expertise
- Sub contract - where the chosen supplier gets another supplier
What kind of reasons would one supplier be chosen over another?
Organisation (size/resources/performance)
Financial (bank references)
Experience (done it before)
Performance (done it before well)
Management (experience, qualifications)
Who owns the risk with a fixed price?
The supplier - same price no matter what even if material prices go up
Who owns the risk during a target price contract?
It is shared - share the pain and share the gain at the end
Who owns the risk with a time and materials contract?
Customer - could go up if they take longer or material costs increase
