A recent posting over on Supply Excellence left me questioning how far has procurement has really developed over the years.

My major difficulty in using the vendors document starts right at the beginning of the procurement process – the message it sends to the vendor is that ‘the buyer does not know what they want’ and does ‘not have a rigorous sourcing process’. Easy pickings for the vendor.

The contract should be introduced early on in the sourcing process and not later than inclusion with the RFP.

Introducing the contract early is a significant step in the move from ‘traditional’ procurement towards strategic sourcing. In doing so the contract is integral to the selection process in the following ways:
1. The contract is part of the vendors proposal evaluation
2. Introduces commercially standard contract language and terms.
3. Promotes structured approach to risk identification and mitigation.
4. Requires fewer resources to reach commercially sound decisions.
5. Reduces overall sourcing cycle time.

By presenting the buyers document with the RFP, contract negotiation becomes part of the sourcing process and moves the buyer from a position of weakness to one of strength. This promotes:

1. Performance based contracting.
2. More effective SLA’s
3. Expectations of ongoing cost reduction and performance improvements.

Leaving the contract to the end does not work to the buyers advantage and will prolong discussions and increase risk. Buyers must therefore step up and be counted and develop contract documentation that presents them as the professionals they seek to be.

“Caveat Emptor”