Public sector procurement isn’t a haphazard process that you can bumble through until you award a contract. There is a procurement cycle that must be followed. Although procurement process flow well, having said that, the cycle isn’t set in stone. You have some leeway to adapt the cycle to suit your contract’s needs.
Generally, the procurement life cycle in the public sector consists of six primary steps, which we’ll cover below. We’ll also look at the CIPS procurement cycle, which is an overarching process that pertains to procurement globally.
The Public Sector Procurement Cycle
The procurement cycle benefits contracting authorities and suppliers by emphasising value for money, maintaining compliance with business requirements, and fostering relationships.
Delta eSourcing makes working through the cycle easy thanks to our eTendering portal, which streamlines the overall procurement process for all parties.
The Six Steps of the Procurement Cycle
We’re going to look at the six steps of the procurement life cycle and how Delta eSourcing’s competitive tender management services facilitate each step.
Step 1: Procurement needs analysis
Before you can do anything you must know what you want. This is not a vague idea, it is specific so that suppliers understand exactly what is required and contracting authorities know exactly what to look for. The solution must ensure that procuring goods raw materials or services aligns with your strategic goals.
This is the concept stage of the procurement process and is the best time to begin early engagement with external suppliers.
Step 2: Identify suppliers
Sourcing suppliers is best done on a procurement portal where they are registered to provide services in specific categories. Our eTendering portal boasts over 100K active suppliers, making it one of the best supplier identification tools available.
One of our standout features is our community-building approach that facilitates collaboration within a transparent environment. This can also facilitate innovation through competitive tendering processes.
Step 3: The tendering process
The tendering process itself can be divided into steps. The first step is to create the tender documents, which must include a detailed breakdown of the contract, especially essential data, including specific requirements, evaluation process, contract terms and conditions, payment terms, and closing date for submissions.
The second step is to publish the contract notice on a procurement portal or contracts finder platform like our eTendering portal. Our portal enables you to manage other steps in the procurement process, including bid evaluation, supply chain management, and contract negotiation.
Step 4: Select suppliers
Thorough evaluation is crucial to choosing the supplier that delivers the best value. Making the wrong decision can result in unnecessary costs, not to mention wasting time and resources. We provide the insightful advice you need for insightful supplier selection.
Remember, our collaborative eTendering platform also ensures supply chain transparency, which is emphasised by the Procurement Act 2023.
Step 5: Manage the contract
Contract management software enables you to keep an eye on how the project is progressing, for example, is it on time, is the quality as expected, are the regulations being followed?
Our eTendering portal has the tools you need to monitor the procurement process, track supplier performance, and manage your relationships with multiple suppliers.
This keeps everyone honest, informed, and on track.
Step 6: Review delivery and contract performance
This is the last stretch. The contract is fulfilled and you must review the supplier’s performance. Again, our portal has tools that enable you to conduct a comprehensive review that includes procurement efficiency, expectations, results, and potential for future tenders.
CIPS Procurement Cycle
The Chartered Institute of Procurement & Supply – CIPS – is a global organisation that oversees procurement as a whole, setting the standards, promoting best practices indirect procurement, and providing education and training for all procurement processes.
CIPS also serves as a professional network to forge connections and build a community spirit across borders.
When it comes to procurement lifecycle best practices, CIPS recommends a 13-stage procurement life cycle. However, the number of stages contracting authorities use depends on a variety of factors, including budget, location, and business size.
13 Stages of the CIPS Procurement Cycle
We’re going to look at the 13 steps in the procurement cycle as recommended by CIPS, so you can decide which ones suit your purpose.
Stage 1: Define your needs
This mirrors step one above, where you carry out a sufficiently detailed needs analysis.
Stage 2: Conduct a market analysis
This isn’t necessarily relevant to the public sector, but you can still find out about potential suppliers and consider whether the project is best suited to an SME or larger enterprise.
The Procurement Act 2023 states that contracting authorities must remove barriers that hinder SMEs from participating in the tendering process, so, if the project is quite big, see if you can break it up into smaller lots for SMEs.
Stage 3: Develop a procurement strategy
Public bodies must develop a procurement strategy that does more than focus on price. They must consider how the project is likely to impact the environment in which their target market lives.
For example, how will it impact the local fauna and flora and how can suppliers provide added value that offsets the impact and keeps the community happy?
Stage 4: Conduct a pre-procurement market test
This stage is also not necessarily relevant to public procurement, but it’s a good time to assess your procurement strategy to ensure it aligns with your goals and incorporates the principles of transparency and fair competition.
Stage 5: Create tender documents
Creating tender documentation mirrors step three above.
Stage 6: Request for Information
This stage doesn’t apply to all public bodies and their procurement requirements, but it is a helpful way to pre-qualify suppliers before moving a purchase request forward.
Stage 7: Issue tender documents
Issuing tender documentation also mirrors step three above.
Stage 8: Evaluate bids
It’s time for finance team to evaluate bid submissions using the prescribed detailed specifications. In some cases, the initial evaluation can be managed by software automation. It’s only when it comes down to the final selection that the procurement team gets involved.
Stage 9: Award the contract
Notify the winning supplier. The Procurement Act states that you your procurement department must publish a contract award notice and provide feedback to all bidders before the finalisation of procurement processes.
Stage 10: Manage warehousing and logistics
If necessary, you should have warehousing and storage pre-arranged and logistics processes in place to ensure seamless delivery and order classification.
Stage 11: Measure performance
Performance must be monitored and regularly assessed to ensure rules and regulations are followed and to gauge supplier performance. Overall contract performance is measured against set KPIs. Opportunities for improvement are identified and issues are resolved.
Stage 12: Manage supplier relationships
Supplier relationship management (SRM) software is available to help you manage all preferred supplier relationships, not just the ones working on current contracts. SRM fosters long-term relationships.
Stage 13: Asset management
This just means that you should evaluate your current needs to determine if requirements have changed. If they have, you must develop a new tender. If they haven’t, you’ll have to re-tender the contract with the same technical requirements.
The procurement cycle starts again, regardless of the assessment results.
Delta eSourcing Is Your Procurement Partner Of Choice
The procurement cycle can be as complex or simple as you make it. Obviously, simpler is better and that’s where Delta eSourcing comes in.
We provide a simplified procurement process with the tools and services you need to further business objectives and streamline procurement activities, providing guidance and support when needed.
We have decades of experience in public sector procurement and have perfected our public sector sourcing solutions, making it easy for you to complete the six steps of effective procurement. We are also constantly innovating, so you can rest assured our services will always give you a competitive advantage in a competitive market.
Book a free demo or contact us for more information on our array of procurement solutions for buyers and suppliers alike.
