Developing and Managing Requests for Proposals in the Public Sector

Theresa Bauccio-Teschlog, Dennis Carney, Joyce Foster, Ronald King, Christine Weber

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9780367520311
• eBook ISBN: 9781000092578
• Edition: 3
• Topic: Politics & International Relations
• Subtopic: Evaluation & Assessment in Education
• Index: Politics & International Relations

Mastering RFP solicitations is a critical skill required of every public procurement professional. Designed to provide a strategic overview of the skills and traits necessary to fulfill the procurement function, Developing and Managing Requests for Proposals in the Public Sector explores the complex and ever-changing process of competitive negotiations, providing hands-on guidance for practitioners to successfully achieve the best value for both their entity and the taxpayer. While rules, ordinances, policies, practices, and procedures vary among jurisdictions, the book breaks down the basic steps involved in the competitive negotiation process, providing best practice guidance for public procurement professionals to help them navigate the formidable and exacting process successfully, fairly, and with transparency. This book is required reading for every public procurement professional and will be recommended reading for all public procurement courses as well as concentration and certificate programs.

Chapter 1
The Procurement Process: An Overview

Introduction

The goal of public procurement is to obtain goods and services in a timely fashion to meet the needs of its customers. Recognizing that government resources are limited, it is imperative that public procurements be conducted with efficiency and integrity in a fair and open competitive environment.

Goods and services required by most entities can be categorized as follows:

• ■ Operational categories such as, but not limited to, office supplies, information technology products involving computers, phones, audio-visual equipment, telecommunications, and maintenance. These types of goods and services are essential to the performance of the government’s daily operations, thus less detailed planning is needed, and budget requests and decisions regarding these commodities are more straightforward. Planning and budgeting are done on an incremental basis, with needs and funding based on the previous year’s level unless new requirements are identified.
• ■ Outsourced operational or program activities, such as government services delivered to the public by program partners, or operational activities that are contracted out such as counseling services, testing services, and cloud services.
• ■ Major capital projects and equipment requiring large-dollar-value funding, such as information technology implementation, infrastructure, and construction, and major equipment procurements such as fire trucks and subway cars. Major capital projects need to be well planned and are intensely scrutinized.

The procurement process encompasses the following activities:

• ■ Assessing needs and determining requirements
• ■ Requesting and appropriating funds
• ■ Creating a procurement plan
• ■ Preparing and processing a purchase requisition
• ■ Determining the source selection method
• ■ Drafting and issuing a solicitation
• ■ Evaluating bids or proposals and awarding a contract
• ■ Administering the contract, to include establishing expectations and assessing performance
• ■ Receiving and accepting the goods or services
• ■ Managing delivery, payment, and contract closeout

These activities or steps can be grouped into three phases:

• ■ requirements determination and budgeting;
• ■ contract planning, solicitation, supplier selection, contract formation; and
• ■ contract administration, payment, and closeout.

In order to achieve the multiple goals of their public procurement needs, government entities have issued strict procurement laws and regulations and established sound procurement policies and procedures with which procurement professionals must comply. These policies and procedures vary by entity as well as the commodities to be procured.

Before a procurement can take place, the entity should develop a strategic plan that forms the basis for a sound procurement budget and budget appropriations. Consensus must be built among stakeholders so that projects can be moved forward to effectively and efficiently meet the goals, objectives, and mission of the entity.

Requirements Generation and Appropriation

Every procurement begins with an identification of needs by the end user. The end user, stakeholders, and procurement professional then collaborate to convert the needs into requirements or alternative approaches and desired outcomes. This process often requires extensive market research and the development of a business plan that is created by conducting a business analysis.

A business analysis examines the various ways that a need can be fulfilled. That analysis provides a choice of reasonable alternatives that includes costs, benefits, critical success factors, and risks. Decision makers can then make an informed choice about which alternative appears to best satisfy the need. A business analysis may be simple and informal or highly formal and complex and may be used as the basis of funding requests or budgeting. It can be used as the basis of a procurement plan.

A procurement plan is a living document that encompasses procurements associated with a project. A procurement plan takes into consideration the commodities required, lead time, estimated cost, and sourcing requirements, all of which may change over time to best meet the entity’s needs. The business plan is used to justify future purchases.

Contract Formation: Contract Planning, Solicitation, and Selection

The contract formation phase includes determining the type of solicitation, developing the solicitation, evaluating the offers, making the award, and developing the contract.

Contract planning is the process by which the efforts of all personnel responsible for a procurement are coordinated and integrated through a comprehensive plan for fulfilling the entity’s need in a timely manner and at a reasonable cost. Contract planning includes developing the overall strategy for managing the procurement.

The planning stages of the solicitation incorporate the requirement generation and appropriation phase into a scope of work and specifications that can be easily understood by potential suppliers. The solicitation plan identifies the people involved in the procurement and their roles and responsibilities within an established time frame.

Supplier Files

Constant record keeping and maintenance of databases are required to track, protect, and maintain critical information on suppliers, commodities, and end users, including the amount of money spent with a supplier, the commodities procured, and the number of complaints received. Supplier files are useful, particularly when evaluating past performance, because the information provides an objective and well-documented record. If the entity has no previous history with a supplier, the procurement professional will need to conduct thorough reference checks or other inquiries.

Contract Administration

Contract administration can range from simple to complex depending on the type and value of the contract and the nature of goods or services required. For goods, contract administration consists of ordering, monitoring the ordered items’ quantity and quality, paying invoices, and keeping a good accounting record, and contract closeout when applicable.

For services, contract administration consists of ordering, monitoring performance through established deliverables, metrics and measures, payment and accounting, and contract closeout or termination.

For construction, the contract administration is very structured and more complicated, consisting of major phases, including initiating work and modifications or ordering, contract monitoring, payment and accounting, and contract closeout or termination. After a construction contract is awarded, a contract administrator issues a notice to proceed that sets contract administration in motion. While contractors perform, the procurement professional or designated contract administration team needs to carefully monitor contract performance. Areas to be monitored include quality, schedules, acceptance, conflicts, contractor performance, changes, budget, and payment.

There is often a disconnect between the end user “assuming” a contract has ended, without notifying the procurement and contracts team to take action to “close the file,” even for the procurement of goods. Closeout may include notifying the contractor that all work is considered complete and may be tied to final payments. Certain deliverables such as project reports may be requested for goods being installed.

Unlike a purchase order, of which the receipt of the items ordered and subsequent payment constitute closure, the formal closeout of a contract must meet the following requirements:

• ■ All contractual obligations have been met.
• ■ All changes, if any, have been incorporated into the final contract.
• ■ All deliverables such as hardware, data, code, and reports have been received and accepted.
• ■ All services have been performed.
• ■ All government property, such as equipment, badges, data, and confidential information, has been returned.

The final payment is authorized only when performance is completed and accepted.

Once all the preceding items are complete, the procurement professional or contract administrator writes a formal closure document discussing the contractor’s strengths and weaknesses in the performance of the contract. This document is invaluable if disputes arise. The information collected may also prove useful when potential suppliers are considered for future procurements.

Factors Determining Procurement Method Selection

The selection of a procurement method is determined by three major factors:

• ■ The type and size of good or service to be procured
• ■ The decision whether to include factors other than price only
• ■ The market uncertainty and risk for that type of good or service

Types of Commodities to Be Purchased

Government entities procure a wide range of goods and services:

• ■ Commercially available goods and services
• ■ Major technology systems, software systems, and networks
• ■ Research and development
• ■ Construction and architect-engineer services (professional services)
• ■ Maintenance, repair, and operations (MRO)

Goods and Services

These consist of all commodities that are sold competitively in the market. For these types of goods and services, government entities should specify their needs based on market research in a manner designed to promote full and open competition. The entity should only include restrictive provisions or conditions when necessary to satisfy their specific needs because such restrictions generally increase price.

Requirements should be further defined in terms that

• ■ enable and encourage suppliers to offer commercial items or, to the extent that commercial items suitable to meet the end user’s needs are not available, commercial goods that can be customi...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Contents
• Acknowledgments
• 1 The Procurement Process: An Overview
• 2 The Request for Proposals Process
• 3 Developing the Request for Proposals Document
• 4 Scope of Work and Specifications
• 5 Proposal Receipt, Evaluation, and Selection
• 6 Evaluation Methodologies
• 7 Contract Negotiations
• 8 Contract Writing
• 9 Completing the Request for Proposals Process
• Appendix: Code of Ethics—National Institute for Governmental Purchasing
• Index