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Define Procurement - How The Procurement Process Suppose To Work
Define Procurement, a dictionary answer- the act or process of the obtaining of supplies or services, usually by a government.
Define Procurement, a practical answer- the two-layer process governments and government supported entities use to purchase goods and services. Layer one is the way the procurement process is suppose to operate. Layer two is the way the procurement process actually works.
This hub attempts to define procurement as it concerns the first layer - how the procurement process suppose to work. The second layer can be found here at Definition of Procurement.
Different governments (federal, state, local) may define procurement slightly differently but the purpose is the same. Ostensibly, the process is to assure that the government is getting the best pricing, but usually more important is a set of protocols to assure improprieties do not happen.
Governments of all forms have had a history of corrupt purchasing policies. From $400 dollar hammers for the federal government to cronyism of county or municipal governments. So, most governments have set up central purchasing processes with a set of protocols to assure best pricing and most fair pricing. At a set monetary threshold a government will go to an open bid process for a product or service. Like any purchase over $10,000 must be bid competitively which is define procurement speak for 1). Get as many people to quote a price on this purchase, and 2). Keep the process open for a period of time that businesses can learn about the request for bid and respond. It is not practical for a government to go through a whole bid process for say a box of pens. Even if the government doesn’t buy the least expensive pens, having a $15 per hour employee spend thirty minutes ($7.50) on saving fifty cents on a box of pens is not fiscally responsible. But having the same employee spend twenty hours ($300) using an open process to save a thousand dollars is fiscally sound. Plus, there is the open benefit of transparency, assuring that there are no allegations of impropriety, low bid wins.
Therefore, in the procurement process most governments allow purchasing departments to buy from whatever vendor they want on smaller ticket items. Although, that choice could be limited to a pool or list of pre-approved vendors. Sometimes, governments define procurement with a middle level between open purchasing and the bid process. Most use a three bid process. So, it works something like this- from $0-$1,000 purchasing can buy from any pre-approved vendor, from $1,001 to $10,000 purchasing must get at least three bids for a purchase, and above $10,000 the purchasing department has to go through a bid process.
That middle bid process is typically not very well-defined and solely in the hands of the person doing the purchasing. It means that the purchasing employee simply calls three vendors and asks them to quote. Say he is looking for a copier, he will call three vendors, lay-out the specs and requirements ask the vendors to quote. Once he has three quotes he will buy from the lowest bid.
Finding a procurement opportunity is somewhat easy if one is open and willing to look for them regularly. Because of the open process, the notification of as many interested parties is necessary. Some smaller municipalities may even list solicitations in the legal notices of the paper. However, with the advent of the Internet announcing solicitation notices has not been easier. Federal, state, counties, local, and major universities have their announcements online.
To offer some examples, here are some sites I visit weekly. Also, in my industry I can pretty much work nationally, but I focus regionally. I work about five states Arkansas, Kansas, Missouri, Oklahoma, and Texas looking for procurement opportunities.
The US Government is required to put all purchases above $10,000 out for bid. FedBizOpps is the clearinghouse web site and has plenty of functionality on the search side to narrow your search as you desire. Narrow the search to geography, minority set-asides, or industry codes.
State governments list their solicitations too from the central purchasing department. Provided below is the Oklahoma Department of Central Services. At the date of this writing Oklahoma was looking for a varied range of products and services ranging such as satellite phones, humidifiers, life insurance coverage, uninterrupted power systems, registered nursing services, cafeteria services.
Again, because of the Internet one does not have to be limited to their home area. A person may expand as far as they are comfortable. Presented is the Dallas County web site for procurement solicitations.
Just as with county, one can collect a number of solicitation web sites. Presented are purchasing web sites for Wichita Kansas, Springfield Missouri, Tulsa Oklahoma, and Dallas Texas.
Purchasing is not limited to large or mid-sized cities. Small towns also list but not all; however a search of your area could produce some interesting results. Listed are a couple of examples with Miami, Oklahoma population 14,000 and Fayetteville, Arkansas 58,000.
Major universities are great sources for define procurement opportunities. An example is the University of Oklahoma listing.
Also, consider other possibilities that may list. If a military installation is nearby, they often have a listing for local solicitations. Native American tribes can also be a source for solicitations.
A person can see how a list can quickly develop. That list should be viewed at least weekly as bids will have closing dates. Once they are bookmarked it is easy to go through them looking for pertinent solicitations. Some higher volume industries like office supplies or printing may need to be checked more often. Larger ticket products and services may not come as often but still need to be monitored as closing dates can come and go quickly.
The In a Nutshell series is compact but thorough and a good way to get the premium information needed for government contracts.
- Definition Of Procurement - How The Procurement Process Does Work
Above you read how the procurement process suppose to work, but here you can read how the procurement actually works.
- Federal Procurement Policy
The federal procurement process can be quite lucrative for the small business owner. However, there is a steep learning curve when dealing with the federal government. Learn more.
- Procurement Marketing For Entrepreneurs
Procurement marketing is a way businesses can get other business while looking for opportunities from government purchases and contracts. A good way to ramp up an entrepreneur's networking efforts.
- Government Contract Awards for Small Business
Even small businesses can pursue United States federal government contracts and get awarded jobs. There is help available to make small business successful from government purchases.