The Procurement Process

4 Procurement Strategy

Procurement Principals
0 Procurement Principals 1 Project start-up 2 Risk Allocation Model 3 Business Case 4 Procurement Strategy 5 Market Assessment 6 Market Creation 7 Produce Requirement 8 Supplier Selection 9 Proposal Evaluation 10 Contract Preparation 11 Bid Evaluation 12 Award 13 Project Closure 14 Implementation / Transition 15 Contract Management
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You are on step 10 of 14 steps.

Click for slide: Take account of previous procurements Click for slide: Encourage small and medium sized enterprises Click for slide: Specify requirements Click for slide: Determine the procurement option Click for slide: Options for construction projects Click for slide: Options for IT projects Click for slide: Determine the procurement route Click for slide: Plan the procurement Click for slide: Produce the procurement strategy Click for slide: Develop a contract strategy Click for slide: Determine pricing mechanism Click for slide: Develop the evaluation strategy Click for slide: Prepare an OJEU Notice Click for slide: Update the business case and Decision Point
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What you need to do

Decide the type of contract to use, this should be based on appropriate standard model (there are OGC models suitable for construction, IT-related and PFI contracts and for the procurement of other goods and services). If a standard model is not used as the basis for the contract, be prepared to justify that decision. See the Risk Allocation Model for guidance on 'deal shapes' and contractual issues relating to IT projects.

Decide on the optimum contract period. This is a balance between the competitive value of short-term contracts and the stability, continuity and potentially lower yearly costs of a longer term contract.

Think early on about the issues of recompetition at the end of the contract period, particularly if a long term contract is likely to provide better value for money


There are a number of options at this stage in terms of whether the work should be delivered by a number of first tier suppliers contracted directly with the contracting authority, by a consortium, or by a single contractor who engages other organisations as subcontractors (e.g. prime-type contracting), or a combination of all of these approaches.

Points to consider

A contract strategy should include:

  • type of commercial arrangement sought (e.g. PFI/PPP, partnering, single or multiple suppliers etc)
  • form of contract
  • negotiation plan, where relevant, including draft contract schedules
  • contract duration
  • Supply Chain Management in Public Sector Procurement: A Guide
  • commercial features such as incentives and rewards
  • review periods
  • payment mechanisms (see below)

Need to consider:

  • arrangements relating to any existing contracts affected by the new contract.
  • any staff transfer (TUPE), asset transfer, property leases/sales etc
  • implications if the procurement is a  collaborative opportunity
  • ownership of intellectual property
  • whether there will need to be arrangements like SLAs, MOUs etc with OGDs or any contractual arrangements with other third parties (e.g. Access agreements) covering data provision, usage etc.