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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 11 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

Determine the approach to the pricing mechanism - the basis on which the supplier will be paid (fixed price or variable - e.g. on number of transactions, milestone payments), the method of payment and any links to performance.

Points to consider

For variable price contracts, the criteria for price variation and the period of review should be specified. Where appropriate (typically in long term, high value, contracts) there may be scope for 'incentivisation' payments - that is, payments linked to risk and reward. These may be particularly appropriate for innovative requirements.

See the Risk Allocation model for guidance on IT projects and other.

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