Procurement and Contract Management: For a long period of time, procurement has been considered as an aspect that deals with purchasing supplies and stationary. Notably, procurement is an absolutely fundamental function in any business and it's important for the success and profitability of the business, particularly with regards to the economic recession and downturns. Until recently, procurement was important but rarely celebrated component of many multinational corporations. Currently, procurement and contract management play vital roles in companies, especially global firms, in ways that the traditional managers could not have imagined. As a result, the procurement and contract management has risen to increased prominence and popularity in the highly competitive business environment. Through these components, companies have been able to strategize towards mitigating risks associated with the tightening of the supplies of critical commodities and increase in prices.

Definition and Importance of Procurement and Contract Management:

Procurement can be described as the process of acquiring goods in the right price, quantity, and quality. This concept involves working in partnerships with suppliers through establishing and ensuring long-term working relationship with them ("Defining Procurement," n.d.). The process also involves taking into consideration the storage implications and interruption of cash flow during the acquisition of goods. Traditionally, procurement meant purchasing goods in a hard line manner i.e. The sense that the buyer would attempt to knock down the supplier in relation to the established relationship and cost of products. In some cases, the buyer had the power as the supplier was forced to agree to seemingly harsh conditions of the procurement process.

However, this practice has changed since suppliers are considered as partners and procurement being regarded as a relationship that can be mutually beneficial. As a result, procurement also helps in keeping suppliers content and excited in the relationship in order to promote greater flexibility. This flexibility is defined as the ability to negotiate and an increasingly productive working arrangement in the procurement process.

Contract management is described as the process of methodically and effectively controlling of the creation, implementation, and evaluation of a contract in order to maximize operational and financial performance and lessening risk. While there are various descriptions of contract management, most of them refer to post-award activities. Notably, successful contract management is most efficient if pre-award and upstream activities are carried out efficiently. Contract management requires flexibility and partnerships on both sides of the negotiations and a readiness to adapt the contract terms to reflect the changing situations ("Contract Management Guide," n.d.).

Procurement and contract management have become important in the modern business world, especially because of their link to the success and profitability of a business. Procurement is an important process because it's a complex process that can assist businesses to become more effective since all the obtained goods and services that are purchased will be of right quality, price, and quantity. While procurement may not really produce the commodities that are sold, it can assist in increasing profits, usually dramatically.

Effective contract management has become important and beneficial to many organizations and the entire business world because organizations in the public and private sectors are experiencing increased pressure to lessen costs while enhancing operational and financial performance. As a result, contract management enables these organizations to minimize the costs without interfering with the business' operational and financial performance.

RFP Selection Tools:

The Request for Proposal document is regarded as one of the most significant, if not the most important document, in the process of selecting the vendor. The importance of RFP originates from the fact that the document is presented to providers to obtain a better understanding of their core competencies, willingness to develop a substantive business relationship, and solution delivery. In most cases, the inclusion of an effective pricing template or strategy in the RFP promotes assessment, contract negotiations, and contract management as the procurement relationship grows.

Request for Proposal selection tools consist of various sections that enable the achievement of their objectives in the contract negotiation and management process. These sections include the administrative, background and overview, statement of work, supplier qualification and references, supplier, pricing, contracts and licenses, and appendices sections. The administrative section consists of all of the managerial requirements and information that a supplier must comply with in order to present an acceptable proposal ("Request for Proposal," 2004). On the other hand, the background and overview section offers the suppliers with background information of the company and problem statement that will be resolved with the RFP and the overall objectives and goals.

While the Statement...

Supplier section enables suppliers to have a place in the document in which they can provide necessary information that was not requested. A detailed format for suppliers to comply with in the development of price proposals is contained in pricing whereas contracts and agreements from vendors are under contracts and licenses section. The final section of RFD selection tools contains detailed information that is quite lengthy for the body of RFP document.
The response to the Request for Proposal is the Proposal since the previously submitted documents by the vendor were not contractually binding. The proposal is then assessed in order to choose a solution to the specific problem, the proposed solution, and the terms and conditions that are contractually binding, which forms the basis of the contract. Request for Proposal selection tools are mainly used for choosing the most suitable vendor for a contract. The selection process of a vendor also involves the assessment of the presented proposals during contract negotiations. In the assessment process of a proposal, every document will undergo a thorough peer review process. Conducting a very thorough and transparent assessment of proposals is important in the determination of the most appropriate vendor in the contract.

The assessment of proposals begins after the presentation of documentation from the vendors. Some of the major steps for improving the assessment of the proposal include conducting three periodical vendor presentations, reviewing information from the presentations and summaries, and providing follow-up questions (Rumph, n.d.). The periodical vendor presentations provide unique and very educational information regarding the vendor's products and databases. On the contrary, the presentations and summaries are used to show the need for any clarifications whereas follow-up questions are developed in order to obtain any necessary clarifications.

Concept of Procurement Planning:

Procurement planning is a concept that is defined as the process with which companies or institutions to organize any purchasing activity for a particular period of time. The procurement planning process is usually carried out and completed during the process of budgeting. Actually, the first step in the procurement planning process is budgeting since every department is needed to request budget for every staff, purchases, and expenses annually. These budgets are then reviewed as the accountants spend time to identify the common requirement for purchasing. These departments work together with the central purchasing sector to merge the planned spending for certain commodities depending on the presented budgets.

Procurement planning process works effectively in organizations or businesses that are committed to minimizing costs since issues around date of delivery, customer service, and compliance with contract must be solved internally before the contracting. Generally, the basic concept of procurement is that advanced planning, preparation, and group purchasing will contribute to more effective business operations, cost savings, and increased profitability. Some of the major components of procurement planning include just-in-time delivery and bulk pricing and negotiating ("What is Procurement Planning?" n.d.).

In addition to procurement planning, the project management team should adopt various strategies that are necessary for the success of a project. Despite of the nature and kind of project, some of the various strategies that could help in project success include planning, validating, managing, adapting, resource, leverage experience, and auditing results. These strategies help in addressing the factors associated with the project in order to contribute to success and effectiveness.

Selecting the Most Qualified Vendor in a Proposal:

The process of selecting a vendor can be quite complicated and emotionally draining experience if a suitable approach is not adopted from the start of the process. This is despite of the fact that successful selection of the most appropriate vendor is crucial to the success of a project. Some of the most important steps in ensuring the successful selection of the most qualified vendor in a proposal include & #8230;

Analysis of Business Requirements:

It's important to assemble a team of individuals with vested interest in the specific vendor selection process before the collection of data or conducting any interviews. The first responsibility for the vendor selection team would involve defining the product and/or service that is required from the vendor. After identifying the required product or service, the vendor selection team should define the technical and business requirements and document the areas that are relevant to the selection process. The published document should basically incorporate the business requirements that form the basis of searching for the most qualified process.

Vendor Search:

Once the business and vendor requirements have been established, the selection team should start searching…