W8._Norbert Eze_ Vendor Selection, Bid Analysis & Contract.

W8._Norbert Eze_ Vendor Selection, Bid Analysis & Contract.

By norberteze on December 19, 2012

I.      PROBLEM RECOGNITION, DEFINITION AND EVALUATION

What are the best understood criteria for selecting vendors?

Lowest?

·         What are the pitfall in this criteria

·         What is the quality to be received for lowest cost?

·         Does procurement office know about the quality and reliability for each type of service or product to be supplied?

Vendor/Supplier Selection are quality and reliability an issue in cost controls? What should one do about procurement policy to avoid the quality and reliability.

II.    DEVELOPMENT OF FEASIBILITY ALTERNATIVES

The feasible alternatives:

·         Supplier A

·         Supplier B

·         Supplier C

III.   DEVELOPMENT OF OUTCOMES FOR EACH ALTERNATIVE

Bid Analysis starts when the requirement is defined. Requests for bids/tenders or Proposals should contain the following:

·         What is required

·         Specification that the supplier must be an approved supplier

·         What criteria is the bid going to be measured against

These criteria will define to all

-include the supplier

-own procurement department as to how the bid would be evaluated

Criteria and Weightings

·         Cost                                                                                         60%

·         Supplier Quality System Rating                                             20%

·         Time expected for supplier to respond for assistance           10%

·         Previous Reliability on jobs                                                     10%

Steps:

1.Score each criteria separately-base 100

2.Multiply each score by its weight

3.Add each supplier total

Table..1

IV.  SELECTION OF A CRITERION (OR CRITERIA)

·         Supplier A

Base on the bid analysis recorded in table 1 by the performance of Supplier A, cost score is 75, supplier quality system ratings is 100, supplier response time is 100 and previous reliability on jobs is 70. The total performance is 82

·         Supplier B

Base on the bid analysis recorded in table 1 by the performance of Supplier B, cost score is 100, supplier quality system ratings is 80, supplier response time is 90 and previous reliability on jobs is 80. The total performance is 93

·         Supplier C

Base on the bid analysis recorded in table 1 by the performance of Supplier C, cost score is 90, supplier quality system ratings is 60, supplier response time is 70 and previous reliability on jobs is 100. The total performance is 83

V.    ANALYSIS AND COMPARISON OF THE ALTERNATIVES

From Bid Analysis it is proven that Supplier B won the bid with score weighting of 93, Supplier A scored 82 and while Supplier C scored 83.

VI.  SELECTION OF PREFERRED ALTERNATIVE

From Bid Analysis it is proven that Supplier B won the bid with score weighting of 93.

VII. PERFORMANCE MONITORING AND POST-EVALUATION OF RESULT

Through Analysis with criteria of cost, supplier quality system, supplier response time and previous reliability on jobs Vendor Selection, Bid Analysis & Contract will enhance the performance monitoring and post-evaluation of the result.

References:

1.      AACE International. (2012). Skill & Knowledge of Cost Engineering, (5th ed.)  (Selection 5) (Chapter 23) (pp. 23.1-23.10) (Chapter 24) (pp. 24.1-24.5)

2.      Purdue OWL APA style. (2011). APA formatting and style guide, pg (10). Retrieved from http://owl.english.purdue.edu/owl/resource/560/19

3.      Sullivan, W. G., Wicks, E.M., & Koelling, C.P. (2012). Engineering economy, (15th ed.)  (Chapter 1) (pp. 29)

4.      Howard Technology Middle East (2012). Operating Cost Estimating and Financial Analysis, ( 2012) (Selection 7) (pp. 1-7)