– By Cindy McDougall, Fleet Management Officer, City of Tea Tree Gully –
Procurement deals with the sourcing, negotiation and strategic selection and acquisition of goods and services that are of importance to an organisation.
Purchasing, on the other hand, is the process of how goods and services are acquired. Purchasing can usually be described as the transactional function of procurement for goods or services.
In our daily jobs, procurement can become a very cumbersome role, particularly with the probity and transparency required in the public sector.
So, what is the process? Firstly, we need to understand what it is we have to procure. Who defines what you need to source? Is it the end user or the team leader, or the fleet manager, or the finance department?
This can sometimes be overwhelming as they can all have different views, requirements and opinions. It’s a bit like the old Holden or Ford – which one is better? Port or Crows in the AFL? It can all become a big game.
And I’m sure in fleet we have all met ‘Little Mike’. Little Mike is a very needy person, who needs the latest and greatest of everything. He wants the most expensive, the biggest engines, the shiniest tools, everything is never going to be enough for Mike!
I’m certainly hoping those days are over now and we have become more diligent with our procurement processes and have full probity and accountability.
How do we ensure we’re procuring, not just purchasing?
I would start by enrolling a varied team on the panel.
For example, if we are buying a new truck with an EWP mounted for the tree gang, I would suggest the panel includes the team leader for the gang, one of the more knowledgeable staff in the team, maybe your workshop manager, and/or the plant and fleet manager (someone with the technical expertise a fleet purchase requires) and others that have a stake or can contribute. Ensure lots of communication and have an open mind when discussing needs.
So, after meeting with the stakeholders and scoping the needs, which direction do you take next?
Develop a specification and make sure it clearly states requirements and provides opportunity for innovative solutions. If you get the specifications wrong you will get what you asked for – not what you need.
Decide on your process. Does your organisation have their own contracts team, or do you undertake the RFQ process? Do you use a pre-qualified panel (i.e. vendor panel)?
Once the specifications and tenders have gone out and the responses are back, how do you score them?
- The cheapest
- The best quality
- The right design for the job
- The body builder has a good reputation
- Their tender conforms
- They can complete your job in a certain timeframe
- They have a really good service department
- They have a stringent WHS team at their site
All of these factors may play a part in the decision we make when evaluating the tender responses. What we want to achieve is the best value decision for the organisation, by considering a range of factors. The IPWEA Plant and Vehicle Management Manual describes this process as one where tenders are assessed using the appropriate pre-defined assessment criteria for the item being tendered – those things that are important to achieve a best value outcome for your organisation.
Each assessment criteria is allocated an agreed weighting by the panel and each tender is scored by the team against the criteria and a total score achieved. The best score points towards the best value offer.
The cheapest is not always the best – although sometimes it is!
When deciding which option to purchase, make sure you evaluate with the best intentions to purchase the best product for the job. Be mindful of others’ needs and wants and wishes, but don’t get carried away with all the bells and whistles, which can be costly when they may not even be needed.
Cindy McDougall is Fleet Management Officer with the City of Tea Tree Gully SA and a member of the IPWEA FLEET Council.