In day-to-day business, procurement experts with the assistance of other technical experts evaluate various elements of input in a tender in order to make business decisions. Some of the evaluations criteria are, however, subjective because they are based on qualitative measures.
This poses challenges hindering the capability to select an appropriate supplier due to circumstances surrounding the development of evaluation criteria in both private and public sector organisations.
In most instances, buying organisations in their minds know vividly that they want a supplier who offers the best product, with technical competence in terms of staffing and equipment and are financially sound. Crafting an appropriate statement to invite participants to appropriately demonstrate their capabilities is the challenge to many.
Many end up providing subjective requirements such as “respondents must prove that they offer quality products, or they are technically competent, or have required equipment, or are financially sound”. Such requirements are slanted and different evaluators can bring different results when bidders try to respond to such qualitative requirements.
Public procurement buyers are more in a fix. They are required by law to develop criteria that are understood by participants, and it is the one used as a basis to challenge tender award. If the evaluation criterion is not objective, the resultant decision is vulnerable to appeals resulting in delay in public service delivery.
Evaluation criteria are the standards used to evaluate offeror’s technical and operational effectiveness or the standards on which a technically sound judgment or decisions on the selection of various alternatives may be based.
They are also used as defined benchmark or standards or point of reference for evaluating performance or levels of anticipated quality, or a yardstick against which issues of accomplishment, conformance and suitability of an individual alternative activity, product or plan are measured.
The benchmark or standards may be drawn from the buying firm’s own experience, experience from other organisations such as environmental issues monitored by Environmental Management Authority or ISO14000 certification; quality issues monitored by professional bodies that set standards such as ISO9000 certification.
Legal requirements include company registration requirements, compliance with tax laws, industry registration, social security compliance, safety, health and environmental SHE issues.
Organisations ought to develop evaluation criteria that enable them to assess and select viable options from the various options offered by the market. In the public sector, section 31 (b) (iv) of the Procurement Act (Cap 22:14) states that the criteria by which suppliers shall be evaluated must be clear in the request for proposal. Section 11 (1) (i) of the procurement regulations states that the evaluation criteria must be broad. There is a lot of emphasis in the manner in which evaluation criteria is crafted.
Apart from providing a basis for ensuring organisational requirements are competitively sourced, it provide a means of ensuring that evaluation team can objectively select the best bid and a guide to prospective participants of what the buying organisation is looking for.
It is therefore the prerogative of user departments within organisation to identify, describe and specify necessary inputs for procurement requirements to the procurement management section whenever necessary.
Procurement experts must be knowledgeable on how to appraise such requirements in order to develop a good request for proposal (RFP). It is critical that such requirements are not qualitative and are SMART — specific, measurable, attainable, relevant and time bound.
A certain level of procurement knowledge is required for one to be proficient with designing good RFPs.
.Nyasha Chizu is a fellow of CIPS and the branch chairman for CIPS Zimbabwe writing in his personal capacity.