C/P Award Process

Can you explain the contract/procurement award process?

Awarding the contract

Once a supplier's winning tender

·         Has been identified

·         And the sum involved approved by senior management

·         As a commitment

·         Against corporate or project accounts

·         Notify the successful supplier!

Supplier notification

·      Initial notification to the supplier

·         Can be by a "Letter of Intent"

·         I.e. a letter that expresses the organization's intent to award a contract

·         Which itself becomes an "interim" legal contract

·         So care must be taken in its preparation

·      A letter of intent is useful

·         If there are some final technical details to be settled

Do not touch the price!

·      Final negotiations are OK

·         Covering when, where, and how to start the work

·      However, any such "negotiations"

·         Should in no way have the effect of altering the submitted price

·         As that is tantamount to making a counter offer

·         And could result in failure of the entire process

·      Such post tender price negotiations

·         Are highly unethical, and

·         Bring discredit to the acquisition organization

·         Though unfortunately is done all too often

Formal contract

·      Now is the time to

·         Prepare a formal contract agreement document

·         Obtain the supplier's agreement and signature

·         Obtain the corporate signature, and

·         Distribute the contract document to the supplier

·         And others as necessary

This is now a legal document

·         That can be enforced in a court of law

·         This final step enables the real work to begin!

A cautionary note

One last word of caution

·         Do not allow the supplier to start work

·         Before the contract proper is signed

·         Doing so, establishes acceptance by the parties

·         Without any of the protection

·         That the clauses of the contract may provide