Choosing the Seller

For the performing organization to finalize the process of selecting a vendor, there must first be eligible sellers. Assuming there is more than one seller that can satisfy the demands of the project, there are seven tools and techniques the project manager can rely on:

• Weighting system A weighting system takes out the personal preferences of the decision-maker in the organization to ensure that the best seller is awarded the contract. A weighting system creates a matrix, as seen in Figure 12-4. Weights are assigned to the values of the proposals, and each proposal is scored. Because the weights are determined before reviewing the proposals, the process is guaranteed to be free of personal preferences and bias. The seller with the highest score is awarded the contract.

• Independent estimates These estimates are often referred to as "should cost" estimates. These estimates are created either by the performing organization or outside experts to predict what the cost of the procured product should be. If there is a significant difference between what the organization has predicted and what the sellers have proposed, either the statement of work was inadequate or the sellers have misunderstood the requirements.

• Screening system A screening system is a tool that filters or screens out vendors that don't qualify for the contract. For example, the project manager

Possible Score

20

20

15

10

10

5

20

100

Value

Experience

Certifications

Level IV Engineers

Security Clearance

Start Date

Waste Removal

Price

Total Score

12

Allen Builders

12

20

12

10

10

0

10

74

FRJ Construction

18

20

11

0

10

5

18

82

Howe &Who Construction

18

15

5

0

5

5

15

73

Ralph Engineers

15

8

8

0

10

5

17

73

Figure 12-4 A weighting system scores values to the seller's ability to deliver goods or services.

Figure 12-4 A weighting system scores values to the seller's ability to deliver goods or services.

could say that only vendors that have built eight bridges in the state of Utah can qualify for the contract. Sellers that don't meet the requirements are removed from the selection process, and their proposals are not considered.

• Contract negotiation The performing organization creates an offer, and the seller considers the offer. The contract negotiation process is an activity to create a fair price for the work the seller is to complete. The performing organization and the seller must be in agreement on the expectations, requirements, authorities, terms, technical and business management approaches, price—and any other pertinent factors covered within and by the contract—prior to signing the contract.

• Seller rating systems Seller rating systems are used by organizations to rate prior experience with each vendor that it has worked with in the past. The seller rating system can track performance, quality ratings, delivery, and even contract compliance. The project manager of the current project can reference this internal seller rating system to determine the expectations of working with a vendor based on the vendor's past performance.

• Expert judgment Sometimes, the project manager isn't the best person to make a decision as to which vendor should be selected. Consider very large projects, like building a new skyscraper. The project manager likely wouldn't be the only person involved in making the procurement decision, but rather a team comprised of different experts would contribute to the decision.

• Proposal evaluation techniques This big bucket of tools and techniques can include objective and subjective considerations from experts within the organization, weighting systems, multiple reviewers, scoring systems, screening systems—just about any source selection technique that the project management team feels like using. The point is that there are many different approaches to compare and contrast proposals, so the project management team should use all of the appropriate techniques available to make the best decision for the good of the project.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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