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Evaluating Tenders

This is part of the sub-web covering Selecting ERP, and other Application, Computer Systems. To go to the overview of this sub-web, please click Overview. To go to the web-site home page, please click Home.

Stages of the Process

When the tenders are received, they have to be evaluated, leading to the selection of the preferred supplier. The evaluation process consists of a number of stages, namely:

- evaluation of proposals;

- discussions with short-listed suppliers;

- evaluation of revised proposals and selection of preferred supplier.

These stages are discussed in more detail below.

Evaluation of Proposals

On reading the proposals, it will soon be apparent that there are fundamental differences in the approaches adopted by different suppliers. Some will have covered every point raised, often in excessive detail, while some will have omitted large areas of requirements, probably because they cannot provide it, but leave you to find the omission. Some will identify each point in the ITT and specifically address it, whilst some proposals will be so disorganised that the recipient will need to check in detail to find the answers. In this case, any omissions should be checked with the potential supplier. If suppliers are being asked to include proposals for equipment, proposals will also be received suggesting varying amounts of equipment. In this case, somebody should decide on a reasonable configuration, and adjust the equipment proposals to achieve this configuration.

The degree of fit, for each point requested, should be noted, and a weight attached, following which the proposals can be scored. An example is provided in Appendix II, of the Downloadable Systems Selection Guide. Similarly, the equipment can be compared, as in the example in Appendix III.

During this process, all gaps and modifications should be discussed with the supplier, so that they can correct any misapprehensions and provide a proposal addressing the customer's requirements.

At the end of this process the customer should have an analysis of fit, and a comparison of equipment and price, so enabling him to decide on the tenders to be short-listed. The ideal is to list three suppliers, but four can be listed, if the additional effort, in providing the facilities for visits by the extra supplier, discussions, attendance at demonstrations, et cetera, can be afforded.

Discussions with short-listed Suppliers

The second stage of the evaluation process involves getting to know the short-listed suppliers. The normal procedure consists of:

- inviting the selected suppliers to visit the company, to confirm their understanding of the requirements;

- attending demonstrations of their proposed system, usually at their premises;

- visiting existing clients of theirs, both to see the system working and to find out how the relationship, between supplier and customer, has worked;

- holding discussions with the suppliers to clarify their understanding of the requirements;

- talking to other customers, of the suppliers, to determine the strengths and weaknesses of the suppliers;

- carrying out any investigations, if appropriate, into the financial strength of the suppliers;

- receiving revised proposals from the suppliers.

At this point, the management should have around three proposals in front of them, which appear to reflect the needs of the business.

Evaluation of Revised Proposals and Selection of Preferred Supplier

The crucial decision has now to be made. Hopefully, at this point, the directors, or managers responsible for the decision, have the following information available:

- the revised proposals;

- a revised analysis of fit, if required;

- a revised cost comparison;

- a clear impression of the relative strengths and weaknesses of the suppliers;

- awareness of the individuals with whom they will be working to implement the system.

At this point, normal commercial negotiating can take place to enable the most suitable deal to be achieved. The negotiating, however, should cover the contract terms, and an implementation plan, which are discussed elsewhere on this web-site (see Contract Review and Implementation Planning), at the same time. The contract can then be signed.