Copyright © tutorialspoint.com

Procurement Documents

previous next


Introduction

In order to understand procurement documents, it is important to understand the term Procurement Management.

Procurement is the purchase of goods and services at the best possible price to meet a purchaser.s demand in terms of quantity, quality, dimensions and site.

The procurement cycle in businesses work which follow the below steps.

 procurement cycle
  1. Information Gathering: A potential customer first researches suppliers who satisfy requirements for the product needed.

  2. Supplier Contact: When a prospective supplier has been identified, the customer requests for quotations, proposals, information and tender. This maybe done through advertisements or through direct contact with the supplier.

  3. Background Review: The customer now examines references for the goods/services concerned and may also consider samples of the goods/services or undertake trials.

  4. Negotiation: Next the negotiations regarding price, availability and customization options are undertaken. The contract regarding the purchase of the goods or services is completed.

  5. Fulfillment: Based on the contract signed, the purchased goods or services are shipped and delivered. Payment is also completed at this stage. Additional training or installation of the product may also be provided.

  6. Renewal: Once the goods or services are consumed or disposed of and the contract has expired, the product or service needs to be re-ordered. The customer now decides whether to continue with the same supplier or look for a new one.

Documents involved in the procurement cycle are called procurement documents. Procurement documents are an integral part of the early stages of project initiation.

The purpose of procurement documents serves an important aspect of the organizational element in the project process. It refers to the input and output mechanisms and tools that are put in place during the process of bidding and submitting project proposals and the facets of work that make up a project.

In a nutshell, procurement documents are the contractual relationship between the customer and the supplier of goods or services.

Examples of Procurement Documents:

Some examples of what constitutes procurement documents include the buyer's commencement to bid and the summons by the financially responsible party for concessions.

In addition,, requests for information between two parties and requests for quotations, and proposals and seller's response are also parts of procurement documents.

Basically procurement documents comprise of all documents that serve as invitations to tender, solicit tender offers and establish the terms and conditions of a contract.

Types of Procurement Documents

A few types of procurement documents are:

Structure of a Procurement Document

Most procurement documents adopt a set structure. This is because it simplifies the documentation process and also allows it to be computerized.

Computerization allows for efficiency and effectiveness in the procurement process. In general, procurement documents have the following attributes:

Commonly Encountered Procurement Documents

Conclusion

In most organizations, the procurement department is one of the busiest. Managers need to purchases goods or services required for the smooth running of their organization.

For example, in a hospital, a procurement manager needs to purchase medicines and surgical instruments among others. These goods and services need to be purchased at the lowest possible cost without any deficit in quality.

The documentation that passes between the procurement manager of an organization and a supplier are the procurement documents.

previous next

Copyright © tutorialspoint.com