Knowledge Area:Procurement Management 

For some of the project work, there always may be a need for engaging some third party suppliers, contractors. During planning, the team would have already decided what to procure, and would have developed detailed specification of the procurement item or service. An RFP or RFQ is generally prepared during the procurement planning stage.

Before beginning execution, it will be important to share our detailed REQUIREMENTS through the RFP or RFQ document with potential suppliers. We need to request their response, proposal, and quotations.

Upon receiving the proposal, response and quotation from various suppliers, we need to EVALUATE their responses in an objective manner. We then need to invite the bidders with best proposals for final negotiation. After negotiation, the best seller/supplier is selected and an AGREEMENT is signed with them.

Negotiation is a DIFFICULT process. It should be kept in mind to ENSURE that the negotiations are done in a win-win manner ensuring the considerations and interests of both the sides are equally taken care of. After all, the selected supplier/seller becomes part of you extended team. Hence it should be seen more as a relationship rather than a transaction while negotiating the terms and conditions.

For more details you can refer our tutorial at,procurement management