General Purchasing Practices

While the ultimate responsibility for the procurement process at Brandeis University is delegated to Procurement Services, many may wish to provide assistance by doing some of the procurement work themselves. This is particularly true of individuals purchasing highly technical equipment and services.

The following gives those wishing to be more involved in the procurement process some basic guidelines for good procurement practices.

 

Selecting Qualified Suppliers

Supplier selection and evaluation are processes that can take some time and energy, but the effort will be rewarded when the product or services needed are supplied in a timely and cost-effective way.

The first step in supplier selection is often research, particularly if the item or service has not been purchased before. There are a number of tools to assist you in this initial phase:

  • Discuss your purchase with Procurement Services in advance.
  • Search the Web.
  • Consult the local and Boston yellow pages for local suppliers.
  • Consult professional journals, trade publications, directories, and supplier catalogs.
  • Talk with colleagues here and at other institutions who might have purchased similar items.

Once a list of potential suppliers has been compiled, begin to evaluate their capabilities. Ask suppliers for a list of references. Visit their sales offices, warehouses and manufacturing plants to evaluate their operational capabilities. Look to see if the firm appears prosperous. Evaluate their use of technology. Ask employees how they feel about the company. When needed, ask for samples and prototypes (there may be a cost associated with these). Inquire into the supplier’s ability to supply the goods or services.

It is a good practice to investigate the financial stability of the supplier. Brandeis has utilized the services of Dun & Bradstreet to analyze the stability of publicly held companies. Their services may be obtained by contacting Procurement Services. Analyzing a privately held company is more difficult. It may be necessary to look at an audited financial statement for the company. You may also ask for bank and other trade references. Again, Procurement Services can assist you in this analysis.

 

Managing a Bid

Once you have selected a few qualified suppliers, the best method to determine if an offer is competitive is to request a written bid.

Bidding will allow you to verify the pricing provided by the supplier, tell the supplier you are seeking competition and delineate your expectations of the supplier and his/her expectations of Brandeis. When needed it can also form the basis for a legally binding contract.

The bidding process begins with the development of a set of specifications or objectives. To be able to define the requirements exactly requires doing your homework. The resources to assist you in this include colleagues, trade manuals, the procurement services staff and the suppliers themselves. Try to make your specifications as generic as possible, allowing the suppliers to use their expertise to find the best solution to your needs.

Here are some tips on preparing a bid:

  • You will need sufficient time to prepare and evaluate the bid. The suppliers will need sufficient time to respond (usually two to four weeks depending on the complexity).
  • All suppliers should receive identical copies of your bid documents and any subsequent changes.
  • Specify a deadline for receipt of bids. If you extend this deadline for one, you must extend it for all.
  • If the bid is quite complicated and will generate a host of questions or require a site visit from the suppliers before they can bid, it may be most expedient to hold a pre-bid meeting with all parties present.
  • Make sure the person who is submitting the response is appropriate. All bids should be signed by an officer of the supplier's company with authority to commit the company’s resources.
  • All bids are confidential and should not be used as a bargaining tool among suppliers. Once bids are received, you need to evaluate them in a fair and open process. While the procuring of goods and services at the University does not require the lowest bid, it is required to document the justification when a lower bid was not accepted (see Single or Sole Source justification section of this Guide).

Some tips on evaluating bids include:

  • Take the time to review the bids carefully. Narrow the field by determining which vendors are responsive. A responsive bid will include ALL the information needed to procure the product or service up front.
  • Look carefully at the proposed prices. Be wary of suppliers who substantially underbid others. It might mean the supplier misunderstood the requirements or is low-balling the bid. In this case, the product or service might suffer.
  • Consider the supplier's past performance, after-sale support and services, technology and other criteria that might separate one supplier from another.
  • Always compare TOTAL acquisition and life cycle cost. This includes shipping, consumable supplies, service agreements, potential repair parts, and other after-purchase costs.

 

Negotiating a Price

There are times when the bid process cannot be used. When this occurs, prices must be negotiated.

Negotiation should be used when:

  • The purchase involves a significant amount of money or requires an ongoing effort. In these situations, negotiation may be used in conjunction with a bid.
  • The number of suppliers available is too limited to create competition via a bid.
  • New technologies or processes are required for which a selling price has yet to be determined.
  • The supplier is required to make a substantial financial investment or commit other resources.
  • There is not enough time available to seek competitive bids.

When negotiating a price, it is important to remember to do your homework. Find out as much as possible about the company. Be sure you understand your requirements fully and how these might affect prices. Investigate the costs associated with providing the service or materials you are requiring. Develop your own strategy for the negotiation and try to anticipate the strategy of the supplier. Make sure the person you are negotiating with has the authority to make offers and commit the supplier.

Finally, remember that a successful negotiation is a win-win for both parties. You must allow the supplier enough leeway to make supplying the goods or services attractive.

 

Managing Supplier Relationships

Maintaining good supplier relationships should be important to all members of the community. A good buyer-seller relationship is a partnership, a win-win situation that nurtures both parties. A supplier treated with courtesy, honesty and fairness will deliver quality products and services at the best price. A supplier who feels he or she is being treated well will be responsive to emergency and special requests. A well-managed supplier is also a useful resource in attaining industry knowledge.

There is also a public relations aspect to procurement that should not be overlooked. Brandeis University is in a unique position in the local, research and business communities. Our name is well known and associated with quality and integrity. This reputation is an important asset that we should always strive to maintain. A well-managed supplier is likely to communicate their positive experiences to others, further enhancing our reputation.

Here are some guidelines to positive supplier relationships:

  • Be Fair: Give all qualified suppliers equal access to compete for our business.
  • Maintain Integrity: A supplier's price is confidential and should never be shared with another supplier for any reason.
  • Be Honest: Never inflate requirements to get better pricing. Negotiate in good faith. Do not change requirements and expect the supplier to hold their offering. Communicate with suppliers openly and honestly.
  • Be Ethical: Procurement decisions should be made objectively and free from any personal considerations.
  • Be Courteous: Treat suppliers as you wish to be treated.
  • Be Reasonable: A supplier is entitled to make a profit. Requirements should be attainable without putting undue financial hardship on either party.
  • Process Needed Documents Promptly: We demand that our suppliers respond to the requirements in a timely manner. We, too, have an obligation to uphold our end of the bargain by providing them with timely documents and payments.