The management of the procurement process should not be ad hoc. In fact, I contend that procurement management should be a matter of policy, and that the policy should be driven by a strategy. Before you begin any procurement, you should have your procurement policies in place. These policies should support your procurement strategy.

Given an understanding of the ways in which the tender process, the proposal process and the agreement process can be best used, it is now possible to consider the management of each of these processes.

Managing the Tender Process

The tender process remains totally under the management and control of the customer. The amount of manoeuvring that can be done by any tenderer is usually very small. There is a full specification of what is required, there is often a specification of the quality and performance required, there is a set of specific questions to be answered by the tenderer and there is a deadline.

The tender process is itself rigorous. It applies evaluation criteria based either on "Yes" or "No" responses or on stated values and amounts. Any scoring is on the basis of objectivity.

Because of the rigour in the process itself, there is less need for rigour in the management of the process. Often, customers imagine that they are applying rigorous management when they are actually just applying the rigour of the rules of the process itself.

Managing the Proposal Process

The proposal process is more subjective than the tender process. Often, during the evaluation, judgements are made by the evaluators, based upon their knowledge of the proponent or the content of the proposal. Instead of a "Yes" or "No" answer, which is the equivalent of a 100% or 0% answer, the evaluators may make judgements on the degree to which the proposal fits.

This can be any amount between 0% and 100%. The process is therefore more subjective than the tender process.

The proposal process may still involve "Yes" or "No" responses and value and amounts given by the proponent, but it usually also does involve the subjective x% answers, decided by the evaluators rather than the proponent.

This means that the management of the process must be more rigorous for the proposal process than for the tender process. The evaluators must be able to justify why they chose x% rather than y% as a measure of a proponent's capability in a particular area.

Managing the Agreement Process

The agreement process is the most subjective of the three. Indeed, on occasion it can become almost totally subjective. This is especially true of outsourcing, where a customer may be seeking a provider who can build a successful relationship with it.

As a result, the management of the process must be clearly and provably rigorous.

Often, with the agreement process, the ways in which the providers intend to operate can be very different. Sometimes, the services that they offer can be very different. The customer has to be able to distinguish between the different solutions and approaches and establish a decision-making process that will be fair to all the providers.

Sometimes, particularly in central government, the agreement process may not be an option. It may be very difficult to set up an evaluation procedure for the agreement process that will show that the decision on appointing a service provider has been made on a basis that is equitable, contestable and competitive.

As an example, three service providers have been asked to bid for work in outsourcing the management and control of a company's computer network, including the servers, client PCs and the entire network operating systems, desktop environments, standard application software and licence management.

One of the providers quotes for the entire service, including the addition to the network of a major new software suite in two years time, which will entail strengthening the network and many of the client PCs.

One of the providers quotes for outsourcing the current service, with a note that a full audit of the network will be needed before estimates can be prepared for the support of the major new software suite.

The third provider refuses to provide any estimate at all until a full audit has been completed, as it intends to bring the network quickly up to the performance levels required for the major new software suite.

The customer's IT department has to distinguish between these three responses and determine the correct course of action and an appropriate budget for a paper to the board.

This is a real instance.