As with any company operating today, Riordan Manufacturing, Inc. does not posses the necessary resources or skill set in-house to produce all the materials required to meet project goals and objectives. Riordan must obtain material and services from outside sources, which is accomplished through the procurement process. Once Riordan has submitted a request for proposal (RFP), companies are able to evaluate the RFP requirements and submit proposals in the hopes of winning the contract. This paper will describe the methods employed by Riordan to evaluate bid proposals, select the proposal that best meets Riordan's requirements and, lastly, conduct contract negotiations.
Evaluation of submitted proposals can be approached in a quantitative or a qualitative manner, or both. Quantitative evaluations are often considered best since the buyer is able to use metrics to perform the evaluations. For example, Riordan can quantitatively evaluate how long a prospective supplier has been supplying materials to the plastics industry or how much material the supplier is able to reliably supply.
However, not all criteria can be evaluated in such a manner and is subjective in nature and requires a qualitative response. For example, Riordan's procurement team needs to know how well each supplier understands the needs and objectives of the RFP, clearly a qualitative evaluation. Table 1 provides an example of how to qualitatively assess this requirement (Jones, 2006, pg. 6).
Table 1 Qualitative Criterion Vendor Appreciation of Needs and ObjectiveStep A - Does not meet requirementThis proposal shows a limited appreciation of the needs and objectives of the engagement. It fails to meet most requirements.
Step B - Meets some requirementsThis proposal shows a good appreciation for the needs and objectives of the engagement but fails to meet some requirements.
Step C - Meets all requirementsThis proposal shows an excellent appreciation for the...