Integrity and competence a must in government procurement

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Integrity in government procurement must be held to the highest standards on every RFP and tender issued

Stephen_Bauld.jpgStephen Bauld deals with so many issues related to the integrity of the request for proposal (RFP) process every week. As a government procurement expert, he is concerned about the way municipal procurement staff understand the policies and procedures they need to follow to issue documents to suppliers and contractors.

Generally, there is a clear benefit in employing suppliers who have a proven track record of successful delivery and a good reputation within the business community for integrity and competence.

For major contracts, provided that the municipality has access to relevant professionals who can make this kind of assessment, consideration should be given to whether a proposed supplier possesses the experience or the financial, technical, personnel or other resources that may reasonably be expected to be necessary in order to carry out the obligations that the supplier proposes to assume under the terms of the bid.

Another consideration that should be taken into account (provided there is proper supporting evidence in place to document any decision made) is the prior record of the bidder as a supplier to the municipality.

In order to take into account considerations of this nature, the right to do so should be spelled out expressly in the terms and conditions of any RFP or tender. On the other hand, one should not overemphasize the importance of quality.

As with every other concern in purchasing, there are declining marginal gains in quality. Thus quality cannot be considered without regard to other aspects of cost, much as price cannot be considered without regard to quality. Bauld suggests that quality is not an absolute. It must be considered relative to expected usage — how often, how long, under what conditions and so on.

If usage is rare, a cheaper model may be the best even if it is less durable.

Furthermore, quality management (or control) may be approached on a proactive or a reactive basis. The provision of proper specifications to potential suppliers plays a key role in proactive quality management, because the risk of unsatisfactory performance is greatest where suppliers lack a full understanding of what is expected of them and the things that they are to supply.

Proactive quality management also involves incorporating measures into the contract award and documentation process to minimise the chance that a supplier will be selected who cannot satisfy the specifications.

Finally, a proactive approach involves the systematic testing and inspection of procured items to determine whether or not they are qualitatively deficient. In general, the last point will be covered under the municipality's inspection and acceptance procedures.

A reactive approach to quality management involves the identification of qualitative problems in supplied material during the course of use: the isolation of the cause of a problem; the procedures for dealing with a supplier whose materials do not conform to contract quality requirements, or are otherwise incomplete; the method of determining whether the contractor is required to correct or otherwise complete the order; and assessing whether or not this has been done.

While a proactive approach is intended to identify and correct problems before they are encountered during use, ultimately some form of reactive quality management will always be necessary.

The United States Federal Acquisition Regulation, or FAR, provides clear guidance as to the way in which qualitative concerns ought to be approached in discharging public procurement responsibilities. In general terms, the regulation requires quality to be addressed in every source selection. The overall goal of the regulation is to ensure that supplies and services acquired under a government contract conform to the contract's quality requirements.

Bauld is keen to understand South Africa’s regulations and how they address the quality supplied to South Africa’s government.

He can be reached at swbauld@purchasingci.com.

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