Question

procurement is a vital element of project management since it must provide the goods/material and services necessary to execute the project plan. With reference to this, describe the procurement process in the public and private sectors and explain the extent to which they differ(30marks)

Answer 1

Procurement process in public sector

1-) Requirement Identification- The first step is to identify a requirement. To start the project, some basic requirements or material are needed and hence first we have to identify the requirements.

2-) Determing procurement method- After identification, we shall plan how the materials or services will be transferred to the location to start the project.

3-) Procurement plannning- This step is important in the process as procurement planning is to be done about gow much the quantity of the good be, what Quality should it adhere to etc.

4-) Procurement recieving process - The Suppliers are informed about the order type and till when the order should be received.

5-) Documents preparation- The documents are prepared for every good or service that will be bought. It contain information about the price , quantity time etc.

6-); Proposal meeting - The Suppliers and company officials meet to negotiate the price and any other modifications whicb is required.

7-) Proposal submission and evaluation - The proposal is submitted by the company and it is evaluated by the Suppliers. If everything goes right, the order is placed.

8-) Contract Suggestions - Both the parties then negotiate what terms should be in contract.

9-) Contract signature - After all the evaluation, the contract is signed.

Procurement process in private sector

1-) Need identification and purchase order sent - The need is identified and purchase order is sent to the purchasing department.

2-) Evaluation of the request - the order is evaluated by the procurement team and the unnecessary items are cancelled.

3-) Budget approval - The order is then sent to accounts department for approval.

4-) Quotation requests - After that , the order brochure is sent to many vendors and their quotations are taken

5-) Negotiation- negotiation is done and the best vendor is chosen

6-) Receive goods and services - The goods and services are received by the company as per the order.

7-) Three way matching - A very important process where purchasing order, packaging slip and vendor invoice is matched to inspect everything.

8-) Payment is processed as per the invoice.

8-) The payment is recorded in the books of accounts.

Difference between Procurement process in public and private sector are

1-) Fundings - public sector has less control over their Procurement process because their funding are process by large institutions upon collection of tax. So if funding are late ,they wont be able to order. Private sector has funding in hand, so they are free to order whenever they require.

2-) public sector procurement is done basically for the benefit of soceity whereas in private it is done for profit .