Procurement Management: Strategies, Ethics, and Contract Report

This report provides a comprehensive overview of procurement management from a buyer's perspective, covering various aspects of the process. It begins with an introduction to proposal planning and the importance of strategic thinking in purchasing goods and services, emphasizing the need for careful supplier selection and ethical considerations. The report details different procurement methods, such as open tendering, restricted tendering, and request for proposals, highlighting their suitability based on the nature of the goods or services. A significant portion of the report focuses on ethical behavior in procurement, discussing the importance of fairness, transparency, and integrity to maintain a good reputation and long-term relationships with suppliers. It also explores the implications of unethical behaviors like accepting bribes and conflicts of interest. The report further delves into contract management, emphasizing the need for mutual understanding between buyers and sellers, and outlines key factors for ensuring successful project outcomes within the procurement process, including procurement planning, solicitation, and effective cost and quality management. Finally, it discusses risk mitigation and the importance of ethical practices in a global procurement context.

Running Heading: PROCUREMENT MANAGEMENT 0
PROCUREMENT MANAGEMENT

PROCUREMENT MANAGEMENT 1
Proposal planning is planning which includes a document designed to influence an
organization or an individual to buy a product or a service. Being a buyer, I got to learn a lot
about, proposal planning and management. From my learnings I understood that, when as a
buyer, a person need to purchase goods and services from a seller, the buyer must make a rough
estimate and outline of the quantity, quality and amount of the goods needed by the buyer and
should ensure to spend money wisely. Procurement management involves steps in a logical
order. Firstly, it involves planning for the requirement and the need of contract. Then comes the
step for planning for doing it and then the buyer sent the contract requirements to the sellers.
Then the best one is picked among them and then the contract is signed (Watt).
A buyer must set a project vision first and then estimate the requirements. A buyer must
ensure the needs and the motive to achieve a product before buying any product rather than
simply buying the products by paying without any prior planning. Then he must find out the best
suppliers who can provide him suitable goods at best price. The buyer can find the suppliers
through advertisements given by the suppliers, analyzing the past records of the suppliers,
through trade associations, contact references and business advisers (Canada business Network,
2020).
Some of the procurement methods for a buyer depending upon the company could be,
firstly, Open Tendering, which allows companies to bid on some products or goods in an open
competition. It encourages to obtain goods by the buyer ensuring the value of money. Open
tendering provides the company with advertisements done locally, have unbiased technical
specifications, open equally for all the qualified bidders and having objective measures for the
evaluation. Secondly, Restricted Tendering, in which there are, limited agencies which are
invited by the procuring team. The procuring team should set guidelines while selecting the
suppliers for the invitation list. This method will help the buyers to find the best suited qualified
agencies, to buy goods and services (Juo, 2020). The third one is, Request for Proposals (RFP),
which is used when suppliers proposes their goods and services to procurement team or the
buyers for review. Fourth is Two Stage Tendering, in which the team which is procuring receives
proposal containing two envelopes. Among which, one is the proposal itself and another consists
of the associated financial information. Fifth is Request for Quotations, which is suitable for
small-valued products. This is useful for fast procurement and least paperwork. Sixth is Single-

PROCUREMENT MANAGEMENT 2
Source Procurement, this type of procurement is suitable in cases where the procuring entity
need to acquire products from sole provider (Juo, 2020). Therefore, the type of method for
procurement depends on the type and nature of goods and services.
It is important to think strategically while selecting the suppliers and select the right
supplier before procurement of goods. The buyer must shortlist the suppliers on the basis of the
financial security of the suppliers and their capability to deliver the goods to the buyer at right
time (Canada business Network, 2020). And then the buyer must compare among the potential
suppliers and select the best suitable supplier. And finally, a buyer must acquire a written
quotation and also share a contract specifying terms and conditions with the supplier (Canada
business Network, 2020).
For example, a buyer selects a supplier without investigating his previous records. The
buyer completes the formal agreement and the contract procedure with the supplier paying him a
part of the payment. And when the goods are delivered to the buyer, he founds that the quality of
the goods were not full filling his requirement. As, when the buyer placed the order, he specified
certain quality standards, but later when the buyer receives the goods, he found that, they were
lacking the quality standards. And when the buyer investigates about his past records, he founds
that, in the previous records also the supplier did not provide with the optimum quality standard.
This example shows that if the buyer would have done previous investigation of the supplier and
taken right decision, by shortlisting suppliers and selecting best among them, he could have
secured himself from this loss.
Being a buyer, I think that ethical perspective is an important element of procurement
process. This means that he must follow the rules and standards for fair conduct and also practice
the standards of the profession. Procurement team must follow the business practices in an
ethical, unbiased and in a fair manner. A professional can achieve success only when he
contributes to the business in an unbiased manner (Wins, 2018).
I believe that the ethics are the most important part of a business for a procurement
professional because unfair behavior can negatively impact the brand image of the company. A
good ethical behavior helps in establishing goodwill of the organization and a long term
relationship with the suppliers. An ethical person once earns reputation, carries it for a long time

PROCUREMENT MANAGEMENT 3
and is respected for his work. Some of the unethical behaviors which can destroy the reputation
of a buyer are accepting bribes and gifts from the suppliers, conflict of interest, confidentiality of
information, integrity and unbiased and unfair treatment with any vendor (Wins, 2018).
My code of ethics during procurement process as a buyer is to be fair in all the areas of
my work done. Some of my code of conduct in procurement process is to obtain value of each
money spent, refuse personal gifts and bribes and treat all the suppliers fairly by paying equal
consideration as permitted by the institutional policy (Carnegie Mellon University, 2019). I
would conduct business with good faith with potential and the current suppliers. Before using
any proprietary design or ideas for competitive purchasing purposes, I would take the consent of
the originator of the proprietary designs and ideas. I would involve only into fair and legal trade
practices. I would try to mutually settle in case of any agreeable and equitable conflict or
controversy with the supplier. And I would be willing to submit my major controversies the
arbitration or the other third-party review within the legal framework (Carnegie Mellon
University, 2019).
A buyer and seller must make a contract with a mutual understanding of terms and
conditions. A contract for buying is a mutually binding agreement between buyer and a seller,
where seller is liable to transfer goods or services to the buyer, in exchange of money. According
to me, an ethical management of contracts from the buyer and the seller perspective is to attain
an effective managed procurement cycle at each level of the cycle.
During procurement process, I would consider ethical implication such as to be unbiased
and fair, since a procurement manager may get pressure for chances of bribes and accepting gifts
for unfair work. Some other ethical implications are that a buyer must show transparency
towards his work and should not disclose the confidential information of the supplier to any
other third party. A procurement officer should not select a supplier on a bribery basis by
accepting a payment from the supplier to include him into the suppliers list (The Chartered
Institute of Purchasing and Supply, 2020). A buyer should be honest, morally strong and truthful
in his work to gain good reputation for a long term in the market.
If a procurement officer uses unlawful tactics in the procurement process, they may earn
profit for a short term. But in long term the goodwill of the buyer will be ruined. To gain a

PROCUREMENT MANAGEMENT 4
vendor or supplier for long term, a buyer must be honest and lawful in his work. For example, a
buyer agreed to purchase mobile phones from a small-sized American company at a particular
quantity and certain price. Suddenly, the demand for the buyer of the product decreases and at
the same time buyer comes into contact with a supplier who is providing the buyer with mobile
phones at lower rates, than the previous supplier and with the required quantity of the buyer. And
buyer makes a decision to change his supplier with the new supplier. He thought that the legal
action of the company would be unlikely because of the small size of the company. But for a
long term, this behavior is not beneficial for the buyer as it will affect the goodwill of the buyer.
From a global procurement perspective, a key to mitigating risk and unethical behavior of
a buyer and a seller relationship is needed to maintain a smooth flow of business. There are
distinct risk factors present at each level of business; therefore, it is important to analyze risk at
each stage for efficient procurement planning. Risk management will help in mitigating the
impact of risk, to ensure less occurrence of the risk and reducing risks which are avoidable
through planning, monitoring and suitable actions. The procurement team must identify and
analyze the probable risk factors, which are likely to occur and decide the suitable response for
the risk factors. Some of the responses which may be included are ignore, reduce, transfer,
manage and decide the most appropriate factor for managing the risk (Interagency Procurement
Working Group (IAPWG), 2012).
Buyer and seller turn can each transaction into long term beneficial transaction by mutual
understanding and by mitigating their unethical behavior. The interaction, mannerism and format
between buyer and seller plays an important role in maintaining a good and ethical relation
between them. A seller can contribute in mitigating unethical behavior with the buyer by
maintaining a strong relationship with the customers by relationship marketing. Under
relationship marketing, the seller provides customers with the information with an open
communication and directly relating to the, needs and interests of the customer. Their
relationship also depend upon the style of interaction such as task-oriented style, self-oriented
style and interaction oriented style (Mocke, Niemann, & Kotze, 2020).
I agree with the fact that, more work needs to be done, to address contract performance
and management. Contract management consists of the whole procurement cycle including
planning, administration, formation and execution. Its purpose is that all the parties relating to

PROCUREMENT MANAGEMENT 5
the contract are able to meet their obligations effectively and efficiently, providing them with the
value of money (Interagency Procurement Working Group (IAPWG), 2012).
I think, more work needs to be done in the process because it involves monitoring and
control methods such as cost control, schedule control, compliance with terms and conditions,
compliance with paperwork requirements, direct observation and indirect observation. These
methods consume time, which enables them to do more work. And contract performance and
management also add the work to do the inspection, examination and testing of the goods to
ensure whether they fulfill the contract requirements. Some of the inspection methods such as,
sensory checks, physical performance check, dimensional check and destructive checks
(Interagency Procurement Working Group (IAPWG), 2012).
Factors for ensuring good project outcomes within the procurement process are
procurement planning, solicitation planning, solicitation, source selection, contract
administration, time management, cost and quality management (Clements, Drysdale, &
Francis , 2012). Procurement planning helps in determining what has to be procured, when it has
to be procured and how it has to be procured. Solicitation planning involves documentation of
the requirements of the products and identification of the potential sources, whereas, solicitation
involves obtaining of the information from the sellers regarding the project needs. Therefore, if
there is an efficient cost and quality management, it will result into cost and quality effective
project (Clements, Drysdale, & Francis , 2012).
Some other factors such as make-or-buy decision helps the procurement team to take cost
effective decision by figuring out whether there is a requirement to outsource or the company
itself can do it. Deciding on the suitable type of contact is also important, to select the contact,
which is more suitable and gives the best result. And some other important factors such as,
managing the vendors and contractors involved, development of project schedule, identification
of prequalified suppliers and coordinating the purchase lead time can help a company to ensure
good project outcome (Watt).
Proposal planning is an important part of procurement, in which the supplier maintains a
document designed to influence a buyer for purchase. I learned that, a buyer must design
estimation about the planning and management of the products they require. A buyer must

PROCUREMENT MANAGEMENT 6
shortlist best suppliers and selects the suitable supplier for his needs, using the different methods
of procurement. My ethical perspective as a buyer would be to be fair, genuine and unbiased in
my work. Unethical behavior by a procurement officer can ruin the overall goodwill and
reputation of the organization for a long term. A company may obtain advantage by using
unethical tactics for a short term, but in long term a company cannot survive due to his unethical
behavior. My code of conduct, as a buyer during the procurement process are, to be truthful in
my work, deny for any kind of bribery or gifts and not to include any supplier in the shortlisted
supplier’s list for an advantage of money. Therefore, risk is involved at each level and all areas
of the procurement process. People involved in procurement process must try to mitigate all the
possibilities of risk. Risk management factors such as planning, monitoring and taking effective
actions are important, to mitigate risk factors at each level. Open communication, effective
interaction and relationship marketing also play a role to mitigate unethical seller and buyer
relation. Some factors for ensuring favorable project outcomes are procurement management and
planning, time and cost effectiveness, contract administration and solicitation planning.

PROCUREMENT MANAGEMENT 7
References
Canada business Network. (2020). Supplier selection process. Retrieved from Supplier selection
process - Info entrepreneurs: https://www.infoentrepreneurs.org/en/guides/supplier-
selection-process/
Carnegie Mellon University. (2019). Procurement Services. Retrieved from Buyer Code of
Ethics - Procurement Services - Finance ...:
https://www.cmu.edu/finance/procurementservices/policies-procedures/buyer-ethics.html
Clements, G., Drysdale, J., & Francis , J. (2012). PROJECT MANAGEMENT FOR
INSTRUCTIONAL DESIGNERS. David Wiley.
Interagency Procurement Working Group (IAPWG). (2012). UN Procurement Practitioner's
Handbook. Retrieved from 4.1. Risk Management - the UNGM:
https://www.ungm.org/Areas/Public/pph/ch04s01.html
Juo, J. (2020). 6 Procurement Methods: Obtaining Quality Goods and Services. udemy.
Mocke, K., Niemann, W., & Kotze, T. (2020). The role of personal relationships between buyers
and suppliers of third-party logistics services. African Online Scientific Information
Systems (Pty) Ltd t/a AOSIS. Retrieved from
https://actacommercii.co.za/index.php/acta/article/view/367/573
The Chartered Institute of Purchasing and Supply. (2020). Ethical Business Practices in
Purchasing and Supply Management. Retrieved from Ethical Business Practices in
Purchasing and Supply ... - CIPS:
https://www.cips.org/Documents/About%20CIPS/Ethical_Bus_Prac%20printed.pdf
Watt, A. (n.d.). Project management-Procurement Management. BCcampus Open Education.
Retrieved from https://opentextbc.ca/projectmanagement/chapter/chapter-13-
procurement-management-project-management/

PROCUREMENT MANAGEMENT 8
Wins, M. (2018). Procurement Academy. Retrieved from Ethics in Procurement: What are you
doing to keep procurement ethical?: https://www.procurement-academy.com/ethics-
procurement/