The critical stages in the procurement process :

Step 1: Need Recognition This is a seemingly obvious step, but one that needs
to be mentioned. A business owner (or procurement department) must recognize a
product is needed in order to purchase it. That product can be either a brand new
item, or one that is being re-ordered.
Step 2: Specific Need Does your industry have specific requirements for various
products. If that is the case in your industry, be sure you are up-to-date on those
requirements and order accordingly.
Step 3: Source/Examine Supplier Options Every business needs to determine
where to get their goods. Some companies have an approved vendors list (this is a
recommended practice) while others are still trying to determine who the best
suppliers are. Once a supplier is chosen, companies should stick with that
relationship and try to establish preferred pricing.
Step 4: Price and Terms Once a supplier is chosen, companies should stick with
that relationship and try to establish preferred pricing and specific terms (i.e.
delivery).
Step 5: Purchase Order The purchase order is used the formal contract used to
buy the product. The purchase order outlines the price, specifications and terms and
conditions of the product or service and any other additional obligations.
Step 6: Delivery The transfer of the purchase order via email, mail or fax (email
is highly recommended).
Step 7: Expediting This stage addresses the timeliness of the service or
materials delivered. Delays, for many businesses, are important. The purchase
order will have expected delivery date information.
Step 8: Receipt and inspection Once delivered, the receiving company inspect
and, subsequently, accepts or rejects the product. Rejection is almost always due to
a damaged product.
Step 9: Invoice Approval and Payment At this stage, three documents must
match when the seller wants payment the invoice, the receiving document
(attached to the product) and the original purchase order. This is known as threeway matching. If there is a discrepancy, it must be resolved before payment is
made.
Step 10: Record Keeping The receiving (buying) company must keep good
records. This means saving all relevant documents for every completed purchase.
How can e-procurement help?
An e-procurement solution can be a significant source of help in various stages of
the procurement process. For instance, an e-procurement solution will electronically
generate purchase orders, with all of the requisite information.
Also, an e-procurement solution is a critical tool when it comes to delivery and
record keeping. With an e-procurement solution, all purchase orders will be sent
electronically in the system (an email notifying all parties will be sent as well),
ensuring delivery is completed immediately.
Finally, an e-procurement solution will catalogue every transaction in the system,
ensuring your records are kept up-to-date. Those records are of critical importance
for financial forecasting, or in the vent of an audit.
The benefits of an e-procurement system like Procurify extend to each stage of the
procurement process. Stream line your purchasing and procurement processes,
reduce employee headaches, eliminate annoying paperwork. Switch to an eprocurement system like Procurify today!

Practice
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Plan the Procurement Based on an Identified Need

Scope the Procurement
Determine the Procurement Method
Prepare to Approach the Market
Approach the Market
Evaluate Submissions and Conclude the Tender Process
Manage the Contract

Step 1: Plan the Procurement Based on an Identified Need

Determine the objectives for the procurement.
Detail a clear scope of requirements.
Consult entity Central Procurement Area for advice were appropriate.
Seek specialist advice, where appropriate.
Research the market to understand capabilities and restraints.
Ensure probity arrangements are considered where appropriate.
Document relevant decisions and justifications relating to the procurement.
Understand and incorporate Australian Government transparency
requirements.
Step 2: Scope the Procurement
Determine whether the goods or services to be purchased are subject to
coordinated procurement arrangements that must be used.
Determine if the relevant entity already has a panel or multi-use list could be
used.
Consider whether there are opportunities for cooperative procurement.
Undertake detailed research of the market if appropriate.
Estimate the value of the procurement this must be done.
Where procurements are unable to be valued or reliably valued, they must be
treated as if they are over the relevant threshold.
Unless a specific exemption applies, entities must comply with the Division 2
Additional rules for procurements at or above the relevant procurement
threshold.
Step 3: Determine the Procurement Method
Open Tender
Involves a one-stage (ie Request for Tender), open approach to the market.
Is the default for all procurements valued above the relevant thresholds
($80,000 for non-corporate Commonwealth entities)
Must be advertised on AusTender.
Prequalified Tender
Involves a procurement from:
o a multi-use list;

a two stage process (even if the Expression of Interest was sought as

an open approach to the market); or
o a list of all potential suppliers with a specific licence or ability to meet a
legal requirement that is essential to the procurement.
Limited Tender
Involves procurement based on quotes being sought directly from one or
more suppliers.
Includes what was previously referred to as sole source and select or
restricted source procurements.
Can be undertaken for any procurement under the relevant thresholds where
it represents value for money.
Can only be used for procurements above the relevant thresholds where it is
specifically allowed by the CPRs. The value and reasons for the direct source
must be documented.
Step 4: Prepare to Approach the Market
Put in place appropriate governance arrangements.
Prepare tender evaluation plan and request documentation, that
appropriately incorporate Procurement Connected Policies.
Seek delegate clearance / approval to approach the market.
Step 5: Approach the Market
Notify the market for open tenders this involves (as a minimum), publishing
o

Step

the opportunity on AusTender[ ].

For open and prequalified tenders, ensure the minimum time requirements of
the CPRs are met.
Include essential information (eg. closing time, lodgement mechanism,
evaluation criteria and methodology, process rules, contact officer and the
possibility of an industry briefing, site visit, and/or mid-term review) in the
request documentation to enable suppliers to develop and lodge competitive
and compliant submissions.
Include a draft contract and statement of compliance in the request
documentation.
Use appropriate limitation of liability and standard contract clauses where
available.
Do not use unnecessary mandatory language (i.e. must, will), jargon and
acronyms from the request documentation.
Ensure clarifications or additional materials are made available to all potential
suppliers in a timely and equitable manner.
Do not materially change the evaluation plan after the opening of
submissions.
6: Evaluate Submissions and Conclude the Tender Process
Deal with unintentional errors in tenders in accordance with the CPRs.
Deal with late tenders in accordance with the CPRs.
Ensure the procurement process is/was fair, equitable and will stand up to
scrutiny, including that the evaluation is conducted in accordance with the
Tender Evaluation Plan.
Ensure the process is consistent with the CPRs, including in relation to
handling complaints.
Undertake a financial viability assessment(s) of the preferred supplier(s) if
necessary.

Step

Provide sufficient documentation and information to the delegate to enable

them to make an informed decision.
If required by your entity's Accountable Authority Instructions, obtain
delegate approval in accordance with s18 of the PGPA Rules and two signed
copies of the contract (one for the entity, the other for the service provider).
Advise unsuccessful tenderers and where requested.
Report contracts valued at $10,000 (GST inclusive) and over on AusTender[
].
7: Manage the Contract
Develop a contract management plan to assist the entity to understand and
implement obligations under the contract.
Assess contract extension options on a value for money basis in accordance
with the terms of the contract.
Ensure compliance with the Procurement On-Time Payment Policy for Small
Business.
Appropriately consider and, as appropriate, issue contract variations.
Consider any obligations that survive the contract end-date or termination of
the contract such as confidentiality.

Procurement Specialist
Job Summary
The Procurement Specialist ensures that the items and services to build and maintain our
advanced oilfield technology products are purchased from specified suppliers and are delivered
according to agreed terms and conditions. An important aspect of this role is seeking maximum
value for the company through time and cost agreements while working with technology
advanced products.
Essential Responsibilities and Duties
Interfaces with Product Line Planning Manager to plan and prioritize purchasing
activities.
Reviews planned orders, creates requisitions for purchased items, and manages approval
process.
Transmits and prioritizes approved purchase orders and supporting documents to supplier.
Tracks order acknowledgement, prepares and communicates shortage and backlog
reports, and provides visibility of potential interruptions to internal customers.
Tracks orders and confirms system lead times, delivery dates, and costs.
Reviews, updates, and maintains purchase orders until they are closed.
Ensures orders adhere to supplier agreements and contracts; reports nonconformances.
Leads finance and logistics staff in resolving reception and invoice discrepancies.
Identifies opportunities and implements actions to achieve efficiencies.
Contributes to consolidation, reduction, and rationalization of the local supplier base.
Qualifications
Masters or bachelors degree in fields of supply chain, engineering, or manufacturing.

Get Your Purchasing in Order: 5 Common

Procurement Problems (With Easy Fixes)
A reliable procurement system is designed for speed, efficiency and accuracy. Yet despite all
precautions, problems ranging from human error to organizational shortcomings can still have a
negative effect on a companys procurement and purchasing ability, no matter how hard you try
to prevent them. Heres are five of the most common issues youll encounter as well as simple
ways to fix them.

1. Accidental Orders
Did you order the wrong item? Or the wrong quantity? If you have a good relationship with your
supplier, immediately follow up to admit the mistake and rectify the order. This can save you
from considerable hardship in the long run. Given the speed of transactions these days, these
types of ordering errors are still common, but they do raise concerns about the checks and
balances that exist in your supply chain. Adopting a protocol that allows for approval from more
than one person is one safeguard against mistakes like this in the future.

2. Inflexible Suppliers
Many procurement decisions correlate to a companys risk management strategy: the lower the
costs, the better theyre reflected on the bottom line. Most suppliers who recognize that will
accommodate a purchasing companys needs to maximize their performance. Still, some
suppliers may not offer discounts or insist that certain surcharges be included in the price. Before

opting for rigid supplier, consider other negotiation options. Can the supplier pay for shipping?
Are discounts available in larger bulk orders? A skilled procurement professional like yourself
will often find some wiggle room for negotiation and youll look good doing it.

3. Exceeding Budget
Chances are, procurement transactions that exceed your budget arent due to reckless spending if
you have your companys well-being in mind. Its more likely that a communication (or
coordination gap) is present in your procurement protocol and should be addressed as soon as
possible. Regular budgetary updates affecting the financial status of all links in your supply
chain, including budgetary changes, will go a long way towards rectifying that problem.

4. Damaged Goods
Impulse buying, making emotional decisions based on preference of suppliers and literally
phoning in an order are often the most common causes of procurement errors, especially if the
company is a rapidly growing startup. When a company launches, decision-makers usually want
to ensure everything is ordered and in place all at once. Hitting the ground running often means
ignoring the cautionary steps in a procurement process and may result in cost overruns in
inventory before revenue streams can compensate for these purchases. A good, comprehensive
procurement system allows for both prompt orders and more thoughtful decision-making.
Thought it takes time upfront (and okay, you caught us, implementing a procurement process
isnt an easy fix), it will save you a ton of work in the long run.

5. Rushed Purchases
If your delivered order is damaged in any way, you have the option to refuse the delivery or
accept the items but clearly indicate the condition of the shipment, you are the customer after all.
Depending on who paid for freight, you must notify the courier and supplier immediately and
negotiate who is responsible for compensating your company. Bear in mind that if the items were
damaged during transport and if your company paid for the freight, the responsibility no longer
rests with your supplier, but with the courier. Consider having a variety of couriers on deck in
case one doesnt work out. Also, always be sure to report any discrepancies as soon as possible to
expedite solutions with either your supplier or courier.
Since most procurement problems can be attributed to human error, these issues can usually be
resolved fairly easily. Make sure that your procurement system takes these mistakes into account
and ensure your partnership with a supplier is based on mutual understanding. The more
safeguards that are in place, the less of an effect these type of errors will have on your companys
procurement ability.