When assessing the award of a tender or RFP, the municipality needs to have all the up-to-date information on bidders to make an accurate assessment of the winning bid.
It has been estimated that 75 per cent of business performance improvement projects fail to produce the intended results.
One reason for this high failure rate is that these plans are based on incomplete or inaccurate information. For real planning to take place, managers must have access to information on a timely basis and they must have confidence in its accuracy and utility.
They must also be trained in using the data they are provided. A prerequisite to meaningful assessment is to measure the initial position, for only by doing so can one track progress towards an intended target.
In order for municipal managers to make rational decisions they must have access to current, accurate and comprehensive data, provided to them on a timely basis by all the bidders. The gathering of information in an updated manner is critical in the many factors that may affect the award process. Contractors need to make municipalities aware of any major changes in relation to issues that need to be considered in the award of a contract.
A significant advantage of a more centralized approach towards procurement is that it is possible to work with global information relating to the municipality as a whole and to implement across the board improvements in a single stroke.
It would be beneficial to conduct training sessions with construction buyers. It is not necessary to call in all department managers from operation departments of the municipality for such training, and thereby undermine ongoing municipal operations.
I have always stated the monitoring and measuring of the internal and external award process related to the purchase of construction should be continuously improved whenever possible. The general goal is to try to cut both the time and cost involved when sourcing qualified contractors. The intent in this regard is to identify and correct all internal obstacles to optimal procurement.
Since the optimal result is dynamic, the process of such improvement is ongoing.
In other words, further improvements can always be made. As with contractor performance monitoring, performance should be measured across a range of criteria.
Benchmarking is one of the widely utilized techniques for measuring the extent of acceptable performance. It is a highly respected practice in the business world, which looks inward and outward to find best practices and then measures actual business operations against those goals.
Both external and internal benchmarking can be used in conjunction with other improvement tools. Under an internal program of benchmarking, performance targets are fixed, the current performance of contractors is assessed, methods are devised for improving the standard of performance to a target level and then a measurement is taken after a reasonable period of time to determine whether progress has been made towards reaching those targets.
Under external benchmarking, the performance of an organization in key areas is compared with that of its principal competitors. The goal of external benchmarking is to bring about continuous improvements in service delivery.
The ultimate goal is to try and raise the level of performance at least par with the best competitor in each area.
One of the biggest mistakes made in settling upon external benchmarking comparators is to look to organizations within the same industry. Such a narrow focus is unnecessary, since many business processes are common throughout industry.
One attraction of benchmarking is that it can provide a basis for an ongoing program review. Any review of performance should consider the effectiveness of prior corrective measures.
Stephen Bauld is a government procurement expert and can be reached at email@example.com.
Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.