Procurement Vendor Selection Criteria

Many of the projects involved working with offshore contract developers. They provide Business Systems Analyst, Web Page Designers, Program Developers, Database Administers, and Project Managers. In order to select a vendor that would provide the quality work needed for the project, the sponsors and the project management, in conjunction with company procurement department, needed to develop evaluation criteria in which to measure information coming from the vendors. An Request for Proposal (RFP) would be issued to each of the vendors and from submitted RFP’s the selection committee would identify those vendors ranking highest in the criteria determined by the purchasing agent, and the selection committee to be relevant and material to properly evaluate a proposal (Fleming, 2003).

Project Description
The project was to develop a user form that would be used company wide by employees requesting access to various business systems used throughout the company. These users were located globally, the main project team was located in North Chicago, IL, and the business sponsors were located in Germany. The third party suppliers were located in both the United States and India. Documentation used in this process included the Project Management Plan, the Statement of Work and the project plan schedule (PMBOK, 2013).
Once the requirements were identified, and the solicitation package prepared, the criteria for selecting the responding vendors needed to be determined (Kerzner, 2001).

Selection Criteria
The following criteria would be used to select the vendor:

  • Criteria/Weight
  • SharePoint Experience / 30%
  • Resource Availability / 20%
  • Management Capabilities / 20%
  • Cost / 30%

Since the project consisted of developing an online SharePoint form it was considered highly important that the vendor have experience with developing in SharePoint, especially the latest versions. And since there was another project handling the upgrade to the newest version that would have a significant impact on our project it was very important that the vendor have experience with upgrading to the newest versions. The project was given a very tight timeline along with a tight budget; resources had to be available when needed according to schedule and within budget. This meant that managing those resources according to the project schedule would be a high risk and highly important (Kendrick, 2009).

The group also defined the relative value to be used to score each category:

Score Meaning:

4 – Fully satisfies
3 – Substantially satisfies
2 – Partly satisfies
1 – Does not satisfy

The group wanted to ensure that the meaning of each score was interpreted correctly. For example, if the criterion is “cost,” then a low cost would have a high satisfaction level. To calculate weighted scores for each criterion, multiply the weighting factor by the scoring factor. Total the weighted scores for each criterion to calculate the weighted score totals for each alternative.

While a number of criteria can be used; time, cost, expected management team of the project and previous performance history, were considered important to the project. As an example, assume that 100 points is the most that can be given to each of the criteria. The vendor that is selected would have the greatest number of total points. Weighing factors can also be applied to each of the four criteria. As an example, previous performance may be worth 200 points, thus giving 500 points as a maximum. Therefore, the lowest price supplier may be downgraded significantly because of past performance and not receive the contract (Kerzner, 2001).

SharePoint Experience Criterion
As noted above, experience with the SharePoint platform was a major requirement. The vendor also had to have resources that were highly experienced with the programming languages that make up SharePoint. These languages included C#, VB.Net, Java and SQL.

This experience with SharePoint required a further breakdown in the criteria used to select the vendor. The following ranking breakdown was created:

Qualifications of the vendor
a. Experience of proposed consultants
b. Availability of proposed consultants
c. Cost of each consultant
2. Experience with SharePoint
a. Versions
b. Number of years
c. Past performance
d. Experience with similar projects
e. Database experience

The following table would be used to record the criteria results for each vendor:

Vendor/Criteria SharePoint Experience Consultant Experience Consultant availability Consultant costs SP Versions Year’s experience Past performance Similar projects Database experience Resource Availability Management Capabilities Total Cost Totals
Vendor 1 4 2 3 4 2 2 2 4 4 2 2 4 35
Weighted Score 1.2 0.25 0.375 0.5 0.25 0.25 0.25 0.5 0.5 0.4 0.4 1.2 6.075
Vendor 2 4 2 3 4 2 2 4 1 3 2 2 4 33
Weighted Score 1.2 0.25 0.375 0.5 0.25 0.25 0.5 0.125 0.375 0.4 0.4 1.2 5.825
Vendor 3 4 2 3 4 3 1 3 2 2 2 2 4 32
Weighted Score 1.2 0.25 0.375 0.5 0.375 0.125 0.375 0.25 0.25 0.4 0.4 1.2 5.7
Vendor 4 3 1 3 2 2 2 2 4 4 2 2 4 31
Weighted Score 0.9 0.125 0.375 0.25 0.25 0.25 0.25 0.5 0.5 0.4 0.4 1.2 5.4

As an alternative or in addition to the weighting systems, the selection committee decided to adopt decision rules. A decision rule tells the committee how to deal with a criterion under fluctuating conditions. For example, a decision rule might be: if management is rated anything less than satisfactory, the entire proposal is unacceptable, or, if the proposed price is thirty percent higher than the projects original estimate, it will be judged as being potentially unrealistic and the vendor’s proposal will be reevaluated to determine if there is a misunderstanding of the requirements. Thus the team was giving more meaning to the numbers making it easier to make a decision using the criteria being used to measure each vendor.
Fleming, Q. W. (2003). Project procurement management: Contracting, subcontracting, teaming. Tustin, CA: FMC Press.
Kendrick, T. (2009). Identifying and managing project risk: Essential tools for failure-proofing your project. New York: AMACON.
Kerzner, H. (2001). Project management: A systems approach to planning, scheduling, and controlling. New York: John Wiley.
Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK guide), fifth edition. Newtown Square, PA: Author.

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Author: Rich Garling

Successful results-driven experience in IT program/project management, focusing on collaborating with multiple businesses and IT workstreams to define detailed business process requirements into workable enterprise software solutions for retail, finance, pharmaceutical, and inventory processes. A successful proven track record in leading cross-functional international teams of project managers while managing expectations and delivering projects of greater than $10M within stakeholder expectations. Provided an in-depth knowledge of SDLC using Agile and Waterfall project management methodologies (Scrum Master (SMC)), MS IT Management/Project Management (AMU)), and a talent for developing business requirements delivering workable technology solutions. Rich holds a Bachelor of Science in Political Science from Northern Illinois University and a Master of Science in Information Technology/Project Management from American Military University. He is currently a Project Manager III for Bradford Hammacher Group in Niles, IL/