Vendor Selection Process

Let’s face it. No matter how hard we try or how much we want it, we can’t do it all. Regardless of the size of your organization, you will eventually come across at least one aspect (usually several) that is not feasible or cost effective to do for yourself. Whether it is buying paper, printer ink, food, or a new MRI machine, you will sooner or later find that you must go in search of a vendor.

Hiring a vendor has several advantages. It can reduce operational costs, enhance working conditions, improve responsiveness, and save significant money.

While outsourcing to a vendor may be necessary, there are also times when it is not wise to do so.

  • If you and the potential vendor do not have the same goals.
  • If you feel like you must micromanage the entire project and process.
  • If you hate confronting someone over poor performance.
  • If you want 100% control.

If any of these situations apply to you, hiring a vendor may not be the best choice.

Doing market research will help you save time and money in the vendor selection process. First, you need to find out if there is even anyone capable of doing the needed service. This should take place before you put forth any type of solicitation. Determine if there is more than one company that can provide the product or service you need. If there is, this allows for competition in the bidding process. This could turn out very well for the buyer and will aid in getting your financial goals met faster. Research will let you see what similar organizations have done. You can find out what practices, processes and norms have worked and those that haven’t. In addition, you can find what other organizations have paid in the past to gain an estimate on your cost.

When it comes time to choose your vendor, be specific with clear expectations. Let the vendor know what you expect. Clearly detail all responsibilities and boundaries. Establish a positive win-win mind set. Let the vendor know that you are there to help him or her. Create a clear flow of communication so there won’t be any confusion. Set a clear monitoring schedule. Know and communicate deadlines.

Regardless of how much research you do, it is possible to choose a bad vendor. It is a challenge for the buyer to know which vendor will meet their needs while doing a quality job. There is a five phase process to assist you in the vendor selection process.

Phase 1 – Pre-solicitation Planning

This planning process is customized to the individual organization or agency due to the internal culture, policies and procedures needed for acquiring goods and services. During this process, you will determine whether products or services will be produced within the organization or outsourced to a vendor. This is the time to use the market research that you have conducted.