Good evening Abdullah - I'll contribute an observation on the first one. Perhaps others who have been doing contract management and procurement for longer than me might have a different view, or say it more eloquently, but here goes....
Purchasing is a subset of procurement. It is the giving effect to a lot of the procurement work that you've done earlier (i.e. establishing what you want, identifying suppliers etc).
That said, I think that you can purchase without doing procurement, and in fact, I'd go so far as to say that you can even get the same outcome.
However, only by procurement can you demonstrate that you've got the right outcome. If you only purchase, and don't understand your needs, identify the market and consider the offerings against your needs, you can't demonstrate that you've got the best outcome for the business.
And this is where I think we as a group can demonstrate our worth to the business. We can show with procurement the outcomes that we've avoided (goods not matching requirements, getting better pricing outcomes, repetitional damage etc) by running a fair and robust process ensures that the business is better off.
On many occasions I've seen my team has moved someone from their initial fixed ideas into better outcomes by taking the time to show them what's possible and what good looks like. Do that enough times, and you have more and more allies in the business to encourage others to use your services.
Check out this article in the IACCM Library, 'Procurement' and 'Purchasing' Are Different:
Having looked at this topic, there is actually already a lot written on the question of the difference between purchasing and procurement. As they observe, for the typical person they are probably the same, but apparently 'the experts' in procurement know the difference! Though once you start reading, there is plenty of contradiction...
When it comes to Supply Management, it is yet another variant and clear as mud whether it is actually different from Procurement. Supply Chain Management is certainly a more holistic activity of which procurement is part, but that's about all you can really deduce.
The net is, these terms are used with a high degree of variability and tend to mean whatever anyone wants them to mean; the only common factor is that they are all associated with the act of buying!
Whilst it's the way that a lot more suppliers seem to be going, if you think about this in with your procurement hat on - and that is what's going to happen at the end of 3-5 years - it's tough to see you doing anything but just rolling this over (and over and over again) as someone else has all of your data on their server.
At the risk of being awfully contentious, my own experience is that in a lot of circumstances, there's little consideration of whole of life costs - especially with that thinking about what's to happen in 3-5 years. Right now, many of these purchases done right now are flying under the radar of procurement teams because they're below procurement limits or just being called operational expenditure within business delegated authorities.
That said, one of the benefits that I've also seen is that upgrades happen automatically on the server of the host without the business having to create teams to do this, especially where there was a major upgrade - which were previously a big financial impact on many businesses.
Hope that this is useful.
Bahrain National Gas Co. (B.S.C)
I suppose this depends on what you mean by a Contract Agreement. If you have a Master Services Agreement in place that contains agreed legal terms and conditions, signed off by both parties, then the RFP process could proceed. However, depending on the types of good or service being sought, i.e a major construction project, then the terms and conditions within the Master Services Agreement may not be appropriate, its always best to consult a legal professional before you issue the RFP to ensure all legal provisions are either sufficient or addressed.
• AJA Global Consultancy Services, LLC
Pallab, I may be missing something from your description of the issue; or what you describe as "execute a Contract Agreement (signed by both parties)..." could be the reason of my confusion.
It is not clear to me if your organization represents the buyer or purchaser side (who is the party making pressure to move ahead). But anyway, the practice you are describing seems to me as the typical recipe for potential claims. As Gary says in his reply: seek in-house legal advice.
Sorry I can not be of much help.
• Bahrain National Gas Co. (B.S.C)
What I mean by the Contract Agreement is the Form of Agreement which is generally the first covering pages of any standard Contact wherein it is stated..
This Agreement is entered into on the xth day of ... by and between ......
followed by the list of documents that together constitute the Contract and showing the precedence of documents in the event of conflict between the documents.
A blank Form of Agreement is provided as a format along with the tender documents which is finally filled up and signed by us and the successful tenderer. The format when filled up and signed, we call it the 'Contract Agreement'. This document is used for tenders (for services, construction works, etc.) having reasonably high estimates where full tender package is used to invite bids.
On the other hand, for small supply orders ( spare parts, plant consumables, etc.) a system generated RFP document is used to invite bids and eventually a system generated PO is issued referring to RFP document and supplier's quotation.
Now let me rephrase my question as - is there any thumb rule ( example- bid estimate) that could be followed as a criterion to determine
• when a full fledged tender document to be used to invite bids and finally a Form of Agreement is signed off to conclude a Contract, and
• when a simple RFP document to be used to invite bids and and just a system generated Purchase Order is issued to the winning bidder, and no Contract Agreement is executed.
• Omaha Public Power District
I think blockchain will have a major impact in the future of and will transform the legal industry. And I try to stay informed ('try' is the magic word) -- check out this link as well: www.legaler.com/
Blockchain approaches are really bleeding edge at this point, and only for the very best informed. We recently did a workshop at MIT on AI, Blockchains and the Future of Law. Happy to make introductions if you are seriously considering this. But in the meantime- suggest you might look at the work we are doing with the IACCM on contract standards that are compatible with a blockchain approach - or not. github.com/IACCM and a "Wise Contracts" paper with Helena Haapio - papers.ssrn.com/sol3/papers.cfm.
Also - the AccordProject.org is very active in this field and in the IACCM.
Hi Andrew, aeternity is a blockchain implementation with some limited contracting features. Basically the ecosystems support smart contracts on their blockchain but with many limitations in terms of compliance. Our approach is a bit different, we offer an end to end contract management system in the blockchain supporting eprocurement and supply chains. Have a look here www.trakti.com and let me know if you want to know more. PS we are production ready ;-)
Public Works Advisory, NSW Department...
I'm not sure I can reflect on any experience that directly relates. However, I would like to comment and also hear from you an update as to this situation.
Unless the terms and conditions of the contract specifically indemnify the other party [that produced the documentation] in relation to errors and omissions in its own documentation, then you have grounds to negotiate a variation for the higher price of the preferred product. Depending on the scale of the change, perhaps it's best to absorb the cost and seek savings elsewhere...