What are Principles Of Procurement? Definition

The principles of procurement are guidelines that dictate how government agencies and organizations should go about procuring goods and services. The main goal of these principles is to ensure that the procurement process is fair, efficient, and cost-effective. There are a total of 10 principles of procurement, which we will explore in more detail below. Whether you’re new to the world of procurement or just looking for a refresher, this blog post is for you.

What is procurement?

Procurement is the process of acquiring goods or services. It includes the contracting and purchasing of goods and services, as well as the receipt and payment for those goods and services.

The procurement process begins with the identification of a need within an organization. This may be the result of normal operations, or it may be triggered by a special event or project. Once a need is identified, the organization will develop specifications for the goods or services required to meet that need. The next step is to solicit bids from vendors who can provide those goods or services. The organization will then evaluate the bids and select a vendor. The selected vendor will then provide the goods or services to the organization in accordance with the contract that has been negotiated between the two parties. Finally, the organization will pay for the goods or services received.

There are several principles that guide procurement activities. These principles include:

– Ensuring that procurements are fair, transparent, and competitive;

– Maximizing value for money;

– Ensuring that procurements are conducted in a manner that protects against corruption; and

– Complying with all applicable laws and regulations.

The different types of procurement

There are four main types of procurement:

1. Open Tender
Open tendering is the most commonly used type of procurement. It is a transparent and fair process, in which all potential suppliers are invited to submit a bid for the required goods or services. The bids are then evaluated on the basis of price and other criteria, and the contract is awarded to the most advantageous bidder.

2. Selective Tender
Selective tendering is used when there are only a limited number of potential suppliers who are able to provide the required goods or services. These suppliers are invited to submit a bid, and the contract is awarded to the most advantageous bidder.

3. Negotiated Procurement
Negotiated procurement is used when it is not possible to use open or selective tendering, for example because the required goods or services are unique or there is only one potential supplier. In this case, negotiations are held with the potential supplier in order to agree on a price and other conditions for the supply contract.

4. Direct Procurement
Direct procurement is used when the buyer purchases goods or services directly from a supplier, without going through a tender process. This can be done if the goods or services are available from only one supplier, or if time is too short to go through a tender process.

The principles of procurement

In order to understand the principles of procurement, one must first understand what procurement is. Procurement is the process of acquiring goods or services. The purpose of procurement is to obtain items that are necessary for an organization in a cost-effective and efficient manner.

There are several principles that guide procurement:

1) Necessity: Organizations should only procure items that are necessary for them to function. Items that are not essential should be avoided as they can add unnecessary costs.

2) Value for Money: Organizations should focus on getting the most value for their money when procuring goods or services. This means considering factors such as quality, quantity, and price before making a purchase.

3) Competition: Competition among suppliers is important in ensuring that organizations get the best possible value for their money. Organizations should solicit bids from multiple suppliers and select the one that offers the best combination of price and quality.

4) Transparency: Theprocurement process should be transparent so that all stakeholders can see how decisions are being made. This transparency helps to ensure that there is no corruption or favoritism involved in the process.

The benefits of procurement

There are many benefits that can be achieved through effective procurement. By working with the right supplier, you can improve your organization’s bottom line and achieve efficiencies in your operations. In addition, procurement can help you to mitigate risk and ensure that you are getting the best value for your money.

When done correctly, procurement can be a powerful tool to help your organization save time and money. With the help of an experienced procurement professional, you can streamline your processes, get better prices from suppliers, and minimize risk.

The risks of procurement

Procurement is the process of acquiring goods or services. It typically involves purchasing goods or services from an external supplier, but can also include leasing, rental, and other types of acquisition.

There are many risks associated with procurement, such as:

– The risk of not receiving the goods or services that were ordered
– The risk of receiving defective or damaged goods
– The risk of delays in delivery
– The risk of overpaying for the goods or services

Conclusion

Principles of procurement are guidelines that help organizations ensure that their procurement processes are fair, efficient, and effective. By following these principles, organizations can improve their chances of getting the best possible value for their money when procuring goods and services. If you’re involved in procurement, it’s important to be familiar with these principles so that you can apply them in your own work. Thanks for reading!