Select Sellers

Selecting sellers is the process where sellers are chosen based on the responses that have been made to requests by the buyer. The sellers' responses are filtered through evaluation criteria that are selected by the buyer, and the final award, which may go to one or several sellers, is made based on these criteria. Often the criteria are weighted so that certain criteria are more important than others. Price is always a criterion unless the project is in response to a massive emergency. In certain types of projects, the technical solutions offered as well as the skill sets of the vendors may be a major factor in determining who will get the contract.

Inputs to selecting sellers include organizational process assets, the procurement management plan, evaluation criteria, procurement document package, proposals, qualified sellers list, and the project management plan. All of these were discussed earlier in the chapter.

The tools and techniques for selecting sellers may include a weighting system, independent estimates, a screening system, contract negotiation, seller rating systems, expert judgment, and proposal evaluation techniques. The weighting system usually assigns a value to each of the evaluation criteria. By summing all of the criteria ratings, you will have a number that gives you one of the major tools for determining who will be the vendor of choice.

Independent estimates are done either by the buyer or by another independent organization. The independent estimates can be compared to the sellers' estimates when responding to the buyer's proposal.

A screening system is tied to the weighting system. In the screening system, go/no-go criteria are established so that a minimum standard is set for the seller. This screens out the sellers that do not have the prerequisites necessary to bid for the project.

Contract negotiation occurs before the final contract is approved and signed. During contract negotiation, various aspects of the contract may be negotiated. When agreement is reached, the final contract is the output of the process.

Rating systems for sellers are tied to both weighting systems and screening systems. The organization puts together its requirements and performance criteria and makes this into a rating system. All the sellers should be rated using the same metrics.

Expert judgment may be used when looking at proposals that contain specialized information. The subject matter expert looks at the portions of the contract that are within his or her specialty area and gives an opinion on the seller's proposal.

Proposal evaluation techniques are a blend of evaluation criteria, screening systems, rating systems, weighting systems, and possibly expert judgment. Various inputs can be used from reviewers of the proposal to build a proposal evaluation system that can be used for multiple projects.

The outputs from selecting sellers are the actual selected sellers, the contract, a contract management plan, issues of resource availability, updates to the procurement management plan, and requested changes. All of these have been discussed previously.

Q.	The system that assigns a value to evaluation criteria is known as the ________.
		A.	Weighting system
		B.	Screening system
		C.	Expert judgment
		D.	Rating system

The answer is A. The weighting system is the basis for many of the other tools that are used in selecting sellers.