Procuring+Goods+&+Services

This page is for the work on Chapter 12: Procuring Goods and Services

Owners of this page, please introduce yourself:

Something that you like to do:** || **Say something about your experience with software** || **What would you like to learn from this course?** || **How would you like to learn from this course?** || ID#093-25-139 || Consultancy || In Bangladesh context my experience is not satisfactory because most of the cases software project fails due to lack of understanding of clients requirements. || Simple and easy way to manage a software project. || Paper work and analysis of different projects. For that, we can share previous experiences and can provide new idea for the new challenging projects. || ID#092-25-127 || Programming || More than three years of experience in designing and developing software in various organizations including Bank, Offshore Software Development Companies and other industries. || Simple and easy way to manage a software project. || Sharing ideas and experiences. ||
 * **Name/ID** || **Name a hobby or
 * Muhammed Samsuddoha Alam
 * Muhammad Ashik Iqbal

Task 1: Summarise the chapter below in terms of bullets: (10 marks)

**__Chapter 12: Procuring Goods and Services __**

Edited by: Muhammed Samsuddoha Alam , //**Muhammad Ashik Iqbal <092-25-127>**//

**// Procurement //** (the art of buying resources) is usually a formal written process. For the procurement we have to test the services with the reasonable cost for that we have to search for the perfect vendor.

The selection of vendor depends on the priorities and requirements of our organization and stakeholders. When we are searching for a vendor we must consider risk tolerance, cost and time. For searching the appropriate vendor we have to follow the below steps, The best way to solicit information from vendors is to create formal documentation to request information. This formal request is appropriately referred to as a //Request for Information// (RFI). The RFI might contain the following list of requirements and questions:
 * Search a Vendor **
 * 1) Send out a Request for Information (RFI).
 * 2) Set up a bidders’ conference.(A bidders’ conference is optional, not required.)
 * 3) Send a Request for Proposals (RFP).
 * 4) Review proposals and make your final decision.
 * Using RFIs to Solicit Vendors **


 * The software testing application must integrate with the development database residing on our on-site servers.
 * Is any specialized hardware required on our end?
 * How long has your company been providing application-testing services?
 * What are the general qualifications of the personnel who would be providing software-testing services?
 * Can you perform the software testing on-site, or do we have to come to you?

The steps are as follows:
 * Hosting a Bidders’ Conference **
 * The bidders’ conference is the second-best opportunity for vendors to impress you.
 * It is a knock-you-out-cold proposal that you can’t turn down
 * Conference is an informal meeting
 * For the conference you send formal, written requests for vendors to attend, or simply invite the vendors by e-mail or phone, control of the meeting begins with who you invite.
 * What the vendor offers before you extend an invitation. If the vendor doesn’t understand your process, it is unwise to bring him in at the last minute.

Steps are as follows:
 * A day in the life of a Bidders’ Conference **
 * Make an opening statement that outlines your agenda and highlight the specific areas that you would like the vendors to address concerning their product or services.
 * Give chance to the members and other stakeholders to express any specific interest.
 * Clarify the requirement if the software vendors ask any questions.
 * Give the vendors the opportunity to make a final statement as to their capabilities and continued interest in working on your project.
 * At the close of the meeting, present each of the interested and eligible parties a //Request for Proposal// (RFP) package and give them an overview of the logistics for the presentation of all proposals.

Setting up criteria for RFPs A Request for Proposals (RFP) is your request for various vendors to provide the down-and-dirty, cut-to-the-chase offer to sell you their products or services. In the RFP, you specify exactly what you want vendors to supply with logistical and service requirements. // Logistical requirements // are the delivery and installation timelines for any equipment and products; // Service requirements // are contracts concerning warranties, maintenance, and upgrades after any warranties expire. Evaluate all proposals carefully, because the second you accept one, any terms and stipulations included in the proposal may be included in the purchase contract and may override any terms and conditions you may have negotiated outside the vendor’s boilerplate purchase quotation form.


 * Selecting the Vendor **

After you get some proposals, get out your magnifying glass and detective hat and get ready to investigate all the offerings to arrive at a vendor selection. The devil is in the details. As you read through the proposals you’ve received from the vendors clamoring for your business, you can clearly see that all of the offerings handle the big stuff — the main items that you want to purchase — pretty much the same. Only the details differ, and these details (and the differences) can make or break the proposal.
 * Considering market conditions
 * Using a screening system
 * Using the help of others
 * Implementing a weighting system

You’ve considered the market conditions, used an elaborate — or not — screening system that incorporated a well thought out weighting system, and selected a winner from all the vendors who came begging for your attention and business. Now you have to negotiate the final contract and get the ball rolling on the actual implementation of the system. The main point is: Everything else — remembers everything is negotiable — comes later. Negotiating steps are as follows:
 * Negotiating for the Best Solution **
 * Starting with price
 * Considering time, cost, and quality issues
 * Here’s what you need to negotiate as far as the Iron Triangle is concerned:
 * Be sure that your agreement with the software vendor includes timelines and benchmarks that are realistic regarding your needs.
 * Include penalties for not meeting targets. Don’t jeopardize your project by allowing the vendor to provide a product at a time that is clearly out of touch with your reality.
 * Factor in all the costs when purchasing your application. Be sure you know what is covered under your warranty and what services you might be paying for in areas where the warranty doesn’t apply.
 * Spell out how much support in manpower and equipment you need to assure a smooth implementation.
 * Make sure that other resources with costs are accounted for in writing, including such items as room space for testing, extra computer servers, additional power capabilities, and cabling for the testing equipment. All of these costs come out of someone’s budget, and if you don’t specify that they are coming out of the vendor’s budget, they’re coming out of yours.
 * Make sure there’s something in writing that gives you an out if something doesn’t work as specified. You must be able to control the quality of the product you are producing

If your company has a legal department, be sure to have one of its representatives review the contract first and alert you of any potential problems and help you negotiate the terms if necessary. The type of contract you negotiate determines whether you bear most of the risk or whether the vendor bears most of the risk.
 * Administering Contracts **

// Terms and conditions // are the details of a contract that define every aspect of its implementation and how its requirements on all parties are performed.
 * Writing the Terms and Conditions **

FOB origin means that the title to the product transfers to the buyer at the point the product is manufactured and shipped, and FOB destination means that the title transfers at the buyer’s location.
 * Free On Board (FOB) Point: **

Software vendors provide only the software of which their product consists. Usually, they specify that any hardware, cabling, air conditioning, infrastructure or other factors necessary for the successful implementation of their product are to be provided by the buyer.
 * Payment Terms: **
 * At product delivery
 * At initial installation
 * Upon first use
 * After completion of installation
 * At product acceptance
 * Extraneous Work and Materials: **

The //statement of work// (SOW) is a written document that details the scope of the work that the vendor will perform and is an output of the procurement planning process.
 * Creating the Statement of Work **

The statement of work, at a minimum, should include in detail Solving Problems and Compromising ** Problems sometimes arise during the application of the terms of your agreement. Arbitration is a common remedy for resolving disputes that involve performance and implementation issues, and it’s a better way to address these issues than a good old-fashioned lawsuit. If all parties know what is expected from your agreement, there should be little need for dispute resolution. Compromise and working through issues are always better than going to arbitration, being sued, and creating a hostile and tense working environment that you might have to endure due to a poorly executed contract.
 * The product that is being installed
 * The process and procedures for installing the product
 * A specific statement about who will be doing the work
 * A specific list of resources that are necessary for completing the project
 * Specific milestones for marking the advancement of the project
 * The expected amount of time to achieve completion of the project

Auditing the goods and services Signing off for the procured goods and services
 * Closing the Vendor Contract **

Task 2: Explain the bullets in terms of the Grameen Bank Form 15 system. (10 marks)

Edited by Muhammed Samsuddoha Alam [093-25-139]


Fig.1. : Estimation for Grameen bank [GB] by using Excel

From the above figure 1. we want to say that for better solution by using excel we need to divide all the branches of GB in 6 zones [where 1 zone = 13 areas] and [1 area=8 branches].

For each zone we need 3 PCs. So, 3 * 6 = 18 PCs For Data Management we need 2 servers Others maintenance cost and manpower is required for the whole task.

By the above details you can see we need only 3 days [200 forms per day by using 18 pcs]

From the 6 zones the inputted data will be sent to the Head Office by email.

For purchasing the right products and services according to the above details we have to follow the steps given below:
 * Search a Vendor
 * Using RFIs to Solicit Vendors
 * Hosting a Bidders’ Conference
 * A day in the life of a Bidders’ Conference
 * Setting up criteria for RFPs
 * Selecting the Vendor
 * Negotiating for the Best Solution
 * Administering Contracts
 * Writing the Terms and Conditions
 * Free On Board (FOB) Point
 * Payment Terms
 * Extraneous Work and Materials
 * Creating the Statement of Work
 * Solving Problems and Compromising
 * Closing the Vendor Contract