US Government vs. Commercial Procurement

US Government vs. Commercial Procurement

Commercial procurement in project management denotes the process in which an organization sources a vendor to help them in the acquisition of the critical products and services needed for its successful completion. This endeavor often sees the firms engage the suppliers of their products and services in business contracts, which indicate the terms of their agreement. It compares with government procurement for project management, which denotes the process the institution employs to acquire the critical products and services needed by the various government agencies to complete its projects successfully (Yukins, 2017). This endeavor helps them to foster efficacy in their delivery of services to the masses.

The successful articulation of the procurement process in project management usually obligates both the government agencies and commercial entities to conduct it through a series of vital steps, which highly align. Mainly, it sees them first identify their unmet needs of the project, share these requirements with vendors through advertisement, then hire the best bidder and engage them in the signing of a contract detailing the terms of engagement. Upon the beginning of the project, the process sees the project manager in both the government agencies and commercial entities monitor the activities of the vendor closely to ensure that it aligns with their contractual agreement. Finally, the culmination of the project usually sees them close out their contractual agreement with the vendor. This paper will aim to conduct a comparative analysis of the U.S government and commercial procurement processes.

Procurement Management Planning

The procurement management planning process in project management for both government agencies and commercial entities usually begins with need recognition. The concept denotes the identification of the critical needs of the project from inception to completion. It forms the backbone of the process since as it is these needs that often go to informing their statement of work. Often, it sees both the government agencies and commercial identify and describe all the works of the project that they will denote in the contract. This endeavor usually sees them aim to define the required service, material, skill, or relationship with a vendor, the scope of work, the project risks, costs, and the risks involved for both the suppliers and the contracting party. Doing so helps them to convey their expectations to the vendors adequately to help inform their bids.

A second component in the procurement management planning efforts for both government agencies and commercial entities comprises their request for proposals from vendors. This concept denotes the writing of a formal document by both agencies to the potential vendors to inform their submission of their business propositions regarding the project. The U.S government and commercial entities usually engage this step in sourcing for their required suppliers. They, however, differ slightly in their articulation of the process.

Mainly, the U.S government agencies often publish their requests for proposals on the Federal Business Opportunities website. This situation arises because their stature as public institutions compel them to do so to help promote equity by ensuring that all the suppliers stand an equal chance of seeing the requisition and responding to it. However, the stature of commercial entities as private establishments, coupled with their need for profit, often sees them display a more flexible approach in sourcing. Mainly, the firms usually engage in the soliciting of contractors from their approved list of vendors, particularly for small or repeated projects. Doing so allows them to simplify the procurement process while assuring them of deriving the known benefits of partnering with the suppliers. For complex projects, commercial entities may foster the sourcing of new contractors by placing an advertisement of their request for proposals through their preferred media, including publications on their websites, print media, or televised ads. Usually, their selection of the right communication tool is essential to help them convey the requisition to their particular target of vendors.

Conducting Procurement

This stage of the procurement process in project management often sees both government agencies and commercial entities engaged in the evaluation of the bids acquired from the contractors in their endeavor to select the best one. In pursuing this endeavor, the federal government often employs various mechanisms to gauge the eligibility of the bidders for the project. Notable among them is the requisition for firms desiring to engage it in business to obtain the Data Universal Numbering System (DUNS) to help in verifying their location. A second qualifying mechanism is a requisition for these vendors to register with the federal government’s System for Award Management (SAM). Other considerations are the business size. At present, regulations require the federal government to consider awarding at least 23% of the net value of the contracts for a project to qualified small businesses (Yukins, 2017). Doing so enables them to give these entities the chance to compete favorably against the conglomerates that often display the might to take on massive government projects. Finally, in engaging with the contractors, the government agencies usually engage them in negotiations to determine the bid that would enhance value for the project. This endeavor is critical in ensuring that consumers attain benefits from the project.

Similarly, commercial entities usually engage various criteria in evaluating the bids acquired from the contractors to help them pick the best. Mainly, in considering the eligibility of a vendor, they often focus on assessing their financial capabilities to measure their ability to deliver the project on schedule. This endeavor usually sees them engage in processes such as conducting a credit check of the supplier to assess their worthiness. Also, they often examine the expertise of the contractor in the field to aid them in determining their reliability in delivering the project as intended. Finally, they also consider suppliers whose bids foster a win by ensuring the delivery of the project as intended at tenable costs to promote their attainment of profit. Such contractors often provide the best value for the project compared to rivals. The culmination of this step often sees the government agencies or commercial entities sign a formal contractual agreement with the selected vendor.

Controlling Procurement

This stage of the procurement process in project management denotes the endeavor by both government agencies and commercial entities to manage the vendors they hired to ensure that their work processes align with the schedules of the project. Also, depending on the nature of the contract, it often sees them develop detailed specifications of the workflow processes and ensure that the project manager holds the contractor to be accountable in complying with them. For instance, the high breadth of critical projects usually demands contractors to display significant financial might to execute them effectively. This situation often sees both government agencies and commercial entities engage the contracted vendors in a fixed-price contract to help shield them from the overrun costs that may emerge due to unforeseen risks, including inflation or natural disasters. Doing so helps usually encourages investment by assuring the contractor of protection should an unexpected event occur. Overall, both parties tend to coordinate with the contractors to ensure the project adheres to the schedule until its culmination.

Closing Procurement

This stage of the procurement process in project management denotes the effort by both government agencies and commercial entities to close it upon the successful completion of the project. Often, it comprises of the review of the initial contractual agreement by either organization to confirm that the vendor delivered the project as initially expected. Often, government agencies and commercial entities usually seek legal redress as denoted in a contract should a vendor fail to deliver on any part of the agreement. However, if they articulated the project successfully, then the agencies usually engage them in a write-up of the procurement process to facilitate closure. This endeavor also sees them evaluate the final costs incurred and reimburse the contractor as per the terms of the contract. The receipt of payment by the contractor serves as the main sign of the completion of the process.

Conclusion

The procurement process in project management usually sees both government agencies and commercial entities engage in the contractual of vendors to help in acquiring the critical resources needed to facilitate their projects. The process often adheres to a structured protocol, to source and manage these vendors in executing the project expectations until its completion. Doing so helps to ensure that both parties understand their requirements and work towards them to enhance the success of the project. Ultimately, the culmination of a project usually sees both government agencies and commercial entities terminate their contractual agreement by reimbursing the contractors for the services rendered.