Best Practices for Procurement Part 10 - Preparing the RFP - Create Price Lists

By Sandy Chockla, Franchise Owner, Expense Reduction Analysts.

When creating the list of products or services to be priced, you need to ensure you specify exactly what is to be priced.   If you are collecting the price of stretch wrap, for example, you need to specify if it is clear or opaque, the color, the thickness, the size of the rolls, the locations where it needs to be delivered, etc.  
 
You should also decide if you will allow the suppliers to suggest substitutions or alternate products.  If so, the best practice is to ask the suppliers to quote the specified product (so you can compare like for like), but then provide additional columns for the suppliers to complete if they have a suggested alternate.
 
Be sure to collect information in order to be able to calculate your total cost.  For example, is the delivery charge included?  Will the suppliers offer volume discounts or rebates?  Is there is a cost involved with switching suppliers?  Examples of switching costs are the cost for tooling that the supplier needs or the cost to educate your employees on the new software.  

Sandy Chockla is a franchise owner and Principal Consultant for Expense Reduction Analysts (ERA).  ERA has a network of experts in more than 40 overhead expense categories which I leverage to benchmark prices, review supplier agreements, and optimize our client’s purchases or services.  This is done without compromising supplier quality or service.  If you would like to have a discussion, you can contact Sandy at schockla@expensereduction.com or call direct at 970-232-4860 .