Course Project PP III - Procurement and Contract Keller...

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Procurement and Contract Keller Graduate School of Management OCT 2011 Name: Anh Nguyen Ruhling Manufacturing Company 1. Why might negotiation be favored over competitive bidding in certain procurement situations? Answer: Negotiation may be favored over competitive bidding in certain procurement situations because negotiation can be; flexible, inexpensive, a method of obtaining value for money in a single source contract, and can be useful when the requirement is difficult to specify. Competitive bidding can take months to get responses back and then you have to analyze the bids for risk versus opportunities. Some contracts may not have the luxury of time. 2. Considerations of Epsilon's alternative proposal:
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a. What is the applicability of a requirements contract from Ruhling’s point of view? Assume that Epsilon will still make a profit resulting from economics of long runs and learning curves: Answer: From the Ruhling's point of view, requirements contracts may make possible the substantial reduction of selling expenses, give protection against price fluctuations, and of particular advantage to a newcomer to the field to whom it is important to know what capital expenditures are justified offer the possibility of a predictable market. Ruhling has already done some research and have established an estimated price of $29.00. The five other bids came in close to their estimated price. There seems to be no pressing reason for Ruhling to request similar Requirement bids from the other 4 suppliers. If Ruhling does request another set of bids it would extend the contract start time and create more work in excess of what has already been done for the original bids. b. Assuming Ruhling is now interested in a requirements contract, how should Ruhling proceed with the bidding/award process? Answer: Ruhling should proceed with the bidding/award process by contacting the other 4 bidders and ask for submission of a 1 year long requirement contract with all other details the constant or same. Bidding Process: Bids will be evaluated by a team led by the Division of Purchases and Supplies and including Economic Development and the Mayor’s Office of Equal Opportunity. This team recommends a “lowest and best” bid according to the criteria laid out in the ITB and the evaluation will be reviewed by the Law Department.
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Once a lowest and best bidder is identified, it is sent the City’s Board of Control, which reviews the recommendation and may then approve a contract based upon the recommendation. c. What would you do if you were the decision-maker at Ruhling (don't sit on the fence)? Answer: As the decision-maker at Ruhling I would have went ahead with my original plan for a
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This note was uploaded on 10/29/2011 for the course PM586 PM586 taught by Professor Pm586 during the Fall '11 term at Keller Graduate School of Management.

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Course Project PP III - Procurement and Contract Keller...

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