Requirements can arise in a number of ways, an existing item or facility may be reaching the end of its life and need replaced. Alternatively, there may already be a formal procurement arrangement in place and it is reaching its end date.
The identification of this need is the first step in the tender (and for lower value requirements the quotation) process. There are number of issues that must be addressed before embarking on a competition (tender or quotation):
- What is the estimated value of the requirement?
- If approaching potential suppliers to seek an indication of the likely costs of a requirement, the user must be careful to ensure that there is no misunderstanding over the approach ie the supplier should not be led to expect that an order will follow at some later stage.
- Has a budget been approved or is other preparation work required before approval will be granted?
- What is the proposed timescale for awarding a contract for the requirement?