Procurement Cycle

Graphic of the Procurement Cycle

All procurements regardless of their value or complexity follow a standard sequence of actions. This is known as the procurement cycle. In practice, you will complete some of the stages without being aware of having done so. This is particularly true of lower value, routine purchases. Think about the decision processes involved with restocking the stationery drawer. The user simply decides what and how many of the stationery items are needed and the items are purchased from the nominated stationery supplier perhaps using the departmental procurement card. The time spend on the decision process is minimal.

If however, it is the time to make application for funds to upgrade the department's desktop computers, more consideration is given, especially if there will not be enough funds to replace all the current systems and some degree of prioritisation will be needed. More consideration will also be given to the specification, ability etc of the new systems than in the stationery example.

As the value, risk and/or profile of a requirement increases so to does the time spent at each stage of the procurement cycle. In major procurements, such as large building projects, a very formal process is followed that includes formal review stages to ensure that the best solution is selected and implemented.

The stages in the procurement cycle are: