When starting a procurement exercise, it is necessary to make an assessment of risks that may arise during the exercise. Factors such as the value, political profile, marketplace and the importance of the proposed procurement will determine the potential for risk and indicate the time and effort required in completing an assessment.
For example, generally a minimal risk assessment will be given to low value routine requirements however larger or complex requirements, generally need a more consideration in terms of risk.
Potential risks that should be considered include but are not limited to:
- the procurement exceeds allocated budget
- the goods/services are not delivered on time
- the goods/services selected do not meet the users' expectations
- there is a technology shift between the procurement selection and delivery
- there is a change in the strategic direction of the Member/department
- market constraints limiting supply of goods/services
- limited interest of requirement within the marketplace
Risk assessments have been provided for each stage of the procurement cycle.
More detailed guidance and information from other sectors where the principles applied could be useful are the Risk Allocation Model from central government and the Risk Management Standard from the Institute of Risk Management. Also see our A Guide to Managing Risk.