The main driver behind most procurement processes is to get the best service at the best price, but this does not always mean that a competitive tender process is the best solution.

In many instances, customers develop relationships with certain suppliers and a competitive tender process is not appropriate or necessary in the procurement of outsourcing services. In these circumstances, customers often embark on a “single source” procurement. However, in other instances, particularly for public sector organisations and for major outsourcing projects, it is best practice to create a competitive market in which various suppliers have the opportunity to present the best service offering and the best price that they can.

If it is decided that tendering is the most appropriate route to an outsourced service, then, as with any complex procurement, the entire process should be carefully thought through, with time-scales identified.

It is important to have a clear strategy when embarking on the tender process. There are three key components:

• the service requirements

• the tender rules; and

• the draft contract.

The procurement process will depend on the level of known requirements, and the "maturity" of the market for the particular requirements (ie is it a well-known and defined service with a number of established vendors, such as a payroll service or customer relationship management program, or is the requirement for a new one-off or bespoke service?).

Other factors to consider are timing, and how competitive the market place is for your particular service.

Many organisations use different terms to describe the various stages of the procurement process. These terms are not unique, and so it is important to clearly define the process. Some examples include:

• Expressions of Interest (EOI);

• Request for Information (ROI);

• Request for Proposal (RFP); and

• Request for Tender (RFT).

See Preliminary matters.

As discussed earlier, it is important to document the customer's requirements as much as possible. The more detail that is given, the easier it will be to compare the various responses.

Most tender documents will also set out in detail the form and manner in which the responses must be given, all designed to make it easier to compare the service offerings and price from the respondents.

See The requirements.

When a customer prepares a Request for Tender, that customer should clearly explain the specific guidelines or tender rules for the assessment and treatment of tenders.

Setting tender rules can assist in ensuring that each tender is treated equally and fairly. An additional consideration in setting out clear rules is to ensure that the market takes the tender process seriously, as preparing a tender response often requires a significant amount of work by the supplier. Customers need to be mindful when including a set of tender rules in an RFT that tender rules have been considered by courts to equate to a contract or "process contract" in some instances.

See The tender rules.

A well-prepared customer will include the draft contract in the tender pack, and ask the proposed service providers to comment on the contract as part of its response.

This has the advantage of providing a more level playing field making it easier to compare the various responses.

It also greatly assists in reducing the negotiating time with the preferred service provider, help to prevent the “battle of the form” type of arguments, and generally reduces the ability of the preferred service provider to change its response on the basis that it did not anticipate particular terms that the customer has included in the supply agreement.

See The draft contract.