Simply About Complicated: Multi-Stage Procurement

Multi-stage commercial procurement is a method of procuring goods, works or services, involving the submission and consideration of competitive offers in several separate stages. This mechanism is applied in the following cases:

the tender is held according to a very voluminous technical task;
there are additional issues requiring agreement with the supplier;
it is difficult to make detailed technical requirements for the subject of procurement.

The customer provides basic information to all companies interested in bidding. Next, candidates are selected for further procedures. And to the final stage are allowed selected companies that meet all the requirements of the customer and can compete on equal terms.

Types of Multi-Stage Procurements

Online tenders for a multi-stage system are held in two possible ways:

open bidding;
closed bidding.

The first option guarantees coverage of the entire market and the second allows you to allow a limited number of counterparties to participate. Closed commercial bidding is usually held for exceptional reasons.

How Multistage Procurements Are Going

The multi-stage procurement scheme differs significantly from the usual procurement procedure and is conditionally divided into three main stages.

Market Analysis

This is the first stage during which participants (contractors) submit an initial competitive offer, which contains technical and quality characteristics of products, works or services, as well as data on their qualifications and possible conditions of sale, indicating the preliminary price.

Prequalification

At the second stage, consideration of proposals and, possibly, negotiations with suppliers are carried out to clarify any procurement issues. Based on the information received, a decision is made on the admission or non-admission of participants to the next stage of procurement.

Limited List Auction

To the last, the third stage is allowed suppliers whose proposals were selected in the second stage during retraining. It is at this stage that the downward bidding process (reduction) takes place, and the suppliers compete with each other.

In the final proposals, the participants indicate the full information, including the final price, and upload all the necessary documents to the system. Complex procurement is carried out in stages, optimally for the customer and bidder.