In today’s world, it has become practically impossible to talk about procurement without raking in agents and subcontractors. In fact, it almost goes without saying that domestic subcontractors and procurement agencies are a vital element when it comes to obtaining goods and services. But how necessary are they? Let’s find out.
How Procurement Works
In simple terms, procurement is the act of buying or obtaining goods and services, either for business purposes (private procurement) or on behalf of a government agency (public procurement).
Although the word “procurement” is only three syllables long, the actual process is far more complicated than most people seem to think. The procurement process could include all the steps taken before a final purchasing decision is made. Basically, a procurement process begins with the preparation and processing of a demand. What goods or services do you need? For instance, a company or government agency may need to use the services of an essay writer for a project. In this case, the need for an essay writer is in demand. Subsequently, the process of procurement may entail supplier research, selection, pricing, and of course, financing.
However, before the process is finalised, there has to be a procurement contract. This document entails the legally-binding agreement between the supplier and the agency or company. After the procurement contract has been signed and the services of the contractor acquired, the chosen contractor will then provide an in-depth plan for the project.
This detailed plan is included in the contract programme. The contract programme is a detailed document outlining the work to be done, how the contractor intends to carry out the work, and the order in which it’ll be done (taking time and resources into consideration). It also includes how subcontractors, vendors, and other third parties will affect the project plan.
Who are the Subcontractors and Agents?
Just before making a case for subcontractors and procurement agents, it is important to have a firm grasp of their role in the great chain of procurement.
Who is a Subcontractor?
No one is a stranger to outsourcing. At least, not subcontractors. A subcontractor typically works under the main contractor. In a situation where the contractor cannot take on certain aspects of the project at hand due to some reason, the subcontractor will take on the task in question.
The contractor usually has to gain approval from the buyer before bringing a subcontractor or assistant onboard. However, even after gaining approval from the buyer, the contractor will remain responsible for the subcontractor and ensure that the subcontractor’s work stays true to the obligations, requirements, and quality assurance processes outlined in the contract.
The Procurement Agent
The agent (or purchasing agent, as they are popularly called) basically oversees the procurement process from start to finish. This includes monitoring the budget and handling negotiations with the supplier. Procurement agents work in the manufacturing industry and in public institutions like schools and government agencies where there’s always a need to buy supplies needed for operations.
The agent is responsible for selecting and buying the necessary products or services. This is done by sourcing and analysing relevant information concerning contractors, products, and price differences.
Why Subcontractors and Agents are Necessary for Procurement?
It is important to note that subcontractors and procurement agents work hand-in-hand to promote efficiency and seamless operations.
However, to quell any doubts about the necessity of these two bodies here is a quick rundown of why they are so important.
Procurement agents help to manage vendor relationships and smoothen transactions. They equally ensure that the agency or company receives all the goods and services needed for profit realisation.
Without an agent, the link in the chain between the agency and supplier weakens.
Agents are also a vital element when it comes to the negotiation of deals. Believe it or not, any deal your procurement agent makes with a supplier has the ability to affect your profit margin, either negatively or positively.
Finally, a procurement agent’s expertise in his industry is second to none. Many authorities or business owners may not be able to stay on top of fluctuating market prices and trends. In this case, the agent’s expertise comes in handy.
Although subcontractors are generally viewed as a smaller piece of the pie, they are also important to the procurement process.
Procurement is a vast industry that is continuously evolving. With new procurement technologies and trends springing up each day, receiving goods from a different area may be overwhelming. Fortunately, subcontractors make the process easier and considerably smoother.
They equally come in handy when the workload is too high or the timeframe dedicated to the project is too small.
Both subcontractors and procurement agents share a symbiotic relationship and help to improve the overall performance of any organisation.
How Government Agencies Can Benefit from Procurement Technology?
Having defined the role of the subcontractors and agents, it is crucial to understand the current trends and technologies in procurement. Some of these include:
Cloud services integration
Cloud-based procurement platforms have become widespread with most organisations making the leap from traditional to cloud strategies. This integration makes procurement processes more efficient and accessible to teams in the organisation.
Analytics is being used to improve procurement processes, mitigate wastage of resources, and optimise cost. It has also greatly improved the process of decision making.
Government agencies can benefit from these technologies by leveraging the global collaboration in procurement to source services/ products that are tailored to suit their particular needs. They can also benefit from procurement technologies by using analytics and cloud services to store and easily interpret vendor data. For instance, if a government agency is seeking to hire essay writers, x-raying the analytics on keywords like “write my essay” would help it locate relevant contractors.
Subcontractors and procurement agents are an essential part of any procurement process. They work together to improve the overall performance of any government agency or organisation. If you decide to embark on a project, keep in mind that your procurement agent is just like a head attached to a body. When the head is in place, the other body parts work perfectly.