Choosing a supplier is a two-stage decision, not one: a technical evaluation answered yes or no, then a commercial comparison among those who passed only. Mixing the two stages is the root of most failed buying decisions.
1 Pre-qualification and the approved base
| Dimension | What is required |
|---|---|
| Legal standing | Commercial registration, tax certificate and whatever the authorities require |
| Financial capacity | Financial statements or solvency indicators suited to the contract size |
| Technical capacity | A factory, a warehouse, people, or an agency |
| Quality | Recognised certification and inspection procedures |
| Track record | Comparable clients and projects that can be contacted |
| Sustainability and compliance | Safety, labour practices and business ethics |
Qualify once, buy many times
A pre-qualified supplier base shortens every subsequent purchase, because the eligibility questions are settled once a year instead of being repeated in every request. Require periodic revalidation — a supplier qualified five years ago may no longer be the same business today.
2 Requesting offers: three forms
| Form | When it is used | Basis of selection |
|---|---|---|
| Request for information | The market is not yet understood | Not for buying — exploration only |
| Request for quotation | The item and specification are fixed | Price among the compliant |
| Request for technical and commercial proposals | The solution is open and the need complex | Technical weighting plus commercial weighting |
- A reasonable deadline: two days produces inflated, defensive prices.
- One set of information for everybody: any clarification given to one supplier goes to all.
- A standard pricing template: without it, comparison is impossible.
- Separate technical and commercial envelopes on larger purchases, so the technical evaluation is not swayed by price.
- A published closing time, with no offers accepted after it.
3 The comparison sheet
| Item | Supplier A | Supplier B | Supplier C |
|---|---|---|---|
| Price of goods | 480,000 | 500,000 | 520,000 |
| Freight and installation | 35,000 | 0 | 0 |
| Two years of spare parts | 28,000 | 12,000 | 0 |
| Delivery time | 120 days | 60 days | 45 days |
| Warranty | 1 year | 2 years | 3 years |
| Payment terms | 50% advance | 30 days | 60 days |
| Comparable total | 543,000 | 512,000 | 520,000 |
The apparent cheapest is A; the actual lowest is B. And C is only 8,000 higher in return for delivery two weeks sooner, a year more warranty and twice the credit period — which may well make it the best choice if downtime is costly.
The lesson: do not compare prices — normalise the offers first onto one scope and one set of terms, then compare.
4 Weighted evaluation and award
| Criterion | Weight | Supplier B | Supplier C |
|---|---|---|---|
| Total price | 40% | 40 | 37 |
| Quality and specification | 25% | 20 | 24 |
| Delivery time | 15% | 11 | 15 |
| Warranty and support | 10% | 7 | 10 |
| Track record | 10% | 9 | 7 |
| Total | 100% | 87 | 93 |
Weights are published before the offers are opened
Setting weights after seeing the prices lets the criteria be tailored to the desired outcome. Approve the weights in writing and signed before the closing date, and the sheet becomes a genuine decision tool rather than a justification for a decision already taken.
- Document the award rationale in minutes signed by a committee, not by an individual.
- Awarding to other than the lowest price is legitimate where the justification is written and convincing.
- Notify the unsuccessful bidders — it keeps them participating seriously in future.
- Keep the complete file: the requisition, the offers, the comparison, the minutes and the purchase order.
Lesson summary
- The decision has two stages: technical compliance first, then a commercial comparison among those who passed.
- Qualifying suppliers once shortens every purchase that follows.
- A standard pricing template and one set of information for all are conditions of a fair comparison.
- Normalise the scope before comparing: freight, installation, warranty and payment.
- Weights are approved in writing before the offers are opened, never after.
- Awarding to other than the lowest price is legitimate with documented justification.
5 Test your understanding
Three quick questions
Pick the answer you believe is correct and you will see the result immediately.
1. An offer of 480,000 excludes freight of 35,000 and spare parts of 28,000:
Comparison comes after the scope of the offers is made identical; otherwise you are comparing different things.
2. A committee set the evaluation weights after opening the commercial envelopes:
Criteria precede offers; setting them afterwards turns the sheet into a justification rather than a decision tool.
3. An order was awarded to a supplier that was not the lowest priced. The correct position:
What governs is the published criteria and the documentation, not the lowest price on its own.