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USPS Supplying Practices Process Step 2: Evaluate Sources

Develop Purchase Plan and Best Value Parameters

A purchase plan provides the overall strategy for accomplishing and managing a purchase and is usually prepared under the general direction of the Commodity Sourcing Strategy Plan (CSSP). Information regarding the CSSP can be found in the Develop Commodity Strategy topic of the General Topics. The purchase plan helps define the type, size, and phasing of the purchase to comply with the Postal Service's Supply Management Principles, after having made a decision on the most-appropriate sourcing option. The complexity of the purchase plan depends on the nature of the purchase and its effect on the Postal Service's business and competitive objectives. A purchase plan should set forth the Postal Service's objectives and tactics to obtain the best value in a specific purchase. Purchase planning also focuses the Purchase/SCM team on aspects of best value that the Postal Service is seeking.

Developing the purchase plan is an ongoing process, and therefore the components of the purchase plan are discussed throughout Process Step 2: Evaluate Sources. The purchase plan will be considered complete when all applicable tasks of Process Step 2: Evaluate Sources have been addressed.

The purchase plan is designed as a stand-alone document that provides sufficient information so that someone unfamiliar with the project can understand what is being proposed. Depending on the nature of the purchase, the purchase plan does not need to be lengthy; a concise, clear statement of the facts, the best value the Postal Service is seeking, and rationale supporting the proposed purchase are all that is necessary.

The purchase plan should be general enough to allow some project management flexibility, but be specific enough to give coordinating and approving officials adequate information with which to base their decisions on the technical and business merits of the purchase. The plan should be viewed as a living document subject to periodical updating and revision during the course of the purchase. It should keep the Purchase/SCM Team focused on the process and to communicate the status to management and other internal stakeholders. It should also reflect the relevant Commodity Sourcing Strategy Plan (CSSP).

Best Value

Defining best value is the process of comparing quality, prices, and availability to provide an overall benefit to the Postal Service. Obtaining best value is the goal of every Postal Service supplying activity and the basis for award of Postal Service contracts. To develop the parameters for evaluation, what will constitute best value is defined before the solicitation process. Customer satisfaction and business success are equally important for the Postal Service and will help define best value. A best value definition is made by the Purchase/SCM Team.

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Preliminary Sourcing Strategy

Determining a preliminary sourcing strategy - that is determining whether the purchase should be made through multiple sourcing, single sourcing, or sole sourcing - is another basic component of the purchase plan. The complexity of the sourcing strategy will depend on the size and scope of the purchase, but at this point in the process, the Purchase/SCM Team should make a preliminary decision regarding which type of sourcing strategy will in fact provide the Postal Service with the best value. In doing so, the Purchase/SCM Team must specifically consider whether any sourcing strategy may potentially negatively impact the Postal Service's commitment to establish a strong and competitive supplier base by putting small, minority or women-owned businesses at a competitive disadvantage. In these instances, the purchase/SCM team should gather and analyze the pertinent data supporting the preliminary sourcing strategy and make a preliminary determination that the strategy is justified. Depending on the nature of the purchase, the proper data and analysis to determine the appropriate strategy may be obtained through:

• Conducting spend analysis

• Market research

• Determining the extent of competition in the market place

Again, this is only a preliminary determination. Further analysis and justification for a particular strategy may be necessary when the Purchase/SCM Team makes its final sourcing decision, especially if the decision is to go with a single source. More information on this subject is contained in the Develop and Finalize Sourcing Strategy in Process Step 2, Evaluate Sources.

Components of a Purchase Plan

A purchase plan should include the following:

Purpose of the purchase

Statement of objectives (SOO), statement of work (SOW), specifications, or product descriptions

Item purchase history

Special considerations (e.g., compatibility with other equipment; cost, schedule, or performance constraints; compatibility or conformance with Postal Service-approved items; environmental issues; or security requirements)

Resource availability (including funding)

Preliminary total cost of ownership (TCO) estimate

Delivery schedule or period of performance requirements

Risk management

Preliminary sourcing strategy

Contract type

Supplier prequalification plans

Any proposal-specific performance evaluation factors that will help determine best value

Proposal evaluation strategy, if proposal evaluation factors will be used

A written description of the purchase method to be used; whether the purchase will be competitive or noncompetitive (if noncompetitive, the business case for this decision must be included in the plan)

Quality assurance plan (QAP)

Supplier reporting requirements

Clarification of data rights and intellectual property issues

Life cycle support plan overview

Supplier diversity considerations

Postal Service property or facilities that will be furnished to the supplier

Possible conflicts of interest

In addition to the elements above, and depending on the complexity of the purchase, the purchase plan must include a project plan that clearly identifies significant key milestones critical to the success of the purchase (e.g., publicizing the purchase, issuing the request for proposals [RFP], receiving proposals, evaluation, discussions, and any reviews or approvals needed), schedule, and resources required. The Purchase/SCM Team is responsible for developing the project plan, as well as development and finalization of the purchase plan.

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Other Topics Considered

Develop Commodity Strategy topic, General Practices

Develop Preliminary Total Cost of Ownership (TCO) Estimate topic, Conceptualize Need task, Process Step 1: Identify Needs

Revisit/Update Resource Assessment topic, Decide on Make vs. Buy task, Process Step 1: Identify Needs

Manage Risks topic, Decide on Make vs. Buy task, Process Step 1: Identify Needs

Develop and Finalize Sourcing Strategy topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Start Request for Proposals (RFP) Development topic, Prepare Project task, Process Step 2: Evaluate Sources

Conduct Spend Analysis topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Develop Life Cycle Support Plan topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Clarify Data Rights and Intellectual Property Issues topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Select Contract Type topic, Develop Sourcing Strategy task, Process Step 2: Evaluate Sources

Prequalify Suppliers topic, Perform Solicitation-Related Activities task, Process Step 2: Evaluate Sources

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