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Supplier selection framework for strategic government procurement

This research project is a study on supplier selection decision-making framework on strategic government procurement. Current practices do not allow balanced tradeoffs to reach optimal procurement decisions consistently. The main drawback of the current system can be traced to the practice of the lo...

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Main Author: Chai, Khin Chung
Format: Thesis
Language:English
Published: 2005
Subjects:
H Social Sciences (General)
Online Access:http://eprints.utm.my/id/eprint/4196/1/ChaiKhinChungPBATC2005.pdf
http://eprints.utm.my/id/eprint/4196/
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spelling my.utm.41962018-01-16T03:51:14Z http://eprints.utm.my/id/eprint/4196/ Supplier selection framework for strategic government procurement Chai, Khin Chung H Social Sciences (General) This research project is a study on supplier selection decision-making framework on strategic government procurement. Current practices do not allow balanced tradeoffs to reach optimal procurement decisions consistently. The main drawback of the current system can be traced to the practice of the lowest acceptable offer principle which is not capable of establishing any scientific relationship between the price and quality criteria and therefore, unsure of identifying the best bid and maintain decision consistency. Due to absence of scientific structured supplier selection method in the present system, supplier selection decision-making process is heavily skewed to decision-makers’ intuition and ad hocism; no clear audit trail exists and, therefore lacks system transparency. The main objective of this study is to propose a framework that is capable of overcoming the major systemic weaknesses, namely, lacking of proper guidelines and clear framework that can be used to make balanced and consistent supplier selection decisions for complex system procurement. The study uses Royal Malaysia Police as an example and the procurement of a complex telecommunications system as a case study. Focus interview was used to identify buyers’ strategic orientation, main and sub supplier selection decision criteria. Via focus interview, RMP procurement practitioners also suggested that closer working relation between the financial and technical evaluation committees could be more effective in identifying the best bid. Literature review suggested the total cost of ownership procurement principle is widely used among the more progressive companies globally and Analytic Hierarchy Process (AHP) emerged as the most suitable decision-making technique for supplier selection. Based on the above findings, a generic framework was established. The proposed framework was tested successfully in an actual tender evaluation of complex telecommunications system procurement. Being scientific, explicit, transparent and objective, it was capable of addressing the current systemic weaknesses satisfactorily. The framework was able to bridge the policy/implementation gap of the Treasury Instruction and is capable of realising the desire of practicing total cost of ownership (TCO) principle in the Malaysian government procurement function. Testimonies on the relevancy and applicability the AHP based supplier selection decision-making framework by the Chairman of the technical evaluation committee and the Chairman of the Home Ministry Tender Board, confirmed the success of the framework under test and also this project as a whole. The proposed framework when modified is suitable for any kind of purchase in other government departments or agencies. 2005-02 Thesis NonPeerReviewed application/pdf en http://eprints.utm.my/id/eprint/4196/1/ChaiKhinChungPBATC2005.pdf Chai, Khin Chung (2005) Supplier selection framework for strategic government procurement. PhD thesis, Universiti Teknologi Malaysia, Business & Advanced Technology Centre.
institution Universiti Teknologi Malaysia
building UTM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Malaysia
content_source UTM Institutional Repository
url_provider http://eprints.utm.my/
language English
topic H Social Sciences (General)
spellingShingle H Social Sciences (General)
Chai, Khin Chung
Supplier selection framework for strategic government procurement
description This research project is a study on supplier selection decision-making framework on strategic government procurement. Current practices do not allow balanced tradeoffs to reach optimal procurement decisions consistently. The main drawback of the current system can be traced to the practice of the lowest acceptable offer principle which is not capable of establishing any scientific relationship between the price and quality criteria and therefore, unsure of identifying the best bid and maintain decision consistency. Due to absence of scientific structured supplier selection method in the present system, supplier selection decision-making process is heavily skewed to decision-makers’ intuition and ad hocism; no clear audit trail exists and, therefore lacks system transparency. The main objective of this study is to propose a framework that is capable of overcoming the major systemic weaknesses, namely, lacking of proper guidelines and clear framework that can be used to make balanced and consistent supplier selection decisions for complex system procurement. The study uses Royal Malaysia Police as an example and the procurement of a complex telecommunications system as a case study. Focus interview was used to identify buyers’ strategic orientation, main and sub supplier selection decision criteria. Via focus interview, RMP procurement practitioners also suggested that closer working relation between the financial and technical evaluation committees could be more effective in identifying the best bid. Literature review suggested the total cost of ownership procurement principle is widely used among the more progressive companies globally and Analytic Hierarchy Process (AHP) emerged as the most suitable decision-making technique for supplier selection. Based on the above findings, a generic framework was established. The proposed framework was tested successfully in an actual tender evaluation of complex telecommunications system procurement. Being scientific, explicit, transparent and objective, it was capable of addressing the current systemic weaknesses satisfactorily. The framework was able to bridge the policy/implementation gap of the Treasury Instruction and is capable of realising the desire of practicing total cost of ownership (TCO) principle in the Malaysian government procurement function. Testimonies on the relevancy and applicability the AHP based supplier selection decision-making framework by the Chairman of the technical evaluation committee and the Chairman of the Home Ministry Tender Board, confirmed the success of the framework under test and also this project as a whole. The proposed framework when modified is suitable for any kind of purchase in other government departments or agencies.
format Thesis
author Chai, Khin Chung
author_facet Chai, Khin Chung
author_sort Chai, Khin Chung
title Supplier selection framework for strategic government procurement
title_short Supplier selection framework for strategic government procurement
title_full Supplier selection framework for strategic government procurement
title_fullStr Supplier selection framework for strategic government procurement
title_full_unstemmed Supplier selection framework for strategic government procurement
title_sort supplier selection framework for strategic government procurement
publishDate 2005
url http://eprints.utm.my/id/eprint/4196/1/ChaiKhinChungPBATC2005.pdf
http://eprints.utm.my/id/eprint/4196/
_version_ 1643643992392335360
score 13.211869

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