Agreement in procurement process is a crucial step that ensures a smooth and successful procurement process. Procurement is the process of acquiring goods, services or works from an external source. It is an essential function of any organization, whether private or public. The procurement process starts with the identification of a need and ends with the payment of the supplier. However, the procurement process also involves various agreements that must be made between the buyer and the supplier.
The first agreement that is made in the procurement process is the procurement agreement. This agreement outlines the terms and conditions of the procurement process, including the scope of work, timelines, and payment terms. The procurement agreement is a legally binding document that is signed by both the buyer and the supplier. It ensures that both parties understand their roles and responsibilities in the procurement process.
The second agreement that is made in the procurement process is the service level agreement (SLA). The SLA outlines the expectations of the buyer and the supplier regarding the quality of the goods or services being provided. It specifies the service level targets and the consequences for not meeting these targets. The SLA is an essential agreement in the procurement process as it ensures that the buyer receives the quality of goods or services they require.
The third agreement that is made in the procurement process is the confidentiality agreement. This agreement is signed by both the buyer and the supplier to ensure that any sensitive information shared during the procurement process remains confidential. The confidentiality agreement prevents the supplier from sharing any confidential information with third parties.
Another crucial agreement in the procurement process is the purchase order. The purchase order is issued by the buyer to the supplier and outlines the specific goods or services that the supplier is required to provide. It includes details such as the quantity, price, delivery date, and invoicing requirements. The purchase order is a legally binding document and serves as proof of the contract between the buyer and the supplier.
In conclusion, agreement in procurement process is essential for a smooth and successful procurement process. The procurement agreement, service level agreement, confidentiality agreement, and purchase order are all crucial agreements that must be made between the buyer and the supplier. These agreements ensure that both parties understand their roles and responsibilities, and they provide a framework for the procurement process. A clear and concise agreement in the procurement process is critical for delivering the right goods or services, at the right time, and at the right cost.