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Procurement professionals capability set

The Procurement Professionals Capability Set is comprised of ten capabilities that define additional knowledge, skills and abilities required for roles within the procurement profession.

They work in conjunction with the NSW Public Sector Capability Framework to support:

  • role design and description
  • recruitment
  • performance management
  • learning and development, and
  • workforce planning.

The Capability Framework applies to all public sector roles.

Every role requires, at an appropriate level, all of the capabilities in the Capability Framework, including the People Management capabilities for roles responsible for managing others.

Most procurement roles will only require a subset of the Procurement Professionals Capability Set, depending on the focus of responsibilities.

Download the complete

Procurement Professionals Capability Set (PDF 2.9MB)

  • Lead the development of Procurement as a professional, strategic, value adding function enabling delivery of organisational business objectives and optimising procurement quality, productivity and performance outcomes

    Level 1

    Know the role of procurement in the organisation as a core business partnership

    Effectively deal with basic procurement queries from users and stakeholders

    Explain NSW Procurement Policy and local procurement processes to employees outside of the procurement area, at a transactional level

    Apply NSW Procurement Policy and local procurement processes correctly in undertaking basic procurement activities

    Adapt to and support changes and improvements in procurement

    Level 2

    Recognise the procurement role and responsibility across the organisation and act as a business partner when undertaking procurement activities

    Engage confidently with senior stakeholders on procurement matters

    Understand the strategic value of procurement and the need to achieve agreed performance targets and business objectives

    Contribute to the development and standardisation of processes and apply changed processes and standards consistently

    Seek to maintain and build their currency and professionalism in procurement

    Level 3

    Contribute to the strategic direction of the procurement function and implement this at a local level

    Assess key stakeholders and develop strategies to gain buy-in and support for procurement programs/initiatives

    Set targets, priorities and objectives for own area of responsibility

    Deploy and align procurement processes effectively to support business needs and targets; support the development of key governance processes

    Proactively identify and recommend changes and improvements to procurement policy, processes and standards

    Continue to develop skills and abilities to research, learn and apply contemporary best practice in procurement and proactively share knowledge

    Coach staff within the procurement function and influence users and suppliers to deliver better procurement outcomes for the organisation

    Level 4

    Influence the strategic vision and direction of the procurement function and support its effective implementation across all areas of the business

    Incorporate business insights and objectives into the development of the procurement strategies

    Develop innovative procurement solutions at a project/category/ organisational level

    Use a range of organisational procurement models to design structures which suit the organisational environment

    Establish KPIs and reporting processes and frameworks to capture and report the benefits of the procurement function

    Lead efforts to develop and harmonise procurement processes/ standards across all user groups to gain buy-in and organisational commitment

    Research and seek opportunities for improvement in procurement and effectively promote and manage changes in procurement policy, processes and practice

    Mentor other procurement professionals on best practice and innovative methods to deliver better outcomes and lead by example

    Level 5

    Establish the vision and direction of the procurement function to meet the business need and implement this across the organisation

    Incorporate business insights and objectives into the development of the procurement function

    Champion the application of advanced and innovative procurement processes, technologies, techniques and strategies

    Set stretch functional objectives and targets ensuring alignment to corporate objectives with consideration to local business unit strategies

    Establish appropriate governance mechanisms at a functional level within the organisation to drive effective procurement practice across the organisation

    Drive continuing improvement and change in procurement policy, processes and practice to deliver better outcomes for the organisation, state and economy

    Inspire others and contribute significantly to the ongoing development of procurement as a profession in the organisation and externally

  • Gather and evaluate information on the market, business needs, categories, key suppliers, the supply chain and contextual factors to inform procurement decisions

    Level 1

    Interpret business needs and specifications

    Undertake basic supply market and demand analysis

    Use templates provided to conduct basic spend analysis

    Use basic sources to collect supply market and category information (internet, newspapers etc.)

    Know the value of key suppliers and how they impact business outcomes

    Seek out competitive options to specified products or services

    Apply basic techniques and utilise procurement systems effectively

    Level 2

    Engage with stakeholders to determine business needs and requirements to inform procurement decisions

    Thoroughly research the key risks, people, market, supplier and timing issues for categories

    Develop basic analysis of spend using simple tools and spreadsheets to identify trends and assess changes in demand

    Undertake basic supply market analysis for straightforward areas of spend with some direction and oversight

    Undertake basic supplier/customer preferencing for straightforward areas of expenditure

    Develop functional specifications to ensure supply options are not limited

    Apply different tools/techniques appropriately in different procurement situations

    Level 3

    Effectively engage stakeholders and develop procurement strategies based on sound knowledge of business needs and supply markets

    Identify a number of different supply markets from which a category can be sourced and assess the optimal approach

    Develop robust, detailed spend models using data from a variety of sources, providing insight into supply markets and internal demand analysis

    Apply strategic tools such as Supply Positioning, market segmentation analysis, PESTLE and Porters Five Forces to analyse supply markets

    Undertake supplier/customer preferencing and effectively translate the outcomes into procurement sourcing strategies

    Research and provide competitive procurement options to deal with limited supply of products and services

    Review and select tools and systems solutions developed to suit the application needed

    Level 4

    Lead the development of procurement strategies in consultation with business partners

    Interpret markets and their dynamics to inform procurement decisions for complex categories or large projects

    Develop detailed spend visualisations which interpret the data, providing trends, demand drivers, themes and insight

    Regularly and effectively apply strategic tools to supply markets and across the supply chain

    Scope and shape categories to align with supply markets to maximise the organisation’s influence

    Develop procurement strategies to deal with markets with limited suppliers

    Bring the external perspective to the organisation based on a deep understanding of practices from other industry sectors

    Research and develop systems solutions to meet changing procurement and supply chain needs

    Level 5

    Create ambitious and wide ranging procurement strategies based on supply market and category analysis together with an in- depth knowledge of organisational demand, needs and requirements

    Effectively evaluate, shape, influence and develop supply markets to meet the current and future needs of the organisation

    Work with business partners to develop the analytics infrastructure to provide accurate spend information as required by procurement teams and stakeholders

    Demonstrate expertise in analysing supply markets across all categories and provide expert advice on the process

    Develop strategies and supply markets to effectively deal with limited sources of supply

    Set the overall strategy and framework for how different ‘go-to-market’ techniques are to be established and used throughout the organisation

    Lead the interpretation, development and applications needed to better inform procurement decisions

  • Select suppliers of required goods and services, based on market evaluation, capability and alignment to the strategic procurement directions of the organisation

    Level 1

    Procure a range of straightforward goods/services

    Effectively engage with internal and external stakeholders on routine procurement matters

    Recognise the need for procurement strategies to consider activities beyond a simple ‘go-to-market’ approach

    Prepare procurement documentation which is professional, well- structured and concise, uses appropriate language and contains relevant information for low value/ risk projects

    Assist in the evaluation of suppliers against market analysis, qualification and award criteria and effectively undertake simple tenders

    Develop simple evaluation plans and raise purchase requisitions for the creation of Purchase Orders

    Capture and report on the KPIs and performance of contracted suppliers

    Level 2

    Procure a wide range of complex goods/services

    Consult with internal stakeholders to determine procurement business needs and changes in demand and manage stakeholder expectations

    Recognise the different routes to market and determine which is the most appropriate i.e. RFx1, negotiation, e-auction etc.

    Prepare procurement documentation which is professional, well- structured and concise, uses appropriate language and contains relevant information for medium value/risk projects

    Proficiently use all types of RFx and other ‘go-to-market’ processes

    Develop evaluation plans that incorporate both price and non-price components.

    Undertake simple Value for Money calculations

    Develop template Contract Management plans that include defined KPIs for straightforward procurement contracts

    1 RFx captures all references to “Requests for .....” including Requests for Information (RFI), Request for Proposal (RFP), Request for Tender (RFT), Request for Quotation (RFQ)

    Level 3

    Manage categories or large areas of expenditure

    Engage supply markets and internal stakeholders positively to achieve effective communication and conditioning

    Analyse all internal and external procurement information to effectively develop supply base strategies for major procurement projects

    Prepare procurement documentation which is professional, well- structured and concise, uses appropriate language and contains relevant information for high value/ high risk projects

    Demonstrate expert knowledge of the supplier evaluation and selection process and manage the process for high value/high risk projects

    Develop evaluation plans that allow for a multi-stage evaluation and assessment of several potentially competing criteria and complex Value for Money calculations

    Conduct straightforward debriefs

    Develop detailed Contract Management plans that include defined KPIs, a pre-determined approach to feedback, and an action plan to address non-performance issues

    Level 4

    Lead sourcing activities and management of large, complex categories or projects and often facilitate expert reference groups

    Lead supplier event days and other internal/external communication forums aimed at developing and engaging with the supply base to improve performance

    Lead the development of the supply base strategy within major markets and incorporate input from senior stakeholders and technical functions to obtain agreement to overarching strategy

    Demonstrate expertise in the development of all types of market facing documents in all categories and types of procurement activity

    Lead cross-functional teams in the evaluation of large, complex, organisation-wide agreements

    Develop evaluation plans that assess multiple complex criteria over several stages and incorporate complex Total Cost of Ownership or similar calculations

    Execute contracts in line with delegated authority and conduct potentially contentious or difficult debriefs with unsuccessful suppliers

    Develop detailed Contract Management Plans, KPIs, performance reviews, governance structures, resources, benefits tracking and reporting for significant projects and procurement categories

    Level 5

    Coach and support category managers and procurement professionals in determining the key drivers and sourcing attributes of all procurement categories

    Consult widely through the organisation on the strategic direction of business units and how the procurement function can contribute as a strategic business partner

    Lead the establishment of procurement document frameworks that meet stakeholder and regulatory requirements and deliver optimum strategic outcomes

    Lead the procurement function in ensuring that all supply market engagement activity is of the highest quality and is undertaken consistently with organisational values

    Conduct high-level sensitive or contentious debriefs that could attract political or media interest

    Develop organisational guidelines and procedures for the development of Contract Management Plans, KPIs, performance reviews, governance structures, resources, benefits tracking and reporting

    Review and report procurement outcomes to the Executive Team/ Procurement Governance

  • Plan, conduct and analyse the outcomes of commercial negotiations to achieve business objectives

    Level 1

    Complete and follow a template commercial negotiation plan in preparation for low level procurement negotiations

    Respond to and deal with issues for straightforward procurement negotiations

    Plan and lead limited issue local business procurement negotiations

    Adapt own procurement negotiation approach throughout the process

    Level 2

    Work with business areas to identify where improvement and negotiation is required in procurement activities and develop basic commercial negotiation plans to suit

    Recognise procurement negotiation issues and options and make informed assessment of negotiation arguments

    Lead straightforward procurement negotiations often during the tendering cycle or as part of a contract review

    Use a range of persuasion methods and simple tactics to achieve successful procurement outcomes

    Level 3

    Partner with business areas to prepare and plan the procurement negotiation strategy based on sound knowledge, research and structure

    Thoroughly research the key people, market, supplier, timing and risks for each procurement negotiation and set appropriate targets

    Lead a multi-disciplined negotiating team in complex procurement negotiations (at a regional or cross business unit level)

    Adopt negotiation styles to suit the situation (emotion, logic, threat, bargaining and compromise) and consistently utilise successful negotiating and influencing behaviours

    Level 4

    Develop robust negotiation plans with business partners for complex procurement negotiations and coach other procurement staff in how to approach negotiations

    Gather and apply leading edge procurement negotiation thinking and practice across the organisation

    Lead negotiations for large complex categories and significant projects (e.g. outsourcing agreements, Joint Ventures, partnerships)

    Adopt appropriate negotiation styles for all situations (internal and external), and effectively use these to deliver optimal procurement outcomes

    Level 5

    Lead business stakeholders in the development of toolkits and frameworks aimed at supporting all areas in undertaking effective procurement negotiations

    Effectively influence the executive team and other internal and external stakeholders to use best practice procurement negotiation principles

    Provide high level consultancy advice on negotiation process and tactics, as an expert negotiator within the business

    Actively promote and support the development of commercial negotiating skills and practice across the organisation

    Persuade, influence and condition others to change their position to achieve optimal procurement outcomes, taking a tough negotiating stance when necessary

  • Identify, assess and mitigate procurement risks

    Level 1

    Use basic techniques and tools to identify key risks

    Identify risks as required through procurement policy/procedures

    Utilise standard contractual provisions to mitigate contractual business risks

    Identify and track non-compliant procurement behaviours

    Level 2

    Identify and evaluate key risks at a contractual level for straightforward arrangements and seek input from other functions as appropriate (e.g. finance, legal etc.)

    Input to risk logs and opportunity assessment reports as outlined in the organisational procurement practices

    Develop risk mitigation strategies for straightforward procurement arrangements

    Identify areas of non-compliance to procurement policy and raise with relevant stakeholders

    Level 3

    Develop risk mitigation strategies for complex procurement arrangements

    Proactively keep abreast of risk management processes and effectively use systems and practices to input to project risk logs and opportunity assessment activities within own team

    Develop risk mitigation strategies for complex and large procurement projects, ensure appropriate ownership of risk between the organisation and the supplier (i.e. allocation of risk where it is best managed)

    Champion compliance as a key procurement risk mitigation strategy

    Level 4

    Lead the development of risk management tools and techniques to identify and prioritise risks to service delivery

    Work closely with business areas to identify and manage commercial, contractual, operational, financial, reputational, ethical and supply chain risks emanating from procurement activity and supply base arrangements

    Follow procurement risk management processes for major projects and coach others within the team on how to conduct risk assessments using established processes and frameworks

    Act as an internal consultant on techniques and actions to manage risk for high value complex projects and relationships, and take calculated risks to achieve objectives

    Manage compliance and work with business partners to eliminate non- compliant practices in procurement

    Level 5

    Partner with key business stakeholders to develop an organisation wide procurement risk management strategy and consistent, sustainable approach to the identification and assessment of risks and opportunities

    Develop policies, procedures, systems and appropriate review mechanisms for all procurement related risks (Political, Health and Safety, Financial, Commercial, Contractual, Social, Economic, Environmental) to ensure procurement risks are effectively managed

    Champion procurement risk management throughout the organisation and promote a culture of risk management and mitigation balanced with realisation of future opportunities

    Develop procurement compliance management frameworks and consequences for non-compliance

  • Establish constructive and innovative strategic relationships based on driving value through appropriate long term relationships

    Level 1

    Comply with policies, processes and frameworks during the contract administration and management lifecycle

    Deal effectively with suppliers at a transactional level

    Identify benefits on an ad-hoc basis and work with local benefits realisation mechanisms

    Level 2

    Understand supplier segmentation and determine the appropriate type of supplier relationship needed from straightforward areas of expenditure

    Develop appropriate supplier relationships for lower value or lower risk goods and services

    Assess impacts on suppliers and work to eliminate areas of unnecessary costs in straightforward categories

    Track and monitor benefits through supplier relationships for low risk/ spend suppliers and contracts

    Level 3

    Use supply positioning to determine the appropriate supplier relationship needed for all categories of expenditure and coach other staff on the application of supplier relationship management (SRM) principles

    Develop sound working relationships with strategic suppliers at an operational level

    Identify areas of waste throughout the supply chain and work with suppliers to eliminate these

    Track and monitor benefits through supplier relationships for high risk/ spend suppliers and contracts

    Level 4

    Consult throughout the organisation to support the development of strategic and high risk contracts and supplier relationships

    Establish strong supplier relationships with strategic suppliers at a strategic level

    Identify sources of value through the supplier relationship

    Take action to realise identified opportunities

    Lead supplier development activities for key suppliers and market segments to meet the needs of the organisation

    Develop frameworks to identify and track benefits through supplier relationships

    Establish mechanisms to ensure supplier relationships are effectively governed both within and outside of the procurement function

    Level 5

    Lead or direct the development of contract management, supplier performance and relationship management policies and processes across the organisation

    Establish long term key supplier relationships at CEO level

    Work proactively with suppliers and sectors to identify opportunities to deliver value for all parties

    Develop frameworks and strategies to identify suppliers and supply markets where supplier development activities would be beneficial

    Work with business partners to link procurement benefits into local budgeting processes

  • Effectively manage the performance of suppliers through robust contract frameworks, successfully delivering contractual obligations

    Level 1

    Follow all required processes in administering straightforward contracts

    Update contract registers and utilise systems to record and manage supplier performance and feedback

    Comply with contract management plans

    Monitor compliance with contract management plans

    Administer straightforward contracts to ensure accuracy of pricing, scope variations, updates to terms and conditions. Monitor and report on contract milestones and outcomes

    Effectively deal with internal procurement feedback about suppliers on issues such as quality, timeliness, service and price

    Review KPIs and meet with suppliers to monitor and manage routine performance

    Level 2

    Systematically follow contract management and administration guidelines on key contracts

    Record contract documentation and performance outcomes

    Manage suppliers to ensure goods, services and projects are delivered in line with agreed terms and conditions (on-time, on-cost, quality etc.)

    Administer routine to complex contracts to ensure accuracy of pricing, scope variations and updates to terms and conditions. Monitor and report on milestones and outcomes

    Undertake internal surveys and performance feedback as input into supplier performance reviews for straightforward contracts

    Establish KPIs, performance metrics and SLAs for simple straightforward categories with some guidance and support for more complex areas

    Capture and report on contract performance to measure value and effectiveness of incentives

    Level 3

    Utilise tools and systems to analyse and interpret a wide variety of supplier and performance related information to drive better outcomes through the relationship

    Ensure the contracted services are delivered in accordance with the intent of the contract, risks are identified and performance effectively managed

    Administer complex contracts such as outsourced arrangements and joint ventures

    Review and negotiate contract variations and monitor the contract database to ensure contract details are up to date

    Work with internal business partners to define and provide a single face to the supply market, ensure agreements are fully understood and utilised and performance issues are addressed effectively

    Effectively analyse data to assess strategic supplier performance and identify changes/improvements needed to deliver better outcomes

    Level 4

    Establish mechanisms to ensure contracts are effectively governed both within and outside of the procurement function

    Manage and adjust complex and strategic contracts to meet the intent of the business need and continue to add value

    Develop the overall plan for contract administration and set priorities and targets for renewal and extensions based on the business needs and market conditions

    Lead expert reference groups for key areas of spend and effectively work with business partners to support procurement programs and supply chain initiatives

    Lead the development and implementation of innovative performance and measurement metrics and incentive schemes

    Identify and mitigate variation and change claims which arise, and resolve conflict with suppliers

    Level 5

    Establish and maintain effective frameworks (such as Contract Lifecycle Management systems) and structures to manage all organisational supply arrangements

    Ensure all contracts are effectively reviewed and managed to drive better outcomes

    Drive innovation and best practice throughout the supply chain

    Provide leadership and direction to contract management teams.

    Set the overall business objectives and contract management objectives

    Provide expert advice and strategies on all supplier related matters at senior levels in the organisation

    Assess strategic suppliers and key supply markets to identify opportunities to improve the performance of the supply base

  • Ensure that the planning, management and delivery of procurement outcomes is fully consistent with all relevant legislative, probity and policy requirements

    Level 1

    Undertake procurement activities in accordance with documented practices (covering relevant legislation)

    Address codes of practice within the scope of routine procurement/ contract management activity undertaken, seeking advice on probity issues as required

    Take an ethical approach to all procurement activity

    Communicate basic concepts of best practice Public Sector probity and ethical standards as they relate to procurement to other people within their organisation

    Apply basic sustainability decisions in straightforward areas of expenditure

    Level 2

    Ensure procurement policies and practices (incorporating relevant legislation) are applied by all users at a local level

    Address codes of practices for complex procurement sourcing activity undertaken, seeking advice on probity issues as required

    Undertake procurement activities in accordance with documented practices (covering relevant legislation, regulation, probity and ethical standards)

    Coach and support team members in the application of public sector best practice ethical procurement policies/practices

    Assess social and environmental impact and incorporate social and environmental objectives into all procurement activity

    Provide forward schedules of programs and projects to supply markets

    Develop basic sustainability solutions for straightforward areas of procurement

    Level 3

    Ensure that all relevant legislative requirements are incorporated into procurement related activities

    Model behaviour on the code of conduct and ensure procurement practices address all legislative requirements and organisational corporate social responsibility (CSR) guidelines and requirements

    Demonstrate full understanding of public procurement probity and ethical processes and undertake/ oversee major tender processes to deliver successful solutions

    Assess the social and environmental impact of procurement activities and work with internal and external stakeholders to address these risks and impacts

    Undertake sustainability risk assessments (social, economic and environmental) for major projects and incorporate sustainability strategies into sourcing activities

    Level 4

    Interpret and effectively apply the intent of the government procurement framework and all related polices and legislation

    Regularly review and interpret legislative requirements to ensure procurement/contract management policies and practices comply with the intent of the legislation

    Lead by example and seek to ensure all codes of practice (e.g. Ethics, Probity, Health and Safety) are fully understood and consistently applied to procurement activity across the organisation

    Act as a reference point on knowledge of best practice on Public Sector procurement processes, for senior stakeholders within the organisation

    Interpret government social and environmental objectives and incorporate these into all procurement objectives and sourcing activity

    Work closely with industry bodies and internal stakeholders to proactively develop supply markets to meet future procurement needs

    Develop leading edge sustainable procurement strategies that drive improved social, economic and environmental outcomes throughout the supply chain

    Champion sustainability within the industry and the organisation

    Level 5

    Regularly review and interpret legislative requirements to ensure procurement policies and practices comply with the intent of the legislation

    Work actively with public sector policy and legislative stakeholders in the development of frameworks and policies for probity in procurement to reflect best practice

    Develop policy and processes for the integration of current ethical standards across all areas of the organisation and integrate the organisation’s Corporate Social Responsibility (CSR) policies and standards into procurement policies and practices

    Provide expertise in Public Sector legislation and best practice procurement for most senior stakeholders within and outside the organisation

    Assess the broader social and environmental objectives of government (such as Indigenous and SME participation and development) and incorporate these into procurement policy, planning and sourcing activities

    Monitor the health of the supply market to ensure the organisation adopts a responsible approach to the engagement and development of supply markets

    Lead the development of the organisation’s sustainability strategy/ policies for procurement and incorporate these into sourcing practices

    Provide leadership to the industry in sustainability

  • Prepare, confirm and approve concise and complete contractual documentation and protect the organisation’s commercial position in areas such as liabilities, indemnities, insurances and warranties

    Level 1

    Seek advice from senior procurement staff on any contractual issues

    Interpret basic contract terms and conditions and their contextual meaning

    Effectively use template contracts for basic goods and services

    Level 2

    Seek advice on the interpretation of variations to contract terms and conditions if challenged by suppliers

    Interpret contract terms and conditions and how they should be applied to straightforward contracts

    Prepare clear, concise and complete contractual documentation using existing templates for straightforward contracts

    Develop appropriate KPIs for straightforward contracts from existing guidelines and performance management frameworks

    Conduct risk assessments on straightforward contracts and take action to reduce/minimise the organisation’s exposure

    Level 3

    Interpret all contract terms and conditions, using a working knowledge of contract law and seeking advice for specialised terms/conditions or dispute resolution as needed

    Interpret and apply laws and legislation as they relate to procurement activity

    Prepare and negotiate clear, concise and complete contractual documentation from existing templates

    Work with key stakeholders to develop effective incentives for straightforward procurement contracts

    Use existing guidelines to develop appropriate KPIs for contracts and supply agreements based on risk and business outcome

    Conduct risk assessments on complex contracts and take action to minimise the organisation’s legal and commercial exposure

    Level 4

    Approve complex contracts, applying expertise in contract law and seeking high level legal advice when needed

    Interpret and apply statutory and common law obligations that must be incorporated into relevant contracts

    Provide expertise to the organisation on all types of contractual processes and documentation

    Partner with business stakeholders to develop effective ‘service credits’ (motivational and punitive) related to agreed KPIs and business risks for complex and major projects

    Develop holistic performance management KPIs and service delivery targets for significant contracts and supplier arrangements to achieve optimal performance

    Build clear understanding of the consequences of non-performance and mitigate this risk

    Level 5

    Interpret the intent of all contract conditions and often mediate disputes

    Interpret and apply statutory and common law obligations and ensure these are effectively embedded across all procurement contracts

    Work with legal professionals and other key business stakeholders to ensure that an appropriate range of contracts are developed and are accessible across the organisation for all types of contracts

    Establish effective contractual governance arrangements throughout the organisation

    Develop procurement policies and frameworks for supplier incentives based on business needs and risks that drive performance throughout the supply chain

    Develop procurement policies and frameworks for supplier performance management based on management of risk and meeting the intent of the contract

    Ensure supply chain risks are allocated where they can be best managed and set high standards for performance management to continue to deliver better business outcomes

    Develop and lead processes for effective methods of contract dispute resolution

  • Analyse cost make up and financial information and assess financial risk within a market to inform procurement planning, control and decision making

    Level 1

    Undertake analysis of submitted supplier pricing

    Differentiate between price and cost in decision making at a minimal level

    Develop simple cost breakdowns to use for financial assessments

    Work with suppliers on price movements and seek advice and guidance on how to handle proposed changes

    Level 2

    Use standard templates to assess Total Cost of Ownership (TCO) for basic supply arrangements

    Differentiate between price and overall cost in decision making

    Use template cost models to determine true contract costs for straightforward contracts

    Work with suppliers on price movements and negotiate changes for straightforward arrangements

    Level 3

    Develop simple TCO models for straightforward supply arrangements

    Differentiate between price and overall cost as part of the overall value assessment of supply arrangements

    Assess cost levers/drivers which exist within a category/product to optimise specification/service levels

    Apply a basic understanding of key financial indicators to assess the financial stability of a supplier in the short term

    Effectively use cost models to determine true contract costs for complex contracts

    Represent procurement in multi- functional value engineering workshops

    Anticipate and take advance action on price movements

    Proactively negotiate lower prices based on identified changes to product/labour price indices

    Level 4

    Develop robust TCO models for complex supply arrangements and create templates and guidance for cost modelling

    Identify price as a part of overall cost which is part of the overall value and expertly apply this principle in assessing the value of supply arrangements

    Work with other business areas to develop ‘should-cost’ models for complex arrangements (functional outsourcing, capital expenditure etc.)

    Proactively assess cost levers/drivers for complex categories/arrangements to optimise specification/service levels and continue to drive better outcomes

    Use financial reports and externally available data to assess supplier financial stability over the medium to long term and the financial capacity to deliver straightforward but high value contracts

    Work closely with key contractors and apply value engineering principles to identify and reduce waste and costs throughout the supply chain

    Account for the effect of external influences on price such as foreign exchange fluctuations, and the impact this can have on pricing over the term of a contract, in contract price variation clauses

    Liaise with financial experts to validate the impact of external influences on price and effectively negotiate with suppliers to achieve good outcomes

    Level 5

    Work with financial experts and other business areas to develop guidelines and templates for assessing and measuring TCO costs

    Provide clear guidelines and tools to all areas of the organisation on assessing overall value of supply arrangements to ensure decisions are not simply price focussed

    Lead a multi-functional team in the development of ‘should-cost’ models for complex arrangements (functional outsourcing, Capital Works etc.), working closely with financial experts to test and validate models prior to market engagement

    Work as a key business partner with individuals and teams to identify cost drivers and strategies on reducing costs and optimising supply outcomes

    Demonstrate a sound understanding of financial data and work closely with financial experts on complex, high value contracts

    Lead and mentor in the education of cost modelling processes across the organisation

    Lead multi-functional teams and supplier groups in applying value engineering principles to identify and reduce waste and excess costs throughout the supply chain

    Work closely with financial experts to assess price movements and develop strategies to ensure the organisation manages these