Six procurement methods to find and select reliable suppliers

Procurement is “the buying of goods and services that enable an organisation to operate its supply chains, in a profitable and ethical manner”, according to the Chartered Institute of Procurement & Supply (CIPS).

The CIPS glossary adds that procurement teams handle market analysis and sourcing. They also manage negotiation and contracting, as well as supplier relationship management. Their work covers the full cycle, from identifying a need through to the end of a contract or an asset’s useful life.

Procurement is broader than purchasing. CIPS describes procurement as a long-term approach to acquiring goods and services, while purchasing is short-term, reactive, and transactional. The distinction affects how teams design workflows for procurement vs. purchasing.

Sourcing sits inside procurement. CIPS puts it plainly:

“Procurement is the profession and departmental title. Sourcing is an activity undertaken by the procurement team.”

The procurement methods below are all ways of running that sourcing activity within a wider procurement process.

Key takeaways

• Procurement methods describe different dimensions: open and selective tendering define supplier access, RFPs and RFQs define solicitation format, two-stage tendering defines sequencing, and single source removes competition.

• Match the method to how well you can specify the requirement. Use an RFQ when your procurement team has fixed the specification, and use an RFP when you need suppliers to propose a solution.

• Quality and delivery have remained leading supplier-selection criteria. Dickson ranked performance history third and price sixth in 1966. Mannheim’s 2023 survey ranked cost first, followed by quality in second place and delivery in third.

• Automated invoicing can reduce invoice-processing costs by 60% to 80% compared with manual and paper methods, according to Ardent Partners’ 2025 research.

6 procurement methods to find reliable vendors

The right procurement method depends on how precisely you can specify what you need. The contract’s value and the level of competition available in the market also matter.

Here is how six widely used methods compare:

1. Open tendering

In an open tender, the contracting authority invites any interested supplier to submit a bid against a published specification. The evaluation team assesses sealed bids only against predefined award criteria.

UNCITRAL treats open tendering as the default method in public procurement, while EU rules recognise open and restricted procedures as baseline options.

Under EU Directive 2014/24/EU:

“Any interested economic operator may submit a tender” in the open procedure.

The directive sets a standard minimum tender period of 35 days from the dispatch of the contract notice.

Use open tendering when your team has clearly defined the requirements and the contract value is high. It also provides the strongest possible price competition and an auditable trail.

A typical process runs from needs identification and tender document preparation through publication and a clarification period. Suppliers then submit sealed bids before the evaluation team assesses them against published criteria and makes the award.

You must not open any bids before the deadline, according to UK government guidance.

The trade-off is time and administrative load. Evaluating a large volume of bids against formal criteria is slow, which is why private-sector buyers often reserve open tendering for major contracts.

2. Request for proposals

An RFP is “a document used to canvass potential solutions from suppliers when the specification is still unclear”, according to the CIPS glossary.

You describe the problem or objective, and suppliers respond with a proposed solution rather than a price alone.

Use an RFP when you know the outcome you need but not the exact route to achieve it. Examples include:

• Selecting a software platform.

• Outsourcing a business process.

• Commissioning a service where suppliers’ approaches will differ materially.

Evaluation uses multiple weighted criteria. The evaluation team typically scores technical capability and experience, then weights price separately.

Structure your RFP scoring before you issue the document, and weight the criteria to reflect the contract’s needs.

ESG questionnaires now carry 10% to 20% of overall RFP scoring at some companies, including Liberty Global, according to its 2024 Sustainability Risk Report.

3. Two-stage tendering

Two-stage tendering appoints a supplier before the buyer has all the information needed for a fixed price.

CIPS describes it as a method:

“Used to allow early appointment of a supplier.”

In stage one, bidders compete on:

• Capability and experience.

• Supply chain strength.

• Fees.

• Relevant delivery expertise.

The buyer appoints the winner under a pre-construction services agreement (PCSA) or a similar arrangement.

In stage two, once the project team has finalised the design and scope, the parties negotiate a fixed price or target cost.

Construction and infrastructure buyers commonly use this method. RICS notes that buyers can select the contractor before completing the design, although an earlier start reduces certainty about the final cost.

Two-stage tendering suits:

• Complex or large-scale projects.

• Refurbishments where the buyer cannot fully define the scope upfront.

• Design-and-build contracts.

• Highways work where early planning for rail possessions or utility diversions is valuable.

The approach is also covered in UK government early contractor involvement guidance.

Two risks require management. RICS cautions that the client loses leverage in the second stage because the incumbent supplier no longer faces competitors. Market costs can also rise between stages.

JCT suggests reintroducing competition at stage two through open-book tendering of subcontracts.

4. Request for quotations

An RFQ is “an invitation to suppliers to bid on specific products or services”, according to the CIPS glossary.

It is the right tool when your procurement team has already defined the requirements. You send selected suppliers a fixed specification and compare responses primarily on:

• Price.

• Delivery timescales.

• Quantity.

• Quality.

Use RFQs for standard, lower-value purchases where suppliers’ offerings are interchangeable. Examples include office equipment and standard components. Routine services can also fit.

RFQs generally suit lower-value requirements, and buyers compare bids on price and delivery. The buyer typically awards the contract to the lowest-priced compliant bidder.

Because an RFQ presumes that the procurement team has settled the specification, avoid using one when design questions remain open.

If suppliers could reasonably propose different solutions, you need an RFP instead. Forcing a solution decision into an RFQ simply moves the ambiguity into the contract.

5. Selective tendering

In selective tendering, the buyer invites bids only from suppliers it has pre-qualified.

Under the WTO Government Procurement Agreement, the procuring entity invites only qualified suppliers to submit a tender.

In construction practice, buyers draw a shortlist from suppliers with a known track record, typically inviting no more than six to tender, according to Designing Buildings Wiki.

Use selective tendering when:

• Open competition would generate more bids than you can meaningfully evaluate.

• The work demands proven capability that you have already verified.

• You want to reduce evaluation time.

• You need to screen out unqualified bidders before they price the work.

Do not confuse selective tendering with the EU’s restricted procedure.

Under Directive 2014/24/EU, the restricted procedure starts with a public call in which any operator may request to participate. The authority then invites a minimum of five candidates to tender.

Selective tendering in the general sense skips that fresh open call and works from an existing approved list.

In England, Wales, and Northern Ireland, the Procurement Act 2023, which came into force on 24 February 2025, replaced the restricted procedure with a competitive flexible procedure. This allows authorities to limit participants and build in negotiation or dialogue stages.

Scotland retains its own procurement rules for most devolved contracting authorities.

6. Single source

With single-source procurement, the buyer awards the contract to one supplier without competition.

It is legitimate in narrow circumstances, including genuine urgency, which FAR 6.302-2 and the EU’s negotiated procedure without publication both codify.

Technical uniqueness may also justify the method where only one responsible source exists.

For compatibility constraints, the EU directive permits additional deliveries from the original supplier if switching would cause:

“Incompatibility or disproportionate technical difficulties.”

CIPS notes that single sourcing can:

• Reduce administration costs.

• Shorten order lead times.

• Offer consistent levels of quality.

• Provide greater price stability.

However, evidence from GAO and ANAO documents substantial overspending and compliance risks. CIPS also warns about supplier dependency.

The US Government Accountability Office found that:

“Noncompetitive contracts pose a risk of overspending because they lack the benefits of competition in establishing pricing.”

In FY2013, US federal agencies did not compete roughly 36% of contracts by value, representing $164 billion, according to GAO-14-304.

CIPS adds two commercial warnings:

• If your sole supplier experiences disruption, you may not get the supplies you need.

• You may miss innovative alternatives available elsewhere in the market.

Treat single source as an exception requiring written justification. This is consistent with how the FAR and EU directive treat the method.

6 best practices for choosing suppliers

Whichever procurement method you use, the quality of the outcome depends on how you vet and evaluate suppliers, and how you manage them afterwards.

Research from professional bodies and industry surveys supports the following six practices. Academic studies add further evidence.

1. Treat vendors as vetted partners

Vet suppliers as if your revenue depends on them, because it does.

Almost 80% of organisations experienced supply chain disruption in the past 12 months, while third-party or supplier failures disrupted 43.6%, according to the BCI Supply Chain Resilience Report 2024.

Deloitte’s February 2024 research associates disruption with losses of more than 6% to 10% of annual revenue, as well as reputational damage.

Only 33% of organisations assessed the business continuity plans of their tier-one key suppliers, according to BCI’s 2023 report.

Only 15% of chief procurement officers have visibility beyond tier one, even though up to 85% of supply chain risk may sit in sub-tiers, according to Sedex.

Practices are shifting in response:

• 73% of companies reported progress on dual-sourcing strategies, according to McKinsey.

• Roughly nine in ten companies now include tariff-related clauses in some contracts, according to an Agiloft survey of 600 respondents.

Ongoing measurement is part of vetting too. Only 22% of procurement organisations use supplier scorecards that combine operational and non-operational metrics, according to Gartner.

Build scorecards that track:

• Delivery.

• Quality.

• Financial stability.

• ESG performance.

Review them on a fixed cadence.

2. Carry out a needs assessment

Define what you need before you decide how to buy it.

The choice between an RFQ and an RFP depends on how complete your specification is. That factor also determines whether you need a two-stage process, so procurement teams should choose the method after completing the needs assessment.

CIPS places needs identification and specification as the first stage of the procurement process, ahead of market engagement and tender preparation.

A needs assessment should cover both the requirement and its sourcing context.

The requirement

This includes:

• Specifications.

• Volumes.

• Quality requirements.

• Delivery expectations.

• Required service levels.

The sourcing context

This includes:

• Market capacity.

• The make-or-buy decision.

• Current category spend.

• Existing supplier relationships.

• Opportunities for supplier consolidation.

Your team can use spend analysis to identify where money currently goes, which suppliers you already use, and where you may negotiate better terms by consolidating spend or suppliers before approaching the market.

3. Select suppliers with care

Weight quality and delivery at least as heavily as price.

Dickson’s 1966 study of purchasing managers ranked quality first and delivery second. Performance history ranked third among 23 selection criteria, while price came sixth.

The pattern holds nearly six decades later. In the University of Mannheim’s 2023 State of the Procurement Profession survey, which covered 409 respondents:

• Cost ranked first at 33%.

• Quality ranked second at 22%.

• Delivery followed closely at 21%.

• Sustainability and flexibility attracted less weight.

• Innovation ranked last.

Apply supplier checks across four areas:

• Commercial and financial: Assess value for money and financial health.

• Operational: Check quality, reliability, capacity, and technical capability.

• Risk: Evaluate operational and reputational exposure alongside data security and compliance.

• ESG: Set the weighting before scoring and apply it consistently.

CIPS supplier-selection guidance supports business-viability and operational checks.

ISM’s guidance goes further, requiring evaluation of:

“Quality, cost, technological capabilities and financial status, as well as weighing layers of risk, including operational, reputational, data security and compliance.”

Add ESG criteria deliberately rather than by default.

Gartner reports that 83% of sourcing and procurement executives face increased pressure for sustainable-procurement metrics.

However, EY’s 2022 CPO survey found that, while almost 98% of respondents include sustainability measures in supplier evaluations, only 17% make environmental sustainability a priority measure.

Decide the weighting before you score and apply it consistently.

4. Make negotiations as detailed as possible

Procurement teams improve negotiation outcomes by preparing before the meeting.

CIPS structures negotiation across seven stages, beginning with preparation and opening. Testing and proposing follow, before bargaining leads to agreement and closure.

CIPS also insists on establishing your BATNA and walk-away point in advance.

Before negotiations begin:

1. Define the ideal outcome.

2. Set a realistic outcome.

3. Establish your fall-back position.

4. Identify your BATNA.

5. Decide your walk-away point.

6. Determine which concessions you can make.

7. Clarify which terms are non-negotiable.

ISM found that asking outperforms telling. High-performing negotiators:

“Ask three times as many questions and talk two-thirds less than their counterparts.”

ISM also advises giving concessions reluctantly. It recommends prioritising concessions that cost you little but carry high value for the supplier.

Harvard’s Program on Negotiation adds a caution against defaulting to competitive bidding for everything. Businesses that procure via auctions pay 3% to 5% more than those that enter exclusive negotiations with a single vendor.

Where relationship and service quality matter, an auction:

“Often can be a bad idea.”

Use competitive negotiation for leverage items. For relationship-sensitive categories, use collaboration for strategic items and an accommodative approach for bottleneck items.

The authors of academic research on the Kraljic matrix support these choices.

Document everything. CIPS warns:

“Without the documentation the agreement is open to interpretation.”

5. Digitise procurement systems

Digitised procurement measurably outperforms manual procurement.

Deloitte’s 2025 Global CPO Survey, which covered more than 250 chief procurement officers across 40 countries, found that:

• 96% of Digital Masters met or exceeded cost-saving targets, compared with 80% of followers.

• 84% of Digital Masters met supplier-performance targets, compared with 59% of followers.

• Chief procurement officers now allocate roughly 20% of their budget to procurement technology, nearly double the 2023 level.

Most organisations remain far from end-to-end automation.

Only 7% of organisations report nearly or fully automated procure-to-pay processes, according to APQC.

In addition:

• 65% still rely on manual reporting to gather supply chain data, according to ISM and Amazon Business.

• Only 30% of small organisations have a procure-to-pay system, compared with 60% of large organisations, according to McKinsey.

• The median cost to process a single purchase order is $55.

• The gap in total procurement cost between top and bottom performers is $5.19 per $1,000 in revenue.

Procurement teams can use these APQC benchmarks to quantify the cost of their manual processes.

Automate purchasing controls first. Purchase requests and purchase orders usually carry the highest transaction volumes.

Then add invoice matching once those workflows are working.

These workflows are where re-keying and lost documents consume time. Chasing approvals adds more. Your team should spend those hours on supplier consolidation and negotiation instead.

6. Streamline payment systems and the authorisation process

Procurement teams secure savings by controlling payment and approval workflows.

Ardent Partners’ State of ePayables 2025 study, which covered 204 accounts payable professionals, found that:

Automated invoicing processes cost 60% to 80% less than manual and paper methods.

Suppliers still submitted nearly half of invoices, 48.6%, manually in 2025, according to the same Ardent Partners study. This helps explain why so many procurement teams spend their time on transactional follow-up.

Fix the authorisation side too:

• Route approvals by threshold and category so finance only reviews what warrants review.

• Link invoice approval to the already-approved purchase order.

• Avoid asking teams to approve the same purchase twice.

• Use three-way matching before payment.

Three-way matching compares the invoice with the purchase order, then checks the goods received note to confirm delivery before your team pays the supplier.

Use a spend management platform to control company expenses

A spend management platform connects the procurement methods above to the daily flow of requests and orders, invoices, and payments.

Spendesk gives procurement teams one workflow covering:

• Purchase requests.

• Purchase order creation.

• Purchase order dispatch.

• Invoice processing.

• Three-way matching.

• Approval workflows.

• Payment tracking.

• Company cards.

• Employee expenses.

• Budget management.

The workflow first compares the invoice with the purchase order, then checks the goods received note to confirm delivery.

The platform provides configurable approval workflows and payment tracking. Finance can manage cards and expenses in the platform, while budgets remain connected to the same workflow.

That connection gives teams spend control. Approvals happen before money leaves the business, and committed spend appears in budgets before the invoice arrives.

Teams can configure the workflow so an invoice that matches a purchase order the buyer has approved skips a duplicate approval round.

According to Spendesk’s company spending statistics, inefficient spending processes carry a documented price tag.

Want to see how it works with your own procurement workflows? Get a free tour.