The Penmann Open Contract Procurement Model

Effective partnering through Open Contract procurement

The Penmann Open Contract is a procurement model that gives many commercial advantages over traditional competitive tendering.

It simplifies the process for buyers and decision makers which makes it a quicker, smoother and more cost-effective exercise, while still providing full financial transparency to guarantee best value for money.

Developing the Open Contract model

During our association with the Food industry, stretching back 43 years, we have developed a number of key long-term partnerships with clients. By working closely with you over many years our knowledge and understanding of your processes and standards is so detailed that we can support systems we’ve installed long after the commissioning engineers move on or retire.

With air handling systems playing a crucial role in providing a safe clean environment for your products, plant and personnel the benefits of partnering with an organisation working exclusively for the Food Industry are many fold.

Penmann is privileged to work with leading blue chip food manufacturers where a culture of mutual trust and confidence and a working methodology has led to the development of a model that we call Open Contract.

An additional reason for developing this model is that clients have found the traditional 3 or more competitive quote model to be flawed in a number of areas, both for them and their suppliers.

Benefits of the Penmann Open Contract approach

Open Contract substantially improves the whole project delivery process. It puts an end to spiralling costs which go hand in hand with post-award specification changes.

Here we outline just a few of the many benefits of Open Contract to be gained by working with us as a trusted and highly experienced supply chain partner.

Efficiency savings in the procurement process

 Published clarification questions and responses during PQQ and ITT stages discourage bidders from asking the right questions as it can give away commercially sensitive information to their competitors.

Without full clarity, inappropriate recommendations could be presented, costed and selected. Once the contract’s been awarded, and specification clarifications start coming to light, designs may then need to be re-engineered. This takes time and will often cost you substantially more than a viable alternative proposal that had lost out on the bid due to price.

Open Contract is a more collaborative approach which will save you around 66% of the time spent on a tender exercise by making sure the right recommendations are made and costed from the start.

Securing best value in your procurement decisions

 Even when there are scoring systems in place to weight responses in the quality submission, traditional tendering generally favours the cheapest bid.

This puts pressure on bidders to lower costs substantially enough to secure the work without eroding their profits.

The best suppliers often choose not to bid as they perceive they have no chance of success against competitors who are prepared to use lower quality materials, hire cheaper (inexperienced) labour or cut corners on processes to achieve the lowest price.

These decisions could also have catastrophic safety and environmental consequences you wouldn’t want your brand to be associated with.

Open Contract is a common sense approach which gives you full transparency from the start on price options and recommendations.

This allows you to make informed decisions that will be the most economically advantageous for you in the longer term without any unacceptable hidden compromises.

Quality assurance in procurement

Experience clearly plays a big part in PQQ stages, but it’s entirely possible for companies highly experienced in HVAC systems to be less experienced in your specific needs in the food and drinks sector.

It’s easy for inexperienced contractors to recommend a solution they’ve applied successfully elsewhere, without realising that it would be highly inappropriate for you.

On the surface, it looks like a competitive recommendation, but a procurement professional without an engineering background may be unaware of the problems it would cause.

With more than four decades of food and drinks sector experience, you’re assured of design feasibility to meet the specific needs of such specialist environments.

Our reputation for trusted quality standards in design, workmanship, materials and approach to safety also provides assurance that we’re a partner you can count on. Penmann’s ethos is built on a foundation of nurturing and growing relationships for mutual reward.

Find out how Open Contract can help you

Find out more about our Open Contract approach and how it’s already delivered substantial benefits for the likes of Quorn and other businesses by contacting us on 0113 202 7300 or through our Contact Page.