Procurement in Latin America

Here is a short post to give you the “why” behind procurement processes in Latin America.

Why do I give you this advice?

I firmly believe in helping companies do good work in the region of Latin America and opening channels for dialogue and ethical business practices. I worked in post contract management for the Canadian Commercial Corporation (Government of Canada’s contracting agency) for over six years in Ecuador and the region and I know what a good procurement contract looks like.

What’s unique about procurement in Latin America?

Because the region is composed of developing countries and most of them have gone through political uprisings and economic troubles (including currency devaluation), organizations are cautious about doing business with companies they don’t know or haven’t worked with before. Just as your shareholders are cautious about doing business in Latin America!

Procurement is also normally an arduous process because of the extensive structures in place that help protect an organization from scams, corruption and the like.

What should one expect with procurement?

A company doing business in Latin America should expect various rounds of proposal submissions and financial approvals. The proposal will go through legal review and sometimes third party reviews and “socialization” processes. If it’s a public bid there will be many parties involved.

What can a company do to be the successful bidder?

TEAM: the people responsible for submitting your proposal and getting an answer need to be proactive and convincing. They need to know when to prod the process along, when to be firm (but not desperate) and when to be patient.

PRODUCT: you need to be sure that the product or service you offer is the solution for your client. Through consultative processes, listening to the client and finding the right solution to meet the real and expected needs of the client, you will do your company and your client’s organization a great service indeed.

PATIENCE: I am not advocating laziness or a reactive attitude here. I am also not going to say that all procurement processes take months of waiting. But there is one truth in procurement in Latin America – at some point it will take much longer than you expected; perhaps you calculated an hour to get paperwork certified (and it takes a whole afternoon) or perhaps you thought that you would hear a response next week (but it just happens to fall on a long weekend which usually grows to 5 days of “vacation”) or suddenly the bid goes public and you have to start the process over again.

For those who can understand Spanish, I encourage you to view my article on international business and the art of fishing in America Economia: ¿Qué tienen en común la pesca y los negocios?

Let me know if you have any feedback on procurement or have questions for me; I would love to hear from you!

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