4 PPM WKD Project Procurement process.pdf

Project procurement

1. Presentation
By
Fred Ntambi
0772552815
1
Project Procurement
Process, roles and
responsibilities of the key
Actors

2. Procurement process is explained as the successive
stages procedure of inviting parties to submit an offer by
public advertisement, followed by evaluation of offers
and selecting a successful bidder
Or are successive stages in the procurement cycle that
include; planning, choice of procedures, measures to
solicit offers from bidders, examination and evaluation
of those offers, award of contract and contract
management
This process is guided by the PPDA Act 2003,
regulations, circulars etc for the public sector while
policies are followed by the private and social sectors
These processes also vary sector by sectorr
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3. •Aformalprocurementprocessissometimesseenas
cumbersomeorbureaucraticbutforanyprocurement
exerciseitisimportanttofollowthekeysteps
•Rememberifyouarenotaprocurementexpert,youwillmake
mistakes.
•Nodoubtyouwilllearnfromthembutwhylearnfromyour
mistakeswhenyoucanlearnfromsomeoneelse’s?
•Aprocurementprocesstemplateprovidesamodelanda
frameworktoworkwithin
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4. Byusingastandardprocurementprocess,youwillfindthat
supplierswillbefamiliarwiththestepsyoutake.Theywill
knowwhattoexpect
Savesyoutime;ensurethatyougettherightsolutionto
meetyourprojectbusinessneeds
Ensureyoupaytherightprice(that’stherightprice,not
necessarilythelowestprice!)
Ensureyouavoidoverlookingvitalstepsthatmaycome
backtohauntyoulater
Itwillportrayyouasaprofessionalandimproveyour
image/reputation.
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5. Notthateveryprojectisuniqueanddifferent.Some
procurementprojectsaresmallandeverystepofaformal
processmaynotberequired
Alternatively,someprojectsmaybehighlycomplexor
regulatedandagenericframeworkwillnotbeappropriateor
sufficientandyouneedtocustomize
Despitethis,everyprocurementprojectfollowsthesame
broadprocess
Thekeythingtorememberistoadapttotheprocesstofitthe
projectinquestion
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8. The procurement process can also referred to as the
procurement cycle
And the procurement process begins with planning and ends
with review of the performance of contract
In the public sector all the steps to be carried out as laid out in
the PPDA ACT and Regulations
A PDE /Project shall apply to the PPDA Act and Regulations,
and if there is a need to deviate from laid out procedures it
should consult the authority ( accreditation)
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9. The key stages in the procurement process are
as follows:
Planning for the required procurements over a given period
Determination of Specifications/TOR
Initiation of procurement
Determination of procurement procedure (method)
Sourcing (soliciting) of offers
Evaluation of offers
Post-qualification/Negotiation (if applicable)
Commencement of contract
Contract performance (delivery) and management
Record management and accountability
Payment
Post contract performance appraisal
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10. What distinguishes a ‘simple’ from a ‘complex’
procurement process are actually;
-The Procurement method
-The nature of procurement (infrastructure, a delivery of
supplies…)
For instance, under a simple procurement process,
methods include;
-Quotation and Proposals
-Direct procurement
-Micro procurement /shopping
-Community purchase
-Force Account
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11. Quotation and Proposals are simplified procurement and
disposal methods which compare price quotations
obtained from a number of providers
Quotation and Proposal method shall be used only
where the value or circumstances do not justify or permit
open or restricted bidding procedures
Quotations are used for works and supplies while
Proposals shall be used for services.
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12. Direct procurement is a sole source procurement or disposal
method for procurement or disposal requirements where
exceptional circumstances prevent the use of competition.
Direct procurement or disposal are used to achieve efficient
and timely procurement, where the circumstances do not
permit a competitive method.
Micro procurement is a simple direct procurement method
used for very low value procurement requirements.
Micro procurement is used to achieve efficient and timely
procurement where the value does not justify a competitive
procedure.
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13. This is complex mainly due to the methods
adopted;
Open domestic bidding
Open International bidding
Restricted domestic bidding
Restricted International bidding
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14. Begins with strategic plan /project procurement plan, work
plans and budgeting.
Procurement planningis mandatory under the
procurement law and details what will be procured in a
given period (year)
It is important to understand lead time and use it in work
planning, procurement planning and scheduling
The critical times to use to determine lead time
-the time when the procurement contract will be performed.
-the time when a procurement is requisitioned.
-The time frames of the key stages of the procurement cycle
Interpersonal skills is important in making Users and other
stakeholders participate and prepare user procurement
plans and consolidated procurement plans

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15. 1. Vision of the organisation
Mission
Strategic plan/ business plan
Goals, Objectives
2. Project management plan
3. Expressed needs
4. Technology changes
5. Economic changes
6. Environmental concerns
7. Expert needs
8. Disasters/ emergency
9. Agreements/ treaties
What can go wrong?
Delay incurred by the stakeholders; misunderstandind of the needs
and requirements
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16. Project entities are required to specify clearly in
detail what to procure e.g. specifications for
supplies, schedule of works and terms of reference
for services (conformance and performance)
This stage is very important :
To ensure the specific need is met satisfactorily
It is the basis for determining the evaluation criteria
in the bidding document and evaluation of bids
For designing contract documents
What can go wrong?
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17. Procurement requisitions are initiated by the User
department and approved by the Accounting officer
It a requirement, approval is made for based on
availability of funds-e.g approved budgeted
Key Components of a Procurement requisition;
Reference code for the procurement, Subject of
procurement, Location for delivery, Date required,
Description of the items, Quantity, Unit of measure,
Estimated unit/total cost, budget codes and balances,
Approval of requisition.
What can go wrong?
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18. The method of procurement is mainly based on:
Estimated procurement value
Nature of procurement (urgent)
Circumstances regarding the market structure
Time
Past experience…
The procurement method is approved by the contracts
committee
Sections 80-86 of the Public Procurement & Disposal of
Assets Act 2003 give the different procurement methods
that can be used by the Procuring and Disposing Entity
for each procurement activity
What can go wrong?
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19. Open Domestic bidding
Open International Bidding
Restricted Domestic Bidding
Restricted International Bidding
Quotation and Proposal (RFQ/RFP)
Micro Procurement (shopping)
Direct Procurement
Force account
Community purchase
Consortium /Pooled procurements
Public, Private Partnerships…
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20. The SBD (invitation to bidders) contains conditions of bidding,
specifications of what is required, evaluation criteria and the
terms and conditions of the conditions. SBDs are issued by
PPDA and customised by entities.
SBDs are very important in public procurement and serious
attention should be given in preparing them to ensure value
for money is obtained from the procurement
The procurement office in collaboration with the Users
prepare the bidding document and submits (SBDs) to
contracts committee for approval of both the SBDs and
procurement method
What can go wrong?
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21. A Bid is an offer made by the provider/supplier
to provide works, services and supplies or a
combination thereof in response to an invitation
The bidding period shall start on the date the bid
notice is first published in the media of wide
circulation or issue of the solicitation document
to bidders and shall end on the date for
submission of bids by the bidders.
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22. Bidders are allowed to seek clarification or access to
project sites where applicable
Pre-bid meeting shall allow sufficient time before the
expiry of the bid period to enable the bidder to take any
additional info into account when preparing the bid
Purchaser may issue an addendum to the bidding
document
What can go wrong?
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23. A bid received afterthe latest time and date for
submission, shall be declared late
The opening of bids by open bidding shall take place in
a public session
Record of bid opening shall be kept
No evaluation should take place during bid opening
What can go wrong?
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24. This process aims to determine the best evaluated bid
Evaluation of bids is the responsibility of the Evaluation Committee
which is approved by the contracts committee
A Member of the Contract Committee or AO is not allowed to be
part of the evaluation committee
Evaluation of bids must use the criteria stated in the bid documents
A PDE may seek clarifications from bidder (s)
The outcome of the evaluation process is an evaluation report
What can go wrong?
Delay thru clarification with bidders; delay if technical panel cannot
reach agreement
Bias of evaluators, changing criteria, influence peddling, conflict of
interest…
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25. The members are nominated by the PDU and approved by
the CC.
Negotiations are not permitted until after the CC has
approved the evaluation committee’s (EC) recommendation
and done with the BEB
The EC shall prepare a negotiation plan specifying the issues
and objectives to be achieved. The CC shall approve the
negotiation plan.
The team shall submit recommendations to the CC.
What can go wrong?
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26. Important to determine that a best evaluated bidder’s
capacity to perform the contract especially in high value
or sensitive procurements.
Provisions and criteria for post qualification should have
been provided for in the bidding document
However due diligenceon any or all the bidders may be
carried out at any time during the procurement process
What can go wrong?
Not doing due diligence coz of rushing to sign contract
Informing bidder of the exercise
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27. It is the duty of the Contracts committee to award a
contract basing on the evaluation committee
recommendations
A contract award decision by the contract committee
does not amount to a binding contract between the
provider and the PDE
The award is subject to approval by the Accounting
Officer
What can go wrong?
Influence peddling, Withdrawal of selected bidder
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28. A notice of best evaluated bidder should be displayed on
the PDE’s notice board after the decision of the
contracts committee to award a contract .
The notice of the best evaluated bidder shall not amount
to a contract.
A BEB notice shall at the time of the display should be
sent to all bidders who participated in the procurement
process
The display should be for statutory period depending on
the procurement method
What can go wrong?
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29. Contract documents should be prepared by the PDU
and approved by the CC
A contract is signed by the Accounting Officer or
authorised personnel on behalf of the gov’tentity
The contract should have a contract
manager/supervisor who could be a staff of the user
dept, a team or consultant
What can go wrong?
Delay thru official signing ceremony in the presence of donors
and communities
Contractor may not agree with contract format and general
conditions of contract (ethical clauses etc)
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30. Contract should be performed in accordance with the
terms and conditions.
The contract should have an implementation plan
The contract should be monitored during implementation
Contract performance reports should be prepared-e.g
Receipt documents, inspection and acceptance reports
Records of contract management should be kept
What can go wrong?
Delay in delivery; delay in mobilizing resources like staff and
equipment in delivery of materials
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31. Compliance to quantity, quality, delivery period
Monitoring progress of work to ensure milestones agreed are
achieved
Monitoring progress of work to ensure milestones agreed are
achieved
Contract review meetings-to review contract performance
and identify the control action that is to be taken to correct
any deviations from the contract plan.
Provider’s performance should be assessed and records kept
What can go wrong??
Inability to monitoring work progess, not documenting
activities
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32. The project procurement process involves acquiring
goods and services from external sources to support
project activities and involves many stakeholders
Key actors in this process include:
Project Manager
Responsible for identifying procurement needs, defining
requirements, and overseeing the procurement process.
They also ensure that procurements are conducted in
accordance with project requirements and regulations.
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33. Procurement Officer: Manages the procurement process, including
preparing procurement documents, issuing requests for proposals
(RFPs), evaluating bids, and awarding contracts. They also ensure
that procurement activities comply with relevant laws and
regulations.
Contracting Officer: Responsible for negotiating and finalizing
contracts with vendors. They ensure that contracts are legally sound
and meet project requirements.
Project Team: Provides input into the procurement process,
including identifying procurement needs, defining requirements, and
evaluating vendor proposals
Employees (Users, Contract Committee, management, AO
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34. Vendors /Suppliers: Provides goods or services to the
project. They respond to RFPs, negotiate contracts,
and deliver products or services according to the terms
of the contract.
Transporters
Professional associations
Government
Prospective Government regulatory agencies
Prospective employees, Industry trade groups
Public at large , Local communities
Investors
Shareholders
Board of directors
Labor unions….
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35. For instance a construction project requires steel beams.
The project manager identifies the need for steel beams
and defines the specifications (size, quantity, quality).
The project procurement officer prepares a request for
quotation (RFQ) and sends it to potential suppliers
Suppliers submit their quotations, and the procurement
officer evaluates them based on price, quality, and
delivery terms
The contracting officer then negotiates a contract with
the selected supplier, and the supplier delivers the steel
beams to the project site
The project team monitors the delivery and ensures that
the steel beams meet the project requirements
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36. Theprojectmanagermustdocumentrelevant
informationforallidentifiedstakeholders.
Thisinformationmayincludethestakeholder’s
interests,involvement,expectations,importance,
influence,andimpactontheproject’sexecutionas
wellasanyspecificcommunicationsrequirements.
Itisimportanttonotethatalthoughsomeidentified
stakeholdersmaynotactuallyrequireany
communications,thosestakeholdersshouldbe
identified.
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37. •Withflawedprocesstheremedyistore-advertisethe
tenderorseekfurtherquotes
•Wherethreequotationsarerequiredbutonlyone
quotationissought.Re-advertisethetenderorseek
furtherquotes
•Withproductspecificationorserviceschedulethat
definesagoodorservicethatcanonlybesupplied
byonecompany
•Rewritethespecificationtoprovideeffectivecompetition
e.g,not'such-and-suchaboilerfromCompanyX'but'a
boilerwithxheatoutputforaschoolofsizey'.
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38. The management of all successful projects should follow
the same process
The SQERT model shows the process which is
explained in detail below:
“Scope”-At the start of any project it is imperative to understand the Scope i.e.
what is required to be delivered or what the desired outcome is.
“Quality”-is key as this is where the standard, grade or expectations of the
level of delivery are agreed. This could be in accordance with a specification or
an agreed standard such as ISO .
“Risk”-is the next element on the SQERT model. Here risk analysis and
evaluation should be conducted to understand what possible challenges could
present themselves.
“Time”-within this model represents the amount of time needed or expected
for the project to be completed and will most likely include a deadline date for
delivery.
“Effort”-is about what levels of resource are required. The understanding of
how many people, how much money and what skills are needed should be
identified and covered here.
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