Public Sector Procurement procedure.pptx

Procurement definition, types and procedure in Public sector

1. Public Sector Procurement

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3. WHAT IS PROCUREMENT? Procurement is the acquisition of goods, works or services from an external source in exchange for money to fulfill one’s need; According to a Oxford dictionary definition, to procure is simply to ‘Obtain (something), especially with care or effort’. Care and effort quadruple once procurement is carried out on a large scale and involves heavy investment like in public sector procurement. A wide range of transactions from purchase of stationery, office furniture and insurance services to the acquisition of complex satellites and missiles, and the construction of hospitals, roads, power stations and airports fall into this domain.

4. WHY IS IT IMPORTANT? Public sector procurement is comparatively different from private sector procurement in its scope and in terms of who it affects. The decisions we make in private procurement, whether good or bad, only affect us and the funds spent on these procurements are our own. In contrast, Public procurement has a large number of stake holders in form of tax payers. The decisions do not affect an individual or a limited number of people but impacts the whole society.

5. PRINCIPLES OF PROCUREMENT

6. Value for Money

7. Competition To ensure competition the procuring agency should focus on effective advertisement. PPRA also places a lot of stress on advertising. This is important to guarantee the widest possible competition, enabling people or business from all over the country (or abroad in some cases) to take part. Any procurement process should try to ensure equality of treatment and avoid any discrimination.

8. Fairness Fairness is a concept that generally requires identical situations to be treated in the same way or different situations not to be treated in the same way, and it requires the identical treatment of identical people. In practical terms this means that procuring agency is only going to make its assessment based on the tender prices and tender quality.

9. Transparency Procurement policies also serve to reduce opportunities for corruption and ensure fairness by imposing accountability and transparency. The publication of tenders guarantees transparency in the discovery process by guaranteeing competition. Similarly, during the process of evaluation of bids the procuring agency discloses all the results and notifies all the bidders, giving them specific reason as to why their bids were rejected.

10. Economy and Efficiency In procurement management, economy and efficiency may be identified as: whether the planning has been appropriate and procurement has been executed as planned whether the procurement is made in a timely and cost efficient manner The best contracting strategies are those that minimize waste and benefit from economies of scale.

11. 11 KHYBER PAKHTUNKWA PUBLIC PROCUREMENT REGULATORY AUTHORITY ACT 2012 & KHYBER PAKHTUNKWA PUBLIC PROCUREMENT OF GOODS, WORKS AND SERVICES RULES 2014

12. Key Definitions -2012 Act 2 (c)“Best evaluated bid” means,- in case for procurement of goods and services, the highest ranking fair bid in accordance with the evaluation criteria set forth in the bid solicitation documents; in case of procurement of works, the lowest responsive evaluated bid will be the ‘best evaluated bid’;

13. Key Definitions – 2012 Act 2 (f) – “bid solicitation documents” means the documents prepared by the procuring entity on the format of standard bidding documents for solicitation of bids ; 2 (e) – “bidding documents” means the data, information and representations submitted by the bidder on the bid solicitation documents advertised and made available by the procuring entity;

14. Key Definitions – 2012 Act 2 (p) - “procurement object” means goods, works or services to be procured by a procuring entity through public procurement process ; 2 (k) – “goods” means articles and objects of every kind and description including raw materials, intermediate inputs, finished goods, products, equipment's, computers, machinery, spare-parts and commodities in solid, liquid or gaseous form, electrical, mechanical as well as incidental services such as installation, transport or vehicles maintenance and similar obligations related to the supply of goods, if the value of these services does not exceed the value of such goods ;

15. Key Definitions – 2012 Act 2 (t) – “responsive” means conformity of a bid/technical proposal submitted by the prospective bidders to the statement of requirements in terms of section 24 of this Act; 2 (v) - “services” means any object of procurement which does not constitute procurement of works or goods and includes consulting services;

16. Key Definitions – 2012 Act 2 (q) – “procuring entity” means – a Department or any Office of Government including a project unit; or any Board, Commission, Council or other bodies established by or under a provincial law; or semi-autonomous or autonomous bodies which are owned or controlled by Government;

17. Key Sections – 2012 Act 21 - Communication. ( 1) All communications between a procuring entity and the bidder or vendor of procurement object shall be in writing. ( 2) Forms of communication as well as the name of the focal person shall be specified in solicitation documents . 24 - Submission of bids . (3) All announcements pertaining to public procurement shall specify the last date for submission of bids as well as the public bid opening which shall be the same.

18. Key Sections – 2012 Act 25 - Minimum qualification of bidders. - A procuring entity shall require all bidders to meet minimum qualification criteria to participate in public procurement to affirm/ensure that the bidder ,- has the legal capacity to enter into the contract ; has the prescribed technical proficiency, equipments/plant and/ or relevant certified experience ; is neither insolvent nor bankrupt ; is not in the process of winding up nor his/her properties are under the control of receiver nor his/her business activities have been suspended nor legal proceedings for any of the foregoing are imminent or have been initiated against him/her; and has fulfilled all obligations under law for the time being in force.

19. Procurement Financial Limits

20. Methods of Procurement Single Stage Single Envelope Single Stage Two Envelope Two Stage Two Envelope /Two Stage Single Envelop Direct Contracting

21. Single Bid In Goods 6A . Single bid in goods The single bid in goods may be considered if it meets the evaluation criteria expressed in advertisement or bid solicitation documents and is not in conflict with the Act, these rules, regulations or policy of Government, for the time being in force. The single bid shall be in conformity with best evaluated bid. The procuring entity shall make a decision with due diligence and in light of section 3 of the Act .

22. Alternative Methods For Procurement of Goods Rule 10 - A procurement entity may use the following alternative methods for procurement of goods, namely:   procurement of goods up to Rs . 50,000/- may be undertaken by obtaining a single quotation through direct sourcing. petty purchases between Rs . 50,000/- up to Rs . 100,000/- shall be procured through alternate method only if the following conditions are met, namely: minimum of three quotations have been obtained. Provided that if despite soliciting, less than three quotations are received it would be acceptable; request for quotation is sent to prospective bidders, simultaneously, with full contents and same information, which is duly acknowledged to be received; the closing time, date and address for submitting quotations has been clearly defined and adhered to; the object of the procurement has standard specifications; in case, amount pertaining to applicable tax is not added in the quotation, comparison of price is made after adding amount of applicable tax; and during comparison, each item should be compared to the corresponding respective specification and bid evaluated to the corresponding total cost.

23. Alternative Methods For Procurement of Goods Rule 10(c) - a procurement entity shall only engage in alternate method if the following conditions exist, namely : repeat orders within a period of six months. Provided that it does not exceed fifteen percent of the original contract value; in case of procurement through government organizations, in accordance with provisions of rule-3(2)(c) of these rules; where the procurement concerns the acquisition of spare parts or supplementary services from original manufacturer or supplier or sole distributor: Provided that the same are not available from alternative sources; where the same goods are not available from alternative sources or only one contractor, manufacturer or supplier exists for the required procurement;

24. Alternative Methods For Procurement of Goods Rule 10(c) - a procurement entity shall only engage in alternate method if the following conditions exist, namely: where a change of contractor or supplier would ensue the procuring entity to acquire material having different technical specifications or characteristics and would result in incompatibility or disproportionate technical difficulties in operation and maintenance, this shall be done with proper justification and recording of such reasons, provided that the contract or contracts do not exceed three years in duration; where the price of goods is fixed by Government; where the motor vehicles or machinery is purchased from local original manufacturers or their authorized agents at manufacturer’s price including transportation charges & other applicable taxes; and in case of emergency as defined in these rules and procurement specified under sub-rule 3(2)(a) and 3(2)( b).

25. Alternative Methods For Procurement of Goods Rule 10(d) - a procuring entity may engage in negotiated tendering with one or more suppliers or contractors without prior publication of a procurement advertisement. This procedure shall be followed when-- the supplies involved are manufactured purely for the purpose of supporting a specific piece of research or an experiment, a study or a particular development; for technical or artistic reasons, or for reasons connected with protection of exclusive rights or intellectual property, the supplies may be manufactured or delivered only by a particular supplier; and for reasons of extreme urgency brought about by events unforeseeable by the procuring entity, the time limits laid down for open and limited bidding methods cannot be met. The circumstances invoked to justify extreme urgency must not be attributable to the procuring entity: Provided that any procuring entity desirous of using negotiated tendering as a method of procurement shall record its reasons and justifications in writing for resorting to negotiated tendering and shall place the same on record.

26. ANNUAL PROCUREMENT PLANNING Annual Procurement Plan Preparation Announcement of Annual Procurement Plan A procuring entity shall announce all proposed annual procurements on the Authority’s website and on their own website before 31 st July each year and shall proceed accordingly without any splitting or regrouping of the procurements so planned

27. PROCUREMENT PLAN FORMAT S# Description of Procurement Activity Estimated Cost ( Rs in Million) Procurement Method Tentative Date of Notice Publication Tentative Date of Award of Contract Tentative Date of Complet -ion Remarks

28. INITIATING PROCUREMENT BY RAISING A REQUISITION A requisition must be raised to start any procurement process. It serves a number of purposes, including :

29. INITIATING PROCUREMENT BY RAISING A REQUISITION

30. Preparing Description of Requirements Following process should be adopted: Define the scope of works Prepare summary of description of requirements Detailed design drawings and specification Prepare the Bill of Quantities ( BoQs ) Prepare work breakdown structure along with timeline Forward to the procuring unit Documentation

31. Preparing Description of Requirements Specifications shall allow the widest possible competition and shall not favor any single contractor or supplier nor put others at a disadvantage. Specifications shall be generic and shall not include references to brand names, model numbers, catalogue numbers or similar classifications. However if the procuring agency is convinced that the use of or a reference to a brand name or a catalogue number is essential to complete an otherwise incomplete specification, such use or reference shall be qualified with the words “or equivalent”.

32. Preparing Description of Requirements S# Description Specification   Office Table Length 48” Width30” Height 30” with 3 Drawer (12”x18”x6”) each & Keyboard rack, Structure made of Sheesham wood, Leg Rest of Sheesham Wood Top made of veneer board and top leatherette Polished As per sample 2 Lap Top 10th Generation Processor Intel Core i7 10th Gen 1.8 / 4.9 Ghz CPU 15.6" FHD Display Size (1920x1080) 8GB RAM 512GB SSD Storage, Webcam, Bluetooth, Wi Fi, Backlit Keyboard, DOS

33. Pre-Qualification of Firms The Procedure: Assess firms on the eligibility/qualifications criteria, To restrict the bidding to only qualified bidders. Through: publication of a pre-qualification notice, the receipt of submissions evaluation of submissions against pre-defined criteria .

34. Pre-Qualification of Bidders Objective: to identify bidders who have adequate capabilities, resources and experience, prior to detailed tenders. Less time and resources required to assess bids bidding is limited to eligible and qualified bidders only. group of similar contracts : avoids the need for repeated pre-qualification procedures allows a bidder to be pre-qualified up to a certain value or size

35. Rule – 8 Pre-Qualification of Suppliers 1. A procuring entity, in the first stage may pre-qualify bidders only in the following cases:   where total worth of contract exceeds Rs . 10 million; and in cases of contracts for large and complex goods and related services, in which there are high costs of preparing detailed bids.

36. Pre-Qualification of Suppliers Rule 8(3): Pre-qualification of bidders shall be based entirely upon the capability, competence and resources of the bidders relevant to performance in the particular assignment, taking into account the following--   legal status along with proof of registration with one of the Federal or Provincial Registration Acts; proof of being a taxpayer; organizational profile, relevant experience, past performance, list of clients & references; relevant experience and past performance; existing capabilities with respect to human resource, personnel, computing and engineering equipment, machinery and plant, as may be the case; financial position for the last three years including bank statements and audited reports by an external auditor; proof of possessing appropriate managerial capability; and any other factor that a procuring entity may deem relevant, depending on the nature and complexity of the contract but not inconsistent with these rules. Rule 8(4): The bid solicitation documents shall be issued to the qualified bidders.

37. Pre-Qualification of Supplier Steps Involved: Prepare pre-qualification document, the qualification criteria, description of Goods. Submit pre-qualification document & invitation to pre-qualify notice to the competent authority for approval. Publish the pre-qualification notice Issue pre-qualification documents to all bidders on request Receive applications until deadline. Late applications should not be entertained Open applications and record. No public tender opening required Evaluate against criteria defined in the pre-qualification document and record results. Prepare a list of pre-qualified bidders and obtain approval from the competent authority.

38. Rule-9 - Open Competitive Bidding P ost Qualification If bidding is not limited to pre-qualified firms, the procuring entity shall engage itself in post qualifying the bidders , in case of contracts of complex nature and valuing Rs. 15 million or above. Procuring entity shall specify the requirement of post-qualification in the solicitation documents. Post-qualification may be undertaken in accordance with the provision of these rules, regardless of the bidders being pre-qualified. This shall be done prior to recommending contract award; the procurement committee shall determine whether the bidder whose bid has been determined to offer the best evaluated bid has the capability and resources to effectively carry out the contract offered in the bid. In case the procurement committee is not satisfied with qualification based on the evaluation criteria resulting in not post-qualifying the best evaluated bid, it shall proceed to make a similar determination for the bidder offering the next best evaluated bid and shall go on with all the qualified & responsive bidders in accordance with their ranking in being best evaluated, till the criteria is satisfied or till all such bids are rejected .

39. Food For Thought If bidding is not limited to pre-qualified firms, the procuring entity shall engage itself in post qualifying the bidders , in case of contracts of complex nature and valuing Rs. 15 million or above. This shall be done prior to recommending contract award; the procurement committee shall determine whether the bidder whose bid has been determined to offer the best evaluated bid has the capability and resources to effectively carry out the contract offered in the bid.

40. SOME MISCILLANOUS POINTS Bid Security in Goods Up to 2% Bid Securities in Goods of Complex Nature Up to 5% Bid Security in Works 2% In case of Goods , a procuring entity may pre-qualify bidders where total worth of contract exceeds Rs 10 Million In case of Goods, if bidding is not limited to pre-qualified firms, the procuring entity shall engage itself in post qualifying the bidders , in case of contracts of complex nature and valuing Rs . 15 million or above In case of Goods if the procurement committee is not satisfied with qualification based on the evaluation criteria, it shall proceed to make a similar determination for the bidder offering the next best evaluated bid and shall go on In case of Works if the procurement committee is not satisfied with qualification based on the evaluation criteria, it shall proceed to make a similar determination for the bidder offering the next best evaluated bid it Can not go beyond 2 nd

41. Bidding Documents KPPPRA has allowed use of Standard Bidding Documents (SBDs). Following SBDs shall be used for works. Standard Form of Tender Documents for Procurement of Works (Smaller Contracts ) under Rs 45 Millions Standard Form of Contract for Engineering Consultancy Services (For Large Projects ) over Rs 45 Millions Standard Form of Contract for Procurement of Consultancy Services (For Large Projects) Standard Form of Contract for Procurement of Goods (For Small Procurement) up to Rs 10 Millions Standard Form of Contract for Procurement of Goods (For Large Procurements) above Rs 10 Millions

42. Bidding Documents The Bidding documents may include but not restricted to the following: Instructions to Bidders (ITB) Bid Data Sheet General Conditions of Contract (GCC) Special Conditions of Contract (SCC) Schedule of Requirements Technical Specifications Bid Form and Price Schedules ( BoQs ) Bid Security Form Contract Form Performance Security Form Manufacturer’s Authorization Form Bid Evaluation Criteria Work Break Down Structure (WBS) / Activity Chart Format of all securities Drawings

43. SOME KEY TERMINOLOGIES / CONDITIONS S.No Condition 1 Earnest Money 2 Variation 3 Performance Bond 4 Completion Time 5 Amount of Liquidated Damages 6 Amount of Bonus 7 Warranty Period / Defects Liability Period 8 Percentage of Retention Money 9 Limit of Retention Money 10 Minimum amount of Interim Payment Certificates (IPC) 11 Time of Payment 12 Mobilization Advance * (Interest Free) 13 Third Party Insurance

44. SOME KEY TERMINOLOGIES 1 Bid Validity 2 Bid Prices 3 Correction of Errors 4 Response Time

45. Construction Contract Announced Bid FIRM - A FIRM - B S # ITEM Qty Rate Amount ( Rs ) ITEM Qty Rate Amount ( Rs ) 1 ABC 45 150.00 6,750.00 ABC 45 155.00 6,975.00 2 DEF 60 330.00 19,800.00 DEF 60 345.00 20,700.00 3 GHJ 25 105.00 2,625.00 GHJ 25 100.00 2,500.00 4 KLM 48 480.00 23,040.00 KLM 48 440.00 21,720.00 5 OPQ 30 195.00 5,850.00 OPQ 30 215.00 6,450.00 TOTAL 58,065.00 TOTAL 58,445.00

46. Construction Contract Evaluated Bid FIRM - A FIRM - B S # ITEM Qty Rate Amount ( Rs ) ITEM Qty Rate Amount ( Rs ) 1 ABC 45 150.00 6,750.00 ABC 45 155.00 6,975.00 2 DEF 60 330.00 19,800.00 DEF 60 345.00 20,700.00 3 GHJ 25 105.00 2,625.00 GHJ 25 100.00 2,500.00 4 KLM 48 480.00 23,040.00 KLM 48 440.00 21,120.00 5 OPQ 30 195.00 5,850.00 OPQ 30 215.00 6,450.00 TOTAL 58,065.00 TOTAL 57,745.00

47. Managing The Bidding Process Publishing Notice for inviting Bids Issuing Bidding Documents Pre-bid Meeting & Site Visit Bids Clarifications, Modifications and Extensions Tenders/Bids Receiving Bids Opening Single Stage Single Envelope Single Stage Two Envelope Two Stage Two Envelope/Two Stage Bidding

48. Managing The Bidding Process Publishing Notice Inviting Tender (nit) Objective: To attract the widest possible participation, To offer all prospective bidders fair opportunity for tendering & pre-qualification Requirements: The procurement unit should steer the whole process in consultation with the technical specialist and end users The draft NIT should be approved by the relevant competent authority before publication

49. Managing The Bidding Process Publishing Notice Inviting Tender (nit) Method of communication with the KPPRA website: Send the advertisement to the KPPRA in soft copy electronic form. KPPRA staff will transfer the information to the KPPRA website. Same format as it is prepared for publication Copy to be sent to the KPPRA electronically using the links in the KPPRA website. 

50. Managing The Bidding Process Publishing Notice Inviting Tender (nit) Following minimum information needs to be given in the NIT. Procurement Number:__________________________   ____________ (Name of Agency) has received funds from ____________ (Name of Agency) for the procurement of Works and now invites sealed tenders from eligible bidders for the supply of: Insert Summary or list of the required works Insert brief narrative giving background information or further specification if necessary   Bidding is open to all Contractors/Contracting Firms who can demonstrate (list criteria for eligibility PEC registration etc.)

51. Managing The Bidding Process Publishing Notice Inviting Tender (nit) Interested bidders may download the tender documents from KPPRA website or can get from the address below on (date__________) time _____________(hours between which the documents are available/working hours). Bidding documents may be purchased upon payment of a non-refundable fee of (fee amount, currency and payment mode). Tenders must be delivered to the address below on or before (date and time of tender closing). All tenders must be accompanied by; a bid security of not less than (fixed figure or %age of the tender price); (list all other required documents and samples where applicable)

52. Managing The Bidding Process Publishing Notice Inviting Tender (nit) Bids will be opened on (date) at (time), in the presence of prospective bidders ’ or their authorized representatives, at the address given below . Late and conditional bids will not be entertained. Full name of the procuring agency Name/title of contact person Street number, Town, City and Province Room &Telephone Number and email; There will be no price negotiations with the lowest evaluated responsive bidders. Information supplied by the firms and contractors shall be subjected to verification & any information found fake will lead to disqualification of the firm/contractor.

53. Managing The Bidding Process Issuing Tender / Bidding Documents Following are the key considerations at this stage: This procedure is basically for guidance on physical issue of bidding documents to prospective bidders and document it. The procedure applies equally to types of invitation documents, such as Pre-qualification, RFP and RFQ documents. In order to provide sufficient preparation time to the prospective bidders the documents should be issued without delay. If invitation issued to only pre-qualified bidders, then it must be dispatched to all at same time

54. Managing The Bidding Process Issuing Tender / Bidding Documents Bidders request for review of documents must be entertained. Same information must be shared all the bidders within the same time period. Queries of bidders must be recorded and addressed Arrangements for receiving, confirming, recording payments and issuing receipts must be made. Record must be maintained.

55. Managing The Bidding Process Issuing Tender / Bidding Documents S.No Name and address of bidder Date of receipt of request for documents Confirmation of payment of fee Date of issue of document Method of dispatch Signature of the Officer / Official 1. 2. 3. 4. 5.

56. Managing The Bidding Process Pre-bid Meeting and Site Visits Pre-bid meetings/site visits are not mandatory, but may be arranged where. highly technical procurement is involved, significant number of likely clarification knowledge of the site is important Pre-bid meeting/site visits may be conducted under Open Tendering, Restricted Tendering and RFP. Pre-bid meeting/site visit is always recommended for works contracts. The end user/technical specialist, must be closely involved to provide responses on technical issues.

57. Managing The Bidding Process Pre-bid Meeting and Site Visits Pre-bid meetings and site visits have the following primary objectives: Structured way of providing additional information All bidders receive the same information. Bidders are assisted in preparing tenders The Procuring Agency can prepare for any unforeseen queries Majority of clarifications cleared Chances of future contractual disputes reduced

58. Managing The Bidding Process Pre-bid Meeting and Site Visits Steps Involved: Evaluate the requirement for a pre-bid meeting and site visit at the planning stage Ensure that all the arrangements are made in advance Brief all staff involved on the procedure for the pre-bid meeting/ site visit Brief the prospective bidders on the process i.e procurement requirements, questions by bidders and closing

59. Managing The Bidding Process Pre-bid Meeting and Site Visits Steps Involved: Management of site visit Record full details and issue minutes of the meeting to all bidders promptly. Where necessary, issue a formal modification of the bidding document promptly for compliance Where necessary issue extension to the bidding deadline promptly .

60. Managing The Bidding Process Pre-bid Meeting and Site Visits Minutes Requirements: Minutes of the pre-bid meeting and site visit typically comprise of the following information the date, time and location of meeting a list of all persons who attended a list of all questions asked and the responses given; and any other information provided to bidders.

61. Managing The Bidding Process Clarifications, Modifications & Extensions Bidder clarifications : Formal requests from bidders for clarification to which a formal response is issued to all bidders; Modifications : Formal amendments to the bidding document, which the Procuring Agency may choose to make, either in response to a bidder clarification or on its own initiative; Extensions: These are formal extensions issued by the Procuring Agency of the deadline for submission of tenders.

62. Managing The Bidding Process Clarifications, Modifications & Extensions Objectives: It prevents. Complaints from bidders Unnecessary delays to the bidding process Reduced number of tenders.

63. Managing The Bidding Process Clarifications, Modifications & Extensions Late requests shall not be entertained. Agree on clarifications/modifications only after consulting end user/technical specialist Consider implications of the above and assess need for deadline extension Issue clarifications/ modifications/extensions and keep records Where substantial change are required, approval of competent authority is mandatory Draft formal clarification/modification – with details of request and any deadline extensions In case of extension: revise arrangements for receipt of tender

64. Managing The Bidding Process Receiving And Opening of Tenders Objective: This procedure is essential to the integrity of the tendering process for the following reasons: it ensures that tendering is closed at the precise time of the deadline it ensures that a record is kept of all tenders submitted on time it ensures that submitted tenders are kept unopened until the time for the public tender opening

65. Receiving And Opening of Tenders Steps Involved Receiving the Tender: Make a locked and sealed tender box available at a public location with procurement reference number Tender box size and slit size should be adequately large. Nominate staff to manage tender closing and be available before closing time. Seal the slit precisely at the deadline Deliver sealed box to Bid Opening Committee at tender opening venue.

66. Receiving And Opening of Tenders Method for Opening: Tenders which have been received on time are opened publicly, in the presence of bidders, and summary details read out and recorded. This procedure applies to Open Tendering and Restricted Tendering methods. Objective; The public tender opening is an important step in the tendering process as: Demonstrate a more transparent tendering process Reading out prices should avoid any disputes Late tenders can be avoided easily

67. Receiving And Opening of Tenders Process to be Followed: Prepare places/room for tender opening Ensure all staff members are present Welcome the bidders, record the attendance Tender box seal shown and then broken The tender box should be opened and all tenders removed and counted. Open tenders and serially number them. Open tenders one at a time. Read out and record details against each serial number

68. Receiving And Opening of Tenders Process to be Followed: Relevant pages of tenders must be signed by the Bid opening committee Allow bidders to ask questions for clarification The chairperson to close Bid Opening meeting Tender opening records copies distributed to all bidders, originals kept in procurement file. Tenders kept safely until evaluation For tender opening of more than one tendering process at the same time, conduct consecutively.

69. Receiving And Opening of Tenders Documentation at Tender Opening Stage: The following must be ensured: Names of all bidders; Unit rate and total prices of the tenders read out; Presence or absence of a tender security Number of copies of the tender received; and Any modifications. Copies of the record be given to bidders on request.

70. Receiving And Opening of Tenders Tender Opening in Single Stage Two Envelope Procedure: Technical proposal and financial proposal are submitted in separate envelops in a single package. Name and technical score of each bidder proceeding to the financial evaluation are announced; Total price of each financial proposal; and Financial evaluation follows the technical evaluation

71. Enlistment Each Department of Government shall constitute a sub-committee, consisting of five members with the chairperson, not below the rank of BPS-19, for scrutinizing credentials, submitted to it by the prospective bidders, before referring to the Provincial Enlistment and Pre-registration Committee for enlistment or renewal, as the case may be. After scrutinizing, the sub-committee shall recommend to the Provincial Enlistment and Pre-registration Committee that the prospective bidder may be registered, renewed or rejected, as the case may be, and the Provincial Enlistment and Pre-registration Committee shall give its final decision of enlistment, registration & rejection, within five working days: The criteria and list of prospective bidders, so enlisted, shall be posted on the web sites of the Authority, Department of Government and Provincial Enlistment and Pre-registration Committee, as well as on a notice board placed in the respective procuring entity at accessible site for public viewing. The process of enlistment shall be open throughout the year and any prospective bidder shall be allowed to apply, with sub-committee without any hindrance. Bidding shall be limited to enlisted bidders only. Enlistment shall not be deemed as pre-qualification or post-qualification.”.

72. Bids Evaluation Methodology: This process usually consists of three stages: Preliminary Screening , to eliminate tenders which do not comply with the basic requirements and eligibility. Detailed Evaluation , to determine whether tenders are substantially responsive to the technical specification and requirements Financial Evaluation to compare the costs of responsive tenders and determine which is the lowest priced tender.

73. Bids Evaluation

74. Bids Evaluation The Process: The Procuring Agency should identify appropriate member(s) of staff to manage the evaluation Review and list the requirements, instructions, specifications and evaluation criteria specified in the Bidding Document: The member of the Procuring Agency should meet with any selected evaluator(s) to review and understand the evaluation methodology and the specifications and criteria Conduct a preliminary screening to eliminate tenders which do not pass the preliminary screening.

75. Bids Evaluation The Process: Conduct a detailed evaluation to determine to eliminate tenders that are not substantially responsive to the minimum specification and requirements Carry out financial evaluation by determining the evaluated price of each tender . Rank the tenders according to their evaluated price. Identify the lowest priced tender, which will be the successful tender. Prepare an evaluation report for submission to the Competent Authority for approval

76. Preparing Description of Requirements S.No Criteria Description Max. Marks 1 Manufacturing Unit’s Years of service Minimum 3 Years (Mandatory); 2 Mark for each year beyond 3 years 20 2 Similar Furniture Projects in hand Each project will be vetted as follows: Above 3 and below 5 Mn = 1 marks Above 5 and below 10 Mn = 2 marks Above 10 and below 15 Mn = 3 marks Above 15 Mn = 4 marks 10 3 Value of projects completed in last five years Each project will be vetted as follows: Above 3 and below 5 Mn = 1 marks Above 5 and below 10 Mn = 2 marks Above 10 and below 15 Mn = 3 marks Above 15 Mn = 4 marks 20 4 Technical Staff in the specific domain 2 points each for every staff member 20 5 Physical Presence/office Manufacturing unit in Peshawar= 5 mark Manufacturing unit in KPK and Islamabad= 3 mark Manufacturing unit in region other than above= 1 mark 05 6 Financial Capability Annual turnover & Financial strength 25 Total Score 100

77. PROCUREMENT - EXERCISE A government department advertised the procurement of Security Cameras and their installation in its premises. Seven firms applied. Passing marks limit was 75%. The following four firms qualified based on the technical evaluation criteria given in the bid solicitation documents. S.No Firm’s Name Technical Evaluation (Marks out of 100) 1 MAKKAYS 90 2 INSIYABI 88 3 Integrated Solutions 96 4 Software House 90

78. PROCUREMENT - EXERCISE In a subsequent meeting the financial bids were opened. Following is the final outcome of technical & financial evaluation of the bids of I.T firms bidding for installation of cameras. S.No Firm’s Name Technical Evaluation (Marks out of 100) Financial Bid (Rs. In Million) 1 NESPAK 90 30.00 2 ACE-ARTS 88 28.00 3 Engineering Consultants 96 35.00 4 ARCH-AID 90 32.00 Apply the 80% (Technical) & 20% (Financial) weightage criteria for the analysis and recommend the top ranked firm to the organization for the award of contract.

79. Final Evaluation Sheet Firm’s Name Technical Evaluation (Marks out of 100) Technical Weightage (80%) Technical Score Financial Bid ( Rs . In Million) Financial Weightage (20%) Financial Score Total Score Final Ranking NESPAK 90 90 x 80/100 72.00 30.00 (28/30) x 20 18.67 90.67 2 nd ACE-ARTS 88 88 x 80/100 70.40 28.00 (28/28) x 20 20.00 90.40 3 rd Engineering Consultants 96 96 x 80/100 76.80 35.00 (28/35) x 20 16.00 92.80 1 st ARCH-AID 90 90 x 80/100 72.00 32.00 (28/32) x 20 17.50 89.50 4 th

80. Rule 32 - PROCUREMENT COMMITTEES Each procuring entity shall constitute committees, in accordance with delegation of financial powers, separately for procurement of goods, works and services. The committees shall have a representative each from the accounts or finance or planning sections of the procuring entity apart from others. A technical member shall be inducted from the relevant line department of Government or hired in all procurements of works or in exceptional cases, provided that procurement is technical and complex in nature.

81. General Evaluating Procedures Step-by-Step Instructions :   The head of the PU and the RA should identify appropriate members of staff to conduct the evaluation Review and list the requirements, instructions & evaluation criteria and seek clarifications if required. ‘Strictly’ follow evaluation criteria   Management should meet evaluator(s ) to review the methodology and criteria to ensure clarity of understanding Preliminary screening: Eliminate those who don’t pass List failed tenders with name tender number and reason

82. General Evaluating Procedures Step-by-Step Instructions :   Examine tenders that have passed. Correct tenders or seek clarifications from bidders as required Conduct a financial evaluation of the tenders which passed the detailed evaluation to determine the lowest priced tender Prepare the Evaluation Report for submission to the RA for approval with the Evaluation Committee’s clear recommendation The RA will render its decision If the evaluation is delayed, and evaluation cannot be completed within the period of bid validity, request all bidders to extend validity of their bids

83. General Evaluating Procedures Bid Prices Unless stated otherwise in the Bidding Documents, the Contract shall be for the whole of the Works based on the unit rates and / or prices submitted by the bidder. B idders shall fill in rates & prices for all items of Works described in the BoQs . Unit rate offered for an item shall be considered up to two significant decimals places for evaluation purposes. Items against which no rate or price is entered by a bidder will not be paid for by the Procuring Entity when executed and shall be deemed covered by rates and prices for other items in the Bill of Quantities. Corrections in rates and prices, if any, shall be made by crossing out, initialing, dating and re-writing .

84. General Evaluating Procedures Bid Prices All duties, taxes and other levies payable by the Contractor under the Contract, or for any other cause, as on the date 28 days prior to the deadline for submission of bids shall be included in the rates and prices and the total Bid Price submitted by a bidder. Additional / reduced duties, taxes and levies due to subsequent additions or changes in legislation shall be reimbursed / deducted The rates and prices quoted by the bidders are subject to adjustment during the performance of the Contract in accordance with the provisions of the Conditions of Contract.

85. General Evaluating Procedures Correction of Errors Bids determined to be substantially responsive will be checked by Procuring Entity for any arithmetic errors. Errors will be corrected by the Procuring Entity as follows: where there is a discrepancy between the amounts in figures and in words, the amount in words will govern where there is a discrepancy between the unit rate and the line item total resulting from multiplying the unit rate by the quantity, the unit rate as quoted will govern, unless in the opinion of the Procuring Entity there is an obviously gross misplacement of the decimal point in the unit rate, in which case the line item total as quoted will govern and the unit rate will be corrected.   The amount stated in the Form of Bid will be adjusted by the Procuring Entity in accordance with the above procedure for the correction of errors and with the concurrence of the bidder and shall be considered as binding upon the bidder. If the bidder does not accept the corrected bid price, his bid will be rejected and the Bid Security shall be forfeited The estimated effect of the price adjustment provisions of the Conditions of Contract, applied over the period of execution of the Contract, shall not be taken into account in Bid evaluation.

86. General Evaluating Procedures Documents/Records Required : The approved Evaluation Report, following the general format and all supporting documents used in conducting evaluation, must be kept on the procurement file. Minutes of the evaluation meetings and copies of all correspondence with bidders, such as letters relating to clarifications, the correctness of adjustments to arithmetic errors, or extensions of the tender validity, must also be kept on the procurement file . The Evaluation Report should include at least the following information: The results of the preliminary screening with the list of rejected bidders and a brief statement of why the bid was rejected; The results of the detailed technical and financial evaluation

87. General Evaluating Procedures Documents/Records Required : A List of any tenders which were rejected as non-responsive and the reasons for the rejection; Details of any non-material deviations, errors or omissions accepted, clarified or corrected and, where relevant, the way in which deviations or omissions have been quantified and taken into account in the financial evaluation; The price of each tender as read out at the bid opening; The evaluated price of each tender, following any correction or adjustments to the price and the conversion to a single currency (if required);

88. General Evaluating Procedures Documents/Records Required : A statement of which tender has the lowest evaluated price and is therefore the recommended tender; and The results of any qualification.  The Evaluation Report must contain clear recommendations to the RA The recommended tender and the price of the proposed contract; and Whether any discussion on delivery period or other contract terms should be held with the recommended bidder. The Evaluation Report must be signed by all staff who have been involved in the evaluation.

89. Conducting Post Bid Negotiations Procuring entity may negotiate with the highest ranked bidder regarding methodology, work plan, staffing and special conditions of the contract. In case of consulting services the procuring agency shall not permit substitution of key staff, unless both parties agree that undue delay in selection process makes such substitution unavoidable. Similarly , negotiations shall not seek changes in the rates quoted by the bidder. In case of failure of negotiations, the procuring agency may invite the second ranked bidder as per the evaluation report.

90. Conducting Negotiations

91. Notice Of Acceptance The Notice of Acceptance is normally a contractually binding notice, which results in the entry into force of a contract. If the bidding document states otherwise for the notice, the terms of the bidding document will prevail.

92. Notice Of Acceptance Entry into Force of the Procurement Contract : A procurement contract shall come into force: where no formal signing of a contract is required, from the date the notice of the acceptance of the bid or purchase order has been given to the bidder whose bid has been accepted. Such notice of acceptance or purchase order shall be issued within 15 days thereof; or where the procuring entity requires signing of a written contract, from the date on which the signatures of both the procuring entity and the successful bidder are affixed to the written contract. Such affixing of signatures shall take place within 15 days after the letter of acceptance or award has been issued: Provided that where the coming into force of a contract is contingent upon fulfillment of a certain condition or conditions, the contract shall take effect from the date whereon such fulfillment takes place.

93. Notice Of Acceptance Entry into Force of the Procurement Contract (Cont’d) : Provided that where the coming into force of a contract is contingent upon fulfillment of a certain condition or conditions, the contract shall take effect from the date whereon such fulfillment takes place. Example: Within 14 days from the date of furnishing of acceptable Performance Security under the Conditions of Contract, the Procuring Entity will send the successful bidder the Contract Agreement in the form provided in the Bidding Documents, incorporating all agreements between the parties. The formal Agreement between the Procuring Entity and the successful bidder shall be executed within 14 days of the receipt of the Contract Agreement by the successful bidder from the Procuring Entity.

94. Contract Document Signing Steps Involved: Collect copies of all documents, which will form part of the contract document Ensure that the Evaluation Report has been published Assemble the complete contract document. Ensure that the contract does not include any terms or conditions which vary from the successful bidder’s tender, which was accepted in the Notice of Acceptance. Obtain approval from Competent Authority for the contract document.

95. Contract Document Signing Steps Involved: Make the required number of copies of the approved contract Must be at least two, one for the supplier and one for the procuring agency The authorized signatory for the procuring agency should sign all copies of the contract Send all copies of the contract to the contractor, with a covering letter instructing the contractor to counter-sign all copies, retain one for his records and return all other signed copies to the procuring agency.

96. Contract Award Announcement & De-briefing As soon as a contract has been awarded the procuring agency shall make all documents related to the evaluation of the bid and award of contract public Provided that where the disclosure of any information related to the award of a contract is of proprietary nature or where the procuring agency is convinced that such disclosure shall be against the public interest, it can withhold only such information from public disclosure subject to the prior approval of the Competent Authority.

97. Contract Award Announcement & Debriefing Debriefing & Grievance Redressal : The procuring agency shall constitute a committee comprising of odd number of persons, with proper powers and authorizations, to address the complaints of bidders that may occur prior to the entry into force of the procurement contract. Any bidder feeling aggrieved by any act of the procuring agency after the submission of his bid may lodge a written complaint concerning his grievances not later than fifteen days after the announcement of the bid evaluation report

98. Contract Award Announcement & Debriefing Debriefing & Grievance Redressal : The committee shall investigate and decide upon the complaint within fifteen days of the receipt of the complaint Just lodging of a complaint shall not warrant suspension of the procurement process. Any bidder not satisfied with the decision of the committee of the procuring agency may lodge an appeal in the relevant court of jurisdiction.

99. Contract Administration vs Contract Management The terms contract management and contract administration are often confused for one another or used interchangeably, but they actually represent different phases of the overall contracting process. C ontract administration is the work done before a contract is signed into effect; whereas Contract management covers everything done after signing to ensure that deliverables and deadlines are adhered to as outlined in the agreement.

100. Contract Management/Administration Objective: Effective contract administration is critical for successful contract implementation and meeting the objectives of procurement requirements. Contract administration procedures are designed to ensure that: the supplier performs the contract in accordance with the terms and conditions specified in the contract; the procuring agency fulfils its obligations and duties under the contract; and swift remedial or preventive action is taken when problems arise or are foreseen.

101. Contract Management/Administration It primarily consists of: Assuring that the performance of both parties to the contract meets contractual requirements Contains conflict management Contract change control system

102. Contract Management/Administration Major Stages Involved : Administering the contract Amending the contract Completing and closing the contract Terminating the contract

103. Contract Management/Administration Administering The Contract: Contract administration procedures are largely determined by the terms and conditions of each individual contract and the description of requirements for the works. On account payments : All procuring agencies shall make prompt payments to suppliers and contractors against their invoices or IPCs/Running B ills within the time given in the conditions of the contract, which shall not exceed thirty days

104. Risk Analysis Risk: It is the uncertainty inherent in projects/contracts and the possibility of something happening, that can affect the prospects of achieving project objectives The objectives of Project Risk Management are to increase the probability and impact of positive events and decrease the probability and impact of adverse factors;

105. Risk Management Process Identifying the Risk Risk Analysis, Quantification and Ranking Risk Mitigation & Management Monitor and Review the risk 

106. Risk Quantification Risk quantification is the process of evaluating the risks that have been identified and developing the data that will be needed for making decisions The objective of quantification is to establish a way of arranging the risks in the order of importance . The severity of the risk is a practical measure for quantifying risks. Severity is a combination of the risk probability and the risk impact.  the  most widely accepted formula for risk quantification  is: Rate (or probability) of occurrence multiplied by the impact of the event equals  risk  magnitude .

107. Extent Of Effect Of The Event Critical: Total Failure Major: Increase costs or hold up the activities Minor: Cause inconvenience but not set the project back. 109

108. Types Of Risks Financial Risk Technical Risk Performance Risk Operational Risk Legal Risk Risks Associated with External Hazards

109. Contract Management/Administration Arbitration : After coming into force of the procurement contracts, disputes between the parties to the contract shall be settled by arbitration. The procuring agencies shall provide for a method of arbitration in the procurement contract, not inconsistent with the laws of Pakistan.

110. Contract Management/Administration Closing of contract: 1. In case of defect liability or maintenance period, defect liability certificate shall be issued within thirty days of the expiry of the said period enabling the supplier or contractor to submit the final bill. Except for unsettled claims, which shall be resolved through arbitration, the bill shall be paid within the time given in the conditions of contract, which shall not exceed sixty days to close the contract for final audit.

111. Contract Management/Administration Closing of contract: 2. Except for defect liability or maintenance by the supplier or contractor, as specified in the conditions of contract, performance of the contract shall be deemed close on the issue of over all delivery certificate or taking over certificate which shall be issued within thirty days of final taking over of goods or receiving the deliverables or completion of works enabling the supplier or contractor to submit final bill and the auditors to do substantial audit.

112. Contract Management/Administration Contract Amendments: This step in contract administration provides the standard operating procedure for amending a contract, when required, during the period of performance of the contract. Amendment may be required in delivery or completion period, the technical description of the goods, works or services, the quantity of an item purchased, the price etc. Contract amendments provide a formal, legal way of amending a contract and of ensuring that both parties have agreed to the changes. Ideally, a contract which has been placed should not need any amendment

113. Contract Management/Administration Scope Verification The main concern here is the understanding and agreement of expectations. Is the client getting what he or she desires in deliverables? Are they getting what is required at the end of the project? Are questions of limits and exclusions covered? Clear communication in all these issues is imperative to avoid claims or misunderstandings.

114. Scope Verification Scope verification is the process of obtaining stakeholders’ formal acceptance of completed project scope and associated deliverables; If the project is terminated early, project scope verification process should establish and document the level & extent of completion. Scope verification differs from quality control in that scope verification is primarily concerned with acceptance of the deliverables, while quality control is primarily concerned with meeting the quality requirements specified for the deliverables. Quality control is generally performed before scope verification, but these two processes can be performed in parallel.

115. Contract Management/Administration Completing a Contract: The contracts should be closed well in time. The Procuring Agency will identify that all contractual obligations and warranty periods have been completed. The Procuring Agency should review the contract and the procurement file to check that the contract is in fact completed Close the file and archive it, if required. Ensure that the closed file is listed in the Procuring Agency’s records and is marked with the date until which it must be retained. (At least for five years from closure).

116. Contract Management/Administration Terminating a Contract: Terminating a contract is required: to avoid or minimise further loss to the procuring agency due to poor performance by the contractor where contract performance has become impossible; or where a contractor no longer remains qualified where a contractor is found engaged in corrupt practices.

117. Contract Management/Administration Steps Involved in Terminating a Contract: Identify the need to terminate the contract. Check the contract or purchase order document, to confirm the conditions of contract relating to termination . Estimate the amount of money, if any, which will be due to the contractor following termination. Prepare a formal notice, terminating the contract and stating the grounds for termination.

118. Contract Management/Administration Steps Involved in Terminating a Contract: Obtain approval of the notice and of the justification for terminating from the Competent Authority. Ensure that the competent authority is informed of the implications of terminating the contract. Issue the termination notice and ensure that it is received by the contractor. Take any follow-up action required, including making any payments to the contractor under the contract and referring any default or corrupt practices.

119. Miscellaneous Provisions Re-bidding . If the procuring entity has rejected all bids under rule 47 it may call for a re-bidding. The procuring entity before invitation for re-bidding shall assess the reasons for rejection and may revise specifications, evaluation criteria or any other condition for bidders as it may deem necessary

120. Outcome Of Neglected Contract Management End user frustration because of poor contract performance in timeliness & quality Lack of supplier accountability Agency acceptance of poor quality Increased costs; and Under or overpayment to a contractor

121. Thank You