More Related Content Similar to Procurement_Planinng.pptx (20) Procurement_Planinng.pptx2. What is Procurement
The process of obtaining goods and
services from preparation and
processing of a requisition through a
receipt and approval of the invoice
and payment.
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3. Procurement (cont.)
Procurement includes all functions
that pertain to the obtaining of any
goods or services, including
description of the requirements,
selection and solicitation of sources,
preparation and award of contract,
phases of contract administration,
coordination with Risk Management
on indemnification and insurance
issues, and consultation with Legal
Counsel on legal issues.
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4. Procurement Steps
Information gathering
Supplier contact
Background review
Negotiation
Fulfillment
Consumption, maintenance, and
disposal
Renewal
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5. THE PROCUREMENT
PROCESS
Defining and initiating the contract:
This first step defines the contract’s
requirements and performance
standards so that they reflect the
needs of the end users and the
urgency of the requirement.
Decisions are needed on the
timeframe for service delivery and the
preferred contracting approach.
© 2009 South-Western, a division of
Cengage Learning 5
6. THE PROCUREMENT
PROCESS
Planning the procurement:
The procurement plan details the
procurement process, the sequence of
actions required, the responsible
parties
and the schedule. This plan is an
important
management tool which helps guide
the partner government and improves
the probability that the desired results 6
7. THE PROCUREMENT
PROCESS
The tendering process and
choosing the contractor:
Through the tendering process a
request for tender (RFT) is prepared
and issued, the evaluation process is
established, tenders are evaluated,
and the contract is awarded.
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8. THE PROCUREMENT
PROCESS
Finalising and monitoring the contract:
The fourth and final step is the post-award
stage,
where contract monitoring, implementation
and
evaluation occur. This includes deciding
whether
government will reassume responsibility for
the
services at the end of the contract, or if it will
continue to contract them out (although
remaining engaged through monitoring and
evaluation, etc.). 8
9. CONTRACT INITIATION
Following are the basis need to be
considered while initiation of
contract for procurement.
Are the needs, objectives and
outcomes clearly defined?
Is the contract requirement urgent?
Assess degree of urgency
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10. CONTRACT INITIATION
Has the need for capacity building
during
the contract period been determined?
Consider sole-source procurement.
Has the capacity of the market been
assessed as sufficient to implement
the contract?
Has the contract type, payment
method and payment machanism
been selected? © 2009 South-Western, a division of
Cengage Learning 10
11. CONTRACT INITIATION
Has the scope of work and tendering
documents been developed?
Competitive tender and contract
award.
The above mentioned are the basis for
any decision to make while planning
procurement
© 2009 South-Western, a division of
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12. SOLE SOURCE BIDDING
To procure organization needs to
evaluate,
Does the provider have capacity to
deliver the contract in a cost effective
and
time efficient manner?
Has agreement been reached on the
end of contract arrangments and are
procedures in place to facilitate these
arrangements? © 2009 South-Western, a division of
Cengage Learning 12
13. SOLE SOURCE BIDDING
Has the contract been drafted and
agreed
between the parties?
Has the contract been awarded and
publicly announced?
Post award and finalisation.
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14. PLANNING OF
PROCUREMENT
The procurement plan lays out the
details of the procurement process,
and the steps that will be required.
The procurement plan should identify
the following, which will then be
reflected in the request for tender and
in the contract itself.
© 2009 South-Western, a division of
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15. PLANNING OF
PROCUREMENT
Goals and objectives of the procurement
Potential service providers
Contract duration
Procurement approach
Payment approach
Scope of services required
Contract monitoring and evaluation
Tender format
Tender evaluation
Procurement schedule
Cost estimate.
© 2009 South-Western, a division of
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16. PLANNING OF
PROCUREMENT
Goals and objectives of the
procurement
The procurement goals are established
when
the procurement plan development begins.
The
purpose of the plan is to establish a
structured
process for ensuring that those goals and
© 2009 South-Western, a division of
Cengage Learning 16
17. PLANNING OF
PROCUREMENT
Potential Providers
In the procurement planning process,
the partner should assess the
market’s financial and technical
capacity to provide the required
material or services.
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18. PLANNING OF
PROCUREMENT
Contract Duration
The procurement plan should state
how long the contract should last.
however, that a shorter contract term
may lead to a higher contract price.
© 2009 South-Western, a division of
Cengage Learning 18
19. PLANNING OF
PROCUREMENT
Procurement Approach
The procurement plan should also
state whether the organization intends
to conduct a competitive or sole-
source procurement.
© 2009 South-Western, a division of
Cengage Learning 19
20. PLANNING OF
PROCUREMENT
Payment approach
There are a few different payment approaches
available:
Fixed price:
In a fixed-price contract, the contractor is obliged to
perform a specific service(s) for a fixed amount.
(e.g. provide water treatment and plant operation
services in a town for one year for payment x).
A fixed-price contract is possible when the service,
performance standards and quantity of work are
known.
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21. PLANNING OF
PROCUREMENT
Payment approach (cont.)
Unit price: In a unit-price contract, the
contractor is paid by the unit.
(e.g. payment x for each injection given).
A unitprice contract is appropriate when the
material and performance standards are
known, but when there is uncertainty about
the quantity of service required.
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22. PLANNING OF
PROCUREMENT
Payment approach (cont.)
Labour contract: In a labour contract,
the contractor is paid on the basis of
staff-time provided
(e.g. payment x for each day of staff
time provided).
This is an input-based contract.
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23. PLANNING OF
PROCUREMENT
Payment approach (cont.)
Performance or output-based
contract: Where possible, the first two
payment mechanisms can be
combined with a performance or
output-based approach, under which
the contractor is only paid for those
services or outputs which meet the
performance criteria of the contract.
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24. PLANNING OF
PROCUREMENT
Scope of services required
The procurement plan should provide
a clear picture of the requirements,
known as the “scope of services”. This
will assist
in preparing the request for tender
(RFT), which needs to specify the
requirements so as to set the same
expectations for all potential bidders.
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25. PLANNING OF
PROCUREMENT
Contract monitoring and evaluation
Performance monitoring can be defined in
several
ways. For example, the RFT may state that
there
will be a quarterly audit of the contractor’s work
documentation, or monthly evaluation visits to a
sample of contractor work sites to ensure that
Work is being performed in accordance with
the
contract. © 2009 South-Western, a division of
Cengage Learning 25
26. PLANNING OF
PROCUREMENT
Tender format
It is important to define the desired
tender format in the RFT and the
procurement plan. This makes it
easier for bidders to respond.
When all the tenders are in the same
format it also simplifies the tender
evaluation process – a “like for
like” comparison can be made of each
bid. © 2009 South-Western, a division of
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27. PLANNING OF
PROCUREMENT
Tender evaluation criteria
Developing the evaluation criteria is a
key aspect of the procurement plan.
The RFT should clearly state the
evaluation criteria that the
organization will use to assess tenders
so that bidders can prepare their bids
to maximize their chance of winning
the contract.
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28. PLANNING OF
PROCUREMENT
Procurement schedule
The procurement plan should include
a detailed timeline of the key steps
leading from the plan to the
implementation of an awarded
contract. This includes the following
milestones:
• Development of draft procurement
plan
• Development of final procurement
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29. PLANNING OF
PROCUREMENT
Procurement schedule (Cont.)
Public meeting with interested bidders (or
receipt
of written questions)
• Response to bidder questions
• Deadline for the receipt of tenders
• Evaluation of tenders
• Negotiation and award
• Contract start-up and start of monitoring and
evaluation
• End of contract
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30. PLANNING OF
PROCUREMENT
Cost estimate
During the procurement planning process,
the
likely cost of the contract should be
estimated.
This estimate can then be used to ensure
that the
required funds are available and ready to be
spent
on the contract. It will also be used to assess
the
reasonableness of the costs proposed by the
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