The document outlines the procedure for purchasing, supplier selection, and management for engineering and construction companies. It details the responsibilities of key personnel, the selection process for suppliers, and the purchasing process for materials and capital items essential for project execution. The procedure aims to ensure that suppliers meet contract requirements and maintain quality and compliance throughout the procurement process.

1. Procedure for Purchasing,
Purchase Order and
Selection of Suppliers
For Engineering & Construction Companies

2. Purpose
The purpose of this procedure is to ensure, evaluate and select suppliers of materials on their
ability to fulfill specific contract requirements, procurement, communication of adequate details
of requirements to the supplier and receiving inspection and verification of purchased products.

3. Scope
This procedure applies to all purchasing activities like materials, which forms
par or project requirement and capital items required in connection with the
project execution

4. Definitions
Project materials are materials which forms part of permanent installation of the project execution and
contract requirements.
Capital Items are materials required for establishing temporary services, site office establishments and
tools and plans.

5. Responsibility
The General Manager, Site Manager, Project Manager, Purchase
in charge are responsible for the application of this procedure

6. Procedure
1. Selection of Supplier
All the suppliers of materials/services will be selected to included in the Approve Supplier List based on their past history in supplying items that are meeting the company specifications and requirements.
The purchase manager will be responsible for sourcing and evaluation of new suppliers
The suppliers performance will be observed on continual bases and any discrepancy will be recorded
A review will be carried out on the suppliers evaluation forms on yearly basis by the purchase manager and quality manager
The result of the review will decide if the nominated supplier will continue to remain part of the Approved Supplier list
The process of selection new suppliers detailed in different form
2. Purchasing Process for Every Day Items
The authorized personnel of the company requiring any equipment/material to be purchased will prepare a Material Requisition Form which
will be approved by PM, Manger
The store keeper will check the MRF against inventory, if they are either out of stock or below the minimum stock level or not on current order and write relevant remarks on the MRF and forward to head office
Purchase manger will send inquiries to the concern suppliers and call for quotations
For Urgent materials, Purchase manager will not call for a quotation
The quotations will be shot listed in another form based on quality and competitive prices
Quotations will be reviewed and the selected suppliers will be approved by the Purchasing manager
The process of purchasing and issuing purchase order are detailed in another forms
3. Purchasing Material which forms a Permanent Installation of the Project
Source of Enquiries:
Enquiries are sent to the suppliers as follows:
A. The preferred suppliers, those who have been specified by clients
B. Specifications and Quantities as agreed in the contract with client are furnished along with the commercial terms with required validity are sought by the suppliers
C. Suppliers whom listed in the approved supplier list
After receipt of quotations, the purchasing manger and project manger will prepare comparison sheet in line with the requirement and commercial conditions. The final negotiation shall be carried out by the purchasing manger
and in the agreed terms with the supplier and record in the comparison sheet.
Sample are requested from the selected suppliers who meet the technical and commercial requirements and whose materials needs approval from client/consultant, thereafter the technical submittal of such products is made
in the format advised by the client/consultant or as per the company format
Orders are placed to supplier by purchase order
Whenever the approval of client/consultant is required, purchase order is prepared after the approval of submittals. Then signed and approved with copied distributed to Accounts, Project file
After acceptance of the purchase order by supplier, necessary instruction will be given to the commercial department to arrange payment/bank draft..etc
In case material is available at another job site/store, as surplus, the same will transferred to the site.
The supplier’s bills/invoice are passed only by Manager approval.
4. Capital Items/Capital Items required for the Project
List of major capital items such as tools, machinery and testing equipment, cars, furniture,required by project manager
required manager approval.