Planning involves three elements Forecasting future events or situations which are not within immediate control; Preparing action to be taken to secure certain ends in the light of these forecast; Forecasting the likely effects of such actions.

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Er. Satya Narayan Shah
B.Sc. In Mechanical Engineering (India)
MS in Manufacturing Engineering & Management (UK)
Email: er.snshah@gmail.com
Cell : 9851004366
August, 2015
“To be
prepared is
half thehalf the
victory.”
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Procurement Procedure
• Formation procuring Unit -PPA -7(3)
• Formation Evaluation Committee-PPA -71
• Preparation of procurement Plan/strategy PPA -6
• Preparation of Estimate (> Rs. 25000.00)-PPA (5)p ( ) ( )
• Preparation of Bid document
• Opening of Bids
• Evaluation of bids
• Award of the contract
• Completion/Termination of the contract
3Er. Satya Narayan Shah
WORKING ON PLAN
Procurement Plan
 Master Procurement Plan to be
Prepared- PPA (clause 6), PPR (clause
7)
– for a period of more than one year or in
making a procurement of an amountmaking a procurement of an amount
exceeding one hundred million Rupees
annually (Ten Crores).
• The master procurement plan to be approved
by the secretary of the Public Entity.
• To be up dated each fiscal year.
Procurement Plan
• Annual Procurement Plan to be Prepared-
PPR (clause 8)-
– In the cases where a Public Entity requires to make
procurement of an amount exceeding one million
Rupees annually.
• Annual procurement plan to be attached with
the annual program and budget of the next
fiscal.
• The annual procurement plan to be revised
and sent to its superior office, Treasury/
Controller Office and PPMO. 6

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Procurement Planning and Budget Linkage:
Legal Reference {PPR 8 (5)}
The chief of the Public Entity shall, after
receiving the approved program and budget of
the current fiscal year, have to revise
accordingly the annual procurement plan
prepared pursuant to this Rule and approve it
and send one copy each of such plan to
– its superior office,
– Treasury and Controller Office, and
– Public Procurement Monitoring Office.
What is Planning?
Planning involves three elements
1. Forecasting future events or situations
which are not within immediate control;which are not within immediate control;
2. Preparing action to be taken to secure
certain ends in the light of these
forecast;
3. Forecasting the likely effects of such
actions.
Planning Process includes three major
components:
1. Information: A collection of facts
from which conclusions may be
drawn
Planning
drawn
2. Deliberation: Discussion of all
sides of a question, Careful
consideration
3. Instruction:A message describing
how something is to be done
Procurement PlanningProcurement Planning
Accurate & realistic planning & prioritization of
needs is:
an essential pre-requisite to effective
procurement
a key tool for monitoring project
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a key tool for monitoring project
implementation
Best procurement practice takes time & the
process with various steps
Preparedness is crucial for successful procurement
Procurement at StartProcurement at Start--UpUp
Ideal Structure
Coherence with project objectives & annual work
plan
Desired Features of a Procurement Plan
Financial estimates in line overall funds allocation
Procurement methods in line with regulatory
framework
Realistic timing & scheduling of procurement
activities
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Procurement Plan
• Establishment of the need for Sustainable
Procurement.
• Fix the procurement policy/strategy based
on the best purchasing option considering
requirements, risk, cost and otherq , ,
management issues.
The Australian Procurement and Construction Council’s (APCC)
defines sustainable procurement as “… a process whereby
organizations meet their needs for goods, services, works and utilities
in a way that achieves value for money on a whole of life basis in terms
of generating benefits not only for the organisation, but also to the
society and the economy, whilst minimizing damage to the
environment.”

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Procurement Planning
Need and Importance
• Monitoring, supervision and control
• Resource management: organize people and
resource – Resource scheduling
• Assignments and responsibilities
• Cost saving
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• Cost saving
• Identification of critical and non-critical
activities
• Timely completion of the project
• Theft, damage, loss, out dated, etc
• Other issues
Procurement Plan (need analysis)
The following questions should be answered
• what is the procurement aiming to achieve?
• Do we really need to purchase, or can the need be met in
another way?
• Can the quantity or scale of the goods, works or services be
reduced whilst achieving the same service delivery?
• Can alternative goods or service be used to meet this need?Can alternative goods or service be used to meet this need?
• Can the works, goods, service be specified to have improved
sustainability outcomes, including being able to serve a useful
purpose after its initial use?
• What information is available regarding sustainably-preferable
options for this purchasing requirement? Where can more
information be obtained about suitable alternatives?
• what happens to the product at the end-of-life?
• how does this procurement impact upon our (environmental/
social) objectives and policies?
Procurement Plan Deliverables
The Procurement Plan should include five
key Steps. The Procurement Steps are
• Requirement Step
• Requisition Step
• Solicitation - Selection Step
• Contract Administration Step
• Contract Closeout Step
Er. Satya Narayan Shah 15
Requirement Step
• Conduct market analysis to gain awareness of
the products / services that are available for
purchase.
• Perform a make vs. buy analysis.
• Estimate investment costs of the Procurement.
• Based on the Procurement Plan, obtain
authorization to proceed from appropriate
agency/ departments.
• Create a Project Procurement Teams
(Procurement Unit, Bid evaluation Committee,
etc.)
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Requisition Step
• Verify that necessary specifications have
been provided.
• Prepare solicitation package (e.g. Bill of
quantity, IFB, Bid document, RFP etc.)
• Review by procurement team and, with
final approval of the IFB, RFP by Agency
Procurement Officer, send for publication
to news papers /e-procurement system.
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Solicitation - Selection Step
• Issue the solicitation document (Bid,
RFP).
• Answer questions received from vendors
in a public forum (Pre-bid meeting based
on instructions published in IFB RFP)on instructions published in IFB, RFP).
• If necessary, prepare for vendor product
demonstrations, or oral presentations.
• Receive and Evaluate Proposals (by
Project Procurement Team)
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Contract Administration Step
• Interpret specifications.
• Ensure that quality of the product or service is
maintained.
• Manage product warranties.
• Manage sub-contractors (if required by theManage sub contractors (if required by the
contract).
• Direct change management;
• Resolve contract disputes;
• Completion of the project;
• Terminate the contract;
• Manage contract risk associated with the project 19
Contract Closeout Step
• Verify product and services meet acceptance
criteria.
• Complete fiscal activities:
– Approve final payment (notify appropriate
accounts payable office),
U d t j t d ti it d– Update project and activity records,
– Close purchase order (notify appropriate
procurement office),
– Update contract file.
• Notify all the stakeholders, if required.
• Archive contract files/documents.
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Procurement Plan
 Master Procurement Plan
 shall contain, the following matters:-
• Type, quantity and tentative estimated cost,
• Procurement method,
• Slice or package for maximizing competition,
• Tentative numbers of contracts,
• Pre-qualification proceedings (if required),
• Tentative time-table of proceedings,
• Any other matter as directed by PPMO
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Procurement Plan
• Annual Procurement Plan to be Prepared- PPR
(clause 8)-
– the following matters shall have to be stated
• The types of procurement,
• Possible package of procurement,
Ti t bl f t di• Time table of procurement proceedings,
– such as Preparation of specification, cost estimate,
bidding documents, notice for invitation, evaluation,
Acceptance, contract, commencement, and completion.
• Procurement method,
• Types of contracts, and
• Any other matter as directed by PPMO 24

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Procurement Planning Contents
• Time table of procurement proceedings
should include the following:
– Specifications preparation (for the
procurement of goods),
– Cost estimation of procurement,
Preparation of sealed quotation form bidding– Preparation of sealed quotation form, bidding
documents or documents relating to proposal
for pre-qualification or request for proposal
(RFP) for consultancy service,
– Publication of a notice for invitation to sealed
quotation, pre-qualification proposal, bid or
request for the proposal of consultancy
services,
Procurement Planning Contents
• Time table of procurement proceedings
should include the following:
– Evaluation of sealed quotation, pre-
qualification proposal, bid or proposal for
consultancy service,y ,
– Approval of sealed quotation, pre-
qualification proposal, bid or request for
proposal for consultancy service,
– Endorsement of Contract,
– Commencement of the job, and
– Accomplishment of the job
Procurement Plan Contents
Project Details
Title: Procurement Plan (PP) for Civil Works [Period
between September 2010‐February 2012]
Project Name & ID: Road Sector Development Project
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Project Name & ID: Road Sector Development Project
Additional Financing RSDP, AF
Loan/Credit/Grant No.:
Executing Agency: Department of Roads, MOPPW
Implementing Agency: Department of Roads,
Babarmahal, Kathmandu
Procurement Plan Contents
Activities Details
1. S No 2. Description of Works & Contract
ID No.
3. Prior/ Post Review 4. PP Status
5. Cost Estimate (NRs Million) 6. Method of Procurement
7. Proc. procedure: GoN or WB? 8. Bid document to WB
9 WB’ NOL Bid D 10 Bid I i i
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9. WB’s NOL to Bid Doc 10. Bid Invitation
11. Public Opening of Bids 12. BER & Award Recommendation
to WB
13. WB’s NOL to Award
Recommendation
14. Contract Signing
15. Completion date of the
contract
16. Procurement at center/ district
17. Remarks
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ISSUES AND CHALLENGES
• Lack of clear concept of procurement planning.
• Generally, Procurement plan is prepared after the
approval of the budget, which in turn, often delays
procurementprocurement.
• Procuring Entities are not found keen in preparing
Procurement Plan.
• There are some contracts without approved budget &
Procurement Plan.

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