Project Implementation, SM 2015 1.pptx

Skillmart International College
Project Implementation
(PMAE 512)
(Semester II)
Betsha Tizazu (Ph.D.)
Assistant Professor of Industrial Engineering
Faculty of Mechanical and Industrial Engineering
Bahir Dar Institute of Technology (BiT), Bahir Dar
University
2

 Introduction
 Setting Norms
 Time management
 Reporters
 Energizing team
 Expectations
1

“ Everything begins with project and
ends with another project…”
… now let us start our project…with
the introduction …
1

Introduction
1. Full Name
2. Educational Background
3. Work experience and current position
4. What I like most?
5. What I hate most?
6. What is your experience on project management?
7. What do you expect from this training?
5

Mode of Delivery
 Presentation of concepts
 Questions, exercises and reflections
 Brainstorming
 Relating concepts with practical situations
 Group work
 Group presentations
7

8
Learning Pyramid: what’s been remembered three days later.

 90% of what they learn when they teach someone
else/use immediately.
 75% of what they learn when they practice what
they learned.
 50% of what they learn when engaged in a group
discussion.
 30% of what they learn when they see a
demonstration.
 20% of what they learn from audio-visual.
 10% of what they learn when they've learned from
Learners retain...

“Our current problems cannot be solved
with the same level of thinking which
created them.”
Albert Einstein
1

Quote
If you can’t fly, then run,
If you can’t run, then walk,
If you can’t walk, then crawl,
But whatever you do,
You have to keep moving forward.
Martin Luther King Jr.
1

What are the current drivers of project
management?
12

Current Drivers of Project
Management
Compression of the Product Life Cycle
1. One of the most significant driving forces is the
shortening of the product life cycle.
2. A common rule of thumb in the world of high-tech
product development is that a six-month project delay
can result in a 33 percent loss in product revenue share.
3. Speed, therefore, becomes a competitive advantage
4. organizations are relying on cross-functional project
teams to get new products and services to the market
as quickly as possible.

Management
Compression of the Product Life Cycle
30-story building built in 15 days
220-story building built in 90 days

Current Drivers of Project Management
Knowledge Explosion
The growth in new knowledge has increased
the complexity of projects because projects
encompass the latest advances.
For example, building a road 30 years ago was
a somewhat simple process.
Today, each area has increased in complexity,
including materials, specifications, codes,
aesthetics, equipment, and required
specialists.

Management
Triple Bottom Line (Planet, People, Profit)
The threat of global warming has brought sustainable business
practices to the forefront.
Businesses should also focus to the environment and society.
Efforts to reduce carbon imprint and utilize renewable resources are
realized through effective project management.
The impact of this movement toward sustainability can be seen in
changes in the objectives and techniques used to complete projects.

Dell Children’s Medical Centre include: 1.7 million
gallons (6.4 million litres) of water is saved
Reflective roof material and light coloured
sidewalks.
Green roofs.
High efficiency fluorescent lights.
Automatic on/off switches with motion sensors.
High efficiency air conditioning.
Saves enough energy power to heat and cool 300
average sized homes each day.
Concrete used is a high percentage of fly ash –
recycled by-product of coal-fired power plants.
Renewable materials are used throughout their
facility,
Chairs are made with recycled material.
All patient rooms are provided with independent
Triple Bottom Line (Planet, People, Profit)

Management
Increased Customer Focus
Increased competition has placed a premium on customer
satisfaction.
Customers no longer simply settle for generic products
and services.

What is
Project Implementation
21

Project implementation
 Project implementation (or project execution) is
the phase where visions and plans become
reality.
 This is the logical conclusion, after evaluating,
deciding, visioning, planning, applying for funds
and finding the financial resources of a project.
 Technical implementation is one part of
22

● Project Planning
● Project
Implementation
● Project Evaluation
Set
Direction
Assess
Needs
CreatePlan
(informed by a
needs
assessment and
effective
practice)
Implement
Plan
Monitor
Work
Adjust
Course

Implementation
Identifying
practices is one
thing;
consistently
implementing
them with
fidelity over time
is another
thing
altogether.
(Layland& Redding, 2019)
Implementation
Failure
Lack of a
Clear Plan
Lack of
People,
Process, or
Technology
Lack of
Organization
Involvement
Lack of Clean
Data
In the Chat, In the
chat, write out which
Implementation
Failure has impacted
you or your
organization's
success

Implementation Choices
Letting it
happen
Recipients are
accountable
Helping it
happen
Recipients are
accountable
Making it
happen
Implementation
teams are
accountable
Based on Greenhalgh, Robert, MacFarlane, Bate, & Kyriakidou, 2004

The project lead and all staff responsible for
actions make up the Project Implementation
Team.
The Team should meet at least monthly to
progress on completing actions.
Challenges are discussed and solutions are
formulated to ensure that the work stays on
track for completion according to the timelines.
Implementation Team

NIRN https://nirn.fpg.unc.edu/module-2/implementation-drivers
Formula for Success

Implementation Drivers
In the Chat, share
what drivers you
may currently pay
the least attention
to (Competency,
Organization, or
Leadership) and
why.
NIRN https://nirn.fpg.unc.edu/module-2/implementation-drivers

Contents
 Procurement
 Contract
 E-procurement
 Ethics in Procurement
 Sustainable procurement
30

Investigative Questions
 What is procurement? Purchasing? What is the
difference between the two?
 Explain the procedures of project procurement in
your organization or any organization you are
familiar with?
 Discuss the major risks in project procurement?
 Compare and contrast international project
procurement and domestic project procurement.
31

Procurement
 Procurement: obtaining goods, works, consultancy or
other services through purchasing, hiring or by any
contractual means.
 Public procurement: procurement by a public body by
public fund .
 Public procurement in modern times is an engine for
economic growth and development as it stimulates
domestic, regional and international trade.
 Procurement reform is also a crucial factor in good
governance.
32

Procurement…
1. Goods: raw materials, products and equipment and
commodities in solid, liquid or gaseous form,
software and live animals as well as installation,
maintenance services
2. Works: construction, reconstruction, demolition,
repair or renovation of a building, road, or structure
3. Consultancy service: a service of an intellectual and
advisory nature provided by consultants using their
professional skills to study and organize specific
advise client, conduct training and transfer
4. Other services: maintenance, security, janitorial,
33

Procurement Cycle and Process
 The procurement cycle in government financed
projects and programs consist of the following:
1.Procurement Plan
2.Selecting methods and tools
3.Bidding process and contract agreement
4.Contract management
5.Storage
6.Issue/ Distribution
7.Counting and Disposal
8.Evaluation
34

 The procurement process consists of the following major
steps.
1. Procurement Planning
2. Requirement Definition
3. Sourcing
4. Selection of a procurement method
5. Preparation and issuance of bidding document
6. Receipt and Opening of offers
7. Evaluation
8. Contract award and finalization
35

Basic Principles of Public Procurement
 The procurement principles are in most of the cases follow
international best standards.
 The World Bank procurement guideline sets four general
considerations that guide Bank procurement policy:
1. Economy and efficiency
2. Equal opportunity to compete for all eligible bidders from all
countries
3. Development of domestic contracting and manufacturing in
borrowing countries
4. Transparency in procurement process
36

 Procurement in the UN system is also guided by the
following principles:
1. Promotion of UN objectives
2. Fairness, integrity and transparency through
3. Economy and effectiveness
4. Best value for money.
N.B. The ultimate objective of procurement in the UN
add value to the organization in fulfilling its mandate,
objectives. To a large extent the other three principles
to this overarching principle.
37

 The principles and objectives pursued by the
procurement reform process in COMESA countries
have included: economy and efficiency; value for
money; enhanced participation and competition;
economic development; fairness; transparency; and
accountability.
38

 The following are the major principles of FDRE
procurement:
1. Economy and efficiency in use of public funds
2. Non discrimination
3. Transparency
4. Accountability
39

Basic Public Procurement Rules and
Procedures
 The Ethiopian Federal Government Procurement and
property Administration Proclamation No 649/2009 Articles
22-34 contains basic public procurement procedures such as
the following.
 Procurement plan
 Records of procurement
 Non-discrimination
 Preference
 Form of communications
 Language
 Qualification of candidates
 Technical specification
40

 Rejection of bids, proposals and quotations
 E-procurement
 Rules of ethics:
Conflict of interest
Equal opportunity of competition
Any gift or offer
Concern for public resources
Keep in secret any confidential information
 Methods of procurement
 Public private partnership
41

Procurement Planning
 A critical element in the procurement process.
 Many procurement problems arise at the time of selecting
contractors or contract administration because of the failures
of procurement planning at the outset.
 Specifically designed to assure that funds are available for the
procurement.
 An annual event and the procurement plans must be approved
together with the budget estimates.
42

 For project procurement (e.g., works contracting, consulting
services) the planning process is more complicated.
 Planning for projects involves careful attention to:
the choice of procurement method,
the types of contract to be utilized, and
the schedule for project implementation,
all coordinated with the availability of funds to pay
contractors on a timely basis.
43

Key activities in a Procurement Cycle
44

Steps/stages of the bidding process
45

Procurement categories
 Procurement categories are groupings
of similar goods or services with
common supply and demand drivers
and suppliers.
Example: A pen is a good whereas
stationery could be the procurement
category.
 A procurement category can be defined
47

Procurement Methods
 The differences between the methods are significant
in terms of formality, level of competition, duration,
and complexity for bidders and the procuring entity.
 According to the World Bank procurement guideline, open
competition is the basis for efficient public procurement.
 The bank requires its borrowers to obtain goods, works and
non-consultancy services through International Competitive
Bidding.
48

 Proclamation No 649/2009 Article 33 contains six approved
methods of public procurement:
1. Open Bidding
2. Restricted Tendering
3. Request for Proposal
4. Two stage Bidding
5. Request for Quotation
6. Direct procurement
49

Open Bidding
 Except as otherwise provided in the proclamation,
public bodies shall use open bidding as the preferred
method of procurement
 Public bodies shall not split procurement
requirements for a given quantity of goods, works or
services with the intention of avoiding the preferred
method
 It may be National Competitive Bidding (NCB) or
50

Restricted Tendering
 It includes both national and international.
 Selected or limited tendering is used when the goods,
works or services by reason of the highly complex or
specialized nature, are only available from a limited
number of suppliers.
51

Contract administration
What is Contract Administration?
 Contract is an agreement between two or
more parties where by each party promise
not to do something .
 A transaction involving two or more
where each has reciprocal rights to demand
performance of what is promised.
52

Contract administration… cont’d
 It begins when the notice of contract award has been
given to the selected contractor and the procurement
contract signed.
 The award must be notified to the successful bidder prior
to the expiry of the period of bid validity.
53

 Contract administration includes the organizational
dimension to :
contract management;
contract terms(the things you agree to do);
payment and monitoring;
the resolution of disputes;
contract modification, termination, breach and record-
keeping.
 The important practices of effective contract management
are nonetheless critical to the successful completion of the
54

Contract administration … cont’d
 Contract management refers to the
performance of the contract by the
the procuring entity, during which the
performs the agreed upon scope of work
procuring entity, monitoring that
provides payments on timely basis.
 Contract management is critical
importance to the proper functioning of the
procurement system and is essential to the
55

Contract administration…
 Contract administration is one of the most
neglected areas in public contracting.
 The majority of the focus is placed on the
procurement process.
 After the contract is awarded that the real benefits
of undertaking the procurement process can be
obtained, so more attention needs to be placed on
ensuring that the contract is implemented as
56

 Contract award marks the beginning of the
contract administration phase.
 Contract administration deals primarily with
management of risks in the post award
 Its main purpose is to monitor performance
ensure that the objectives of the contract are
time and within budget and also to detect
that might go wrong and find a remedy
suspension or termination of the contract)
57

 It is misleading and risky to believe that only
procurement practitioners (through the procuring
entity) are responsible for contract administration.
 In fact, once a contract is awarded, the procuring
entity is too far removed from where the actual
implementation of the contract takes place to
effectively monitor the performance of suppliers,
contractors and service providers.
58

Contract administration…cont’d
 To be effective, contract administration should be a joint
effort and not the responsibility of only one entity.
 The procuring entity processes requests for goods and
services before the contract is awarded.
 Contract administration reduce the risk of failure to
successfully complete the contract and to fulfill the
corresponding need.
59

 The bulk of contract administration (overseeing
performance) responsibility should be with the
entity that is closest to where the contract is
executed because: it is there that the opportunity
exists for early detection of any breach of contract,
substandard performance of goods received or
services rendered.
60

Challenges of contract administration
 The main challenge for the government in contract
management is to properly be grateful for the importance
of it.
 Often procuring entities give full attention to the contract
selection process, but then walk away from the
procurement once the contractor is in place.
 The government should employ adequate staff and
resources to the phase of contract management, unless
this happens the government fails at a risks in
procurement and the additional time and money to go
through the process again.
61

Types of contracts for consultancy services
1. Lump Sum (fixed price)
2. Time Based
3. Percentage contract
4. Framework agreement
62

Types of contract for works
 Factors affecting the choice of Contract Type:
1. The nature and complexity of the works
2. The size and duration of the contract
3. The degree of risk
• Budget constraints
• The previous experience of the Employer
63

Lump sum
 All-inclusive price contracts
 Used for small, short duration( 1-2 years)
 Well defined, detailed works and building
constructions
 Not subject to large quantity variation or
conditions of high risk
Examples: small bridges, rural schools, clinics,
housing 64

Lump sum… cont’d
Advantages of LS contract:
1. Fixed sum for budgeting
2. Easy to administer
3. Little or no measurement
4. Less documentation
Disadvantages:
•Inflexible to changes/ high risk
65

Unit rate
• Unit Rate (admeasurements)
• Most common for infrastructure construction of
short or long
Examples: transportation, power, irrigation, water
supply)
Advantages:
• Equitable basis for bidding
• Periodic payments follow contractor’s cash flow
• Normally little difference between estimates, bids
and final cost
66

Unit rate … cont’d
Disadvantages:
Preparing and monitoring detailed BOQ
Cost Reimbursable plus fee(Cost Plus)
Open-ended emergency situations( earthquakes,
floods)
High risk
67

Contract Administration…cont’d
Contract Administration: Best Practices
 To implement projects/ to satisfy needs
 To control performance/ outputs, quality, budget,
time
 To control key elements of the contract such as plan
performance, duties and responsibilities, risks,
standards, payments and securities, inspections,
reports, forecasting of problems
68

Contract Administration…
Methodology: systematic, proactive, teamwork
Public bodies have to record the date on which the actual
implementation of the contract has began upon fulfillment of
precondition set forth in the contract for the actual
implementation of the contract
Payment for construction works shall be made on the basis of
the progress of work against payment certificate to be verified
by the consulting engineer supervising the work.
69

 For all construction work 5% shall be retained from
payment indicated in each payment certificate.
 50% of the amount retained pursuant to the above, shall be
released up on completion of the works and issuance of
provisional acceptance certificate.
 The remaining 50% shall continue to be retained for one
year period of warranty.
 The consulting engineer shall complete verification of the
payment certificate prepared and submitted by the
contractor within seven days of its receipt.
70

The Public Body shall effect the payment within 14 working
days of receipt of the payment certificate verified by the
consulting engineer.
The consulting engineer shall be responsible for any request
made by the contractor to receive additional payment from the
procuring entity due to the consulting engineer’s failure to verify
the payment certificate within prescribed period.
71

Risk Management in Procurement
and
E-procurement
72

What is Risk?
 It is possibility that something bad or
may happen.
 It is the possibility that an expected outcome
not occur, or that an unforeseen event
deleterious will occur.
 It can arise from limited information,
and knowledge on which to base decisions,
uncertainty of future event. 74

What is Risk Management?
 Risk management is the process of identifying risks,
analyzing their consequences, and devising and
implementing responses to ensure that procurement and
service delivery goals are achieved.
 The aim is to achieve more reliable planning, improved
decision making and greater certainty of outcomes.
 By managing risk, agencies or government bodies can
identify potential problem areas that may adversely affect
the desired procurement outcomes, and try to reduce the
uncertainty of outcomes and economic losses.
75

The main areas that give rise to procurement risk and ethical
concerns are:
1. Gifts and benefits
2. Consistency and continuity of process
3. Communication with bidders
4. Conditions of bid and deadlines
5. Invitation to bid documentation
6. Finalizing the contract
7. Briefing sessions
8. Documentation
9. Conflict of interest
10. Supplier ethics
76

concerns are:
8. Documentation
10. Supplier ethics
77

1. Gifts and benefits:
 Public officials who involve in any aspect of a
process are strongly advised not to accept gifts or
for the reason that it can be or may be seen as a
influence to compromise or appear to compromise
and impartiality.
 Potential suppliers should be aware of that public
officers (and consultants, advisors and sub-agents)
solicit and generally may not accept a gift or benefit.
78

2. Consistency and continuity of process:
 Application of the principles of competitive
equity requires that all bidders be given the same
commercial information, and the same guidance and
instructions on the conduct of the bid/offer process.
 Bidding procedures and evaluation processes should
applied consistently so as to prevent any actual or
discrimination.
79

3. Communication with bidders:
 Clear procedures need to be established for
with bidders to ensure a uniform approach that
same messages to all participants.
 Best practice procurement uses detailed meeting
and authorizes particular procurement personnel
on specific subjects.
 Procedures should be in place to ensure that
communications with bidders are prepared and
off at an appropriately senior level.
80

4. Conditions of bid and deadlines:
 Adherence to established conditions of bid and
deadlines is essential in maintaining the integrity of
 Bidders can be seen to obtain an unfair advantage if
given more time to prepare their offer.
 If bids are opened and distributed ahead of the
there will be the risk that details of those offers
passed to other potential bidders.
81

5. Invitation to bid documentation:
 Documentation including conditions of offer and
specification, and evaluation criteria should not be
during the course of a procurement process,
likelihood of change has been indicated in the
 In the invitation documentation the underlying
suppliers are entitled to submit proposals on the same
and evaluation basis, and get the same information on
to structure their offers.
 Where changes are proposed, these should be
appropriate procurement staff or committee following
consideration of all aspects.
82

6. Finalizing the contract:
During the evaluation of offers, procurement staff
to be in frequent contact with members of the front-
offering teams.
To prevent any risk of ‘drifting into a contract’
discussions with a bidder , nothing must be
explicitly or implicitly, to indicate where they stand or
they are successful until all relevant evaluation
offs and approvals have been obtained.
Clear procedures for handling communications with
are needed.
The Request for Offer should also specify how and
contract will be concluded.
83

7. Briefing sessions:
Briefing sessions may be held at different times
course of procurement.
Such meetings should be conducted with appropriate
and other arrangements to enable effective
All bidders should be notified of the outcome at the
time the result of a procurement process is
At all times the procurement team must avoid
information which may be seen to compromise the
confidentiality or commercial interests of any84

8. Documentation:
Good record keeping is essential throughout the
process.
The outcomes of key discussions and data must be
documented and filed in a form which allows those
subsequent reviews of the process to clearly
why, when and by whom the key decisions were made.
85

9. Conflict of interest:
 Conflict of interest is any personal business or professional activity that
create a conflict between personal interests and the interests of the
 It is also important to note that employees, (and directors and members
board of directors) should also avoid any activity that may be perceived
conflict of interest.
 Managing conflicts of interest are vital in any procurement activity.
 Family or personal relationship and investment pose potential conflicts
that are especially relevant to procurement.
 Family/personal relationships is a conflict of interest takes place if a
member or personal friend has a financial stake in, or is part of the
a company that is a supplier or potential supplier.
 Investments: If an employee is a purchaser for an organization and is
investor in a company that is a supplier for goods and services to the86

10. Supplier ethics:
 A focus on internal ethical issues should not
the importance of external ethical issues related to
business practices, past conduct and performance of
bidders.
 Regardless of how well the procurement process is
conducted, a contract should not be awarded to a
has a record of illegal or unethical activity.
 Depending on the significance of the contract,
should be given as to whether it would be
conduct probity checks on suppliers.
 Some of the unethical practice on the supplier side
fixing prices, collusion among bidders, and
product samples with the intention of supplying
products. 87

Risk Management has Seven stages:
1. Establishing the risk context
2. Identifying potential risk
3. Analyzing the risk
4. Assessing and prioritizing the risk
5. Treating the Risk
6. Preparing and implementing treatment plans
7. Monitoring and reviewing
88

1. Defining the nature and scope of procurement
2. Relevant goals and strategies
3. PESTLE factors:
a. Political consideration, such as government policies in the
the countries from which they are buying.
b. Economic considerations, regarding the employment of finite
finite resources and the effect on supply and demand.
c. Socio-cultural considerations, for the people employed to
to produce and manufacture the materials and products along
with the customer base.
d. Technological advancements and the possibility of alternatives
alternatives
e. Legal requirements and contractual documentation and
and processes.
f. Environmental considerations and policies of the suppliers and
suppliers and the procurement organization.
89

4. Expectations of stakeholders such as beneficiaries, local
communities,
 government agencies and service providers
 Developing risk criteria such as strategic concern,
efficient completion, cost control, quality, compliance,
delivering on time, budget
 Break down the procurement activity into key element
90

 What can happen? Compile a list of the possible events that
could have an unwanted or unintended effect on the
procurement.
 Consider the full life-cycle.
 How and why could it happen? Explore the events
identified in the first question for their possible causes and
implications.
 Checklist developed through brainstorming or workshops
are useful for procurement involving new or unusual risks
 Use all the available data sources to understand the risk , 91

 How likely is the event?
 What are the consequences of the event?
 What is the overall risk level?
92

 Categorization of risks as;
• Low risks,
• Moderate, and
• High risks.
 The output is a prioritized list of risks to be treated, risks to be
accepted and monitored, and acceptable risks for the
procurement
93

 Avoid the risk
 Transfer the risk to another party or insurance
 Accept the risk
 Reduce the likelihood of occurrence
 Reduce the consequences by contingency planning, contract
terms and conditions, inspections and checks to detect
compliance, and recovery programs
 Evaluate and select the appropriate options
94

 Actions and expected outcomes
 Timetables
 Resource budgets
 Responsibilities
 Reporting requirements
 Monitoring requirements
95

 Few risks remain static.
 Ensure its ongoing relevance and amend if circumstances
change.
 If the procurement is of high value, strategic or complex, the
risk management plan should specify and detail the review
process.
96

 E-procurement involves electronic data transfers to support operational,
tactical and strategic procurement.
 E-procurement serve as a means of improving procurement efficiency and
effectiveness.
 Procurement officers and managers can make contribution to decisions about
investments in, and configuration and use of e-procurement tools by:
1. having an understanding of the various e-procurement applications;
2. identifying the procurement processes that are effectively supported;
3. understanding the sources of benefit of e-procurement;
4. identifying the risks associated with the adoption of e-procurement;
5. contributing to the development of e-procurement tools.
98

Some of the tools and applications in e-procurement include:
a) electronic systems to support traditional procurement;
b) EDI (electronic data interchange);
c) Enterprise Resource Planning (ERP) systems;
d) electronic mail (e-mail);
e) extensible markup language (XML);
f) world wide web (www).
99

Some of the internet tools that replace traditional procurement are:
1. E-sourcing
2. E-tendering
3. E- auctioning
4. E-ordering and web-based ERP
5. E-information
10
0

 The potential benefits we may obtain from e-procurement in terms of the
public procurement principles and objectives are:
1. Value for money: by attracting many bidders procuring organizations
organizations can optimize both price and quality of what they buy;
2. Economic development: by taking up e-commerce itself, the public
public sector can drive the uptake by the private sector, especially small
and medium enterprises of e-commerce. Thus it helps to propel the
economy into areas of growth and modernization;
3. Transparency: one of the main advantages of e-procurement is that it
that it boosts transparency in a procurement system, since the inherent
nature of e-procurement is openness and maximization of publicity and
access to information;
10
1

4. Accountability: by promoting transparency and record keeping,
e-procurement helps to promote accountability of participants
action that they take;
5. Economy and efficiency: by reducing transaction costs, e-
procurement can decrease the costs of conducting procurement
transactions in terms of money that we spend to run the
avoidance of expensive print-media advertisements, replaced by
publication), as well as time and human resources required ;
6. Integration and mainstreaming of the procurement system with
systems: a prime example of this is the potential for linking
processes with integrated financial management information
10
2

Electronic Data Interchange
 EDI is an application whereby electronic messages can be
exchanged between computer programs of two separate
organizations.
 Some features of EDI include:
1. Messages are exchanged in groups, known as batches.
2. Messages can automatically be sent, transmitted and
stored between computers without retyping or keying
data.
 EDI has to be implemented by each pair of organizations
(sender and receiver) who wish to use it.
103

Enterprise Resource Planning system
 ERP systems are management information systems that
integrate and automate many of the business practices
associated with the operations of a company or organization.
 ERP system typically handle the manufacturing, logistics,
distribution, inventory, shipping, invoicing, accounting for a
company or organization.
 ERPs aid in the control of many business activities like sales,
delivery, billing, production, procurement, inventory
management, and human resources management.
104

Application of e-procurement
 Electronic functional equivalents of submission of bids: the technology
exists and is already increasingly in use around the world to provide
secure means of submitting bids electronically (into a secure “electronic
bid box”), over the internet, and keeping them from being opened
prematurely;
 Electronic public bid opening
 Purchase cards: including possible security measures, which allows
credit-card type of cards to be used by designated purchasing officials, as
well as by officials during their business travel;
 E-purchasing: including the concept of “Purchase-to-Pay” integrated e-
procurement systems (P2P), and the related use of
 Electronic means in contract administration: a good example of how
electronic means can facilitate improved contract implementation and
105

What is Ethics?
 Ethics is the basis on which most of the
related principles, such as fairness, integrity,
transparency, are based.
 A set of moral principles that mature and decent
feel should guide behavior.
 Is doing the right thing.
 Is the imbibed value system – may vary from
culture, place to place, but there are certain
accepted values.
 Is what money cannot buy.
 Best when internalized and comes from within.
 Can be forced- but true ethics is doing the right
even when not watched.
10
7

 Ethics are the principles which define behavior as right,
good and appropriate.
 Employees in public service are bound to uphold certain
values.
 Ethical procurement best practice starts with the
employees in procurement following an ethical code
which dictates their behavior and actions while conducting
business.
 Ethical procurement practices should be extended to all
stakeholders in the procurement cycle.
 Ethical procurement should also include an understanding
of suppliers’ operations and the procurement professional
should offer guidance and
 Support when improvement is necessary or appropriate.
10
8

 Government employees and organizations,
maintaining ethical behaviour involves more than simply
avoiding corrupt or dishonest conduct.
 It involves applying public sector values such as
impartiality, accountability and transparency.
 Ensuring ethical standards in public sector activities is
part of every public official’s duty to adopt processes,
practices and behaviours that enhance and promote public
sector values and interests.
 Achieving an ethical, transparent approach requires that
the procurement rules be clear, open, well understood
and applied equally to all parties to the process.
11
0

The broad objectives of ethical behavior in procurement are
to:
1. Provide accountability;
2. Maintain public sector integrity;
3. Ensure compliance with processes;
4. Ensure that all offers will be evaluated against the same
criteria;
5. Preserve public and supplier confidence in Government
processes;
6. Minimize potential conflicts and the potential for litigation;
7. Ensure the procurement activity provides the best outcome; and 11
1

Professional standards of ethical conduct, no matter what the
organization, contain typical characteristics, including
commitments to:
1. behave honorably in all aspects of work;
2. maintain trust and confidence in the integrity of the acquisition
process;
3. uphold the organization’s standards and policies and all relevant
legislation;
4. avoid conflicts of interest;
5. appearance of impropriety;
6. avoid engaging in personal business with any supplier;
7. avoid lending money to or borrowing money from any supplier;
8. avoid any and all potential for nepotism;
9. avoid any overlap of duties in the procurement process;
10. safeguard the procurement process from political influence.
11
2

 Business dealings with suppliers must be fair and transparent.
Procurement shall:
1. Refrain from showing favoritism or being influenced by suppliers
through the acceptance of gifts, gratuities, loans or favors;
2. Safeguard supplier confidentiality;
3. Refrain from requiring suppliers to pay to be included on an
approved or preferred supplier list;
4. Refrain from requesting donations of goods or services to the public
entity;
5. Select suppliers on the basis of meeting appropriate and fair criteria;
6. Discourage the arbitrary or unfair use of purchasing leverage or
influence when dealing with suppliers;
7. Avoid the exertion of undue influence or abuses of power
8. Treat all suppliers fair and equal.
11
3

 Some ethical concepts and principles that relate to the
procurement process are:
1. Loyalty and respect for rules and regulations;
2. Integrity: the quality of being honest and having high quality of
moral principles;
3. Impartiality and fairness;
4. Transparency;
5. Confidentiality;
6. Avoidance of appearance of impropriety/bad behavior;
7. Due diligence: try hard enough to avoid harming another person or
property;
8. Makes everyone's life pleasant.
11
4

 Rules of ethics formulated in the public procurement law of
our country:
1. Conflict of interest;
2. Equal opportunity of competition;
3. Any gift or offer;
4. Concern for public resources;
5. Keep in secret any confidential information.
11
5

 Effects of procurement
 As procurement is prone/suffer from/ to corrupt
has many effects:
1. It distorts the market mechanism;
2. It represents a high cost to the procurer;
3. It results in poor quality of goods and services;
4. It erodes public faith.
11
6

 Any sound procurement procedure should be based on
principles of ethics, fairness, equity and transparency.
 In brief, the canons(generally accepted rule) of public
procurement are:
1. Right Place – Need / scope
2. Right material - Quality
3. Right Time - Time
4. Right Price - Value for money
5. Right Vendor – Fairness & Transparency
11
7

 What is sustainable? an action or process that can continue
or last for a long time.
 It is about taking social and environmental factors into
consideration alongside financial factors in making
procurement decisions.
 It is the process by which organizations buy assets, supplies
or services by taking into account a number of factors
including:
1. Value for money considerations such as, price, quality,
availability, functionality;
2. The entire life cycle of products; 11
9

 It is a concept whereby companies integrate social and
environmental concerns in their business operations and in
their interactions with their stakeholders on a voluntary basis.
 Values of CSR:
1. Seeks to understand and meet the needs of stakeholders;
2. Integrity of individual and collective action;
3. Honor;
4. Fairness
5. Respect;
6. Participation;
12
0

 Elements of CSR Process:
Elements Description
No-harm The firm should not engage in any action that
leads to harm.
Transparency Full disclosure and provision of information to
all parties.
Voice Stakeholders’ interests are protected.
Equity Ensure the exists of a perceived equity in the
action of business.
Benefit What are the gains and losses?
Integrity Truthfulness of actions.
Liberty The right of individual to engage in or
disengage from transactions with the firm.
Care Focuses on protection and promotion of
positive rights by the firm. 12
1

 The word “green procurement” refers to practices that are implemented in a
procurement system and its various processes which aimed at minimizing the
negative environmental impact attributable to the manufacture, transport,
operation and disposal of what the public purchaser acquires.
Green procurement has the following objectives:
1. Restoration of the environment, and curtailing of negative environmental
environmental impact, in public procurement activities by procurement of
goods, works and services that:
a. require less resources for production or application;
b. reduce or eliminate toxins in their production, composition or
provision;
c. are more fuel efficient to operate;
d. are more durable;
12
2

2. Ensure compliance in the public procurement process with
applicable national and international environmental
3. Promote innovative, environmentally friendly techniques
and technologies including alternatives and renewable
energy;
4. Identify various possible ways of expressing green
policies, and translating them into action in planning and
implementing procurement proceedings;
5. Identify ways in which economy and efficiency in
value for money can be promoted by green procurement
and
6. Implementation of government environmental policies.
12
3

 Environmental concerns are reflected in reducing waste.
 The “making waste work” initiate has identified the Four
“Rs” for the reduction of waste:
1. Reduce the amount of waste;
2. Reuse items i.e. plastic reusable packaging rather than
cardboard;
3. Recycle items i.e. at recycling depots or recycling
companies;
4. Repair items i.e. increase maintenance and avoid
scrapping. 12
4

1. Avoiding unnecessary consumption and management of demand;
2. Emphasizing the procurement of green goods, works and services like,
energy efficient goods and vehicles, as part of the overall strategy of
reducing greenhouse gas emissions;
3. Utilization of renewable energy;
4. Reduced water consumption ;
5. Reduction and prevention of waste and promoting diversion of material
from the solid waste stream (e.g., by promoting use of recycled materials
in manufacture, reuse, and recycling at disposal);
6. Vehicle fleet management policies and practices that stress fuel
efficiency and alternative fuels; and
7. Fostering a culture of corporate responsibility which includes not only
environmentally friendly practices, processes and products, but also
“social performance” (e.g., working conditions, transparency), “civic
performance” (dialogue with civil society, NGOs, etc.) and “economic
performance” (good prices and quality, good commercial relations with clients
and suppliers).
12
5

1. Long-term efficiency saving;
2. More efficient and effective use of natural resources;
3. Reducing the harmful impact of pollution and waste;
4. Reducing the impact of hazardous substances on human health
and the environment;
5. Encouraging innovation;
6. Providing strong signals to the sustainable products market;
7. Practical expression of organizations’ commitment to
sustainable development.
12
6

 Sustainable procurement should incorporate a number of
safeguards and checks in the procurement process to
positively assist in the following areas:
1. human rights;
2. labor rights;
3. environmental impacts;
4. local entrepreneurship;
5. Empowerment of women;
6. poverty eradication;
7. governance.
12
7

This Concludes Today’s Presentation
Thank you for your attention
128

Exercise
 How do you see the practice of procurement in your
organization or any organization you are familiar with?
What do you think are the challenges and prospects of
procurement?
 Evaluate the of practices public procurement ethics in
your organization or any organization you are familiar
with. Elucidate your evaluation with practical examples.
Suggest solutions for the identified problems.
 Evaluate sustainable procurement practices in your
organization or any organization you are familiar with.
Elucidate your evaluation with practical examples.
129

Project Human Resource
Management
130

Reflection
1. What is Human Resource Management?
2. What do you think are the major areas of Project
Human Resource Management?
3. Can you list some of the problems related to Project
Human Resource Management and what do you
think are the reasons for this problems? Suggest
solutions to solve the problems. (take your own
organization as a case study)
131

What is HRM?
 HRM is the management of people working in an
organization, it is a subject related to humans.
 It is the management of humans or people.
 HRM is a managerial function that tries to match an
organization’s needs to the skills and abilities of its
employees.
 People are important part of a project’s success.
132

Process of Project HRM
 Project Human resource management includes the processes
required to coordinate the human resources on a project.
 The main processes involved in a project human resource
management are:
a) Human resource planning: identifying, documenting, and
and assigning project roles, responsibilities, and reporting
relationships.
b) Acquiring the project team: getting the human resources
resources needed assigned to and working on the project.
133

Process of Project HRM
a) Developing the project team: developing individual
and group skills to enhance project performance.
b) Managing the team: managing the whole process of
the project team
134

135
Human Resource Planning
 The process of analyzing staffing needs and
identifying actions to satisfy these needs over time.
 It must support the implementation of strategies and
advance the accomplishment of key objectives.

136
Human Resource Planning
 It is having the right people available to do the
required work essential to the success of any strategy,
and
 It is the responsibility of all managers to ensure that
all jobs in their work units are filled with people who
can best perform the required tasks.

137
Factors That Determine HR Plans

138
Steps in the HR Planning Process
 Review organizational strategies and
objectives.
 Establish and refine HR objectives and policies
to compliment the strategic plans.
 Establish HR needs……..via
Job Analysis which results:
1.Job Description
2.Job Specifications.

139
Steps in the HR Planning Process
 Forecast....Project future staffing requirements and
anticipate internal and external supply.
HR Audit
Replacement Charts
Succession Tables
 Take action…recruit - terminate - transfer - promote -
whatever….

140
Attracting A Quality Workforce
 The Recruiting Process
 Advertising of job vacancy.
 Preliminary contact with potential
candidate.
 Initial screening to create a pool of
candidates.

141
Attracting a Quality Workforce
 Recruiting Practices
External
Internal
Traditional
Realistic

142
Attracting a Quality Workforce
 Making Selection Decisions
Application Forms
Interview or Site Visit
Employment Tests (Validity and Reliability)
Reference Checks
Physical Examinations
Analysis and Decision

143
Developing a Quality Workforce
 SOCIALIZATION
A process of systematically changing the
expectations, behavior, and attitudes of a new
employee in a manner considered desirable by the
organization.

144
 SOCIALIZATION
It begins with the initial Employee
continues during later training and
activities as well as day-to-day supervisor-
subordinate relations.

145
Developing A Quality Workforce
 Training and Development
A set of activities that provides
opportunities through which people
and improve job related skills.

146
 Types of Training
On-the-Job
• Job Rotation - Coaching - Apprenticeship
Modeling - Mentoring
Off-the-Job
• Management Development
• Management Simulation Games

147
The Role of Performance Appraisal
The process of formally assessing someone's
work and providing feedback on performance.

148
 Purposes of Performance Appraisal
Evaluation: Letting people know where they
stand relative to objectives and standards.
Development: Assisting in the training and
continued personal development of people.

149
 Performance Appraisal Methods
1. Graphic Rating Scales
2. Narrative Technique
3. Behaviorally Anchored Rating Scales
4. Critical-Incident Techniques
5. Multiperson Comparison
6. 360 degree appraisal
7. BSC

150
 Problems in Performance Appraisal
1. Recency bias
2. The same as to me
3. Different from me
4. Central tendency
5. Bias
6. Leniency

151
Maintaining a Quality Workforce
 Career Development
A Career is a sequence of jobs and work
pursuits constituting what a person does for
a living.
 A Career Path
A sequence of jobs held over time during a
career.

152
 Career Planning
Is the process of systematically matching
career goals and individual capabilities with
opportunities for their fulfillment.

153
 Career Stages
 The Move to Early Adulthood
 Mid-life Transition
 Middle and Later Adulthood
 A Career Plateau

154
 Retention and Turnover
 Promotions
 Transfers
 Layoffs
 Retirements
 Early Retirements
 Firings

155
 Managing Compensation and Benefits
 Base Compensation
Fringe Benefits
Competitive Structures
Flexible Programs

156
 Labor-Management Relations
Labor unions are organizations to which
workers belong and which collectively deal
with employers on their behalf.
 Typical Provisions of a Union Contract
Job Specification and Work Rules
Seniority Provisions
Compensation

Project Team Building and Conflict
Management
157

Contents
• Team Building (Human Resource)
• Conflict management
158

What is Team?
 “A team is a group of people working together towards a
common goal.” (Clark, 1994)
 A team is a small number of people with complementary
skills who are committed to a common purpose,
performance, goals, and approach for which they hold
mutually accountable.
 Teams have become an essential part of the way business
is being done.
 Synergy is the property where the whole is greater than
159

Teamwork in projects
 Projects are managed by people working together as
a team.
In a team,
• People depend on each other;
• May or may not work in the same physical
location,
• Combine to achieve something together
160

Team Building
 The process of working with a team to clarify its task
and how team members can work together to achieve
it.
 A strategy that can help groups to develop into a real
team is “team building”
161

Key actions in Team Building
 Setting and maintaining the teams objectives and
standards
 Involving the team as a whole in the achievement of
objectives
 Maintaining the unity of the team
 Communicating efficiently with the team
 Consulting the team – members before taking any
decisions
162

Nature of project team
 The project team is usually a new, temporary group
with out previous experience of working together.
 Complex projects require complex teams with a set of
work rules and norms.
 High degree of learning and interdependency requires
well functioning and cohesive teams.
163

Team building processes
 Initial project team assembly
introductions
goal explained
rough network proposed
 Some issues debated
 who else should be on the team?
 without concern for budget restrictions, what
would each member contribute?
164

 The group would construct an idealized network
(one they would implement if they could do what
they wanted)
 This would be done with the participation of team
members, giving them an opportunity to know each
other’s views.
 Involvement of people right from the goal setting
stage nurtures commitment & continuity.
165

 Iterate towards a realistic plan negotiations with
each other and the project team
 Here the practical constraints and limitations would
be brought up by the members from their own areas
of expertise and experience
166

 This is the participative process
 Continue the process of negotiation until a feasible
solution is found (operationally viable and within the
budget)
 This network becomes the initial project plan with
which project execution begins.
167

Aspects of Team Development
 When people from different departments are
assembled for a project they form a temporary social
system and as it is new there is no system of customs
that indicate proper behavior while working on that
project.
 Each person brings him/her own set of customs,
beliefs and perceptions to the project.
168

Operating culture
 Group “mind”
 Common set of objectives and motives
 Explicit Vs implicit contract
 Heterogeneous group has no communality of motives
 The initial project plan is the explicit contract for the
team. Working towards building that network helps to
develop the implicit contracts which are necessary for
a smooth working team.
169

Group attributes
 Members perceive themselves as in a group and they
know who is in the group and who is not.
 There is at least one objective that all the members
agree upon, although each individual member may
have a multitude of other objectives.
 There is a need for interaction because of the
interdependencies of the people in the group as they
work towards the agreed upon objective.
170

Group performance
 Studies indicate that heterogonous groups tend to
be more productive than homogenous groups.
 A team is a heterogeneous group with
complementary rather than competing skills in the
members.
 It is a temporary alliance created for a specific
purpose or objective.
171

Key factors to successful
performance of a team – S.C.O.R.E
 Strategy
 Clear Roles and Responsibility
 Open Communication
 Rapid Response
 Effective Leadership
172

Strategy:
 Shared purpose
 Clearly articulated values and ground rules
 Understanding of risks and opportunities facing the
team
 Clear categorization of the overall responsibilities of
the team
173

Clear Roles and Responsibilities:
 Clear definition of roles and responsibilities
 Responsibility shared by all members
 Specific objectives to measure individual results
174

 Open communication:
 Respect for individual differences
 Open communication environment among team
members
 Rapid response:
 Rapid response to the team’s problems
 Effective management to change in the internal and
external environment
175

• Effective Leadership:
 Team leader who is able to help members
the objective and build the team
 Team leader who can draw out and free up
skills of all team members, develop
176

“Coming together is a beginning
Keeping together is progress; and
Working together is success”
Henry Ford
17
7

Stages in Team Building
Formin
g
Storming
Norming
Performing
Adjourning
17
8

Stages in team building ...
 Forming: Provide clear direction to establish
the team’s purpose, setting goals, etc.,
 Storming: Provide strong, hands-on
leadership to keep people talking and task-
 Norming: Codes of behavior becomes
established and an identifiable group culture
emerges. People begin to enjoy each other’s
company and appreciate each other’s
17
9

 Performing: Teams that reach this stage
achieve results easily and enjoyably. People
together well and can improve systems,
problems and provide excellent customer
 Adjourning: Temporary project team reaches
this stage; celebrate their team’s
180

Characteristics of an Effective Team
 Interdependence
 Team leaders have good people’s skills
 Common vision
 Willingness for contribution
 Relaxed climate for communication
 Readiness to take risk
 Clear objectives
 Clear definition of members’ roles
 Open communication and information flow
 Motivation
1
8

Characteristics of an Effective Team…
• Defined roles
• No personal attack
• Creating new idea
• Ability to influence
• Shared leadership
1
8

Team Problems
 Drop in productivity or quality
 Plops formation: Little interaction with new
members
 Pinches: frustrations when expectations are not met.
not met.
 The Abilene Paradox: lack of consensus.
 Clique formation
 Groupthink: members feel invulnerable to error
1
8

Causes for Team Problems
 The goal is not specific enough
 Absence of clearly defined roles
 Absence of a charter or Poor team charter
 Poor team leadership
 Unclear working agreements
 Mismanaged conflict
 Lack of resources
 Failure to integrate the work of the team with the
organization
1
8

Understanding Team Members:
The four Johari Window
perspectives
1
8

Leadership roles in team work
 Project Management is more of the mgt of the
team than the management of the tasks.
 The team goes through various stages in its
development and maturity
187

Task relevant maturity levels
M1 Less maturity level
M4 Maximum maturity level
M1= group can not accomplish the task without direct
supervision
M4= group has matured to accomplish the task with a
minimum of supervision
188

Leadership style
 Style 1 :Structuring:
• Organize and direct the work of others
• make each person accountable
• demonstrate
 Style 2 : Coaching:
• tutoring
• Joint effort
• Role model
189

 Style 3 : Encouraging
• greater responsibility with doer
• recognize and praise good work
 Style 4 : Delegating
• assign task responsibilities and let others
out
• motivate by giving control and respect
190

Task relevant maturity level Vs
leadership style.
M1 S1 [ less matured employees need
structuring]
M4 S4 [ more matured staff need
delegation]
191

Conflict Management
 Conflict is the contest between people with opposing
needs, ideas, beliefs, values, or goals.
 It occurs within all organizations.
 It is an important element of an organization’s
development, and can serve as a means to build
organizational capacity, and to generate creative
ideas.
19
2

 Actually, conflict can have both positive and
negative outcomes.
 Conflict is positive when it causes a broadening of
ideas, stimulates innovation and creativity, and
leads to improved results of a project.
 Conflict can be negative when it leads to tension,
frustration, confusion, and less quality and
productivity of a project.
193

In general, all potential conflict fits one of three categories:
 Goal-oriented conflicts are associated with end results,
results, performance specifications and criteria,
priorities, and objectives.
 Administrative conflicts refer to the management
management structure and philosophy and are mainly
based on definition of roles and reporting relationships
and on responsibilities and authority for tasks,
functions, and decisions.
 Interpersonal conflicts result from differences in work
194

19
5
Sources of Conflict Definitions
Conflict over Project
Priorities
View of project participants differ over
sequence of activities and tasks.
Conflict over Administration
Procedures
Managerial and administrative oriented
conflicts over how the project will be
managed
Conflict over Technical
Opinions and Performance
Trade- offs
Disagreements over technical issues,
performance specifications, technical trade-
offs.
Conflict over Human Power
Resources
Conflicts concerning staffing of project team
with personnel from other areas.
Conflict over Cost Conflict over cost estimates from support
areas regarding work breakdown structures.
Sources of Conflict and their Definitions

 Effective conflict management involves analyzing a
conflict, understanding the dynamics between the
parties in conflict, and determining the appropriate
method of conflict resolution.
 In the absence of confidence and skill in conflict
management, most public officials resort, often
counterproductively, to the use of power,
manipulation and control. Possessing confidence
and skill, one can effectively exercise the available
options for managing conflict.
19
6

19
7
Style Description Effect
Avoiding Retreats from an actual or
potential conflict situation
Does not solve the
problem
Smoothing Emphasizes areas of
rather than areas of
Provides only
term solution
Compromising Searches for and bargains for
solutions that bring some
of satisfaction to all parties
Provides
resolution
Forcing Pushes one’s viewpoint at
expense of others; offers only
win-lose situations
Hard feelings may
come back in
forms
Collaborating Incorporates multiple
and
insights from differing
perspectives; leads to
and commitment
Provides long-
resolution
Problem
Solving
Treats conflict as a problem
solved by examining
requires give-and take
Provides ultimate
resolution
Conflict Management Style

 Conflict can be healthy if it is managed effectively.
Conflict management requires a combination of
analytical and human skills.
 Every project participant should learn to resolve
project conflicts effectively. Good conflict managers
work at the source of conflict.
 To resolve it permanently, they must address the
cause of the conflict and not just the symptoms of it.
19
8

Session 10
Project Procurement and Contract
Administration
199

Contents
 Procurement
 Contract
 E-procurement
 Ethics in Procurement
 Sustainable procurement
200

Investigative Questions
1. What is procurement? Purchasing? What is the
difference between the two?
2. Explain the procedures of project procurement in
your organization or any organization you are
familiar with?
3. Discuss the major risks in project procurement?
4. Compare and contrast international project
procurement and domestic project procurement.
201

Procurement
 Procurement: obtaining goods, works, consultancy or
other services through purchasing, hiring or by any
contractual means.
 Public procurement: procurement by a public body by
public fund .
 Public procurement in modern times is an engine for
economic growth and development as it stimulates
domestic, regional and international trade.
 Procurement reform is also a crucial factor in good
governance.
202

Procurement…
1. Goods: raw materials, products and equipment and
commodities in solid, liquid or gaseous form,
software and live animals as well as installation,
maintenance services
2. Works: construction, reconstruction, demolition,
repair or renovation of a building, road, or structure
3. Consultancy service: a service of an intellectual and
advisory nature provided by consultants using their
professional skills to study and organize specific
advise client, conduct training and transfer
4. Other services: maintenance, security, janitorial,
203

Procurement Cycle and Process
 The procurement cycle in government financed
projects and programs consist of the following:
1.Procurement Plan
2.Selecting methods and tools
3.Bidding process and contract agreement
4.Contract management
5.Storage
6.Issue/ Distribution
7.Counting and Disposal 204

 The procurement process consists of the following major
steps.
1. Procurement Planning
2. Requirement Definition
3. Sourcing
4. Selection of a procurement method
5. Preparation and issuance of bidding document
6. Receipt and Opening of offers
7. Evaluation
8. Contract award and finalization
205

 The procurement principles are in most of the cases
follow international best standards.
 The World Bank procurement guideline sets four
general considerations that guide Bank procurement
policy:
1. Economy and efficiency
2. Equal opportunity to compete for all eligible bidders
from all countries
3. Development of domestic contracting and
206

 Procurement in the UN system is also guided
by the following principles:
1.Promotion of UN objectives
2.Fairness, integrity and transparency through
competition
3. Economy and effectiveness
4. Best value for money.
N.B. The ultimate objective of procurement in
system is to add value to the organization in
fulfilling its mandate, goals and objectives.
207

 The principles and objectives pursued by the
procurement reform process in COMESA countries
have included: economy and efficiency; value for
money; enhanced participation and competition;
economic development; fairness; transparency; and
accountability.
208

 The following are the major principles of FDRE
procurement:
1. Economy and efficiency in use of public funds
2. Non discrimination
3. Transparency
4. Accountability
209

Basic Public Procurement Rules and
Procedures
 The Ethiopian Federal Government Procurement and
property Administration Proclamation No 649/2009 Articles
22-34 contains basic public procurement procedures such as
the following.
 Procurement plan
 Records of procurement
 Non-discrimination
 Preference
 Form of communications
 Language
 Qualification of candidates
 Technical specification
210

 Rejection of bids, proposals and quotations
 E-procurement
 Rules of ethics:
Conflict of interest
Equal opportunity of competition
Any gift or offer
Concern for public resources
Keep in secret any confidential information
 Methods of procurement
 Public private partnership
211

Procurement Planning
 A critical element in the procurement process.
 Many procurement problems arise at the time of selecting
contractors or contract administration because of the failures
of procurement planning at the outset.
 Specifically designed to assure that funds are available for the
procurement.
 An annual event and the procurement plans must be approved
together with the budget estimates.
212

 For project procurement (e.g., works contracting, consulting
services) the planning process is more complicated.
 Planning for projects involves careful attention to the choice of
procurement method, the types of contract to be utilized, and
the schedule for project implementation, all coordinated with
the availability of funds to pay contractors on a timely basis.
213

Key activities in a Procurement Cycle
214

Steps/stages of the bidding process
215

Procurement Methods
 The differences between the methods are significant
in terms of formality, level of competition, duration,
and complexity for bidders and the procuring entity.
 According to the World Bank procurement guideline, open
competition is the basis for efficient public procurement.
 The bank requires its borrowers to obtain goods, works and
non-consultancy services through International Competitive
Bidding.
216

 Proclamation No 649/2009 Article 33 contains six approved
methods of public procurement:
1. Open Bidding
2. Restricted Tendering
3. Request for Proposal
4. Two stage Bidding
5. Request for Quotation
6. Direct procurement
217

Open Bidding
 Except as otherwise provided in the proclamation,
public bodies shall use open bidding as the preferred
method of procurement
 Public bodies shall not split procurement
requirements for a given quantity of goods, works or
services with the intention of avoiding the preferred
method
 It may be National Competitive Bidding (NCB) or
218

Restricted Tendering
 It includes both national and international.
 Selected or limited tendering is used when the goods,
works or services by reason of the highly complex or
specialized nature, are only available from a limited
number of suppliers.
219

Contract administration
What is Contract Administration?
 Contract is an agreement between two or
more parties where by each party promise
not to do something .
 A transaction involving two or more
where each has reciprocal rights to demand
performance of what is promised.
220

 It begins when the notice of contract award has been
given to the selected contractor and the procurement
contract signed.
 The award must be notified to the successful bidder prior
to the expiry of the period of bid validity.
221

 Contract administration includes the organizational
dimension to :
contract management;
contract terms(the things you agree to do);
payment and monitoring;
the resolution of disputes;
contract modification, termination, breach and record-
keeping.
 The important practices of effective contract management
are nonetheless critical to the successful completion of the
222

Contract administration … cont’d
 Contract management refers to the
performance of the contract by the
the procuring entity, during which the
performs the agreed upon scope of work
procuring entity, monitoring that
provides payments on timely basis.
 Contract management is critical
importance to the proper functioning of the
procurement system and is essential to the
223

Contract administration…
 Contract administration is one of the most
neglected areas in public contracting.
 The majority of the focus is placed on the
 After the contract is awarded that the real benefits
of undertaking the procurement process can be
obtained, so more attention needs to be placed on
ensuring that the contract is implemented as
224

 Contract award marks the beginning of the
contract administration phase.
 Contract administration deals primarily with
management of risks in the post award
 Its main purpose is to monitor performance
ensure that the objectives of the contract are
time and within budget and also to detect
that might go wrong and find a remedy
suspension or termination of the contract)
225

 It is misleading and risky to believe that only
procurement practitioners (through the procuring
entity) are responsible for contract administration.
 In fact, once a contract is awarded, the procuring
entity is too far removed from where the actual
implementation of the contract takes place to
effectively monitor the performance of suppliers,
contractors and service providers.
226

Contract administration…cont’d
 To be effective, contract administration should be a joint
effort and not the responsibility of only one entity.
 The procuring entity processes requests for goods and
services before the contract is awarded.
 Contract administration reduce the risk of failure to
successfully complete the contract and to fulfill the
corresponding need.
227

 The bulk of contract administration (overseeing
performance) responsibility should be with the
entity that is closest to where the contract is
executed because: it is there that the opportunity
exists for early detection of any breach of contract,
substandard performance of goods received or
services rendered.
228

Challenges of contract administration
 The main challenge for the government in
contract management is to properly be grateful
for the importance of it.
 Often procuring entities give full attention to the
contract selection process, but then walk away
from the procurement once the contractor is in
place.
 The government should employ adequate staff
and resources to the phase of contract
management, unless this happens the
government fails at a risks in procurement and
the additional time and money to go through the
process again.
229

Types of contracts for consultancy services
1. Lump Sum (fixed price)
2. Time Based
3. Percentage contract
4. Framework agreement
230

Types of contract for works
 Factors affecting the choice of Contract Type:
1. The nature and complexity of the works
2. The size and duration of the contract
3. The degree of risk
• Budget constraints
• The previous experience of the Employer
231

Lump sum
 All-inclusive price contracts
 Used for small, short duration( 1-2 years)
 Well defined, detailed works and building
constructions
 Not subject to large quantity variation or
conditions of high risk
Examples: small bridges, rural schools, clinics,
housing 232

Lump sum… cont’d
Advantages of LS contract:
1. Fixed sum for budgeting
2. Easy to administer
3. Little or no measurement
4. Less documentation
Disadvantages:
•Inflexible to changes/ high risk
233

Unit rate
• Unit Rate (admeasurements)
• Most common for infrastructure construction of
short or long
Examples: transportation, power, irrigation, water
supply)
Advantages:
• Equitable basis for bidding
• Periodic payments follow contractor’s cash flow
• Normally little difference between estimates, bids
and final cost
234

Unit rate … cont’d
Disadvantages:
Preparing and monitoring detailed BOQ
Cost Reimbursable plus fee(Cost Plus)
Open-ended emergency situations( earthquakes,
floods)
High risk
235

Contract Administration…cont’d
 To implement projects/ to satisfy needs
 To control performance/ outputs, quality, budget,
time
 To control key elements of the contract such as plan
performance, duties and responsibilities, risks,
standards, payments and securities, inspections,
reports, forecasting of problems
236

Methodology: systematic, proactive, teamwork
Public bodies have to record the date on which the actual
implementation of the contract has began upon fulfillment of
precondition set forth in the contract for the actual
implementation of the contract
Payment for construction works shall be made on the basis of
the progress of work against payment certificate to be verified
by the consulting engineer supervising the work.
237

 For all construction work 5% shall be retained from
payment indicated in each payment certificate.
 50% of the amount retained pursuant to the above, shall be
released up on completion of the works and issuance of
provisional acceptance certificate.
 The remaining 50% shall continue to be retained for one
year period of warranty.
 The consulting engineer shall complete verification of the
payment certificate prepared and submitted by the
contractor within seven days of its receipt.
238

The Public Body shall effect the payment within 14 working
days of receipt of the payment certificate verified by the
consulting engineer.
The consulting engineer shall be responsible for any request
made by the contractor to receive additional payment from the
procuring entity due to the consulting engineer’s failure to verify
the payment certificate within prescribed period.
239

Risk Management in Procurement
and
E-procurement
240

What is Risk?
 It is possibility that something bad or
may happen.
 It is the possibility that an expected outcome
not occur, or that an unforeseen event
deleterious will occur.
 It can arise from limited information,
and knowledge on which to base decisions,
uncertainty of future event. 24
2

What is Risk Management?
 Risk management is the process of identifying risks,
analyzing their consequences, and devising and
implementing responses to ensure that procurement and
service delivery goals are achieved.
 The aim is to achieve more reliable planning, improved
decision making and greater certainty of outcomes.
 By managing risk, agencies or government bodies can
identify potential problem areas that may adversely affect
the desired procurement outcomes, and try to reduce the
uncertainty of outcomes and economic losses.
24
3

concerns are:
8. Documentation
10. Supplier ethics
24
4

concerns are:
8. Documentation
10. Supplier ethics
24
5

1. Gifts and benefits:
 Public officials who involve in any aspect of a
process are strongly advised not to accept gifts or
for the reason that it can be or may be seen as a
influence to compromise or appear to compromise
and impartiality.
 Potential suppliers should be aware of that public
officers (and consultants, advisors and sub-agents)
solicit and generally may not accept a gift or benefit.
24
6

2. Consistency and continuity of process:
 Application of the principles of competitive
equity requires that all bidders be given the same
commercial information, and the same guidance and
instructions on the conduct of the bid/offer process.
 Bidding procedures and evaluation processes should
applied consistently so as to prevent any actual or
discrimination.
24
7

3. Communication with bidders:
 Clear procedures need to be established for
with bidders to ensure a uniform approach that
same messages to all participants.
 Best practice procurement uses detailed meeting
and authorizes particular procurement personnel
on specific subjects.
 Procedures should be in place to ensure that
communications with bidders are prepared and
off at an appropriately senior level.
24
8

4. Conditions of bid and deadlines:
 Adherence to established conditions of bid and
deadlines is essential in maintaining the integrity of
 Bidders can be seen to obtain an unfair advantage if
given more time to prepare their offer.
 If bids are opened and distributed ahead of the
there will be the risk that details of those offers
passed to other potential bidders.
24
9

5. Invitation to bid documentation:
 Documentation including conditions of offer and
specification, and evaluation criteria should not be
during the course of a procurement process,
likelihood of change has been indicated in the
 In the invitation documentation the underlying
suppliers are entitled to submit proposals on the same
and evaluation basis, and get the same information on
to structure their offers.
 Where changes are proposed, these should be
appropriate procurement staff or committee following
consideration of all aspects.
25
0

6. Finalizing the contract:
During the evaluation of offers, procurement staff
to be in frequent contact with members of the front-
offering teams.
To prevent any risk of ‘drifting into a contract’
discussions with a bidder , nothing must be
explicitly or implicitly, to indicate where they stand or
they are successful until all relevant evaluation
offs and approvals have been obtained.
Clear procedures for handling communications with
are needed.
The Request for Offer should also specify how and
contract will be concluded.
25
1

7. Briefing sessions:
Briefing sessions may be held at different times
course of procurement.
Such meetings should be conducted with appropriate
and other arrangements to enable effective
All bidders should be notified of the outcome at the
time the result of a procurement process is
At all times the procurement team must avoid
information which may be seen to compromise the
confidentiality or commercial interests of any25
2

8. Documentation:
Good record keeping is essential throughout the
process.
The outcomes of key discussions and data must be
documented and filed in a form which allows those
subsequent reviews of the process to clearly
why, when and by whom the key decisions were made.
25
3

9. Conflict of interest:
 Conflict of interest is any personal business or professional activity that
create a conflict between personal interests and the interests of the
 It is also important to note that employees, (and directors and members
board of directors) should also avoid any activity that may be perceived
conflict of interest.
 Managing conflicts of interest are vital in any procurement activity.
 Family or personal relationship and investment pose potential conflicts
that are especially relevant to procurement.
 Family/personal relationships is a conflict of interest takes place if a
member or personal friend has a financial stake in, or is part of the
a company that is a supplier or potential supplier.
 Investments: If an employee is a purchaser for an organization and is
investor in a company that is a supplier for goods and services to the25
4

10. Supplier ethics:
 A focus on internal ethical issues should not
the importance of external ethical issues related to
business practices, past conduct and performance of
bidders.
 Regardless of how well the procurement process is
conducted, a contract should not be awarded to a
has a record of illegal or unethical activity.
 Depending on the significance of the contract,
should be given as to whether it would be
conduct probity checks on suppliers.
 Some of the unethical practice on the supplier side
fixing prices, collusion among bidders, and
product samples with the intention of supplying
products. 25
5

Risk Management has Seven stages:
1. Establishing the risk context
2. Identifying potential risk
3. Analyzing the risk
4. Assessing and prioritizing the risk
5. Treating the Risk
6. Preparing and implementing treatment plans
7. Monitoring and reviewing
25
6

1. Defining the nature and scope of procurement
2. Relevant goals and strategies
3. PESTLE factors:
a. Political consideration, such as government policies in the
the countries from which they are buying.
b. Economic considerations, regarding the employment of finite
finite resources and the effect on supply and demand.
c. Socio-cultural considerations, for the people employed to
to produce and manufacture the materials and products along
with the customer base.
d. Technological advancements and the possibility of alternatives
alternatives
e. Legal requirements and contractual documentation and
and processes.
f. Environmental considerations and policies of the suppliers and
suppliers and the procurement organization.
25
7

4. Expectations of stakeholders such as beneficiaries, local
communities,
 government agencies and service providers
 Developing risk criteria such as strategic concern,
efficient completion, cost control, quality, compliance,
delivering on time, budget
 Break down the procurement activity into key element
25
8

 What can happen? Compile a list of the possible events that
could have an unwanted or unintended effect on the
procurement.
 Consider the full life-cycle.
 How and why could it happen? Explore the events
identified in the first question for their possible causes and
implications.
 Checklist developed through brainstorming or workshops
are useful for procurement involving new or unusual risks
 Use all the available data sources to understand the risk , 25
9

 How likely is the event?
 What are the consequences of the event?
 What is the overall risk level?
26
0

 Categorization of risks as;
• Low risks,
• Moderate, and
• High risks.
 The output is a prioritized list of risks to be treated, risks to be
accepted and monitored, and acceptable risks for the
procurement
26
1

 Avoid the risk
 Transfer the risk to another party or insurance
 Accept the risk
 Reduce the likelihood of occurrence
 Reduce the consequences by contingency planning, contract
terms and conditions, inspections and checks to detect
compliance, and recovery programs
 Evaluate and select the appropriate options
26
2

 Actions and expected outcomes
 Timetables
 Resource budgets
 Responsibilities
 Reporting requirements
 Monitoring requirements
26
3

 Few risks remain static.
 Ensure its ongoing relevance and amend if circumstances
change.
 If the procurement is of high value, strategic or complex, the
risk management plan should specify and detail the review
process.
26
4

 E-procurement involves electronic data transfers to support operational,
tactical and strategic procurement.
 E-procurement serve as a means of improving procurement efficiency and
effectiveness.
 Procurement officers and managers can make contribution to decisions about
investments in, and configuration and use of e-procurement tools by:
1. having an understanding of the various e-procurement applications;
2. identifying the procurement processes that are effectively supported;
3. understanding the sources of benefit of e-procurement;
4. identifying the risks associated with the adoption of e-procurement;
5. contributing to the development of e-procurement tools.
26
6

Some of the tools and applications in e-procurement include:
a) electronic systems to support traditional procurement;
b) EDI (electronic data interchange);
c) Enterprise Resource Planning (ERP) systems;
d) electronic mail (e-mail);
e) extensible markup language (XML);
f) world wide web (www).
26
7

Some of the internet tools that replace traditional procurement are:
1. E-sourcing
2. E-tendering
3. E- auctioning
4. E-ordering and web-based ERP
5. E-information
26
8

 The potential benefits we may obtain from e-procurement in terms of the
public procurement principles and objectives are:
1. Value for money: by attracting many bidders procuring organizations
organizations can optimize both price and quality of what they buy;
2. Economic development: by taking up e-commerce itself, the public
public sector can drive the uptake by the private sector, especially small
and medium enterprises of e-commerce. Thus it helps to propel the
economy into areas of growth and modernization;
3. Transparency: one of the main advantages of e-procurement is that it
that it boosts transparency in a procurement system, since the inherent
nature of e-procurement is openness and maximization of publicity and
access to information;
26
9

4. Accountability: by promoting transparency and record keeping,
e-procurement helps to promote accountability of participants
action that they take;
5. Economy and efficiency: by reducing transaction costs, e-
procurement can decrease the costs of conducting procurement
transactions in terms of money that we spend to run the
avoidance of expensive print-media advertisements, replaced by
publication), as well as time and human resources required ;
6. Integration and mainstreaming of the procurement system with
systems: a prime example of this is the potential for linking
processes with integrated financial management information
27
0

Electronic Data Interchange
 EDI is an application whereby electronic messages can be
exchanged between computer programs of two separate
organizations.
 Some features of EDI include:
1. Messages are exchanged in groups, known as batches.
2. Messages can automatically be sent, transmitted and
stored between computers without retyping or keying
data.
 EDI has to be implemented by each pair of organizations
(sender and receiver) who wish to use it.
271

Enterprise Resource Planning system
 ERP systems are management information systems that
integrate and automate many of the business practices
associated with the operations of a company or organization.
 ERP system typically handle the manufacturing, logistics,
distribution, inventory, shipping, invoicing, accounting for a
company or organization.
 ERPs aid in the control of many business activities like sales,
delivery, billing, production, procurement, inventory
management, and human resources management.
272

Application of e-procurement
 Electronic functional equivalents of submission of bids: the technology
exists and is already increasingly in use around the world to provide
secure means of submitting bids electronically (into a secure “electronic
bid box”), over the internet, and keeping them from being opened
prematurely;
 Electronic public bid opening
 Purchase cards: including possible security measures, which allows
credit-card type of cards to be used by designated purchasing officials, as
well as by officials during their business travel;
 E-purchasing: including the concept of “Purchase-to-Pay” integrated e-
procurement systems (P2P), and the related use of
 Electronic means in contract administration: a good example of how
electronic means can facilitate improved contract implementation and
273

What is Ethics?
 Ethics is the basis on which most of the
related principles, such as fairness, integrity,
transparency, are based.
 A set of moral principles that mature and decent
feel should guide behavior.
 Is doing the right thing.
 Is the imbibed value system – may vary from
culture, place to place, but there are certain
accepted values.
 Is what money cannot buy.
 Best when internalized and comes from within.
 Can be forced- but true ethics is doing the right
even when not watched.
27
5

 Ethics are the principles which define behavior as right,
good and appropriate.
 Employees in public service are bound to uphold certain
values.
 Ethical procurement best practice starts with the
employees in procurement following an ethical code
which dictates their behavior and actions while conducting
business.
 Ethical procurement practices should be extended to all
stakeholders in the procurement cycle.
 Ethical procurement should also include an understanding
of suppliers’ operations and the procurement professional
should offer guidance and
 Support when improvement is necessary or appropriate.
27
6

 Government employees and organizations,
maintaining ethical behaviour involves more than simply
avoiding corrupt or dishonest conduct.
 It involves applying public sector values such as
impartiality, accountability and transparency.
 Ensuring ethical standards in public sector activities is
part of every public official’s duty to adopt processes,
practices and behaviours that enhance and promote public
sector values and interests.
 Achieving an ethical, transparent approach requires that
the procurement rules be clear, open, well understood
and applied equally to all parties to the process.
27
8

The broad objectives of ethical behavior in procurement are
to:
1. Provide accountability;
2. Maintain public sector integrity;
3. Ensure compliance with processes;
4. Ensure that all offers will be evaluated against the same
criteria;
5. Preserve public and supplier confidence in Government
processes;
6. Minimize potential conflicts and the potential for litigation;
7. Ensure the procurement activity provides the best outcome; and 27
9

Professional standards of ethical conduct, no matter what the
organization, contain typical characteristics, including
commitments to:
1. behave honorably in all aspects of work;
2. maintain trust and confidence in the integrity of the acquisition
process;
3. uphold the organization’s standards and policies and all relevant
legislation;
4. avoid conflicts of interest;
5. appearance of impropriety;
6. avoid engaging in personal business with any supplier;
7. avoid lending money to or borrowing money from any supplier;
8. avoid any and all potential for nepotism;
9. avoid any overlap of duties in the procurement process;
10. safeguard the procurement process from political influence.
28
0

 Business dealings with suppliers must be fair and transparent.
Procurement shall:
1. Refrain from showing favoritism or being influenced by suppliers
through the acceptance of gifts, gratuities, loans or favors;
2. Safeguard supplier confidentiality;
3. Refrain from requiring suppliers to pay to be included on an
approved or preferred supplier list;
4. Refrain from requesting donations of goods or services to the public
entity;
5. Select suppliers on the basis of meeting appropriate and fair criteria;
6. Discourage the arbitrary or unfair use of purchasing leverage or
influence when dealing with suppliers;
7. Avoid the exertion of undue influence or abuses of power
8. Treat all suppliers fair and equal.
28
1

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