WELCOME TO

THE PRESENTATION
ON
PROCUREMENT & CONTRACT ADMINISTRATION
BY
DAMTEW WOLDE
Life Consult PLC
P.O.BOX 30870
PHONE:
FIXED: 251-11440 48 90/91
MOBILE: 251-911 22 09 52
E- mail: liconplc@gmail.com
June, 2020
Addis Ababa

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 Contents

1. Definitions
2. Legal and Institutional Frameworks for Procurement
3. Corrupt, Fraudulent , Collusive and Coercive Practice s
4. General Principles of Procurement
5. Procurement Methods
6. Contracts
7. Engineering and Procurement Cycles

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 1. Definitions
1.2. PROCUREMENT
It is the purchasing, hiring or obtaining by any other contractual means of goods, works and services;

1.2.1. Definitions of pertinent terms related to Procurement:

Procurement:

Procurement mean obtaining goods, works, consultancy or other services through

purchasing, hiring or obtaining by any other contractual means;

Goods
Raw materials, products, components, machinery, spare parts, equipment,
petrochemicals, manufactured articles, commodities and the like in solid, liquid or
gaseous forms which are normally delivered in finished conditions to specified standards,
and electricity, as well as installation, transport and maintenance.
Ex - Computers, Vehicles, Books, Equipment etc.

Consultancy service

Professional skills required to carry out projects including individuals, consulting firms,
construction managers and other specialists are services.
–
– Ex - Design, Feasibility Study, Assessment,
– Review, Advisory Service
 1. Definitions ……… Cont’d
Non Consultancy Services
Services that are not related to professional skills like Transportation,
Insurance, Repair work, Printing and duplicating books and other
documents, cassette recording, etc can be examples of non-consulting
services.
Works:
Building, Transport and Water projects and related Infrastructures
which normally require construction at a specified site over a period of
time, with a targeted budget involving integrated management and
technical skills, labor, materials, tools, and equipment are called as
Works.
Supplier:
A physical or juridical person under contract with a procuring entity to
supply goods, works or services;
Candidate:
A physical or juridical person invited to take part in public
procurement or seeking to be so invited;
 2. Legal and Institutional Frameworks for Procurement
Legal Frameworks for Procurement
Government Financed Procurements are handled in accordance with the following documents:
 Proclamation No. 469/2009 dated the 9th September, 2009, the Ethiopian Federal
Government Procurement and Property Administration Proclamation;
 The procurement directive issued by the Ministry of Finance and Economic
Development (MoFED) in June 2010; and
 The Standard Bidding Documents (SBD) prepared and issued by the Public
Procurement and Property Administration Agency (PPPAA) issued in August 2011.
 The Procurement Manual is also published as of July 2002 E.C.
Institutional Frameworks for Procurement
 FPPPAA is the regulatory body for procurement at Federal level.
 All regional Governments and City Administrations have adapted the public
procurement law as well as the public government procurement directive to govern
public procurement at the sub-national level.
 The regional proclamations have provided for establishment of independent
procurement regulatory agencies.
 Regions and City Administrations use the SBD of FPPPAA.
 Integrity Management
Why Firms should adopt Integrity Management???
(Integrity = ሐቀኛነት)

The FIDIC Integrity Management System (Guidelines for Integrity

Management in the Consulting Industry), 2011.
• Integrity is good for business, financially;

• Integrity represents the morally and ethically correct framework for

providing consulting services, it preserves the respect and reputation
for the industry of the interested in using its services;

• Integrity protects the firm and its staff from external influences that
may lead to corruption;

• Integrity is important for the long-term sustainability of a firm as it

grows, adds staff and provides services to existing and new clients.
 3. Corrupt, Fraudulent , Collusive and Coercive Practice s

Corruption is wrong!!!!
“Corruption undermines the values of society, degrades the individual
involved and damages the reputation of the consulting industry and
the value of services. It is more than simply steeling funds; corruption
is in fact the theft of trust.” FIDIC
DEFINITIONS:

 Corrupt Practice (ሙስና ወይም የሙስና ድርጊት) -the offering, giving,

receiving, or soliciting of, directly, any thing of value to influence
the actions of a public official in the selection process or in
contract execution

 Fraudulent Practice (ብልሹ አሰራር ወይም የማጭበርበር ድርጊት) – a

misrepresentation or omission of facts to influence a selection
process or the execution of a contract
Corrupt, Fraudulent , Collusive and Coercive Practice s …… Cont’d

DEFINITIONS (cont…):

 Collusive Practices (መመሳጠር ወይም የመመሳጠር ድርጊት)- a scheme or

arrangement between two or more consultants, with or without the
knowledge of the Client, designed to establish prices at artificial,
noncompetitive levels.

 Coercive Practice (ማስፈራራት ወይም የማስገደድ ድርጊት)- harming or

threatening to harm, directly or indirectly, persons or their property to
influence their participation in a procurement process or affect the
execution of a contract.
 1. Legal and Institutional Frameworks for Procurement

1.0. Legal and Institutional Frameworks for Procurement

• Proclamation No. 649/2009 dated the 9th of September 2009,
Proclamation of the Federal Democratic Republic Government of
Ethiopia
(Determining Procedures of Public Procurement and establishing its
Supervisory Agency);
• The procurement Directive issued by the Ministry of Finance and
Economic Development (MoFED), on June 1, 2002 (E.C); and
• The Standard Bidding Documents (SBD) prepared and issued by the
Public Procurement Agency (PPA) to be used as of January 2006.
• The Procurement Manual is also published as of July 2002 E.C.

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 1. Legal and Institutional Frameworks for Procurement… Cont’d

• Following the issuance of Proclamation No. 649/2009 , PPA was changed

to FPPPAA.
• All regional governments and city administrations have adapted the
public procurement law as well as the public government procurement
directive to govern public procurement at the sub-national level.

• The regional proclamations have invariably not provided for

establishment of independent procurement regulatory agencies.
• Therefore, Government Financed Procurements are handled in
accordance with the following documents:

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 1. Legal and Institutional Frameworks for Procurement… Cont’d

The new Federal Procurement Proclamation has made improvements on the

following areas:
1. The proclamation contains both Procurement and Property Administration;
2. An appeal board to hear the complaints of bidders is to be established independent of
FPPPAA;
3. A body to undertake bulk procurement and disposing off property to be established;
4. Functions and responsibilities of Procurement and Property Administration unit,
Procurement endorsing committee and heads of Public Bodies are segregated;
5. Provisions for price adjustment are incorporated;
6. Provision for margin of preference for Small and Micro Enterprises are included;
7. The use of Electronic Procurement is to be in place after the necessary study;
8. Implementation of Public Private Partnership is introduced;
9. The time allowed for preparation of bidding documents are reduced for non-complicated
procurements;
10. The threshold limits both for the NCB and ICB are increased;
11. Advance payment to procure equipment and machineries for Contractors are allowed; and

12. Special procurement for large value procurement and procedures for frame work Contract
are included.
 4.0. General Principles of Procurement
General Principles of Procurement
General Considerations (Objectives of Procurement)

• Obtain high quality Service/Goods/Works

• Need for economy and efficiency

[Get the best value for money (prices reasonable?)]

• Give all eligible bidders equal opportunity to compete

• Encourage development of local industries (Domestic Preference)

• Importance of Transparency in the procurement process

• Accountability for Procurement Decisions

 5. Procurement Methods

3.1. Procurement Methods for Goods and Works

•Open Bidding
a1. National Competitive Bidding (NCB); or
a2. International Competitive Bidding (ICB)

•Limited Bidding ( LB);

•Request for Quotations or Shopping (RFQ or S);
•Direct Procurement or Direct Contracting (DC); and
•Two stage bidding.
3.2. Procurement Methods for Services
• Quality and Cost Based Selection(QCBS)
• Least Cost Selection (LCS)
• Single Source Selection (SSS)
• Quality Based Selection (QBS);
• Selection under a Fixed Budget (SFB); and
• Selection Based on Consultant’s Qualification (SBCQ).
 6.Contracts
Goods Contract :
• The Contract Agreement;
• The Special Conditions of Contract;
• The General Conditions of Contract;
• The Bid Submission Sheet with Annexes;
• Price Schedule;
• List of accepted items including their unit price;
• Bidder Certification of Compliance with Annexes;
• Technical Specifications + Technical Offer + Compliance Sheet with Annex
Works Contracts:
• Contract Agreement, including all appendices;
•Letter of Acceptance by the Public Body to the Contractor;
•The Special Conditions of Contract;
•The General Conditions of Contract;
•The Bid Submission Sheet with Annexes;
•Technical Proposal with technical specifications;
•The design documentation (drawings);
•For unit price contracts: The Bill of Quantities and Price Schedule (after correction of
arithmetical errors);
•For Lump-sum contracts: The Breakdown of the Lump-sum Price (after correction of
arithmetical errors);
 3. Contracts…Cont’d

Consultancy Services
• The Contract Agreement including all Appendices;
• The Special Conditions of Contract;
• The General Conditions of Contract;
• Appendices to the Consultancy Services Contract

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 7. Engineering and Procurement Cycles

1. Engineering Implementation Cycle

2. Procurement Cycle for Goods
3. Procurement Cycle for Consultancy Services
4. Procurement Cycle for Works
 8. References
References:
1. The Ethiopian Federal Government Procurement and
Property Administration Proclamation …Page 4858 , Proc. No. 649/2009
2. Federal Public Procurement Directive , June 2010
3. Standard Bidding Documents (SBD), PPA 2011 version
4. Consulting Services Manual, 2006, WB
5. The FIDIC Integrity Management System (Guidelines for Integrity
Management in the Consulting Industry), 2011
6. Training Materials and Independent Procurement Audit Reports, Life Consult
PLC
THANK YOU

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