PROCUREMENT

PROCEDURES

UNIT 2(b)
CHITI JOSEPHINE
KWAME NKRUMAH UNIVERSITY

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 Completion of this course the students
• Be able to discuss why procedures are important
• Able to identify and understand the various procurement
procedures(procurement cycle).

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 INTRODUCTION

• Procurement procedures define the process of implementing the policies. These

are the series of steps that the procurement team will follow to achieve the
procurement goal.
• The goal is always the result that the procurement process wants to achieve. The
procurement procedure is consistently repeated until everyone in the team
becomes so used and becomes a routine.
• The only way to create a procedure is to come up with several procurement policies
first. Once you have a set of policies that you can follow, you can start the creation
of procurement procedures to follow.

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The procurement cycle
Stages include the following:
1. Identification of need
2. Preparation of specification
3. Sourcing
4. Receipt of quotation and opening of bids
5. Evaluation of bids
6. Negotiation
7. Contract award
8. Contract management
9. Receipt
10. Payment
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PROCUREMENT PROCEDURES
 Needs
Identificati
on
Contract Confirm

THE PROCUREMENT CYCLE

Closure Funding

Prepare
Contract
Solicitatio
Managem
n
ent
Document

Award of Solicit
Contract Offers

Receive
Evaluate and
Offers Manage
Offers

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 PROCUREMENT CHAIN
Write Prepare
Specifications Solicitation
TOR and SOW Documents
Identify Needs Choose a
Procurement Method

Seek, Clarify
Award Contract and Close
Offers

Evaluate Offers

Manage the
Contract

Negotiate the Evaluate the

Contract Procurement
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THE PROCUREMENT CYCLE

1. Identification Of The Need

– User department/section generates the need.

– Need must not be supplier/contractor driven.
– Need for Procurement Plan (takes into account lead time i.e.
from identification of need, to receipt of goods, works or
services)

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2. Specification
Specification must define quality
• Quality is suitability for intended purpose.
• Specifications must be neutral (i.e. avoid use of brand
names). Where a standard exists, such shall be used.
• Services specifications come in form of Terms of Reference
i.e. define minimum performance levels
• Works specifications come in form of scope of works, bill of
quantity and material specifications or standards.

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 Types of specifications

 Product specification are best described as simple (products in every day use or
very complex e.g. major plant and buildings).
• Types of product specification(Brand name, samples).
 Services specifications come in form of Terms of Reference i.e. define minimum
performance levels
 Works specifications come in form of scope of works, bill of quantity and
material specifications or standards.

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Functional/ performance specifications – what the product is to be used for, i.e.
what it should do or achieve
Technical specifications – detailed description of technical requirements stated in
terms suitable to form the basis of actual design, development and production
processes of an item.

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 Characteristics of a specification

A specification should be
• Clear /unambiguous
• Concise
• Comprehensive(the degree will vary with the specification type)
• Correct
• Consistent(through out the specification and with other specification)
• Easily Transmitted

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Unclear or incorrect specifications can lead to the following
• Disruptions and delays to provisions of the product or service(caused by
the time spent providing additional information or clarification).
• Additional cost arising from the product or service not performing the
required tasks(the cost of rectifying performance).

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• Specifications must define the following:
- Quality – suitability for intended purpose
- Quantity – How much is required?
- Delivery schedules
- Transportation
- Any other information required

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 3. FINANCING
Before any enquiries are made financing must be confirmed i.e. from
budget allocation, donors, contractor financing etc. Funding must be
adequate for the specified items and quantity.

4. SOURCING
 Sourcing is the identification of potential supplier and solicitation of offers.
 The sourcing method is determined by the value of the purchase and
nature of what is to be purchased.

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 5.Receipt and Opening of Bids

• Upon receipt of tenders, the Contract Administrator(Authorised officer) will accept only the ones
that were received within the deadline mentioned in the Invitation to Tender.
• Any late tender should be dismissed and not allowed to be considered. It should remain un-
opened.
• Prior to the tender return date you should establish a tender opening board consisting of at least
two members of your Organization's staff. The board is responsible for:
• Opening
• Checking
• Recording the details of the returned tender submissions on the tender opening form.

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 OPENING OF TENDERS

Tenders shall be deposited in a tender box.

Tenders submitted within the stipulated period shall be
opened;
- in public,
• By an authorized officer,
• On a day other than a public holiday or day after a public holiday

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Opening of tenders
• In Government procurements, bids should be opened
- in public
- by an authorized officer
- on a day other than a public holiday or the day following a public holiday

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 Terms

• A tender is an invitation to bid for a project.

• The price offered is called a bid
• The person offering the price is called a bidder
• The entire process is known as bidding/Tendering
• A Bidders' Meeting is where all tenderers are invited to a venue to discuss the
bids at the same time.

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Selection of Suppliers to be Invited to Tender
• When procuring equipment and materials the following showed be done
• Suitable suppliers of the item to be purchased from among registered suppliers.
• Tenders will be by competitive bidding between selected suppliers. (unless where
the sole supplier of a given item or may be designated based on patent rights).

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A supplier will be appraised in the following ways
• Financial
• Commercial
• Technological
• Environmental
• Motivation

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Bid receipt
• Quotations/ Bids shall be received by the Procurement office.
• The deadline for receipt of quotation/bids should be observed .
• Tenders shall be deposited in a tender box.

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6. Evaluation Of Tenders

The purpose of tender evaluation is to identify the lowest evaluated bidder

[BEST EVALUATED] i.e. which when awarded the contract, shall ensure

• best value for money is obtained

• delivery/completion shall be on schedule

• the right quality and quantity is supplied

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The purpose of tender evaluation is to identify the lowest evaluated
bidder.
[BEST EVALUATED] i.e. which when awarded the contract, shall ensure

• best value for money is obtained

• delivery/completion shall be on schedule

• 04/22/2025
the right quality and quantityPROCUREMENT
is supplied
PROCEDURES
• Evaluation of proposals will be conducted prior to the opening of bids and
evaluation will be on technical and financial status of the bidder
• The technical proposal conforms with the conditions and requirements
(specifications)
• The financial proposal in order to confirm that the technical proposal conforms
with the conditions and requirements.
• During the evaluation, may request that the technical proposal be
supplemented or amended.
• In cases where such changes could result in a change in the bid price, the
supplier will be asked to submit such price adjustment and explanation.
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Evaluation will be done in the following areas
Technical Evaluation
• Technical and quality evaluation is one of the most important stages of the
Procurement Journey.
• The purpose of the technical evaluation is to select those offerors whose
proposals offer organisation the best composite blend of performance,
schedules, and quality of work.
 Price Evaluation
• The evaluation should identify and compare all the costs and benefits' which
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be quantified in money terms
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• Once the solicitation process is officially closed, the procurement team in
conjunction with the evaluation committee will review and evaluate supplier
quotations to determine which supplier will be the best fit to fulfill the existing need.

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7. Negotiation

• Negotiate over the contract price and other conditions

with the most advantageous bidder which meet the
specified technical condition and requirement.
• Show the bidder the standard contract conditions and
reach to an agreement after negotiation.

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 8. Purchase Approval
Purchase approval must be obtained from the appropriate authority prior to
contract award.
The approving authority is determined by the value of the purchase.
The Tender Regulations stipulate the financial limits for each approving
authority.
Retrospective approval cannot be granted, i.e. after the contract award
has already been made.
The Tender Regulations have a procedure for emergency/urgent
purchases

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9. Contract Award

Contract award notification to the supplier/contractor shall be in

writing and shall be by the purchasing officer.
Simple or low value/risk contracts can be by local purchase order.
 However, complex and high value/risk contracts must be written with
relevant Conditions of Contract.
 Advance payments are generally not permitted. Where this is
unavoidable, the supplier/contractor must submit an advance payment
guarantee of equivalent value from a financial institution.

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Tender Award Documentation
• Before a you award a contract you should check the following points:
a) Who was involved in the tender award process?
b) Have there been any changes in staff from those involved during the tender
evaluation?
c) Did any of the tenderers drop out of the process and decide not to proceed with the
tender? Consider if an unknown agreement has been made.
d) Review the list of suppliers/sub-contractors. Are they the same as other bidders
involved in the tender exercise? Such circumstances can lead to a pre-determined
outcome and therefore it would be irrelevant who is awarded the work.
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Debriefing
• Debriefing is a way of helping suppliers to improve their competitive performance,
which in turn produces benefits to procuring organizations.
• Unsuccessful tenderers have a right to know the reasons for their rejection.
Feedback should be provided in writing and it is good practice to provide face to
face debriefing where possible.
• If this is deemed appropriate, you need to make sure enough time and resource
is given to the debriefing process.

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Debriefing Objectives
• Assist suppliers to improve their performance. A debriefing should cover the
positive aspects of their bid and suggest areas for improvement for unsuccessful
bids. Suppliers can then address these issues and improve their competitiveness
in future bids.
• Offer unsuccessful tenderers the opportunity to provide feedback to you on the
tender process. This will help with continuous improvement of the process.
• Establish and maintain a reputation as a fair, honest and ethical customer. This will
help to ensure that high quality suppliers will be encouraged to submit tenders.

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• Once a vendor is selected, the contract negotiation and signing are completed, and
the purchase order is then forwarded to the vendor.
• A legally binding contract activates right after a vendor accepts a Purchase Order and
acknowledges it. Supplier(s) have all the information they require to plan user’s
migration to the new contract
• Users have all the information they require e.g. suppliers’ contact details, information
on the goods/services available from the contract

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 10.Contract Management

Contract Management applies to the specific contract for the good(s) or service(s) being procured. For
example, increasing the quality of waste sacks to meet an organisation requirements.
The purpose of Contract and Supplier Management is to work closely with suppliers and internal
customers to:
• Minimize the total cost of ownership and
• To maximise Supply Chain efficiencies.
Contract and Supplier Management should result in contract procedure and process improvements. It
should also increase Procurement Function knowledge and experience which can then be used to benefit
future contracts.
Supplier Management refers to activities across a supplier’s whole portfolio of contracts. These activities
are normally more strategic, longer term activities.
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 Contract management

The overarching vision of Contract and Supplier Management is that it should

• Ensure that the service/contract is delivered to the required standards
• Provide value for money.
• Identify and manage any risks e.g. which may impact on a supplier’s service
delivery/ fulfilment of contract requirements.
• Improve and develop contract and supplier performance across the organization. A
consistent approach will maximize efficiencies and promote adding value across the
supply base.
• Influence supplier activity and decisions improving value for money, over and above
cost savings.
• Ensure the contract is effectively administered,
04/22/2025 for example from a change
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 11. Receipt Of Goods, Works And Services

Receipt of goods, works and services shall be inconformity with

the provisions of CAP 347 the Finance (Control and
Management) Act

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Delivery and Inspections
• Products are to be delivered as agreed to in the contract.
• The buyers organisation has the right to claim liquidated damages if
delivery is delayed beyond the specified delivery deadline.
• Inspect all products delivered by the supplier to ensure that they meet
the requirements and conditions. Products which pass such inspections
will be accepted. When necessary, inspections may also be carried out
during the production process.

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 12. Payment

• Payment will be made the month following acceptance of the product.

• Payment methods may be considered based on mutual discussions
in cases where a long time period is required for production or where
other special circumstances exist.

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 13. Post Contract Appraisal

This is intended to assess whether the purchase has been conducted in

accordance with the procurement plan.
Deviations are evaluated to ensure they are not repeated and
corrective adjustments made to the procurement and associated
plans.

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 Best Practices for Documenting
Procurement Policies and Procedures

• Use clear, concise and simple language that your staff can actually
understand.
• Create policy statements that specifically address the rule, and
procedures that direct the implementation of activities.
• Develop procedures that offer employees options, when feasible, as
procedures that are unnecessarily restrictive may not prove useful.
Reference forms, templates, checklists and other tools that staff
should use.

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• Identify roles and responsibilities to eliminate confusion.
• Designated and identify persons who can help interpret policies and resolve
problems.
• Assign an owner to maintain and continually refresh your procurement
policies, procedures and documents.

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 Summary

• Preparing and writing procurement policies and procedures can be a time-

intensive task.
• It requires gaining insights and feedback from your staff, integrating issues
of compliance requirements and best practices, and writing it in plain
English so people can successfully understand and implement what’s
required.
• A comprehensive document of procurement policies, procedures,
forms and templates can help an organisation save a significant amount
of time and effort.

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