PROCUREMENT PROCEDURES IN KENYA

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PROCUREMENT
POLICY/PROCEDURES

• MARCH 2014
• Presented by Wilson Aviasa

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(No Transcript)
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Uwezo Fund

• Uwezo Fund is a youth and womens fund which has
  its genesis in the pledge His Excellency the
  President made to allocate the Kshs. 6 billion
  that was meant for the presidential run-off to
  youth and women groups
• Objectives
• Expand access to finance through grants and
  credit to promote youth and women businesses and
  enterprises at the constituency level, thereby
  enhancing economic growth towards the realization
  of the goals of Vision 2030
• Generate gainful self-employment for Kenyan youth
  and women
• Model an alternative framework in funding
  community driven development.

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Ours to provide the .
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That will enhance.
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And the youth shall undertake to formulating and
customising their OWN
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.and have sustainable fulfilling profitable
projects
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The youth will be able to
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Procurement department

• A body corporate created with the purpose of
  ensuring its procurement procedures are
  strategically aligned with the procurement Act in
  as was established under the ACT are complied
  with under the leadership of
• An Accounting officer (Director) who has the
  overall responsibility of ensuring the
  procurement units within Uwezo Fund fulfill its
  obligation under the Act and regulation thereof
  stipulated.

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PROCUREMENT ENTITY

• WHO IS THE PROCUREMENT ENTITY?
• UWEZO FUND IS A Public Entity Making A
  Procurement To Which The Act And Regulation
  Apply.
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• This includes any body that utilizes public
  assets in any form of contractual undertaking
  including
• Public private partnerships
• Companies owned by public entities to carry out
  functions otherwise owned by public entities.

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KEY FUNCTIONS OF PROCUREMENT ENTITIES IN UWEZO
FUND

• Carry out its procurement and disposal activities
  in accordance with the public procurement and
  disposal Act and Regulations.
• Ensure compliance, among other functions
  established,
• Procurement committee,
• Tender committee,
• Disposal committee,
• Inspection and acceptance committee,
• Ad hoc,
• Opening and valuation committees.
• Also established are documented procurement
  procedures.

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The purchasing documents

• Purchasing stores documents utilized
• The Uwezo Fund Store Requisition Order (SRO)
• The Uwezo Fund Purchase Requisition Order (PRO )
• Uwezo Fund Quotation Forms (RFQ)
• Uwezo Fund Local Purchase Order (LPO)

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Uwezo Fund Store Requisition Order (SRO)

• The purpose of this document is
• To notify purchasing the department that a need
  exists and the specifics of the need.
• To authorize issuing from the store or purchasing
  the requirements.
• To provide evidence as to what was requisitioned,
  when and by whom
• To give reasons why the requisition is being
  made.

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Uwezo FundPurchase Requisition Order (PRO )

• The purpose of this document is
• Triggers the Uwezo Fund purchasing process to
  purchase goods services through approved
  methods (quotations/ tender)
• Co-ordinate the Uwezo Fund authorization process
• Acts as evidence to support the reasons why there
  is need to procure

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Uwezo Fund Quotation Forms

• Purpose of this document is
• Obtain information from prospective Uwezo Fund
  suppliers relating to
• Price
• Quality
• Delivery and
• Terms of business.
• The enquiry is accompanied by drawings,
  specifications or samples buyers terms and
  conditions of service.

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UWEZO FUNDLOCAL PURCHASE ORDER (LPO)

• Purpose of this document is
• Gives details of the contract in Terms of
• I.E. P.D.C
• Price
• Delivery applicable the
• Condition on which the order is placed .
• Signifies a legal binding contract between the
  Supplier Uwezo Fund Purchasing entity

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UWEZO FUNDPROCUREMENT COMMITTEE AD HOC
COMMITEES

• The Uwezo Fund Procurement committee is composed
  of
• Procurement committee
• Tender committee
• Disposal committee
• Inspector/Accepting committee
• The Uwezo Fund Ad Hoc Committee is composed of
• Quotation opening committee
• Tender opening committee
• Valuation opening committee

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Note

• All the members of the various committees are
  appointed by the Director/CEO in writing or the
  head of the procuring entity.
• All the committees except disposal committee are
  composed of a chairman, secretary two other
  members.
• Let us now have a look at the various in
  committees in Uwezo Fund and their relevant
  mandates

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TENDER COMMITTEE

• Uwezo Fund Tender Committee in the procuring
  Entity has a wide range of functions among which
  are
• Reviewing ,verifying ascertaining that all
  procurement disposal have been undertaken in
  accordance with the Act Regulation.
• Approving the selection of the successful tender
  or proposal
• Awarding procurement contracts
• Ensuring that funds are available for the
  procurement under consideration
• Approving the list of tenders in case of
  Restricted Tendering ,prequalified persons list
  of persons to be given request for proposals
• Approving amendments of contracts previously
  awarded by the Tender Committee

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UWEZO FUNDPROCUREMENT COMMITTEE

• Committee comprises
• A secretary 3 other members also appointed by
  the Accounting Officer or the head of the
  Procuring Entity.
• Procurement Committee are responsible for
  contracts below the Tender Committee threshold.
• Ensures that the selection of companies invited
  to submit quotations are based on fair
  competition in compliance with legal regulatory
  frameworks for the supply of goods works
  services.

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UWEZO FUNDTENDER OPENING COMMITTEE

• Committee comprises
• Least 3members, one of whom shall not be involved
  in the processing or evaluation of the tenders.
• This committees main functions are
• Open all tenders received within appointed time
• Sign each tender on one or more pages as
  determined by the committee initial in each
  tender against quotations of the prices any
  modification or discounts
• Prepare tender opening minutes, signed by each
  member SETTING the record of the procedure
  followed in opening tenders particulars of
  those submitting the tender or their
  representatives who attended the opening of
  tenders.

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UWEZO FUNDEVALUATION COMMITTEE

• Committee comprises
• A chairman at least two other members none of
  whom may be a member of the Tender Committee.
• All members are appointed by the Accounting
  Officer or the head of the procuring Entity upon
  recommendation by the procurement Unit.
• Uwezo Fund Evaluation Committees function
• Carry out the technical and financial evaluation
  of tenders or proposals.

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UWEZO FUNDInspection and Acceptance Committee

• Committee comprises
• A chairman and at least two other members
  appointed by the Accounting Officer or the Head
  of the procuring Entity on the recommendation of
  the procurement unit.

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(Cont)The main functions of this committee are

• Inspect where necessary ,test goods received
• Inspect review good, works or services accept
  or reject them on behalf of the PE immediately
  after delivery.
• Ensure that correct quantities are received
• Technical standards are met
• Timely delivery or completion any anomalies
  duly noted including all required manuals or
  documentations are received
• Issuance of interim or completion certificates or
  goods received notes, as appropriate.

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UWEZO FUNDDisposal Committee

• Committee comprises
• Least five (5) members
• Officer in charge of finance
• Head of procurement Unit who shall be the
  Secretary
• Head of the accounting department 2 heads of
  end-user department.
• The committee selects a chairperson from its
  members meets within 14 (fourteen) days of its
  appointment subsequently at least once in every
  quarter

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(Cont) Disposal Committee key functions

• Committees main function is
• To recommend the best practice method of
  disposing of unserviceable, obsolete or surplus
  stores or equipment.

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PROCUREMENT OF WORKS

• This is a standard tender document for
  procurement of work which will be used by the
  Uwezo Fund in the procurement of works i.e.
• Building associated Civil Engineering Works
  Electrical
• Mechanical Works
• Including Erection on site)
• Other standard tender documents include
• Procurement of Works/Plant (Turnkey projects),
  Procurement of Insurance Services
• Procurement of Individual Professional
  Consultants
• Letting
• Leasing
• Licensing
• Tenancy
• Franchise and Management Contracting
• Prequalification Document (Works, Heavy
  Equipments, Supply and Installation Contract)
• Sale of Disposal Stores and Equipment

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UWEZO FUNDProcurement procedures

• Purchase transaction is made as soon as a need is
  determined for some article or services. It is
  deemed complete when the need is met payments
  have been made.

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(Cont) Procurement procedures

• Store Regulation Order SRO is filled in
  duplicate by the requisitioning department.
• SRO is forwarded to the Head of the user
  Department for authorization.
• After the confirmation, the SRO is forwarded to
  the stores for issuing of stores.
• If it is a service order or a non-stock item it
  will be forwarded to the buying section.

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(Cont) Procurement of works process

• For Example.. Food
• Necessity demands once in a while the preparation
  of call off contract for food stuff say
  Vegetables fruits, dry goods, etc. in such
  cases user departments prepare projected
  consumption over a certain period e.g. a month or
  so that the Uwezo Fund can benefit from bulky
  purchasing.
• The above procedure then applies.
• The only difference is that quantities on the SRO
  are scheduled delivered staggered over the
  projected period.
• Orders are then raised as when required while
  taking into account usage.

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UWEZO FUNDPurchasing procedure
1. Receipt of the approved annual procurement plan 2. Procurement separates all approved purchase into quarters 3. All purchase requests are processed immediately they are received
4. Procurement department obtains competitive quotations from at least four prequalified supplier who stock the required items. 5. Procurement officer checks authenticity of the quotation endorse them before handing them over to the supplier 6. All quotations leaving the institute are numbered recorded in the quotations register. The register is kept in the procurement office
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(Cont) Purchasing procedure
7. Quotations are then analyzed either by the evaluation teams /or Procurement or Tender committees the following factors considered in selecting the supplier the award decision 7. Quotations are then analyzed either by the evaluation teams /or Procurement or Tender committees the following factors considered in selecting the supplier the award decision 7. Quotations are then analyzed either by the evaluation teams /or Procurement or Tender committees the following factors considered in selecting the supplier the award decision
I. Prices II. Reliability, integrity reputation III. Quality, production capacity flexibility
IV. Credit Terms Price VI. Delivery period ability to meet required deadlines
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(Cont) Purchasing procedure
8. LPO is prepared serially by the procurement unit and copies of the analyzed quotations other supporting documents attached. The LPO is signed by the following persons before being fully approved by the director. Procurement manager Chief Finance Officer Director 8. LPO is prepared serially by the procurement unit and copies of the analyzed quotations other supporting documents attached. The LPO is signed by the following persons before being fully approved by the director. Procurement manager Chief Finance Officer Director 8. LPO is prepared serially by the procurement unit and copies of the analyzed quotations other supporting documents attached. The LPO is signed by the following persons before being fully approved by the director. Procurement manager Chief Finance Officer Director
9. LPO is approved registered, returned to the procurement unit who distributes it as follows 9. LPO is approved registered, returned to the procurement unit who distributes it as follows 9. LPO is approved registered, returned to the procurement unit who distributes it as follows
White copy- sent by post or by hand delivered to the supplier. Pink copy- sent to accounts for payment together with supporting documents. Blue copy sent to the store Book copy- kept in the book
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UWEZO FUNDPURCHASING CEILINGS The following
ceilings apply for goods services
AMOUNT IN (KSH) METHOD APPROVED BY AWARDED
30,000 below Cash PO, Director Procurement
30,000-500 000 Quotations/LPO/ cheque Pc, PO, Director Procurement committee
500 000-1 million Quotations/LPO/ cheque TC, PO, Director Tender committee
A above 1million ( Goods) a above 2 (million services) Restrictive tenders/ LPO cheque TC,PO FO, Director Tender committee
A above 4,000,000 Open tenders/LPO/ Cheque TC , PO, FO, Audit, Director Tender committee
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NOTE

• Goods bought through newspaper advertising, users
  normally give the procurement unit the following
  duration to finalize their request.
• Goods and services 21 days
• Works and consultants 28 days
• Supporting documentation price quotations are
  maintained as part of the purchasing file.
• In all competitive procurement, the award is made
  by the procurement tender committees to the
  supplier offering the best bid in terms of price
  quality quantity time deliveries.
• Award is given to the lowest bidder subject to
  quality, delivery and capacity.
• Accordingly the Procurement Disposal Act 2005,
  purchasing transactions are not to be split or
  fragmented in order to avoid a procurement
  method.

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SUMMARY OF ORDERING PROCEDURE
Step 1 User initiates request (through purchase request or procurement plan)
Step 2 The request is forwarded to the head of Department for approval
Step 3 The Director authorizes the request
Step 4 Procurement section floats the quotations
Step 5 The quotation are taken to the various committee e.g. Tender committee or Procurement Committee for deliberation and awards
Step 6 Director authorizes the minute
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(Cont) SUMMARY OF ORDERING PROCEDURE
Step 7 Writing of local Purchase Order (LPO) by the procurement section. The LPO/LSO is forwarded to the Chief Finance Officer for allocation Of vote head and availability of funds. Signing of LPO/LSO by the Procurement Officer The LPO/LSO is forward to Audit Unit for auditing The LPO/LSO is forwarded to the Director for authorization. LPO/LSO is issued to the supplier or contractor.
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(Cont) SUMMARY OF ORDERING PROCEDURE
Step 8 The supplier delivers the items and the items are inspected by the Inspection Team.
Step 9 Payment is done by the Accounts Section.
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PROCUREMENT METHODS

• The Uwezo Fund Procurement Policy requires open
  competition by prospective suppliers, however
  circumstances may dictate that other methods to
  be used.
• The Public Procurement and Disposal Act
  regulations permits the use of the following
  methods of acquisition of goods, works
  services

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Methods of acquisition of goods, works services
Restricted Tendering Direct procurement
Request for proposals Request for quotations
Single sourcing Open tender
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PROCUREMENT ( PRE-AWARD FUNCTIONS)

• These are activities that take place up to the
  award of contract but before issuing of an order
  depending upon the complexity of the procurement,
  they include

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Activities
Receiving by the procurement department requisitions or procurement requests describing the goods/works and services needed. Identifying potential source (Supplier list) and making a preliminary evaluation of the capability of the potential sources. Issuing invitations to Quote/tender or otherwise asking for expressions of interest in doing business. Communicating with potential candidates, clarifying terms, establishing working relationships. Evaluating the Quotation/tenders or proposals, analyzing price cost, conducting negotiation as appropriate (where allowed). Awarding the contract to the candidates found most responsive competent.
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PROCUREMENT (POST-AWARD FUNCTION)

• These are activities that may take places after
  the award of the contract, depending on the
  complexity of the procurement.
• They include

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Activities
Order preparation placement Modifying the order/contract to correct errors or accommodate unforeseen developments. Adjusting prices Conducting inspections assuring quality contractors performance. Following up expediting Handling discrepancies or deficiencies in the goods, work services provided. Dealing with default, termination of the contract for default. Handling claims, disputes appeals. Administering payment provisions Auditing the procurement.
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RECORDS RETENTION POLICY

• Retention of purchasing records is in accordance
  with the Public Procurement and Disposal Act
  2005. All documents are kept for a period of 6
  years.

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TENDER COMMITTEE

• Note that ALL Stock, Non-stock Capital Items
  above Ksh.1,000,000.00 1Million shillings are
  subjected to the tender process. This excludes
  staff employment.

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In the process of adjudicating the tenders, the
committee considers the following
Matters brought before the committee have gone through proper procurement procedure. That the user Departments have been involved in the drawing up of technical Specifications, in the Evaluation of the tenders. Authority to incur Expenditure has been obtained from the Chief Executive Officer through the Finance Director That the final recommendation for award will deliver value for money to the Institute. Negotiations with prospective suppliers have been carried out with the aim of procuring the best quality item or services at the most competitive price. Submission of the minutes of their deliberations have been presented to the Director for review conclusion before formal signatures by the Tender Committee. Periodically review supplier performance adjudicate on request for price variation.
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THE TENDERING PROCESS

• All stocks, non-stock and capital items above
  Ksh. 1, 000, 000, 00. Are subjected to the tender
  process. This excludes staff employment.
• The user department makes an application to the
  Director indicating its requirement either on the
  procurement plan or other prescribed format.
• The PO finds out from existing data or the market
  availability of the items or services their
  estimated cost.
• The user department then uses the outcomes of the
  enquiry to seek from Director Authority to Incur
  Expenditure.

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(Cont) The Tendering Process

• If Director grants authority to incur expenditure
  ON the Procurement managers specifications in
  consultation with the Director seeks for either
  open or closed tenders. An open tender is open to
  any supplier while a closed tender will open to a
  prequalified list of suppliers.
• The tender submissions are opened in the presence
  of the members of the Tender Opening Committee
  who sign on the price schedule of each submitted
  tender.
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• The secretary then prepares appropriate Technical
  and Financial evaluation schedules bid
  documents prepares an agenda for the Tender
  Committee.
• It is important that the Secretary at this point
  seeks the recommendations of the Evaluation
  Committee summarizes the views for the Tender
  Committee.

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Format of the summary made by the secretary

• A brief description of the item for discussion
• The submitted tenders their price quotations
• Tender evaluation committees recommendation

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(Cont) Summary made by the secretary

• The secretary clearly guides the committee
  through the evaluation reports
• Based on the facts before it, the committee makes
  recommendations.
• The secretary shall then prepare the minutes of
  the meetings, whose format is as follows
• A brief description of the items discussed
• Technical Evaluation Committee recommendations
• The price quotations
• Departmental comments
• Tender Committee deliberations
• Tender Committee recommendations

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(Cont) Summary made by the secretary

• A copy of the minutes are then be forwarded to
  the Director for approval.
• The minutes are confirmed during the next Tender
  Committee meeting any items not approved
  brought up as Matters Arising.
• The secretary always consults with the Chairman
  of the Tender Committee in preparation of the
  Agenda.
• The Tender Committee meets twice a month but the
  Chairman or secretary may at any time convene
  emergency meeting when urgent matters need to be
  discussed.

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CONTRACTS

• After the Director has approved the minutes, the
  Procurement manager then prepares letters of
  acceptance for signing by the Director.
• On the receipt of confirmation from the
  supplier, the Procurement manager prepares
  contracts.
• Contracts are not issued before 14 days to allow
  appeals by prospective suppliers where necessary.

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THANK YOU FOR TAKING YOUR TIME

• The processes and the many control options
  deserve further study, and many other sources of
  information on this topic are available.
• And, finally,..

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And YES .