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Contract review is an essential step in the contracting process. It provides for independent advice on the acceptability of the procurement process undertaken, and the proposed commitment of funds by the highest level authority or officer with the appropriate authority. Award is the formal decision and approval to establish a contract, e.g. services contract or purchase order, with a successful supplier, based on independent review of the procurement process within the limits of awarding authority. The award phase marks the:

  • Successful conclusion of the procurement process
  • Starting point for contract finalization and execution.

The purpose of conducting a review prior to recommending awards is to:

  • Provide an independent and unbiased review of recommendations for contracts or purchase orders.
  • Ensure that the procurement process was fairly conducted and followed the appropriate policies and procedures.
  • Confirm the necessary budget for the contractual commitment is available.
  • Confirm that the recommendation for award and terms of contract represent best value for money and that it is in the interests of the PE to select the chosen supplier.
  • Seek approval from the appropriate authority to contractually commit the PE to procure the goods, services or works.

Thorough preparation of contract recommendation and approval documents is necessary to facilitate the award process; the explanations provided should be transparent, clear and precise justifications of the process leading to the award recommendation. Transparency and due diligence are key at this stage. Deliberate omission of relevant information is as unethical as deliberately submitting wrong information; short submission documents to cut corners are neither efficient in the long-term nor in line with the procurement principles. To avoid delays and omissions, standardized templates and check lists should be used for quality control. When delays arise they are usually a symptom of poorly executed planning or the result of attempted short cuts to speed up the process

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Pre-contractual phase: Planning

Includes activities related to requirement definition and preliminary procurement planning up to issuance of bid solicitation. During this phase, various activities may arise such as:

  • Verify the requisition form for goods and services, the funding and the security requirements
  • Review the requirement and analyze options
  • Verify the statement of work
  • Identify environmental performance considerations
  • Choose the appropriate procurement instrument
  • Verify the Intellectual Property Considerations
  • Develop the procurement strategy
  • Review the non-competitive justification
  • Review the evaluation criteria
  • Develop the solicitation document
  • Determine the appropriate contractor selection methodology
  • Approval of the procurement process
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Contract activities can be split into two distinct but interdependent phases: pre-contract award/renewal and post-contract management. Contract management is command and control of the activities spanning both phases, but the potential value adding outcomes of post contract management will not be realized unless effective pre-contract management has resulted in a contract that addresses all stakeholders‘ needs with the utmost professional skill. A failure in pre-contract management will result in post-contract management time and effort being wasted on trying to resolve and correct omissions and failures of the earlier phase. The following are typical pre-contract activities:

  • Assembling/analyzing the views of stakeholders
  • Market and Spend analyses
  • Developing a supply strategy (including a risk assessment/exit strategy)
  • Drafting specifications and agreed requirements
  • Pre-qualification of potential suppliers if appropriate
  • Drafting and circulating the Invitation to Tender documentation
  • Evaluating tenders and possible supplier audits/post-tender meetings
  • Awarding of contracts

If this is a contract renewal, in addition to the above, other activities will include:

  • Reviewing the supplier performance over the contract period
  • Analyzing stakeholder perceptions of supplier performance.
  • Requesting the supplier‘s contract renewal proposals or the decision to re-tender the business.
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1. Preparation of procurement plan(s)
2. Preparation of procurement specification and initiation of the procurement process.
3. Preparation of pre-qualification/tender/bid documents.
4. Advertisement/initiation of bids e.g. print media, online, website.
5. Receiving and opening of bids.
6. Evaluation of bids.
7. Adjudication and contract award.
8. Notification of contract award both winner and losers.
9. Negotiations (where applicable)
10.Preparation and signing of procurement contract.
11.Contract administration/performance.
12.Receipt, inspection and acceptance of goods, works, services or consulting services.
13.Storage and inventory. (Disposal)

NB: Each stage must be approved by the designed authority.

Factors to Consider:
1. Budget process
2. Commitment control.
3. Finance and expenditure management and audit.

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The Procurement cycle is the cyclical process of key steps when procuring goods or services, from identification of a need and conducting market analysis through to the process of selecting the supplier, managing their performance and reviewing lessons learnt.

Potential suppliers should:
1) Have capacity to deliver.
2) Have financial capabilities.
3) References from previous work.
4) Workforce i.e. skilled labour.
5) If suppliers is socially and environmental friendly.
6) Uses best practices(ethical)

Appraisal of Suppliers.
1) Supplier visits.
2) Questionnaires.
3) Financial statements.
4) Request for demonstration or sampling.

Generic Procurement Cycle.
1. Define the need. (specification)
2. Develop contract terms.
3. Source the market. (Identify potential suppliers)
4. Appraise selected suppliers.
5. Invite quotations (R.F.Q) or tenders (ITT)
6. Analyze quotation and select most promising supplier.
7. Negotiate best value (where appropriate)
8. Award the contract.
9. Need identification.
10.Contact administration/supplier management (monitor, review and maintain performance) The procurement cycle is a series of steps that must take place to supply a production line or to replenish stock in a distribution centre.

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A specification is a description of the physical or functional characteristics of a good, service, or a construction item. It is a description of what the purchaser seeks to buy, and to which a bidder/offeror must be responsive in order to be considered for award of a contract. The more clear and precise the specifications are, the less time will be needed to respond to prospective bidder‘s/offeror‘s questions, the more compliant the responses will be, and the fewer complaints and protests there will be. Specifications have a great impact on the price. Whether the specification is open or restrictive directly affects the extent of competition.
Poorly written specifications:
1. Deter potential offerors.
2. Increases costs
3. Decreases the chance of desired results.
4. Are easily misinterpreted.
5. Are open to challenge and protests by unsuccessful bidders.
6. Increases risk.

Well-written, complete, clear, concise, specific criteria and specifications:
1. Attract many qualified offerors.
2. Are easier to evaluate.
3. Minimizes the possibility of protests.
4. Lowers risks.
5. Lowers costs.

Types of Specifications:
1. Design Specifications:
These types of specifications often have precise requirements that limit competition, prevent consideration of the latest technological improvements, and discourage innovation. Design specifications establish the material and operating requirements of goods.
2. Performance Specifications:
Performance specifications describe what a good is expected to do. There is less concern about the material composition of the good and the way it is manufactured or assembled, and more concern about its performance when put into use. The bidder/offeroris not directed to act in a certain way but is given an opportunity to use ingenuity and to innovate in order to provide a good which will perform a specific task.
3. Combination Specifications:
A single type of specification cannot always adequately describe the need. Sometimes, the design-performance combination will be the best approach, with the design requirements kept to a minimum and the performance characteristics very detailed.

A good specification should be:

  • Consistent.
  • Easy to read and understand.
  • Easy to revise, if needed.
  • Formatted with good direction.
  • Organized and categorized.
  • Concise and free of repetition.

When preparing specifications, consider:

  • Who will receive the document?
  • What do I want people to know or do?
  • How detailed and exact should my information be?
  • What questions might they ask?

Successful completion of a Procurement Plan requires action from multiple departments within a ministry or the wider public sector (procuring entity) depending on the type and nature of procurement. Roles and responsibilities of project stakeholders are provided hereunder:

The Procurement Unit
It must: Plan, manage and fully document the process to acquire goods, works and services;

  • Ensure that the procurement meets program requirements;
  • Determine the type of procurement method to be undertaken, i.e., open tendering, request for quotations, single-sourcing etc.
  • Be thoroughly familiar with the governments‘ procurement policy, procurement law, revised standard bidding documents, revised regulations and accompanying guidelines for the standard bidding documents.
  • Manage solicitation and contract award processes in a prudent and unbiased manner that fairly treats all potential vendors and bidders;
  • Ensure that contracts for goods, works and services are designed to provide the best value to government;
  • Ensure that all ministry acquisitions are consistent with policy and applicable legislation;
  • Coordination – The procurement unit must understand its roles and the roles of all other procurement entities in order to ensure smooth and orderly coordination in the approval and no objection processes.

Responsibility of the Evaluation Committee:

  1. Ensuring the tenders submitted are fully compliant with the special conditions outlined in the data sheet;
  2. Ensuring the evaluation and ranking of bidders is completed in a fully transparent manner without bias to any one bidder.

Responsibilities of the Finance/Accounting Department

  1. Ensure that funding is available as per the deliverable and payment schedule as set out in the contract.
  2. Payments are made in a timely manner.
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Customer Needs Identification is the process of determining what and how a customer wants a product to perform. Customer Needs are non-technical, and they reflect the customers‘ perception of the product, not the actual design specifications, although frequently they are closely related.

Customer Needs Identification has two major goals:
1. To keep the product focused on customer needs
2. To identify not just the explicit needs of the customer, but also the latent needs

These customer requirements should be independent of any particular product or potential solution. After all, it‘s only after identifying Customer Needs that one can begin to meet them. So with that in mind, the goal is to find out precisely what the customer wants. Here is a four step method for identifying Customer Needs:
1. Gather raw data from customers
2. Interpret the data in terms of customer needs
3. Organize the needs
4. Reflect on the Process

1. Gathering Raw Data
Intuitively, the first step must be to gather data from the customers. Without their input, it would be impossible to identify their needs. Try to learn as much as possible about the customers; the data are there to serve as guidelines for product development.
There are three recommended ways to gather data, and there is one common trap that usually provides deceptively shallow data. First, the four robust methods for collecting information:
1. Demand or ask for formal request or requisitions from the users or consumers of the items
2. Interviews: Interviews are one-on-one meetings with potential customers. Frequently they take place in the customer‘s own environment, as they are more comfortable there and there is a chance to see a problem in action.
3. Focus groups: Focus groups are like expanded interviews. The group is lead in a discussion by an interviewer. It is very common for the group to be watched by some number of unseen observers who take notes on the proceedings.
4. Observation: Seeing someone struggle with a problem is an easy way to get a general understanding of the issue. And frequently you are not the first person to identify that problem, so ―watching customers use an existing product or perform a task for which a
new product is intended‖ is a perfectly reasonable way to identify customer needs, as well as ways in which successful companies are attempting to solve them. Observation can either be passive, where one simply watches a customer work in their natural environment, or observation can be active, where one works side-by-side with the customer and gain and understanding of their problems from their perspective.

2. Interpreting Data
So how, exactly, does one transform what the customer says into something you can work with? Here is a useful process with several helpful constraints and suggestions for expressing the data.

  • Write the needs in terms of what the product has to do, not how it might do it.
  • Express the needs as specifically as the raw data
  • Use positive phrasing
  • Express the needs as an attribute of the product
  • Avoid the words must and should

3. Organizing Needs
After interpreting the data, organize them. Group similar needs together, prioritize them, etc. Decide what is truly important to the customer. Define the ―critical needs,‖ those needs which absolutely must be met before the product can be considered successful.

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Public procurement principles set the framework for managing public procurement requirements and also within which procurement practitioners must work.

So as practitioners it is important to not only know and understand these principles but to internalize them so that they serve as guiding principles in our decision making process. By integrating these principles into our work ethics the outcome will always be in line with public procurement principles and working in line with public procurement principles is especially important. Public procurement practitioners are public servants because they handle public funds. As such they are bound by an ethical code of conduct and accountable for what thy do or fail to do when managing those funds.

The following are the seven fundamental public procurement principles:
1. Transparency
2. Integrity
3. Economy
4. Openness
5. Fairness
6. Competition
7. Accountability.

These principles are the foundation of public procurement and should be addressed in the public procurement rules. They govern the management of public procurement and also set the framework for a code of conduct of public procurement practitioners and all other officials directly or indirectly associated with the public procurement process. As a practitioner you must have a clear understanding of these principles and know how to apply them to guide your day to day decision making process. By integrating these principles into your work ethics the outcome of your decisions will be in line with the goal of public procurement. As a public procurement practitioner you are a public servant. You manage public funds, are bound by an ethical code of conduct and are accountable for what you do or fail to do when managing those funds.

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Contents of a procurement plan

The procurement plan shall include but not be limited to the following information:

  • Detailed breakdown of the goods, works, consultancy es and services required;
  • A schedule of the planned delivery, implementation or completion dates for all goods, works, consultancies and services required;
  • Estimate of the value of each procurement package of goods, works, consultancies and services and the source of funding, if different from other packages;
  • Source of funding;
  • Indication of items or sections of the services, consultancies or works that can be aggregated for procurement as a single package;
  • Procurement method;
  • Details of any committed or planned procurement expenditure under existing multi-year contracts;
  • Price adjustment mechanism for long projects (those lasting more than one year); and
  • Timelines for critical stages of the delivery or implementation programme.
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Forecasting is the first, and arguably the most important step in the procurement process because it provides the opportunity to link the procurement plan to the overall business strategy and objectives of the ministry/project and the national budget. When forecasting, consideration should be given to the following:

  • Defining your procurement requirements;
  • Assessing the capacity for implementation;
  • Determining the time frame of project implementation;
  • Presenting realistic three-year budget forecast (external/counterpart funds) for project


  • Seeking approval at the Ministerial levels and the Ministry of Finance financing
  • Identifying all items that have to be procured;
  • Creating sound financial justification for procurement.

Initiating the procurement process

  • Prioritize the procurement/work plan.
  • Conduct market analysis to gain awareness of the products/services that are available for procurement.
  • Perform a make vs. buy analysis.
  • Estimate investment costs of the Procurement Plan.
  • Set clear and reasonable timelines for delivery or implementation.
  • Based on the Procurement Plan, obtain authorization to proceed from appropriate levels of approval authority (e.g., CEO or accounting Officer, Procurement, Finance, IT, etc.).

At this Step the appropriate Project Plan approvals for a Project should be obtained (e.g., ensure that sufficient funds are available and approved for the project and that agency management officially supports and or approves the project)

  • Prepare Statement of Work (SOW) which clearly identifies and documents the details of the work to be performed. The SOW should contain the following characteristics:
  • A detailed statement of the purpose, objective or goals to be undertaken by the contractor.
  • The job classification or approximate skill level of the personnel to be made available by the contractor.
  • An identification of all significant material to be developed by the contractor and delivered to the client.
  • An identification of all significant materials to be delivered by the client to the contractor.
  • An estimated time schedule for the provision of these services by the contractor.
  • Completion criteria for the work to be performed.
  • The name or identification of the contractor‘s personnel to be assigned.
  • The contractor’s work hours required to accomplish the purpose, objective or goals.
  • The contractor’s billing rates per work hour (as provided in the contract documentation).
  • Contractor’s total cost.

2. Requisition Step

  • Verify that necessary specifications have been provided.
  • Establish evaluation criteria. Write clear, concise definitions for each criterion to facilitate a good understanding of its meaning.
  • Develop a detailed, mathematically sound scoring plan that explains how proposals will be evaluated, and provides specific meaning of the scoring methodology. (For example, if a certain criteria is worth X points, a description should follow of what the points mean.)
  • Determine if pre-solicitation conference will be used.
  • Develop a change request management plan.
  • Develop a vendor payment plan.
  • Prepare solicitation package.
  • Utilize standard solicitation documents;
  • Review by procurement team and, with final approval of the RFP by the responsible approval authority, send solicitation to the respective Donor or Approval Board for review and approval

3. Solicitation – Selection Step

  • Issue the Request for Proposal document (RFP) via advertisement or through selective tendering.
  • Answer questions received from vendors in a public forum.
  • If necessary, prepare for vendor product demonstrations, or oral presentations.
  • Form an Evaluation Team.
  • Receive and evaluate Technical Proposals (by Evaluation Team)
  • The Evaluation Team Should:
    Gather the facts,
    Develop objectives (min-max positions);
    Seller minimum willingness to accept,
    Buyer maximum willingness to pay.
    Evaluate each vendors competitive position,
    Define your strategy and tactics,
    Perform a complete cost analysis,
  • Receive and evaluate financial proposals using scoring method to select Best Value.
  • Make selection recommendation to the responsible Procurement Officer.
  • Procurement Officer reviews recommendation and drafts contract then forwards to the respective Donor or relevant authority for review and approval.
  • Agency awards and signs contract, then issues procurement order once the requisite approval is obtained.

4. Contract Administration Step
The purpose of the Contract Administration Step is to ensure that the contractor (vendor) and the products or services delivered comply with the contract requirements. Each project should be assigned a Contract Administrator, who will perform the following functions:

  • Interpret specifications.
  • Ensure that quality of the product or service is maintained
  • Manage product warranties.
  • Manage sub-contractors (if required by the contract).
  • Direct change management:
    Administrative changes,
    Budgetary changes,
    Contract modification (if necessary) and associated change order (get proper approvals),
    Manage smaller, incidental contracts for work associated with the project.
  • Resolve contract disputes:
    Part of the work may be accepted, or
    All of the work may be rejected, or
    Work may be accepted with provisions for corrections in the future.
  • Completion of the project:
    Ensure that all project requirements are complete per contract,
    Product is technologically out of date (contract language should guarantee current technology),
  • Terminate the contract:
    Default of contract:
    o Contractor fails to perform any provision of the contract including:
  • Failure to deliver by scheduled date,
  • Failure to make progress (endangers performance of the contract).
    Termination for Convenience (e.g., project canceled)
    Document contract problems and file formal vendor complaint with Agency Procurement Office, e.g., liquidated damages, opportunity cost, etc. (if necessary).
  • Manage contract risk associated with the project.

5. Contract Closeout Step

  • Verify product and services meet acceptance criteria.
  • Complete fiscal activities:
    o Approve final payment (notify appropriate accounts payable office),
    o Update project and activity records,
    o Close procurement order (notify appropriate procurement office),
    o Update contract file.
  • Archive contract file (include completed Procurement Plan with Project Plan).