Click to edit Master title style Click to edit Master text styles Second level Third level Fourth...

Click to edit Master title style

• Click to edit Master text styles

• Second level

• Third level

• Fourth level

• Fifth level

1

IRD Procurement Policy:

Highlights

Current IRD Procurement Policy and Forms may be found on IRD Portal http://portal.ird.org/

March 2011



• Second level

• Third level

• Fourth level

• Fifth level

2

This Policy Overview Presentation is intended for all IRD Procurement,

Contracts & Grants, Finance, Compliance, Audit and other personnel, charged with administering compliance

with IRD’s Procurement Policy.

Please also review IRD’s Procurement Basics Presentation for general

knowledge and understanding of basic procurement principles.



• Second level

• Third level

• Fourth level

• Fifth level

3

Objectives of IRD’s Procurement Policy

• Comply with Donor Regulations• Ensure procurement of goods and services is

driven by an approved budget• Achieve best value for the IRD and its

donors in providing consistent and effective internal controls

• Establish a selection process for vendors that is open, transparent, fair and consistent

• Promote socio-economic diversity amongst selected vendors where required or otherwise desirable to promote programmatic objectives

3



• Second level

• Third level

• Fourth level

• Fifth level

4

Authority

• This policy applies to all of IRD’s procurements, projects and organizations

• Policy Changes are Approved by the Policy Committee which meets quarterly

• Policy Deviations for specific project situations must be approved by IRD’s Director of Contracts and Grants in writing and kept on file

4



• Second level

• Third level

• Fourth level

• Fifth level

5

Definitions

• Vendor/Subcontractor – means companies or individuals who sell their services or goods to IRD under this Procurement Policy and applicable Donor Procurement Regulations

• Vendor Contract/Subcontract – any legally binding document between IRD and Vendor to procure services or goods, including but not limited to purchase orders, service agreements, sales orders etc.

• Vendor Contracts DO NOT include sub-grants

5



• Second level

• Third level

• Fourth level

• Fifth level

6

Eligibility of Vendors

• Products or services from restricted foreign policy countries (Iran, Cuba, North Korea and Syria) may not be procured unless allowable by the terms and conditions of the client award document and in some cases, separately approved by U.S. government authorities.

• IRD shall only award to responsible contrac tor s possessing the ability to perform successfully under the terms and conditions of the procurement. Consider ation will be given to such matters as the integrity of the contractor, compliance with public policy, record of past performance and adequate financial and technical resourc es.

• IRD will not make an award or permit an award at any tier to any party that is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal procurement activities.

• IRD will require all proposed contractors at any tier to certify whether they have been excluded from participa tion in Federal procurement activities.

• Before award, IRD will consult at the minimum the US Government Excluded Parties List at www.epls.gov as well as other available resources in the country of performance as appropriate, and document the contract file accordingly. See Appendix A of the Procurement Policy for more information.

6



• Second level

• Third level

• Fourth level

• Fifth level

7

Eligibility of Vendors

• IRD complies with USAID additional Eligibility Requirements, discussed later in this presentation

• It is IRD’s policy to comply with export controls of the countries in which IRD has operations. In furtherance of this policy, IRD shall request from the vendor information about the acquired item’s export classification

• All subcontracts/vendor contracts and modification at or over $25,000 must be reported to HQ Contracts & Grants Office, by completing Form A.

• All cost reimbursement, time and materials or labor hour subcontracts/vendor contracts of $500,000 (for US companies) and $300,000 (non US companies) may require a pre-award audit conducted by IRD’s audit unit. HQ Contracts & Grants Office will advise if such audit is necessary before such procurements may proceed

7



• Second level

• Third level

• Fourth level

• Fifth level

8

Internal Approvals• All procurements of services or goods must start with a signed Requisition

Form, prepared by the requesting employee. The form must be signed by an authorized Finance Representative certifying that funds are available for such procurement

• The following buying personnel are authorized to sign procurement action documents where the total dollar value, is that shown below:

*Authorized amount may be raised for individual projects/COPs by blanket DOA to be kept on file

8

Activity Amount By Whom

Awarding/Signing of contracts, grants, other agreements, and amendments

Up to $25,000 Chief of Party/Country Director or designee*

Awarding/Signing of contracts, grants, other agreements, and amendments

$25,000 or more IRD President



• Second level

• Third level

• Fourth level

• Fifth level

9

Client Approval Requirements

• Under USAID Grants and Cooperative Agreements, the following approvals may be required prior to any procurement action:

• Prior Approval by Agreement Officer is required for all sub-awards (sub-grants of any value) and vendor contracts (of any kind or value) not approved by name in the program description and approved budget of the prime award.

• Prior Approval by Agreement Officer is required to purchase all equipment or capital expenditure. Equipment is defined as “non-expendable, tangible personal property having a useful life of more than one year and acquisition cost of $5,000 or more”. Capital Expenditure is defined as acquisition cost of capital assets (equipment, land, buildings), or expenditure to make improvements to capital assets that materially increase their value or useful life.

• Prior approval of Agreement Office is required for purchase of all Restricted Goods (agricultural commodities, motor vehicles (including motorcycles), pharmaceuticals, pesticides, used equipment, US Government excess property or Fertilizer). See also Eligibility and Source, Origin and Nationality Requirements.

• 22CFR226.48 Contract Provisions for contracts issued under Grants and Cooperative Agreements requires that all construction contracts/subcontracts of $100,000 or more bear bid (5% of bid price), performance (100% of contract price) and payment (100% of contract price) bond guarantees. This provision may only be waived by the Agreement officer and must be obtained together with approval of such contract/subcontract.

9



• Second level

• Third level

• Fourth level

• Fifth level

10

Client Approval Requirements

Under USAID Cost Reimbursement and T&M Contracts, the following approvals may be required prior to any procurement action:

• Prior Approval by Contracting Officer is required to purchase all equipment or capital expenditure. Equipment is defined as “non-expendable, tangible personal property having a useful life of more than one year and acquisition cost of $5,000 or more”. Capital Expenditure is defined as acquisition cost of capital assets (equipment, land, buildings), or expenditure to make improvements to capital assets that materially increase their value or useful life.

• All Fixed Price subcontracts/purchase orders at or over $150,000 in value require consent to subcontract from USAID’s Contracting Officer

• All Other Types of contracts require written consent regardless of value

10



• Second level

• Third level

• Fourth level

• Fifth level

11

Competition RequirementsGoods and Services

• Sole Source Procurements may only be authorized in exceptional circumstances and MUST be documented using Forms D & E with Relevant Attachments specified in those forms

• Procurement of items or services under $500 in total value does not require documented competition. Chief of Party, Project Manager or Division Director certifies that the price is reasonable by signing/approving Requisition Form

• Items or Services $500 - $3,000: may be procured based on documented best value determination, which may be in a form of recorded oral quotes, published prices, market surveys etc. A simple “Memo to File” may be used to document best value. No Purchase Order or Vendor Contract is required, but may be used if desired. Invoices must specify Item or Service in detail if no Purchase Order or Vendor Contract is used

• Items or services $3,000 - $150,000: IRD shall provide specifications to the suppliers/contractors and seek a minimum of three (3) offers/proposals or quotes in writing. Signed faxed or emailed (scanned) quotes are acceptable. The selection process must be documented using Forms D and E and relevant attachments. A purchase order or a Vendor Contract shall be issued to the successful vendor

• Items or services $150,000 and above: A Request for Proposal (RFP) or Request for Quotation (RFQ) shall be issued to either a pre-qualified short list of a minimum three (3) vendors/suppliers or as an open tender, posted on internet or print media. Under a short list offering, a minimum of two 2 offers must be considered. In cases where only one (1) offer is received, the RFP shall be posted to broader open tender through internet or print media. The selection process must be documented using Forms D and E and relevant attachments. Purchase Order or Vendor Contract must be issued

11



• Second level

• Third level

• Fourth level

• Fifth level

12

Competition RequirementsLeases

• All Leases must have a Memo to File providing explanation of how the lease negotiated, comparative market analysis to document best value/price and explanation of only one source considered.

12



• Second level

• Third level

• Fourth level

• Fifth level

13

Competition RequirementsModifications

• All Modifications to Purchase Orders or Vendor Contracts must have a Memo to File explaining the reason for modification and explanation of price/cost adjustments if any

• All Modifications at or over $25,000 must have a separate Form A completed and sent to HQ

• All Modifications at or over $150,000 must be treated as Sole Source Procurements and have a new Form D & E completed with attachments explaining why no competition was obtained and why the price/cost change is reasonable

13



• Second level

• Third level

• Fourth level

• Fifth level

14

Illustrative Process for Procurements of $500 - $3,000

Start with Approved Requisition Form

Step 1

Collect quotes from a minimum of 3 sources – may be done by phone, websites, catalogues etc.

Step 2

Choose the cheapest or best value option. If not the cheapest, an explanation of best value determination must be provided.

Step 3

Document your process and choice in a “Memo to File”. Attach quotes, catalogue or website quotes etc.

Step 4

Obtain Donor Approval is necessary

Step 5

Prepare a Contract or Purchase Order if using or make the order via email or phone

Step 6

Document receipt of goods/services (Goods Receipt Form/Approved Technical Reports etc.)

14



• Second level

• Third level

• Fourth level

• Fifth level

15

Illustrative Process for Procurementsof $3,000 - $150,000 and above

Start with Approved Requisition Form

Step 1

Identify a short list of a minimum of 3 (three vendors) or Identify Need for Open Tender

Step 2

Determine type of Contract/Purchase Order to be awarded (Fixed Price, Cost Reimbursement, Time & Materials)

Step 3

Prepare & Distribute Request for Proposal (RFP) or Request for Quote (RFQ)

Step 4

Evaluate received proposals. Document evaluation and determine winning bid. Use Forms D and E to document selection and price/cost reasonableness

Step 5

Obtain Donor Approval if necessary

Step 6

Prepare a Contract or Purchase Order in consultation with Contracts & Grants Specialist

Step 7

Obtain DOA and Issue an award

Step 8

Document Receipt of Goods or Services (Goods Receipt Form/Approved Reports etc.)

15



• Second level

• Third level

• Fourth level

• Fifth level

16

Form D: Source Selection Justification

Identify if the Selection is Competitive or Sole Source

Note: Sole Source Procurements MUST an exception and used infrequently

If the Procurement is Competitive, Form E + Selection Memorandum including Price/Cost Analysis Justification must be attached.

If the Procurement is Sole Source, identify reasons and provide detailed explanation. Attach a Selection/Negotiations Memo and Price/Cost Analysis which provides context on how the price was established and why it is fair and reasonable. See Form E for guidance.

16



• Second level

• Third level

• Fourth level

• Fifth level

17

Competitive Procurements:

Form E + Selection MemorandumIf the Procurement is Fixed Price or Fixed Unit Price or Fixed Daily Rates (T&M) and Competitive, and the award is to the lowest bidder, the price is already justified through competition. Complete Form E and attach a Selection Memorandum describing the competition and selection; also attach copies of all bids/proposals or make sure they are available in the procurement file.

If the award is not to the lowest bidder, a Selection Memorandum must explain why the higher price is worth paying for the selected bidder, i.e. best value selection.

For example: The Technical Score is higher in the areas which show better understanding of the work or propose solutions which are innovative and create long lasting benefits above and beyond requirements etc. A trade off analysis may be performed to show how the higher price is better value in the long run.

17



• Second level

• Third level

• Fourth level

• Fifth level

18

Competitive Procurements:

Form E + Selection Memorandum

If the Procurement is Cost Reimbursement and Competitive:

Individual Elements of the proposed costs

must be evaluated between bidders to establish the best value.

Use Form E as guidance for evaluation and attachments.

For example : Salaries may be compared to show the lowest bidder rates as advantageous. However, Cost Realism must be performed to show that the bidder can reasonably be expected to implement the required scope at the proposed cost estimates and not require adjustment in future or sacrifice quality.

18



• Second level

• Third level

• Fourth level

• Fifth level

19

Sole Source or Single Bidder: Form E + Single Source Memo

For Sole Source Procurements or Procurements where only one bid is received a Price/Cost Analysis must be performed to establish that the price is reasonable.

Fixed Price Procurements on single source basis (Sole Source or Single Bidder) will require comparison with the price paid for similar items in the past, published rates for similar products or services (for example commercial off-the-shelf items), or other justification. See Form E and Sample Sole Source Justification.

Cost Reimbursement Procurements on single source basis will require similar analysis, but done on individual cost items in the proposal/bid.

For example: IRD previously competed procurement of computers and received the cheapest quote at $3,000. This sole source procurement is $2,900 per computer, therefore it is within the price range paid for similar products in the past.

19



• Second level

• Third level

• Fourth level

• Fifth level

20

Documentation

• Procurement files must contain all minimally required information on competition for all procurements of $500 or more.

• IRD Procurement Policy provides a detailed illustrative list of additional procurement documentation to be kept for procurements of $3,000 or more

20



• Second level

• Third level

• Fourth level

• Fifth level

21

USAID : Source, Origin, NationalityProcurements of $5,000 or more

Commodity Procurements Eligibility = Nationality of Supplier + Origin and Source of Commodity

SUPPLIER must comply with prime instrument Geographic Code for Nationality; must be checked against debarment list on www.epls.gov

COMMODITY (Any Material, Article, Supply, Goods, or Equipment) must comply with prime instrument Geographic Code for Source and Origin

Source

Source means the country from which a commodity is shipped to the cooperating country or the cooperating country if the commodity is located therein at the time of the purchase. Where, however, a commodity is shipped from a free port or bonded warehouse in the form in which received therein, ``source'' means the country from which the commodity was shipped to the free port or bonded warehouse

Origin

Origin means the country where a commodity is mined, grown or produced. A commodity is produced when, through manufacturing, processing, or substantial and major assembling of components, a commercially recognized new commodity results that is significantly different in basic characteristics or in purpose of utility from its components

21



• Second level

• Third level

• Fourth level

• Fifth level

22

USAID : Source, Origin, Nationality

Procurements of $5,000 or more

Services Procurements Eligibility = Only Nationality of Supplier

SUPPLIER must comply with prime instrument Geographic Code for Nationality; must be checked against debarment list on www.epls.gov

22



• Second level

• Third level

• Fourth level

• Fifth level

23

USAID Eligibility :

Other Restricted Goods

Certain commodities (e.g., agricultural commodities, motor vehicles, including motorcycles, pharmaceuticals, contraceptives, pesticides, used equipment, fertilizer) by their very nature are restricted from purchase under the terms of the prime contract between IRD and USAID. Before such purchases can be made, written prior approvals must be obtained from the official authorized to approve such purchases – normally Agreement or Contract Officer. These written approvals should be documented and maintained for possible audit or review

Other items (e.g., military equipment, surveillance equipment, commodities and services for support of police and other law enforcement activities, abortion equipment and services, luxury goods, gambling equipment and weather modification equipment) are ineligible for purchase.

23



• Second level

• Third level

• Fourth level

• Fifth level

24


Additional Requirements for Procurement of Vehicles and Leases of

Vehicles (180 days or longer)

Vehicles if approved for purchase MUST be manufactured in the US unless a waiver is

approved by USAID

Please always check with your Contracts & Grants specialist when purchasing or leasing

vehicles under USAID programs

24



• Second level

• Third level

• Fourth level

• Fifth level

25

USAID : Source, Origin, NationalityWaivers

• Any individual transaction not exceeding $5,000 (not including transportation) does not require a waiver. In no event, however, shall procurement be from a foreign policy restricted country

• Appendix B of the Policy describes procedures for obtaining waivers

• If IRD’s prime instrument with USAID authorizes only 000 (US), 899 or 941 as the Geographic Codes for procurement, but contains AIDAR clause 752.225-71 Local Procurement or Mandatory Standard Provision “Local Procurement”, some commodities and services may be procured in the cooperating country . If the Geographic Code authorized in the prime instrument is 935 (Free World), then cooperating country is included in eligible countries list.

25



• Second level

• Third level

• Fourth level

• Fifth level

26


Existing Blanket Waivers – Local Procurement

• Under the blanket waiver issued by USAID on November 24, 2010 establishes (per each USAID award: contract, grant or cooperative agreement) a single $5 million threshold for local procurement as follows:

• up to $5 million of commodities of U.S. origin from local suppliers; OR

• up to $5 million of commodities of geographic code 935 origin from local suppliers; OR

• up to $5 million of professional services contracts from local suppliers; OR

• any combination of these commodities and professional services not to exceed $5,000,000.

• Please note that this waiver does not apply to restricted commodities.

• Under USAID Fixed Price Prime Construction Contracts you may procure locally available services and materials of any value.

26



• Second level

• Third level

• Fourth level

• Fifth level

27


Waivers – Local Procurement

In addition, the following commodities and services which are only available locally may be procured locally:

•Utilities, including fuel for heating and cooking, waste disposal and trash collection

•Communications--telephone, telex, facsimile, postal and courier service;

•Rental costs for housing and office space

•Petroleum, oils and lubricants for operating vehicles and equipment

•Newspapers, periodicals and books published in the cooperating country

•Other commodities and services (and related expenses) that, by their nature or as a practical matter, can only be acquired, performed, or incurred in the cooperating country, e.g., vehicle maintenance, hotel accommodations, etc

27



• Second level

• Third level

• Fourth level

• Fifth level

28

ADDITIONAL INFORMATION AND QUESTIONS

Please contact your Contracts & Grants Specialist or Director of Contracts and

Grants

[email protected]

28

Click to edit Master title style Click to edit Master text styles Second level Third level Fourth...

Documents

Transcript of Click to edit Master title style Click to edit Master text styles Second level Third level Fourth...