Training Workshop on Procurement

download Training Workshop on Procurement

of 81

  • date post

    03-Apr-2018
  • Category

    Documents

  • view

    215
  • download

    0

Embed Size (px)

Transcript of Training Workshop on Procurement

  • 7/28/2019 Training Workshop on Procurement

    1/81

    USAID-Funded Economic Governa

    Training Worksho

    on

    Procurement

  • 7/28/2019 Training Workshop on Procurement

    2/81

    USAID-Fu

    Authors

    This document was prepared by:

    Richard Kupisz

    Electricity Sector Lead

    BearingPointBaghdadIraqTel: +1.703.994.4674GSM: +964.(0)790.191.9596E-mail: [email protected]

    This document is protected under the copyright laws of the United States and other countries: it has been preparedand/or contractors working directly for BearingPoint under the auspices of the U.S. Agency for International DeveloThis document and all accompanying pages are strictly for the use of USAID in support of their own consideration where explicitly stated otherwise, the following information was prepared on the basis of data that is publicly availa

    independently verified or otherwise examined to determine its accuracy, completeness or financial feasibility (wheracting on behalf of either assumes any liabilities, expenses (including attorneys fees and legal expenses) fines, penresulting from the use of any information contained in this document.

    2005 BearingPoint, Inc. All rights reserved.

  • 7/28/2019 Training Workshop on Procurement

    3/81

    Day 1: What is Procu

  • 7/28/2019 Training Workshop on Procurement

    4/81

    USAID-Fu

    Contents

    z Objectives for the Workshop

    z What is Procurement?

    z Setting Your Objectives

    z

    Fairness and Transparencyz Procurement Options

    z The Tender Process (Part 1)

    z Hot Topics

  • 7/28/2019 Training Workshop on Procurement

    5/81

    USAID-Fu

    Objectives for the Workshop

    This Workshop will:

    z Describe the main methods of procurement

    z Describe how you would carry out a competitive tender

    z Discuss how to deal with some of the typical problems

    The FIDIC Tendering Procedure is used as an

    competit ive tender process

  • 7/28/2019 Training Workshop on Procurement

    6/81

    USAID-Fu

    What is Procurement

    Procurement: the act of getting or obtain

    (Blacks Law Dictionary)

    For the purposes of this Workshop it means the purcha

    z Goods or equipment

    z Services

    z Construction

    By a public sector organisation

    The competitive tender process can also be usinvestment for example in tenders for Indepe

    Producers or privatisations of State-owned as

  • 7/28/2019 Training Workshop on Procurement

    7/81

    USAID-Fu

    Setting Your Objectives

    It is important to set your objectives at the be

    What kind of objectives would you suggest?

  • 7/28/2019 Training Workshop on Procurement

    8/81

    USAID-Fu

    Setting Your Objectives

    Price is not the only option

    Quality

    Timing

    After sales service

    You may also have project-specific objectives:

    Improve revenue collections by 50

    Adopt hand-held meter reading tec

    Install baseload or peak generating

    Paint the Ministry building pink

  • 7/28/2019 Training Workshop on Procurement

    9/81

    USAID-Fu

    Setting Your Objectives

    Objectives must be prioritised to avoid conflic

    Potential conflicts

    Pricevs

    Quality

    Delivery timevs

    Quality W

    You should adopt a limited number (normally

  • 7/28/2019 Training Workshop on Procurement

    10/81

    USAID-Fun

    Fairness and Transparency

    A transparent, competitive tender is essential

    Pressure from other bidders encourages com

    Purchaser sets the rules of the game

    Strengthens Iraqs international reputation

    Less likely to be questioned later

    And to rebuild confidence in Iraq

    But sometimes achieving this is harder than it

  • 7/28/2019 Training Workshop on Procurement

    11/81

    USAID-Fun

    Fairness and Transparency

    How do you achieve it?

    Fairness

    Open tender ay qualified bid

    Treat all bidders the same:

    Same information

    at the same time

    Same opportunities for sit

    Same criteria to evaluate

    Actively discourage corruption

    There must be a level playing field any qua

  • 7/28/2019 Training Workshop on Procurement

    12/81

    USAID-Fun

    Fairness and Transparency

    Transparency

    Clear tender process, well communic

    Same information

    at the same time

    Answers to one bidders questions ar

    Advertise the tender widely

    Clear, objective evaluation criteria, co

    Allow bidders to comment on the Ten

    Bidders/public can attend the bid ope

    Press release/public relations to pub

    Provide as much information as poss

    Keep bidders informed throughout th Stick to the Tender Rules

    Avoid changing your mind or reversin

    Consult other bidders if making chan

  • 7/28/2019 Training Workshop on Procurement

    13/81

    USAID-Fun

    Procurement Options

    There are various options available

    International

    Competitive

    Tender

    International

    Competitive

    Tender

    ShoppingShopping

    Invited BidInvited Bid

    The one you choose depends on the specific s

  • 7/28/2019 Training Workshop on Procurement

    14/81

  • 7/28/2019 Training Workshop on Procurement

    15/81

    USAID-Fun

    National

    Competitive

    Tender

    National

    Competitive

    TenderProcurement Options

    What A formal tender process, limited to locally-bas

    When If the good or service is only available locally,contract size is small or the advantages of an outweighed by its disadvantages

    Advantages 9 Can be quicker, with less administrative bu

    9 Can hold the tender in Arabic

    9 Can get a better price for some goods and

    9 Can be used to promote local businesses

    9 International firms can still bid if they have

    Dis-

    advantages

    8 Artificially reduces competition - may get a

    8Time and cost savings may not be great tender

    8 Potential lack of transparency (perception/

  • 7/28/2019 Training Workshop on Procurement

    16/81

    USAID-Fun

    ShoppingShopping

    Procurement Options

    What Informal process, written quotations should be

    suppliersWhen For readily available, off the shelf goods, stan

    or simple works

    Advantages 9 Quick to implement

    9 Low administrative burden

    9 Low cost to the Ministry and bidders

    Dis-

    advantages

    8 Does not work for large or complex or non-

    8 Does not work for most types of services

    8 Potential perception of lack of transparency

  • 7/28/2019 Training Workshop on Procurement

    17/81

    USAID-Fun

    Direct

    Contract

    Direct

    ContractProcurement Options

    What Invite one or (preferably) a number of compan

    without advertising or prequalificationWhen If there are few companies that supply the pro

    suppliers are known to you or if the project is run a full tender

    Advantages 9 Quicker than a full tender

    9 Low administrative burden9 Low cost to the Ministry and bidders

    Dis-

    advantages

    8 Less competition means a worse deal

    8 Risk of missing out qualified suppliers

    8 Risk of including suppliers that are not qua

    8 Lack of transparency suppliers that are le

    8 Risk to Iraqs reputation

    Unless time is important it is best to avoid this

  • 7/28/2019 Training Workshop on Procurement

    18/81

  • 7/28/2019 Training Workshop on Procurement

    19/81

    USAID-Fun

    Procurement Options

    Choice of option depends on the specific situa

    Com-

    plexity of

    project

    Cost Timing Available

    locally?

    International

    Competitive Tender

    High High Long Notnecessary

    National

    Competitive Tender

    Medium-high

    Medium-high

    Long Yes

    Shopping Low-medium

    Low-medium

    Short Yes

    Direct Contract Any Medium Medium

    Notnecessary

    Framework

    Contract

    Low Low Short Yes

    objectives

  • 7/28/2019 Training Workshop on Procurement

    20/81

  • 7/28/2019 Training Workshop on Procurement

    21/81

    USAID-Fun

    Exercise 1

  • 7/28/2019 Training Workshop on Procurement

    22/81

  • 7/28/2019 Training Workshop on Procurement

    23/81

    USAID-Fun

    The Tender Process

    The main stages of the tender

    Internal Due

    DiligenceMarketing

    Pre-

    qualificati

    Bidder DueDiligence

    Final

    Transaction

    Documents

    BidSubmissi

  • 7/28/2019 Training Workshop on Procurement

    24/81

    USAID-Fun

    The Tender Process

    FIDIC Section Tasks

    1.0 Establish ProjectStrategy

    Agree: Procurement methodTimetable

    At this stage the objectives for the project must be set o

    Internal due diligence will need to be carried outAdministrative arrangements must be established:

    Hiring advisers

    Steering Committee and/or Working Group

    Who implements the Tender and who do they report to

    Timetable is indicative at this stage delays a

    tenders, timing for negotiations is unpredictab

  • 7/28/2019 Training Workshop on Procurement

    25/81

  • 7/28/2019 Training Workshop on Procurement

    26/81

  • 7/28/2019 Training Workshop on Procurement

    27/81

    USAID-Fun

    Internal Due DiligenceHot Topics:

    Legal review laws, regulations, court cases

    Financial review accou