ኢትዮጵያ ኤሌክትሪክ ኃይል

Ethiopian Electric Power

Procurement Manual

September 2017
TABLE OF CONTENTS
1.0 INTRODUCTION......................................................................................................................6
1.1 EEP Procurement Manual..........................................................................................6
1.2 Definition of Public Procurement...............................................................................6
1.3 Goals of EEP Procurement Manual............................................................................7
1.3.1 General Goals...............................................................................................7
1.3.2 Additional Goals...........................................................................................7
1.4 Regulatory Framework and Laws...............................................................................8
1.5 Procurement Planning................................................................................................9
1.6 Principles of Public Procurement...............................................................................9
1.6.1 Eligibility.......................................................................................................9
1.6.2 Qualification...............................................................................................10
1.6.3 Technical Specification...............................................................................12
1.6.4 Bid Evaluation............................................................................................14
1.6.5 Bid Rejection..............................................................................................15
1.6.6 Bid Price and Price Adjustment.................................................................16
1.6.7 Writing.......................................................................................................18
1.6.8 Language....................................................................................................19
1.6.9 Confidentiality............................................................................................19
1.6.10 Complex Projects.......................................................................................19
2.0 PROCUREMENT METHODS...................................................................................................21
2.1 Open Bidding............................................................................................................22
2.1.1 National Competitive Bidding....................................................................23
2.1.2 International Competitive Bidding.............................................................23
2.2 Restricted Bidding....................................................................................................24
2.3 Request for Proposals..............................................................................................26
2.4 Request for Quotations............................................................................................28
2.5 Two-Stage Bidding....................................................................................................30
2.6 Direct Procurement..................................................................................................33
2.7 Outsourced Procurement.........................................................................................34
3.0 EVALUATION METHODS.......................................................................................................34
3.1 Pretender Evaluation................................................................................................34
3.1.1 Expression of Interest................................................................................34
3.2 Prequalification........................................................................................................35
3.3 National and International Competitive Bidding Evaluation...................................35
3.3.1 Least Cost...................................................................................................35
3.3.2 Quality and Cost Based Selection..............................................................36
3.3.3 Two Stage Bidding......................................................................................36
3.4 Request for Proposal Evaluation..............................................................................37

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 3.4.1 Quality and Cost Based Selection..............................................................37
3.4.2 Quality Based Selection.............................................................................38
3.4.3 Fixed Budget...............................................................................................38
3.4.4 Least Cost...................................................................................................39
3.4.5 Consultants' Qualification..........................................................................39
3.4.6 Single Source Selection..............................................................................39
3.5 Request for Quotation Evaluation............................................................................39
4.0 TENDER PROCEDURE............................................................................................................41
4.1 Tender Preparation..................................................................................................43
4.1.1 Initiation.....................................................................................................43
4.1.2 Expression of Interest................................................................................43
4.1.3 Pre-Qualification........................................................................................43
4.2 Bidding Documents Preparation..............................................................................45
4.2.1 Instruction to Bidders and Bid Data Sheet.................................................46
4.2.2 Bid Form and Price Schedule.....................................................................47
4.2.3 Bid Validity Period......................................................................................47
4.2.4 General and Special Conditions of Contract..............................................48
4.2.5 Criteria for Bid Evaluation..........................................................................48
4.3 Bid Flotation.............................................................................................................49
4.3.1 Invitation to Bid..........................................................................................49
4.3.2 Advertisement............................................................................................50
4.3.3 Bid Document Selling.................................................................................50
4.3.4 Standard Bidding Documents....................................................................51
4.3.5 Bid Security................................................................................................52
4.3.6 Bid Submission Deadline............................................................................53
4.3.7 Bid Amendment and Clarification..............................................................54
4.3.8 Bid Receipt.................................................................................................55
4.3.9 Bid Opening................................................................................................56
4.4 Bid Evaluation...........................................................................................................57
4.4.1 Margin of Preference.................................................................................58
4.4.2 Disqualification of Bidders.........................................................................59
4.4.3 Approving Bids...........................................................................................59
4.4.4 Discussion with Bidders.............................................................................60
4.4.5 Selection of the Successful Bidder.............................................................60
4.4.6 Bid Evaluation Report.................................................................................62
4.4.7 Procurement Approval Process..................................................................62
4.4.8 Negotiation................................................................................................63
4.4.9 Letter of Contract Award...........................................................................63
4.4.10 Re-advertisement.......................................................................................64
4.5 Contracts..................................................................................................................64

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 4.5.1 Contract Signing.........................................................................................64
4.5.2 Performance Security.................................................................................65
4.5.3 Advance Payment......................................................................................66
4.5.4 Managing Procurement Contracts.............................................................67
4.5.5 Follow Up of Performance of Contracts.....................................................67
4.5.6 Completion of a Contract...........................................................................68
4.5.7 Foreign Procurement (International Procurement)...................................69
4.6 Transit and Customs Clearance................................................................................72
4.6.1 Incoterms...................................................................................................72
4.6.2 Inspection...................................................................................................73
4.6.3 Pre-Shipment Inspection Actions...............................................................73
4.6.4 Transportation Insurance...........................................................................74
4.6.5 Collection of Goods from the Port of Entry...............................................74
4.6.6 Before Accepting the Consignment...........................................................74
4.6.7 Receipt of Goods........................................................................................75
4.6.8 Inspection of Goods...................................................................................75
4.7 Disposal....................................................................................................................75
4.8 Document Archiving.................................................................................................76
4.8.1 Filing/Record Management System...........................................................76
4.8.2 Procurement Numbering System...............................................................77
5.0 ETHIOPIAN ELECTRIC POWER ORGANIZATION....................................................................78
5.1 EEP Executive Management.....................................................................................78
5.2 EEP Engineering Units..............................................................................................80
5.3 EEP Procurement Unit..............................................................................................80
5.3.1 Project Management Office.......................................................................83
5.3.2 Transmission & Substation Construction...................................................83
5.3.3 Transmission & Substation Operations......................................................83
5.3.4 Generation Operations..............................................................................83
5.3.5 Staff Procurement......................................................................................83
5.4 Procurement Endorsing Committee........................................................................83
6.0 PROCUREMENT PLANNING..................................................................................................86
6.1 Procurement Endorsing Committee Responsibility.................................................87
6.2 Outline of the Procurement Process........................................................................87
6.3 Budget Preparation Process.....................................................................................87
6.4 Approval of Procurement Plan and Amendment Conditions..................................87
6.5 Declaration of the Annual Procurement Plan..........................................................88
6.6 Prior Approval Issues................................................................................................88
6.7 Establishing a Timeline.............................................................................................88
7.0 MARKET RELATION...............................................................................................................89
7.1 Market Surveys.........................................................................................................89

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 7.1.1 Open Competition......................................................................................89
7.1.2 Limited Competition..................................................................................89
7.1.3 Approaching the International Market......................................................90
7.1.4 Approaching the National Market.............................................................90
7.1.5 Registration of Vendors..............................................................................90
7.1.6 Vendor Review and Qualification of Candidates.......................................90
7.1.7 Vendor Ineligibility.....................................................................................91
7.2 Maintenance and Updating of the Register of Vendors..........................................92
7.3 Common Elements of solicitation process...............................................................92
7.3.1 Advertising and Publicizing Solicitation.....................................................92
7.3.2 Solicitation Mailing List..............................................................................92
7.3.3 Pre-bid and Pre-proposal Conferences......................................................92
7.3.4 Amendment of Solicitations......................................................................93
7.3.5 Request for Expression of Interest (EOI)....................................................93
7.3.6 Request for Information (RFI)....................................................................93
7.3.7 Pre-Qualification........................................................................................93
7.4 International Vendors..............................................................................................93
7.4.1 International Procurement Requirements.................................................93
7.4.2 Threshold for International Competitive Bidding......................................94
7.4.3 Outline of International Procurement Process..........................................94
8.0 TECHNICAL SPECIFICATIONS................................................................................................95
8.1 Types of Specifications.............................................................................................95
8.1.1 Design Specifications.................................................................................95
8.1.2 Performance Specifications.......................................................................96
8.1.3 Brand Name or Equal.................................................................................96
8.2 Review and Approval of Specifications....................................................................96
8.3 Using Consultants to Prepare Specifications...........................................................96
8.4 Specifications by Procurement Type........................................................................96
8.4.1 Specifications for goods and services........................................................96
8.4.2 Specifications for works.............................................................................97
8.5 Samples....................................................................................................................97
9.0 CONTRACTS..........................................................................................................................99
9.1 Contract Establishment............................................................................................99
9.2 Contract Administration.........................................................................................100
9.2.1 Advance Payment....................................................................................100
9.2.2 Progress Payments...................................................................................101
9.3 Special Contract Provisions....................................................................................101
9.3.1 Special Conditions of Contract.................................................................101
9.3.2 International Contracts............................................................................102
9.3.3 Request for Quotation.............................................................................102
9.3.4 Direct Procurement..................................................................................102
9.3.5 Consultancy Service Contracts.................................................................102
9.3.6 Framework Contracts...............................................................................103
9.3.7 Recurrent Procurements..........................................................................105
9.3.8 Works Contracts.......................................................................................105
9.4 Follow Up of Performance of Contracts.................................................................106
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10.0 DISPUTES AND PENALTIES..................................................................................................108
10.1 Records of Procurement........................................................................................108
10.2 Suspension or Removal from the Register of Vendors..........................................108
10.3 Cancellation of Bids, Proposals, and Quotations...................................................110
10.4 Retendering Process...............................................................................................110
10.5 Performance Monitoring........................................................................................110
10.6 Performance Delays...............................................................................................111
10.7 Appeals Procedures................................................................................................112
10.7.1 Right to Complain / Resolution of Disputes.............................................112
10.7.2 Complaint Submission.............................................................................112
10.7.3 Complaint Contents.................................................................................113
10.7.4 Evidence...................................................................................................114
10.8 Contract Amendment.............................................................................................114
10.9 Termination of Contract.........................................................................................115
10.10 Liquidated Damage Penalties.................................................................................115
11.0 REQUIREMENTS DEFINITIONS............................................................................................116
11.1 Terms of Reference................................................................................................116
11.2 Statement of Work.................................................................................................116
11.3 Technical Specifications.........................................................................................116
11.4 Design Documents.................................................................................................117
12.0 ETHICS AND CORRUPTION.................................................................................................118
12.1 General Ethical Standards......................................................................................118
12.2 Conflicts of interest................................................................................................118
12.3 Corrupt, Fraudulent, Collusive, or Coercive Practices...........................................119
12.4 Offences and Punishment......................................................................................120
13.0 DISPOSAL OF ASSETS..........................................................................................................122
13.1 Deletion..................................................................................................................122
13.2 Transfer..................................................................................................................122
14.0 ACRONYMS.........................................................................................................................123
15.0 DEFINITIONS.......................................................................................................................125
16.0 APPENDIX 1 – WORLD BANK EVALUATION METHODS......................................................131
16.1 Substantial Responsiveness...................................................................................131
16.1.1 Preliminary Examination..........................................................................131
16.1.2 Technical and Commercial Qualifying Criteria.........................................132
16.2 Pre-Qualification and Initial Selection....................................................................132
16.2.1 Pre-Qualification.....................................................................................132
16.2.2 Initial Selection.......................................................................................133
16.2.3 Post-Qualification.....................................................................................134
16.3 Evaluation of Bid/Proposal Cost.............................................................................134
16.3.1 Adjusted Bid/Proposal price....................................................................135
16.3.2 Life Cycle Costs Analysis...........................................................................135
16.4 Unbalanced, front loaded and abnormally low bids and proposals......................137
16.4.1 Abnormally low bids and proposals.........................................................137
16.4.2 Seriously Unbalanced or Front-loaded Bids/Proposals...........................137
16.5 Rated-Type Criteria................................................................................................139

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 16.5.1 Prioritization of Rated Criteria.................................................................139
16.5.2 Evaluation of Technical scores.................................................................140
17.0 APPENDIX 2 –TRANSFORMER PROCUREMENT..................................................................143
17.1 Life Cycle Cost Analysis for Transformers..............................................................143
17.2 Transformer Efficiency...........................................................................................144

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1.0 Introduction

1.1 EEP Procurement Manual

This Ethiopian Electric Power Procurement Manual (herein after referred as 'the Manual’) is a public document
issued by the Ethiopian Electric Power (EEP). It is based primarily on The Ethiopian Federal Government
Procurement and Property Administration Proclamation No.649/2009 and The Federal Government Public
Procurement Directive, as well as on the previous 2014 EEPCO Procurement Manual and the 2011 Public
Procurement and Property Administration Agency Manual. Supplementary information on value based
procurement and life cycle cost analysis is extracted from the July 2016 World Bank Procurement Guidance
Evaluation Criteria; Use of evaluation criteria for procurement of Goods, Works, and Non-Consulting Services
using RFB and RFP.
This Manual has been revised in structure to allow easier and more efficient referencing of relevant
information during different stages of the procurement process, and it has been expanded to include topics
such as Life Cycle Cost Analysis, value engineering, and best value procurement. This manual was written to
update, clarify, and improve the existing EEPCO Procurement Manual from 2012. General information that is
more suited to an academic reference was omitted from the revised Manual to make the contained content
more concise and accessible to the practicing procurement officer at EEP.
Although this manual was written to update, clarify, and improve the existing EEPCO Procurement Manual
from 2012, it is anticipated that this manual must be rewritten after release of a new proclamation. For this
purpose, much of the content in this manual is written verbatim from the existing proclamation and directive,
so that content can be easily identified and replaced if the new regulations differ from previous
documentation.
The Manual is intended for use by EEP procurements’ staff, both the foreign and local purchase committees,
evaluation committees, engineering’s’ staff, projects’ staff, operation staff and power plants’ staff both in head
office and regional offices who are involved in procurement activities that will be financed by EEP's internal
budget as well as the government allocated budget. Moreover, this manual will be applied for any
procurement which is financed by EEP's internal budget as well as the government allocated budget.
1.2 Definition of Public Procurement …………..chapter 1…..2
Procurement is the purchasing, hiring, or contracting of goods, works and services. Public procurement is the
acquisition of goods, works, and services by a public entity, usually but not always by means of a contractual
arrangement after public competitive bidding. The public procurement process spans the project life cycle
from initial conception, definition of the needs, purchase (for goods and services), design and construction (for
works projects), and finally disposal at the end of the item's useful life.
Public procurement expenditure constitutes a significant investment on the part of the Government. Those
investments, both in physical infrastructure and in strengthened institutional and human capacities, lay the
foundation for national development. In procurement terms, those investments are generally grouped into
three categories:

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• Works: all effort associated with the construction, reconstruction, upgrading, demolition, repair, and/or
renovation of a power plant, substation, building, road, or structure, as well as services incidental to the
works.
• Goods: the raw material, products, equipment, and commodities in solid, liquid or gaseous form,
marketable software and live animals as well as installation, transport, maintenance or similar obligations
related to supply of the goods, as well as related services including transportation, commissioning,
insurance, installation, training, and initial maintenance.
• Services
o (non-consultancy): Non-consultancy services are any intellectual or physical efforts such as
maintenance, security, janitorial, electricity, telecommunication, and water supply.
o (consultancy): Consultancy service are of an intellectual and advisory nature provided by
consultants using their professional skills to study, design, and organize specific projects, advice
clients, conduct training and transfer knowledge. These are expert advice and training,
conventionally labeled Technical Assistance, as well as such things as building maintenance,
computer programming, etc.
1.3 Goals of EEP Procurement Manual
The fundamental purpose of EEP Procurement Manual is to ensure value for money in the use of public funds,
as described in the Proclamation. The manual is also helpful to ensure fairness; transparency, accountability
and ethical standards of the procurement practitioners. The basic concerns that govern procurement policies
are the following:
1.3.1 General Goals
• To ensure that works, goods, and services needed by EEP are procured with due attention to economy and
efficiency;
• To ensure that the funds are used for the planned works, goods, and services;
• To provide equal opportunity for all potential bidders and consultants to compete for a contract;
• To encourage development of domestic contractors and manufacturers in the Federal Democratic Republic
of Ethiopia; and
• To ensure that the procurement process is transparent.
1.3.2 Additional Goals
1.3.2.1 Domestic Preference
Domestic preference for works carried out by Ethiopian nationals and for consultancy services rendered by
Ethiopian nationals is described in the Proclamation. Additional preference is made for small and micro-
enterprises. Where in the evaluation of bids for procurement of goods, services or works equal percentage
points are resulted for bidders offering similar price and quality, preference shall be given to local goods,
services or companies. Complaints may not be lodged in respect to domestic preference in Ethiopia.
1.3.2.1.1. Domestic Goods

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For domestic preference evaluation, any good to which more than 35% of the value added occurs in Ethiopia
shall be deemed as one which is produced in Ethiopia. Value added in Ethiopia shall be calculated by
deducting from the total value of the product in question, the cost, exclusive of indirect taxes, of imported raw
materials and other supplies used in the production of such product as well as services rendered abroad in
connection with the production of that product. The margin of preference to be granted and applied when
comparing prices during evaluation of bids shall be 15% for procurement of goods.
1.3.2.1.2. Domestic Construction and Consultancy Services

The following conditions must be satisfied for local companies engaged in Construction or Consultancy
Services to qualify for preference:
a) The company has to be incorporated in Ethiopia;
b) more than 50% of the company’s capital stock has to be held by Ethiopian natural or juridical persons;
c) more than fifty per cent of members of the board of the company have to be Ethiopian nationals;
d) At least fifty per cent of the key staff of the company has to be Ethiopian Nationals.
The margin of preference to be granted and applied when comparing prices during evaluation of bids shall be
7.5% for procurement of construction and consultancy services.
1.3.2.2 Small and Micro-Enterprise Procurement Preference
Preferential treatment granted by the Proclamation and the Directive should be applied whenever possible to
encourage local producers, companies and small and microenterprises which support the national economy.
Preference shall be given by a margin of 3% when small and micro enterprises compete with local suppliers in
National Competitive Bidding. When small and micro enterprises participate in International Competitive
Bidding, the margin of preference to be granted and applied when comparing prices during evaluation of bids
shall be 15% for procurement of goods and 7.5% for procurement of construction and consultancy services
(this is the same preference as for domestic companies). In lieu of bid security, performance security, or
advance payment guarantee, a letter of guarantee written by a competent body organizing and overseeing
small and micro enterprises shall be accepted. Small and micro enterprises shall be required to submit a letter
of guarantee from the body organizing and overseeing them in lieu of performance security. Other distinct
preferences exist for small and micro enterprises.
1.4 Regulatory Framework and Laws
The Government's interest in procurement stems from the provisions of Ethiopian Federal Government
Procurement and Property Administration Proclamation No. 649/2009 (called the Proclamation) that entered
into force on 9 September 2009 when published in the Federal Negarit Gazeta No. 60, and the Federal
Government Public Procurement Directive (called the Directive) issued by the Ministry of Finance and
Economic Development on 8 June 2010. These stipulate that the government funds must be used only for the
purpose for which the funds were intended, with due attention to economy and efficiency.
In the Ethiopian legal system, hierarchy of laws according to their precedence is:
1. The Constitution

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2. Proclamations: The Ethiopian Federal Government Procurement and Property Administration Proclamation
No.649/2009 forms the fundamental text for procurement in Ethiopia, and it is the foundation of this
manual. Some flexibility is found in this document, and in some cases procurement can be conducted
outside the constraints of the Proclamation with Ministerial
3. Directives: The Federal Government Public Procurement Directive is the secondary resource for this
manual.
4. Regulations: The basic concerns that govern procurement policies are the following:
 To ensure that works, goods, and services needed by EEP are procured with due attention to
economy and efficiency;
 To ensure that the funds are used for the planned works, goods, and services;
 To provide equal opportunity for all potential bidders and consultants to compete for a contract;
 To encourage development of domestic contractors and manufacturers in the Federal Democratic
Republic of Ethiopia; and
 To ensure that the procurement process is transparent.
In the situation where there is contradiction between a content of this manual and the proclamation or
directive, the proclamation or directive takes precedents.
Managers / Heads/ Executives in EEP shall be exercising their delegated authorities and responsibilities in the
Procurement process according to EEP Delegation of Power (DOP) 2016.
1.5 Procurement Planning
A Procurement Plan spells out intended purchases; proposes the procurement methods to be used; and shows
different phases of the procurement process for delivery of goods, works or services as necessary. It also
provides a guideline for monitoring procurement implementing over the period. EEP shall be required to
prepare a Procurement Plan supported by action plan enabling them to execute in due time, the procurement
necessary to implement their work program. For more information on this topic, please refer Section .
1.6 Principles of Public Procurement…………………………….555555555
The main goal of public procurement is to support Ethiopia's economic development and to achieve the
maximum value for money by insuring economy, efficiency, and effectiveness. Procurement must be
conducted in a non-discriminatory manner open to all nationalities in a transparent and accountable manner.
Additionally, EEP seeks to encourage local producers, companies, and small- and micro-enterprises, which
support the national economy, through the application of preferential treatment with National Competitive
Bidding. These goals can be accomplished through the following principles taken from the Proclamation and
Directive:
1.6.1 Eligibility
Public Procurement is open to all persons regardless of nationality and/or race or any other criterion not
having to do with their qualifications, international obligations or decisions taken against them under
Proclamation and Directive. This principle shall not apply when there is a standing Government Order or an

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agreement signed by the Government prohibiting the participation of a particular category of persons, for
example:
• The use of funds for public procurement which has been provided by a bilateral development partner and
participation is restricted to Bidders/Consultants whose nationalities are from certain countries unless a
decision is made otherwise the loan or grant agreement as determined by the legal/financing agreement
signed between Ethiopia
• The use of funds for public procurement which has been provided by a multilateral development agency
and participation is restricted to Bidders/Consultants from member countries of that development agency
only;
• Firms barred from participating in public procurement for a certain period because of past poor
performance of awarded contract(s);
• Any Bidder/Consultant barred because of corrupt, fraudulent, collusive or coercive practices; and
• The country with whom the Government has decided not to have trade relations.
The names, category of persons and/or firms or countries excluded from the participation in public
procurement, both in general and for specific bids, shall be made public either by means of a Government
Order or by the PPA. Information concerning persons and/or firms who are barred from participation in public
procurement, for whatever reason, either generally or against specific bids, shall be kept by the PPA and it is
the responsibility of the PPA to inform public bodies about such restrictions and the periods for which they
shall apply.
1.6.2 Qualification
In order to participate in public procurement, candidates shall provide evidence to demonstrate that they are
suitably qualified and capable for award of contract. Qualification take into account objective and measurable
factors such as: experience, satisfactory past performance, successful completion of similar contracts over a
given period, capability of construction and/or manufacturing facilities, financial situation, and eligibility. The
purpose of qualification is to ensure that:
• Those persons or firms participating in public procurement are able to meet the legal professional and
ethical standards set out in the Proclamation, Directive and the Manual; and
• Suppliers, Contractors and Consultants are able to perform the contracts for which they are Bidding or
offering services.
The requirements for such qualification as set out in the Proclamation and Directive are detailed in the
following paragraphs. Based on the below general qualification criteria and the nature and magnitude of the
object of particular procurement, EEP shall set out the specific qualifications in the Pre-qualification
Document, Bidding Documents or Request for Proposal Document.
1.6.2.1 Professional and Technical Capacity
Suppliers, Contractors and Consultants shall show that they possess:
• The professional and technical qualifications and competence to undertake the work/supply/service for
which they are Bidding;

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• Satisfactory financial resources;
• Suitable equipment and other physical facilities or proven access through contractual arrangement to
hire/lease of such equipment/facilities for the desired period, where necessary;
• Satisfactory production/manufacturing capacity, where necessary;
• After sales service, where necessary;
• Managerial capability, where necessary;
• Prior experience of the work/supply/service for which they are Bidding;
• Satisfactory reputation for diligent and non-problematic performance of contracts (repeated arbitration or
legal proceedings against the Bidder spoil its reputation); and
• Appropriate personnel required to perform the contract, both in terms of numbers and skills.

Professional and Technical Capacity documentation that may be requested from the Bidder:

• Provide documentary evidence to show they are enrolled in the relevant professional or trade
organizations registered in the Federal Democratic Republic of Ethiopia or in their country of origin or to
provide a declaration on oath or a certificate concerning their competency in accordance with the
conditions laid down by the law of the Federal Democratic Republic of Ethiopia or of the country of their
origin. Such an oath or certificate would, normally be provided by a professional institution related to the
professional qualifications of the person or firm;
• Provide description of the firm's technical facilities, its available equipment, its measures for ensuring
quality e.g. ISO certification, and its design, research and development facilities;
• Provide list of the major deliveries effected in the past three/five years, with the sums, dates and
recipients, public or private, on a transaction basis, if EEP so requested;
• Provide list of client references who may be contacted by EEP;
• Provide samples, description and/or photographs of the product to be supplied, the authenticity of which
may be certified by a professional institution related to the professional qualifications of the person or
firm, if EEP so requests;
• Submit appropriate statements from bankers of the firm's financial resources;
• Submit firm’s balance sheets or extracts from them, where publication of a balance sheet is required under
company law in the country in which the Supplier, Contractor or Consultant is established;
• Submit statement of the firm's overall turnover and its turnover in respect of the goods/works/services to
which the contract relates for the previous three (3) financial years; and
• Provide details of the numbers of both technical and administrative personnel employed by the firm.
1.6.2.2 Legal Capacity
Suppliers, Contractors and Consultants shall show that they are legally entitled to enter into any subsequent
contract that might arise from the procurement proceedings. This means that persons and/or firms shall
demonstrate to EEP that there is no legal reason, e.g. an order of a judicial court that prevents them from
entering into a contract.

Legal Capacity documentation that may be requested from the Bidder:

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• The legal capacity shall be confirmed by a power of attorney to be notarized by a Notary Public/
Commissioner for Oaths. This document shall state that there are no existing orders of any judicial court
that prevent either a person or firm or employees of a firm from entering into and/or signing a contract
with EEP.
1.6.2.3 Financial Capability and Status
Suppliers, Contractors and Consultants shall show that they are not:
• Insolvent, e.g. the person or firm is not financially capable to perform the contract for which they are
Bidding;
• In receivership, e.g. the firm was in serious financial difficulties and a court had, at the request of creditors,
stopped the firm from managing itself and had placed an independent accountant in charge of the
company's business operations;
• Bankrupt or in the process of being wound up, e.g. the person or firm's financial situation is that they have
more debts than income and can no longer function;
• Suspended from undertaking their business for financial reasons; and
• Subject to legal proceedings for any of the above reasons.

Financial Capacity documentation that may be requested from the Bidder:

 It is for EEP to prove that any of the circumstances detailed above actually exist. However, if EEP so
requests, it is for the applicant or Bidder to prove that none of those circumstances apply. Proof can be
provided in the form of a document issued by EEP or in the country of the Bidder showing that none of
these cases apply.
1.6.2.4 Other Qualification
Additional qualifications are the following:
 Registration in the suppliers list: Subject to the Article 33 of the Directive, suppliers are required to be
registered in the suppliers list;
 Trade license: suppliers are required to have renewed trade license;
 Bank Account: suppliers are required to have a bank account;
 Taxation obligations: Suppliers, Contractors and Consultants who are residents of Ethiopia are required
to produce Tax Clearance Certificate to show that they have fulfilled their obligations to pay taxes
under the relevant national Proclamation and Directive.

Taxation Certificate issued by EEP that may be requested from the Bidder:

• tax registration number or tax payer's identification number (TIN);

• VAT registration number;
• the year up to which income tax and VAT assessment has been completed; and
• confirmation that tax and VAT has been paid regularly.

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 1.6.2.5 Pre- and Post-qualification
In case of pre-qualification, the key qualification requirements shall be stated in the invitation for pre-
qualification, and the pre-qualification document distributed to applicants shall indicate all the qualification
criteria. In the case of post-qualification, the key qualification requirements shall be stated in the invitation to
bid, and the bidding document issued to prospective bidders shall indicate all qualification criteria. Pre/Post
qualification assessment will be done on the basis of the information provided.
1.6.3 Technical Specification
The technical specifications define the characteristics required of a material, supply or service such that they
fulfill the use for which they are intended. Technical specifications and descriptions of the goods and related
services and works and physical services shall be prepared in a manner that provides a correct and complete
description of the object to be procured. They are laid out in the contract documents without creating
unjustified obstacles to competition.
These characteristics include environmental performance, design, conformity assessment, performance
safety, dimensions, quality assurance, and production methods. For public works contracts they also cover
test, inspection and acceptance conditions, as well as construction techniques. When drawing up its technical
specifications, EEP should refer to national and international standards. The technical specification shall be
prepared in a non-restrictive manner so that a fair and open competition is created between all potential
Bidders. EEP shall, where possible, prepare the specifications in close cooperation with the user of the
supply, works, or services.
They shall clearly describe EEP's requirements in respect of:
• name and/or description of the object of procurement to be supplied;
• quality of the object of procurement to be supplied;
• performance standards;
• safety standards and dimensions;
• symbols, terminology to be used in packaging, marking and labeling of the object;
• processes and methods to be used in the production of the object of procurement; and
• requirements for conformity assessment tests.
They shall, where appropriate, be:
• Expressed in terms of performance requirements, rather than design or descriptive characteristics.
• Based upon recognized international standards, where such standards exist or otherwise, on recognized
national standards or codes
• There shall be no reference to a particular trademark or trade name, patent, design or type, specific
country of origin, producer or service Supplier.
Technical specifications, which are prepared using the procedure detailed in the preceding paragraphs, should
enable fair and open competition among all Bidders. Specifications that are linked directly to design or
descriptive characteristics limit competition, as only Bidders whose products match the stated design and/or
description would be able to bid.

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Fair and open competition among Bidders should be maintained:
• For example, if EEP is purchasing a vehicle, it is not permitted to simply issue a bid for a named vehicle, nor
it is permitted to write a detailed technical specification that is so directly linked to one manufacturer that
other vehicle manufacturers would be unable to bid because the specification was so tightly written. No
two vehicles are completely identical, but many vehicle specifications are relatively close and Bidders can
compete if specifications are generalized, e.g. rather than saying a vehicle shall weigh 2,055 Kg, the
specification should state that the vehicle could weigh between 1,800 Kg and 2,100 Kg.
• Similarly, in the case of purchase of computers the generalized specifications prepared may state that the
assembling bench should be ISO certified but under no circumstances shall the name of any particular
brand be stated. Parameters in the technical specifications shall describe the minimum, maximum, or the
acceptable range for a specific line of requirement.
If EEP has insufficient technical expertise to prepare a generalized technical specification or to make the
specifications fully understandable to Bidders, it is permitted to make reference to a particular branded
product, but shall add the words “or similar/equivalent to” into the specification. EEP should use the
standardized specifications for commonly used goods such as paper, office equipment, other consumables etc.
Examples of standards to be followed are those published by the following organizations:
• International Electrotechnical Commission (IEC)
• The International Standard Organization (ISO)
• The American Standard Testing Methods (ASTM)
• Quality and Standards Authority of Ethiopia (QSAE)
1.6.3.1 Two-Stage Bidding for Difficult Specifications
For more difficult technical specifications, the Two-Stage Bidding procedure should be used. After submission
of bids at the first stage of the bid proceeding, EEP may hold discussion with the candidates on the content of
their proposals. EEP will then draw up a specification which is more appropriate to its requirements on the
basis of the evaluation against the requirements of the proposals submitted to it at the first stage of the bid
proceeding. It shall then proceed to communicate the revised specification to the candidates who submitted
responsible bids at the first stage and invite such candidates to submit proposals on the basis of the revised
specification.
In formulating the revised specification, EEP may delete or modify any aspect, originally set forth in the
solicitation documents of the technical or quality characteristics of the goods, works or services to be
procured and any criterion originally set forth in those documents for evaluating and comparing bids and for
ascertaining the successful bids and may add new characteristics or criteria that conform with this Manual.
Any such deletion, modification or addition shall be communicated to suppliers in the invitation to submit final
bids
1.6.4 Bid Evaluation
Bidevaluationshallbedoneinaccordancewiththebiddingdocumentissuedtothebiddersandprequalificationassess
mentonthebasisofprequalificationdocumentdistributed to applicants. The criteria for establishing an

P a g e | 15
Applicant's ability to perform the specific contract in question shall be assessed by EEP as detailed below. For
additional guidelines on technical evaluation, see Section 16.5Criteria. Section 1.6.2Qualification sets out
typical pre- and post-qualification evaluation criteria; however, these shall be varied depending upon EEP’s
requirement. If none of the applicants meet the pre-qualifying criteria, then all applications may be rejected.
Technical specifications are covered in the respective Section 8Technical Specifications.
1.6.4.1 Experience and Past Performance
The company's experience and past performance on similar contracts should be evaluated as described below:
• Technical Experience: completion of a minimum number of similar projects/programs that have been
completed, or completion of more than the minimum number.
• Past Contractual Performance: how the company performed on previous projects with EEP of similar type
and value.
• Financial Capacity: this can include the value of similar completed projects/programs to be considered,
both individually and collectively, the historical financial performance of the company, the size of the
operation, etc.
• Regional Presence: the countries or regions in which the applicant has worked, with emphasis being placed
upon work in Ethiopia or East Africa.
1.6.4.2 Technical Capacity
Capabilities with respect to personnel, equipment and construction or manufacturing facilities:
• Professional Qualifications: the qualifications and experience for key personnel within the organization;
• Equipment: define the types and minimum numbers of equipment that an applicant must possess to fulfill
the contract (or demonstrate that it has obtained a contractual arrangement for hire/lease access to such
equipment during the intended period of use to perform the contract);
• Production Capacity: quantity of units that applicants can supply weekly, monthly, or in total;
• Production Quality: the performance of goods including plant, equipment and machinery supplied to the
buyer.
• Inspection: inspect the equipment/facilities as part of the evaluation of the applications.
1.6.4.3 Financial Evaluation
Financial cost will be evaluated according to the complexity and the duration of service of the project:
• Initial Price: consideration of initial cost only for short term consumables such as paper, laptops, printers,
etc.
• Life Cycle Costs: for more complex projects, initial price, operations costs, maintenance costs, and disposal
costs, in addition to other costs such as commissioning, certification, training, etc. will be considered.
• Financial Adjustments: adjustment for scopes, adjustment for deviation from terms of payment,
adjustment for deviation in the delivery and completion schedule, adjustment for deviations in the
performance and productivity of the goods.
• Multiple Lots: consideration for discount by bidders winning multiple lots.

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• Margin of Preference Criteria: preference shall be granted in any procurement to locally produced goods,
to small and micro enterprises established under the relevant proclamation, and to local construction and
consultancy companies. For more information, see Section 4.4.1Margin of Preference.
1.6.5 Bid Rejection
EEP reserves the right to accept or reject any bid, quotation, or proposal, and to annul the bidding process and
reject all bids, quotations, or proposals, at any time prior to contract award, without thereby incurring any
liability to Bidders with one or more of the following reasons;
If EEP decides to reject all bids, quotations or proposals for reasons other than failure of all responsive Bidders
to post-qualify, EEP shall review the causes justifying the rejection of all submissions, examples of which may
be:
• the price of the lowest evaluated bid substantially exceeds the prevailing market prices;
• there is evidence of lack of competition;
• the bidders are unable to meet the minimum qualifications and/or technical specification; and
• the bidders are unable to offer the required delivery/completion time, provided the stipulated
delivery/completion time is reasonable and realistic.
After rejection of bids, EEP shall reassess the official estimate and/or budget with that of prevailing market
price and shall subsequently consider making revisions to the conditions of contract, design and specifications,
scope of contract or a combination of these factors, before inviting new bids, quotations or proposals.
If lack of competition is considered to be one of the reasons for the rejection of all bids, quotations or
proposals, it may have been because either too few persons or firms saw the advertisements or collusive
and/or coercive practices has taken place. Therefore, having reviewed the causes, when EEP reissues the
Invitations to Bid or Request for Expressions of Interest, it shall be advertised more widely and perhaps,
depending upon value, internationally. In the case of Requests for Quotations, additional persons and/or firms
may be issued with the RFQs. Besides, necessary actions shall be undertaken against collusive and/or coercive
practices, where applicable.
Rejection of all bids, quotations or proposals may be made because they are all considered to be non-
responsive, e.g. they do not comply with the requirements specified in the documents issued by EEP. New
bids, quotations or proposals may be invited from those or other persons or firms, using revised documents,
who were originally pre-qualified or short-listed or who had submitted bids in response to the advertised
invitation.
The following actions must follow a Rejection of All Bids.
• Upon receipt of requests from Applicants or bidders, EEP shall notify them of the reason(s) for the
rejection of its submission. However, EEP is not required to justify the reason(s) for the rejection of their
application, bid, quotation or proposal.
• EEP shall incur no liability of any kind towards an applicant or bidder arising from the rejection of all bids,
quotations or proposals.

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• EEP shall notify all applicants or bidders of the rejection of all bids, quotations or proposals of the decision
being taken to reject all bids, quotations or proposals.
• If EEP decides to cancel the procurement proceedings prior to the deadline for the submission of
applications, bids, quotations or proposals, it shall return unopened, to the bidder any such documents
already received.
1.6.6 Bid Price and Price Adjustment
EEP must to ensure that prices quoted by a bidder are not based on prices of the other bidders and such prices
remain firm and do not vary during the validity period of the bid and throughout the performance of the
contract. However, EEP may, under the following circumstances, indicate in the bidding document that price
adjustments are allowed in respect of works contracts, after 12 months from the effective date of such
contracts and in respect of procurement made under a framework contract, after 3 months from effective
date of such contract:
• Where it is verified that, in respect of works contracts, the performance of the contract requires more than
18 months, and in respect of a framework contract, where the performance of the contract requires more
than 6 months.
• For frame work contracts where the Agency or the Central Statistics Agency issues periodic price index to
use as reference for fixing the initial price and make price adjustment.
• Where it is ascertained that the Agency or the Central Statistics Agency can issue price index or price
indicators for selected categories of items.
• If these conditions above do not apply, where price information is available from a renowned local
producer or competent foreign institution.
1.6.6.1 Price Adjustment for Works Contracts
Any price adjustment made in connection with works contract shall be calculated using the formula provided
in the standard bidding document in accordance with the following procedure:
• Identifying the major inputs necessary for the works in question and the set of items to be classified under
each major input.
• Calculating the share of each major input from the total input of the works in question under which set of
items is classified and select the ones for which price adjustment may be allowed.
• The price index or price indicator operating before the bid closing date should be used as basis for price
adjustment.
• Where a request for price adjustment is filed in accordance with Section 1.6.6Bid Price and Price
Adjustment above, the price adjustment is calculated, especially for works contracts, on the basis of the
formula by applying the price index or indicator applicable at the time of filing of such request.
1.6.6.2 Price adjustment for Framework Contracts
EEP may allow price adjustment in respect of procurement made under a framework contract in accordance
with the following procedure:

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• EEP may allow price adjustment in respect only of supplies for which current price information is available
from the Agency or the Central Statistical Agency.
• Request for price adjustment for procurements under a framework contract may be filed after 3 months
from the effective date of the contract in question.
• The price information of the Agency or Central Statistics Agency applicable to the goods or services on the
day of the bid opening in respect of which price adjustment may be allowed and the time in which such
adjustment is made with in the period in which the framework contract is enforce shall be stated in the
contract agreement.
• EEP shall calculate the difference between the price stated in the contract corresponding to the price
applicable on the day of bid opening, and the price applicable to the time in which adjustment is made as
indicated in the price index issued by the Agency or Central Statistics Agency and subtract or add such
difference, as the case may be, from or to the price quoted by the supplier and apply the price adjusted in
this manner until the next price adjustment.
• For supplies in respect of which the supplier did not conform to the agreed time of delivery, price
adjustment may be made on the basis of the price applicable to the time in which such supplies should
have been delivered as per the contractual agreement.
1.6.6.3 Price Adjustment for Consultancy Services
Where the time for completion of a consultancy service under a contract is extended for a reason not
attributable to the fault of the consultant, EEP may make price adjustment, if it considers that such
adjustment is appropriate. However, price adjustment allowed for consultants shall not exceed 15% (fifteen
percent) of the total contract price. EEP shall state clearly in its bidding document the following and such
other information as it deems necessary for procurement of goods or supplies in respect of which price
adjustment may be allowed:
• The type of evidence candidates is required to supply together with the bid document for the purpose of
price adjustment.
• The conditions for price adjustment, the means by which requests for price adjustment are communicated
and types of evidence and number of copies of supporting documents to be submitted together with price
adjustment requests.
• Other relevant documents and procedures to be followed by bidders in regard to the implementation of
price adjustment.
• In evaluating bids, EEP has to ascertain that bidders agree to the pre-conditions for price adjustment
stated in the bidding document and the evidence submitted by them are admissible.
The following and other information which are deemed to be relevant shall be incorporated in a contract to be
signed between EEP and the successful bidder.
• Goods to be produced or supplied using inputs in respect of which price adjustment may be allowed and
the price adjustment procedure.
• The source and type of documents agreed upon by EEP and the supplier for the purpose of price
adjustment.

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• That the evidence to be produced shall conform to the requirement stated in the contract and that any
evidence originating from other sources shall not be admitted.
• That no adjustment may be allowed for price rise resulting from failure on the part of the supplier to
perform its/his obligation at the time stipulated in the contract.
Where the price difference resulting from price adjustment exceeds 25% (twenty five percent) of the total
contract price, the head of EEP shall be notified in order to be able to make decision on whether to proceed
with the procurement considering the economic benefit of such procurement. For any procurement in
respect of which price adjustment is allowed, EEP shall upon receipt of payment request from the supplier,
inquire whether there is price decrease in respect of inputs for which price adjustment is allowed as per the
contract agreement, and deduct from the sum due to the supplier the amount of the price decrease and effect
payment accordingly.
1.6.7 Writing
All communications between candidates and EEP shall be in writing. Any communications not made in written
form shall be subsequently referred to and confirmed in writing.
All communications between parties of the procurement (applicants, bidders Suppliers, Contractors,
Consultants and EEP) shall be in writing. The purpose of this is to ensure all communications between the
parties are legally binding communications, indicated by the signing of the communication by the sender or an
authorized officer/nominee of the sender.
Verbal communications and information displayed on a website or transmitted by electronic mail or facsimile
shall be confirmed in writing either by EEP or by the applicant, bidder, Supplier, Contractor or Consultant. The
sender or an authorized nominee of the sender shall sign all communications.
Subject to necessary safeguards with regard to authenticity and confidentiality, and when technical conditions
so permit, the Chief Executive Officer (CEO) may issue a memo to determine the extent by which
communication by electronic means may be used in addition to or instead of writing.
1.6.8 Language
Except where a procurement proceeding involves international bidders, for national bids in which only local
bidders participate, the bid document shall be prepared and the bid process shall be conducted in the Amharic
language.
However, if it is found to facilitate the procurement process, EEP may authorize the use of English language in
the preparation of bid documents and bid proposals in a national bid in which only local bidders participate,
provided that such an act is not prejudicial to fair competition. For procurement to be conducted by means of
international competitive bidding, all documents shall have to be prepared in English language.
Note that bids and supporting documents of candidates prepared in a language other than that stipulated in
the bidding document shall have to be translated by a legally competent interpreter into the language stated
in the bidding document and a copy of the translation has to be submitted together with the original
documents, specially where such documents pertain to the fundamental elements of the bid.

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 1.6.9 Confidentiality
After the opening of bids, information relating to the examination, clarification, and evaluation of bids and
recommendations for award must not be disclosed to bidders or other persons not officially concerned with
this process until the award of the contract is announced.
1.6.10 Complex Projects
Complexity of the project will determine what bidding method is used. The following table determines
whether a project is complex:

Goods
Standard sanitary materials Construction materials such as cement, steel,
Standard computers and related accessories quarry products, water pipe, paint, wood, nails
Standard office equipment such as printers, fax Primary food products and processed foods
machines, photocopiers, binding machines Readymade clothes, garments, and shoes
Tires, petroleum, lubricants, and standard spare parts Standard drugs and medical equipment
for vehicles Chemicals and reagents
Standard electric, electronics, or electromechanical Books, journals, and stationery
devices
Works Office furniture
Maintenance of buildings Fencing
Painting Office partitions
Temporary housing
Non-Consultancy Services
Printing Training
Vehicle maintenance Auditing services
Lease or rental of equipment and goods Security and janitorial services
Maintenance of office equipment and machines Procurement services
Transportation services Beautification of compound and office decoration
Hotel services Leasing of offices
Plumbing and Service
Consultancy electrical repair services
Assignment which do not require in-depth study
Table 1 - List of Non-Complex procurements

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2.0 Procurement Methods

As stipulated in the public procurement Proclamation 649/2009 Article No. 33, there are six types of
government permitted methods of procurement used to acquire goods, works, and services, either
consultancy or non-consultancy. For more information on these methods, please review Part IV of The Federal
Government Public Procurement Directive.
 Open Bidding  Request for Quotation
 Restricted Bidding  Two stage Tendering
 Request for Proposals  Direct Procurement
The method selected depends on a number of factors including the type and value of goods or service being
procured, the potential interest of foreign bidders, and the cost of the procurement process itself. They are
detailed in Figure 1.

EEP Procurement

Direct Framework Special Large Value

SMALLER SMALL BIG
Procurement Contracts Conditions? Procurements

NO

Consulting Request for

Services?
YES
Proposals

NO

Request
Simple / Ethiopian Complex Two-Stage
for YES Common?
YES Firms only?
NO Procurement?
VERY
Tendering
Quotation

NO NO YES

National International
Restricted Outsource
Competitive PROBLEMS? Competitive PROBLEMS?
Bidding
PROBLEMS? Procurement
Bidding Bidding

SIMPLE COMPLEX

Difficulty of Procurement Procedures

Figure 1 - EEP procurement method alternatives.

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The following methods are available for procurement by EEP staff:
2.1 Open Bidding
This is standard for goods, works, and non-consulting services.

Prepare Procurement Plan with Prepare standard EEP 

official cost estimate of the qualification documents if pre- Prequalify bidders
object of procurement. qualification is necessary

Prepare detailed specification Advertise Invitation for Bid

Develop bid document using
of the object in the (Minimum 30 days for NCB and
Standard Bidding Documents
procurement 45 days for ICB)

Receive bids, open and process

bids, minutes to be taken, Bid Examination, Evaluation,
Form the Tender Opening
opening in presence of and Approval as per Delegation
Committee
committee, open in one of Powers
location, check the bid security

Procurement Processing and Only appointed bid committee

Process to be confidential
Approval Procedure will evaluate

No negotiation is allowed Issue Notification of Award Sign contract

Use standard contract form
Performance security to be
Maintain and archive records of
called if successful bidder fails
procurement
to sign the contract

Figure 2 - Steps in Open Bidding

Open tendering is a method of procurement that may be used for National Competitive Bidding (NCB) and
International Competitive Bidding (ICB). This is a method of procurement were by qualified and eligible
P a g e | 23
bidders are invited to bid through widely spread media, such as newspaper, radio, TV, or the EEP website. This
is the preferred method of procurement of goods, works and services (both consultancy and non-
consultancy), unless the threshold levels or circumstances relating to a specific requirement make it more
appropriate for one of the other procurement methods to be used. All interested bidders are given adequate
notification of contract requirements, and all eligible bidders are given an equal opportunity to submit a
tender. Unless otherwise justified and provided in this manual to use other procurement methods, all
procurement should be made using the Open Bidding method.
2.1.1 National Competitive Bidding
A procurement may be effected by means of National Competitive Bidding notwithstanding that the cost of
the procurement exceeds the threshold established in the directive for national bidding, described below, if it
is ascertained that the required object of procurement is available only locally. EEP must ascertain that the
following conditions are satisfied when using national competitive bidding:
a) Ascertain that the required objects of procurement can only be procured from local suppliers and the
value of the procurement is below the threshold established for International Competitive Bidding:

 For Works Less than Ethiopian Birr 150,000,000

 For Goods Less than Ethiopian Birr 50,000,000
 For Consultancy Services Less than Ethiopian Birr 7,500,000
 For Non-Consultancy Services Less than Ethiopian Birr 21,000,000

Or
b) The required object of procurement is available only locally, even if the cost of the procurement
exceeds the thresholds above.
In the situation where goods and services are available near remote sites/projects and EEP is beneficial by
saving time and budget, regional offices will have the authority to conduct their own procurement using NCB
methods within their limit of delegation of purchase amount.
2.1.2 International Competitive Bidding
This should be done when National Competitive Bidding is insufficient.
This shall be used whenever National Competitive Bidding cannot obtain an effective competition, or for
procurements above the threshold level for National Competitive Bidding. International Competitive Bidding
shall respect the following procedures:
a) the invitation to bid and the bid documents shall be in the English language;
b) the invitation to bid shall be advertised in a newspaper published in English language which has worldwide
circulation and attracts foreign competition as well as on EEP’s website.;
c) the time allowed for submission of bids shall be sufficient for the invitation to reach candidates and for
enabling them to prepare and submit bids. In any case, it shall not be less than the time prescribed in
Section 4.3.6Bid Submission Deadline;

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d) technical specifications of the goods, works and services shall be compatible with national requirements,
and conform as far as possible with international standards or standards widely used in international
trade;
e) candidates shall be permitted to express their bids, as well as any security documents to be presented by
them in Ethiopian Birr, or in a currency widely used in international trade and stated in the bidding
documents;
f) general and special conditions of contract shall be of a kind generally used in international trade.
Without prejudice to the threshold in Section 2.1.1National Competitive Bidding, and provided that conditions
for using other methods of procurement than open bidding are satisfied, EEP may conduct procurement
through International Competitive Bidding by means of restricted tendering, request for proposals, request for
quotation, or direct procurement where it is ascertained that it is impossible to carry out effective
procurement without the participation of foreign companies.

 For Works Greater than Ethiopian Birr 150,000,000

 For Goods Greater than Ethiopian Birr 50,000,000
 For Consultancy Services Greater than Ethiopian Birr 7,500,000
 For Non-Consultancy Services Greater than Ethiopian Birr 21,000,000

2.2 Restricted Bidding

This method is for goods, works, and services in special conditions.

P a g e | 25
 Prepare Procurement Plan with official
Develop bid document using Standard Prepare detailed specification of the
cost estimate of the object of
Bidding Documents object in the procurement
procurement.

Send bids to qualified limited suppliers

(For complex procurement, minimum 35
Receive bids, open and process bids,
days for International Bidding and 30
Prepare a list of qualified potential minutes to be taken, opening in
days for National Bidding; For non-
bidders / Identify limited suppliers presence of committee, open in one
complex procurement, minimum 21
location, check the bid security
days for International Bidding and 15
days for National Bidding)

Bid examination, evaluation and

Procurement Processing and Approval Only appointed bid committee will
approval as per delegation of financial
Procedure evaluate
powers

Sign contract Use standard contract

Process to be confidential Issue Notification of Award
form

Performance security to be called if

Maintain and archive records of
No negotiation is allowed successful bidder fails to sign the
procurement
contract

Figure 3 - Steps in Restricted Bidding

EEP may use restricted tendering as a method of procurement only when it is ascertained that the required
object of procurement is available only with limited suppliers; the cost of procurement does not exceed the
threshold specified below; or where a repeated advertisement of the invitation to bid has failed to attract
bidders. The number of suppliers to whom the invitation to bid is sent shall be such that it is sufficient to
ensure effective competition and shall not as far as possible be less than five competitors.
To carry out procurement by means of restricted bidding, the following conditions must be satisfied in the
order in which they are listed:

P a g e | 26
1. It is ascertained that the required object, goods, works or services of procurement is available only with
limited suppliers;
2. The cost of procurement does not exceed the threshold specified below;
3. Where at least on two times advertisement of the invitation to bid, bidders’ fails to provide their offer or
proposal;
4. Invitation to open bid for the procurement must have been published at least twice, and the invitation
must have attracted no bidder, or the bidder or bidders responding to the second invitation to bid must
have failed to meet the technical requirements set forth by EEP for that procurement.
5. There must have been no factor associated with the invitation to bid, mode or amount of bid security,
bidding document or any other element of the procurement process, restraining candidates from
participating in the bid.
6. EEP must have believed that inviting suppliers engaged in the field pertaining to the object of procurement
to participate in the procurement by restricted bidding attracts such suppliers to participate in the
procurement.
7. EEP must, as far as possible, have established through inquiry that the suppliers engaged in the field have
no ulterior reason for not wanting to participate in open bid for the procurement, which is illegitimate or
prejudicial to the interest of EEP. The financial threshold for restricted bidding is the following:

 For Works Less than Ethiopian Birr 6,000,000

 For Goods Less than Ethiopian Birr 1,500,000
 For Consultancy Services Less than Ethiopian Birr 900,000
 For Non-Consultancy Services Less than Ethiopian Birr 1,200,000
The tendering process shall follow the open tender procedure with the exception of limited invitation of the
short-listed companies. The procuring unit shall not declare the name of the short-listed companies to each
other. The short-listed bidder shall submit their offer on the same date, time, and place of bid opening.
The time allowed for preparation of bids shall not be less than the minimum number of days stated in the
bidding documents. However, if all suppliers invited to participate in the bid have submitted their bids before
the closing date, EEP may open the bid ahead of schedule by giving bidders prior notice.
2.3 Request for Proposals
This method is for consultancy services or projects which are primarily consultancy.

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 Prepare Procurement Prepare Request for
Finalize Terms of
Plan with official cost Proposals with
Reference using
estimate of the object defined evaluation
standard EOI format
of procurement. criteria

Minimum 28-days for

Use standard RfP Send RfP to shortlisted national tenders and
format from PPA candidates 45-days for
international tenders

Receive proposals Public opening of Examine and evaluate

from consultants financial proposals proposals

Determine combined Negotiate with bidder Issue Notification of

score with highest score Award

Performance security
Use standard contract to be called if
Sign contract
form successful bidder fails
to sign the contract

Maintain and archive

records of
procurement

Figure 4 - Steps in Request for Proposal

EEP may engage in procurement by means of Request for Proposals when it seeks to obtain consultancy
services or contracts for which the component of consultancy services represents more than 50% of the
amount of the contract. In the case of consultancy assignments which may involve potential conflicts of
interest, candidates for such assignments must exclude themselves from procurement of goods and works
which may follow as a result of or in connection with the consultancy agreement.
Depending up on nature of the consultancy and the financial amount, the selection of a consultant can be
made using Quality and Cost Based Selection (QCBS), Quality Based Selection (QBS), Fixed Budget Based

P a g e | 28
Selection (SfB), Least Cost Selection (LCS), Selection Based on Consultants Qualification(SBCQ), Single Source
Selection (SSS). For more information on these evaluation methods see Section 1.6.4Bid Evaluation and
Section 3Evaluation Methods.
To carry out procurement by means of Request for Proposal, the following conditions must be satisfied in the
order in which they are listed:
1. When EEP desires to procure consultancy service for which the value is estimated at more than 900,000
ETB, EEP must first solicit a Request for Expression of Interest from potential consultants. For amounts less
than 900,000ETB, the procuring unit may short list from its supplier list using the restricted tender
procedure.
2. The invitation shall be advertised in large circulated newsletter or EEP's website. All documents and the
advertisement shall be prepared in English.
3. When advertising Expression of Interest, the advisement should specify the deliverables, time and location
of bid opening, consultant qualifications and experience, and the required support documentation
required.
4. The competitors who supply Expressions of Interest shall be evaluated and ranked. The total short-listed
competitors should not be less than three and not more than seven. EEP will then issue Request for
Proposals using set selection criteria to the highest ranked three to seven qualified consultants.
5. The Request for Proposal shall be issued at the same time to all selected potential consultants. When EEP
believes that the tender document should be conveyed free of charge, it will supply the tender documents
along with the Request of Proposal letter.
2.4 Request for Quotations
This is for readily available goods, works, and services with established market supply. It is also known as Pro
Forma purchasing.

P a g e | 29
 Prepare Procurement
Plan with official cost
estimate of the object
of procurement.
Prepare quotation with
Send quotations to at
details on quality,
least three prospective
quantity and delivery
tenderers
time

Recommend lowest
Receive priced
Examine and evaluate evaluated tenders along
quotations after 1 to 2
quotations with comparative
weeks
statements

Issue purchase order for Issue Notification of

Sign contract
contract Award

Performance security to
Use standard contract be called if successful Maintain and archive
form bidder fails to sign the records of procurement
contract

Figure 5 - Steps in Request for Quotation

Proforma procurement is discouraged as a method of procurement. Only items omitted from the
procurement plan which are under the financial threshold can be procured using this method. Intentional
splitting of one purchase order (request or requirement) for the sake of meeting proforma threshold is
prohibited. In addition, when a user department requests an item that is not in the annual Procurement Plan,
the user department must justify why the item is not included in annual procurement plan, and also explain
the urgency of the new item to procure through open bidding method.
This method is commonly used for low value and low volume procurements such as operational and stock
goods. The request is made to a limited number of suppliers for quotations through pro forma invoices. EEP
may engage in procurement by means of request for quotations for the purchase of readily available goods or
for procurement of works or services for which there is an established market, so long as the estimated value
of the contract does not exceed an amount stated below:

 For Works Less than Ethiopian Birr 500,000

 For Goods Less than Ethiopian Birr 200,000
 For Consultancy Services Less than Ethiopian Birr 120,000
 For Non-Consultancy Services Less than Ethiopian Birr 150,000

P a g e | 30
Request for quotation can be used to procure goods, works or services the need of which cannot be foreseen,
or which cannot be included in the EEP's bulk purchase of needed items, or which are needed for immediate
use. To carry out procurement by means of Request for Quotation, the following conditions must be satisfied
1. In any procurement made by means of request for quotation, not less than three candidates, as far as
possible, shall be selected from the suppliers’ list in compliance with the following rules to ensure fairness
in the selection:
a. Unless the interest of EEP requires otherwise, the same supplier or suppliers shall not be selected
repeatedly, so that other suppliers in the suppliers list may have the opportunity of competition to
sale to EEP.
b. EEP has to establish a system to prevent possible acts of connivance in offering and accepting price
in the process of procurement by request for quotation and carry out price verification regularly in
accordance to the current price list posted on the Public Procurement Agency’s website and to the
price survey carried out by the procurement unit and accept the lowest price in respect of an item
as the prevailing market price of that item.
2. Each candidate shall be allowed to quote a firm price which may not be changed. No negotiation shall be
allowed between EEP and the candidate on the price quoted by the candidate.
3. The successful supplier shall be selected on best price basis, by comparing supplies meeting the quality
characteristics of the EEP’s requirements as described in the specification.
4. For the purpose of evaluation, prices offered by suppliers in response to a request for quotation shall
include taxes.
5. In procurement made by request for quotation, the Proforma presented by a supplier to EEP and the
respective letter of purchase order sent by EEP to that supplier constitute a contract between EEP and the
supplier. Hence, it is not necessary for EEP and the supplier to sign a contract.
6. EEP may not split procurements merely to take advantage of provisions governing procurements by
request for quotation.
In the situation where goods and services are available near remote sites/projects and EEP is beneficial by
saving time and budget, regional offices, after communicating with central procurement unit, will have the
authority to conduct their own procurement using request for quotation methods within their limit of
delegation of purchase amount and given that NCB is not possible.
2.5 Two-Stage Bidding
This complex method is used to procure goods, works, and services with difficult specifications.

P a g e | 31
Prepare Procurement Prepare First Stage
Finalize Terms of
Plan with official cost bidding documents
Reference using
estimate of the object with general project
standard EOI format
of procurement. requirements

Send bidding
Use standard ICB Bid security not
documents to
format from PPA required
shortlisted candidates

Minimum 28-days for Discussion with

national tenders and Receive proposals candidates on
45-days for from vendors contents of
international tenders submissions

Prepare Second Stage

Send bidding
bidding documents Use standard ICB
documents to
with defined format from PPA
shortlisted candidates
evaluation criteria

Minimum 28-days for

Bid security is national tenders and Receive proposals
required 45-days for from vendors
international tenders

Public opening of Examine and evaluate Determine combined

financial proposals proposals score

Negotiate with bidder Issue Notification of

Sign contract
with highest score Award

Performance security
Maintain and archive
Use standard contract to be called if
records of
form successful bidder fails
procurement
to sign the contract

P a g e | 32
Figure 6 - Steps in Two-Stage Bidding

In Two-Stage Bidding, the suppliers will submit initial tenders containing their proposals without a tender
price; these may be for goods, works, or services. EEP will then hold discussions with the candidates on the
content of their proposals. EEP will next draw up a specification which is more appropriate to its
requirements, and EEP will then communicate the revised specification to the candidates who submitted
responsible bids at the first stage, and invite such candidates to submit new proposals on the basis of the
revised specification. EEP may delete or modify any aspect of the original request. The bidding document to
be proposed for the second stage bidding shall as far as possible comply with the procedure of competitive
bidding.
EEP will evaluate the bids in accordance with the criteria set forth in the bidding documents. Finally, EEP can
negotiate with the first ranking bidder concerning any aspect of its bid except price.
EEP may engage in procurement by means of Two-Stage Bidding under the following conditions:
• When it is not feasible for EEP to formulate detailed specifications for the goods or works and in the case
of services, to identify their characteristics and, in order to obtain the most satisfactory solution to its
procurement needs;
• Large complex facilities awarded as single responsibility (including as turnkey) contracts for the design,
supply and installation, or single responsibility contracts for the supply and installation of a facility or plant;
• Works for a complex and special nature, or Complex information and communication technology that are
subject to rapid technology advances, it may be undesirable or impractical to prepare complete technical
specification in advance;
• When EEP seeks to enter into a contract for the purpose of research, experiment, study or development,
except where the contract includes the production of goods in quantities sufficient to establish their
commercial viability or to recover research and development costs;
• Where bid proceedings are initiated but no bids are submitted as a result of the nature of the object of
procurement not being clearly described or where all bids are rejected due to failure on the part of EEP
concerned to draw up a clear and complete specification;
• Because of the technical character of the required goods or works, or because of the nature of the
consultancy or other services it is necessary for EEP to negotiate with the suppliers.
2.6 Direct Procurement
For goods, works, and services under specially prescribed conditions only.

Prepare Procurement Prepare detailed

Develop bid document
Plan with official cost specification of the
using Standard Bidding
estimate of the object object in the
Documents
of procurement. procurement

Identify sole contractor Issue purchase order Negotiate with

or supplier for contract contractor or supplier
P a g e | 33
 Sign contract
Award

Figure 7 - Steps in Direct Procurement

EEP may use Direct Procurement for procuring goods and related services, works and physical services, and
intellectual and professional services directly from one single source without going through all the
requirements of a full bidding process. However, this method can only be used for justified reasons, and shall
under no circumstances be used as a means of avoiding competition or for favoring any one particular bidder.
EEP may use Direct Procurement only where the following conditions are satisfied:
• When in absence of competition (for technical reasons) the goods, works, consultancy or other required
services can be supplied or provided only by one candidate;
• For additional deliveries of goods by the original supplier which are intended either as parts of
replacement for existing supplies, services or installations or as the extension of existing supplies, services
or installation where a change of supplies would compel EEP to procure equipment or services not
meeting requirements of interchangeability with already existing equipment or services;
• EEP may carry out directly from any supplier, procurement of goods or services not included in their
procurement plan, or goods or services necessary to solve problems encountered during travel the value
of which doesn’t exceed Birr 5,000 (Five thousand five hundred Birr) however, the total value of such small
procurements within a fiscal year shall not exceed Birr 75,000 (Seventy-Five Thousand Birr)
• Below 2,000,000 ETB, when additional works, which have been not included in the initial contract have,
through unforeseeable circumstances, become necessary since the separation of the additional works
from the initial contract would be difficult for technical or economic reasons;
• Below 2,000,000 ETB, for new works consisting of the repetition of similar works which conform to a basic
project of which an initial contract has been awarded on the basis of open or restricted bidding;
• Below 300,000 ETB, for continuation of consultant services, where the original contract has been
satisfactorily performed and the continuation is likely to lead to gains in economy and efficiency;
• Below 400,000 ETB, for other services;
• The head of EEP has determined that the need is one of pressing emergency in which delay would create
serious problems and therefore injurious to the performance of that EEP;
• Where situations arise in which shopping becomes necessary to meet the special procurement needs of
EEP. A decision to use Direct Procurement Method shall be approved in writing by the head of EEP or an
officer authorized by him/her.
• for purchase of goods made under exceptionally advantageous conditions which only arise in the very
short term. This provision is intended to cover unusual disposals by firms, which are not normally
suppliers. It is not intended to cover routine purchases from regular suppliers.
EEP shall ensure that this method is not resorted to with a view to avoiding possible competition or in a
manner which would constitute a means of discrimination among candidates.
2.7 Outsourced Procurement
This procedure is not common.

P a g e | 34
 In the Directive, Part II Section 5, and the Proclamation, Article 8/F, the head of EEP may authorize the
outsourcing of procurement by reason of its complexity or for lack of capacity in EEP to handle that
procurement, in conformity with the following procedures:
a) Ensure that the outsourced procurement service is rendered in compliance with the provisions herein.
b) Ensure that there is clear demarcation of responsibility between EEP and the entity to which the
procurement is outsourced in the execution of the procurement.
c) Ensure that all decisions taken in respect of out sourced procurements have secured the approval of EEP.

3.0 Evaluation Methods…………………………….43

EEP must indicate clearly the bid evaluation criteria in the evaluation and qualification section of the bidding
document.
3.1 Pretender Evaluation
3.1.1 Expression of Interest
EEP shall invite expression of interest for procurement of consultancy service the estimated value of which
exceeds 300,000 birr. The invitation for Expression of Interest shall state that the invitation is only for
expression of interest.
• The invitation for expression of interest shall state the type of the required consultancy service, the
expected output, the time for completion of the assignment, the qualification required of the consultant,
work experience and any other relevant information as well as the list of documents to be submitted and
the manner, time and place of submitting such documents.
From among the consultants responding to the invitation of EEP for expression of interest, not less than three
but not more than seven consultants, as far as possible, demonstrating better suitability for the required
consultancy service shall be chosen on the basis of evaluation of their profiles, and such consultants shall be
invited to submit their proposals in accordance with Section 1.6.2.5.Error: Reference source not found
3.2 Prequalification
Procurements requiring prequalification bids should satisfy at least one of the following criteria:
 Where the procurement pertains to a work of design, manufacturing or installation of a very high value or
complex nature.
 Where the procurement pertains to a turnkey contract of works, or the acquisition of machinery or
Information technology.
 Where the procurement pertains to supply of goods or equipment of considerable importance and
includes installation.
 Where the cost of drawing up bidding documents is so high that only pre-qualified bidders should
participate in the bid.

P a g e | 35
Bidding documents for pre-qualification shall be prepared inconformity with the standard bidding document
concerning pre-qualification issued by the agency.
Bidder under prequalification screening shall be required to produce evidence in proof of the following facts
to demonstrate their qualification:
 The experience of the bidder enterprise in producing the good, rendering the service or executing the
work required;
 The capability of the enterprise to deliver the required object of procurement, (goods, works or services,)
in terms of having adequate human power, machinery, equipment and complete infrastructure,
 The amount or quantity of works the enterprise is presently executing or goods it is manufacturing,
 That the enterprise has good reputation and financial standing that enables it to perform its obligations
under the contract
Evaluation of bids shall be conducted in accordance with the criteria formulated by EEP to evaluate pre-
qualification bids.
3.3 National and International Competitive Bidding Evaluation
Selection of a successful bidder shall be carried out in either of the following two methods.
3.3.1 Least Cost
Lowest financial price after meeting minimum technical requirements
Setting the minimum technical requirement and selecting the bidder with the lowest evaluated bid from
among the bidders meeting such minimum technical requirements. Life cycle cost analysis can be used to
evaluate lowest financial costs, meaning that the evaluation can be conducted on lowest initial price or lowest
initial price + maintenance cost + operational costs over a specified time period.
3.3.2 Quality and Cost Based Selection
Maximum 50% technical / minimum 50% financial
Indicating clearly in the bidding document the criteria to be applied to determine the functional or economic
value of the procurement and the relative weight to be ascribed to each criterion and selecting the bidder
with the highest cumulative result by conducting evaluation based on these criteria. The World Bank method
for weighting evaluation criterion is recommended; see Section 16.5.1Prioritization of Rated Criteria.
The criteria selected for conducting evaluation as described in Quality and Cost Based Selection shall be
objective and should, as far as possible, be expressed in monetary terms in respect of achieving maximum
value for money and shall take the following conditions into consideration:
• Where the object to be procured is standard supply, whether a value can be sought in respect of that
object which is useful to EEP and which can make a difference among the bidders and facilitates the
selection of the successful bidder.
• Whether a value offered by a bidder in addition to the minimum requirement would bring extra benefit to
EEP, and whether the extra benefit, if any, is significant,

P a g e | 36
• That there is no standard for the goods to be procured and whether similar goods are available which can
respond to the specification in different levels in terms of creating extra benefit to EEP.
• In respect of goods of long term service, whether EEP has to incur different costs of operation,
maintenance and disposal on account of variation in the source of the supply.
• The relative weight to be ascribed to price should not be less than fifty percent (50%) of the total merit
point.
3.3.3 Two Stage Bidding
This evaluation method is appropriate for International Competitive Bidding.
It shall be stated in the invitation to bid that the procurement shall be carried out by means of two stage
bidding, and candidates shall not be required to furnish bid security during the first of the two stages bidding.
Since the purpose of the first stage is to draw up detailed schedule of requirements based on proposals from
candidates, the bidding document prepared by EEP for the first stage shall state the requirements of EEP in
general terms and incorporate the necessary description and questionnaires.
• The technical proposal submitted by candidates during the first stage shall be opened in the absence of the
candidates in the manner stated in the invitation to bid.
• The first stage evaluation shall focus on examining the proposals submitted by candidates at the first stage
to identify the schedule of requirements necessary and the bidders qualifying for the second stage bidding.
• During the first stage evaluation, EEP may also hold discussion with all, some or one of the candidates as
necessary. The discussion shall aim to create better understanding of the proposal submitted by the
candidates.
The bidding document to be proposed for the second stage shall as far as possible comply with the procedure
of competitive bidding set forth in Section 2.1Open Bidding and Section 3.3National and International
Competitive Bidding.
• Invitation shall be sent to the candidates whose proposals have been accepted in the first stage bidding to
participate in the second stage bidding.
• Such bidders shall be required to furnish bid security.
• EEP shall send to such bidders or require them to collect in person the bidding document prepared for the
second stage bidding.
• The invitation to bid sent to the candidates shall state clearly the requirements they have to fulfill to
obtain the bidding documents.
3.4 Request for Proposal Evaluation
Where EEP opts to procure consultancy service by means of Request for Proposal and the estimated value of
such procurement is above ETB 900,000, bid documents for procurements will be made by applying the
selection methods described below and shall be submitted in two envelopes containing the technical and
financial proposals separately.
3.4.1 Quality and Cost Based Selection
80% technical and 20% financial
P a g e | 37
The consultant scoring the highest point in the total sum of the technical and financial evaluation shall be
selected as the successful bidder when using Quality and Cost Based Selection. In evaluating and comparing
technical proposals submitted by consultants in a bid for procurement of consultancy service, EEP shall use the
following criteria:
• The experience of the consultant relevant to the service required;
• The methodology the consultant proposes to apply in conducting the study or research;
• The knowledge the consultancy service to be rendered by the consultant transfers to EEP;
• The level of participation of Ethiopian consultants in the important components of the consultancy service
to be rendered by foreign consultants.
The World Bank method for weighting evaluation criterion is recommended; see Section 16.5.1 Criteria. The
following percentage points shall be given for each criterion listed above, depending on the type of the
required consultancy service:

Experience of the consultant 5-10%

Method applied in doing the study or research 20-50%
Ability to transfer knowledge 5-10%
Competence of key professionals 30-60%
Participation of Ethiopians 5-10%
Bidders getting less than 70% in the
technical evaluation shall be rejected and the envelopes containing the financial proposals of those
consultants scoring 70% and above shall be opened. The envelopes containing the financial proposals of those
consultants who failed to achieve the points required to qualify for financial evaluation shall be returned to
them unopened.
Prices offered by local consultants shall include local taxes. Prices offered by foreign and local consultants may
also include translation, travel, stationery and other incidental expenses. In the financial evaluation, the
highest point shall be given to the lowest priced bid, and conversely, the lowest point shall be given to the
highest priced bid; among technically qualified bids. The points given to other bidders shall be determined
depending on their price offers using the formula below:

LowestPricedBid
Points= ∙ PointsAvailableinFinancialEvaluation
Bid Under Evaluation

From the total merit points to be given for proposals submitted by consultants in a bid for procurement of
consultancy service, the share of technical proposal shall be 80% and the remaining 20% shall be the share of
financial proposal.
3.4.2 Quality Based Selection
Quality Based Selection shall be used under the following conditions:

P a g e | 38
• Where the complexity of the consultancy service calls for special qualification and for this reason it is
difficult to define precise terms of reference or the required input from the consultants, for which the
client expects the consultants to demonstrate innovation in their proposals.
• Assignments that have a high downstream impact and in which the objective is to have the best experts.
• Assignments that can be carried out in substantially different ways, when comparison of such proposal is
expected to be difficult.
The envelopes containing the technical proposals shall be opened in the presence of the bidders, and the
bidder scoring the highest point in the evaluation of the technical proposals shall be selected as the successful
bidder. If the price offered by the selected bidder is beyond EEP's ability to pay, EEP may enter into a contract
with the bidder scoring the second highest point in the technical proposal to procure the required service,
provided that the price offered by such bidder is affordable to EEP. Upon signature of the contract with the
selected bidder, the envelopes containing the financial proposals of the unsuccessful bidders shall be returned
to such bidders unopened.
3.4.3 Fixed Budget
This method is appropriate only when the assignment is simple and can be precisely defined and when the
budget is fixed.
• The envelopes of the technical proposals shall be opened in the presence of the bidders.
• The technical evaluation shall be carried out in accordance with the provisions of Section3.4.1Quality and
Cost Based Selection.
• The financial envelopes of the bidders, who have technically qualified, shall be opened in their presence
and the price offered by each bidder shall be read out.
Bidders offering price in excess of the budget available for the procurement shall be disqualified. The bidder
offering the price within the budget limit allocated to the procurement and scoring the highest point in the
total sum of the technical & financial evaluations shall be selected as the successful bidder. If necessary,
negotiation may be held with the selected bidder on certain issues excluding price.
3.4.4 Least Cost
This method is appropriate for procurement of a consultancy service which is standard, simple and doesn't call
for special qualification of a consultant.
• In evaluating bidders by applying this method, EEP shall set the minimum point of technical evaluation
which they shall indicate in the request for proposal to be issued for consultants who are selected from
the suppliers list.
• The envelopes of technical proposals shall be opened in the presence of the bidders and the evaluation
shall be carried out thereafter.
• Bidders failing to score the minimum point set for technical qualification shall be disqualified.
• The envelopes containing the financial evaluation of bidders not satisfying the minimum point set for
technical qualification shall be returned to them unopened.

P a g e | 39
• The financial envelopes of the bidders who have technically qualified shall be opened in their presence and
the price offered by each bidder shall be read out.
• The bidder offering the lowest evaluated price shall be selected as the successful bidder from among the
bidders who have technically qualified.
3.4.5 Consultants' Qualification
This method may be used for small assignments of which the cost and time required for preparing and
evaluating competitive proposals is not justified, and where the value of the consultancy services does not
exceed Birr 50,000.
• The terms of reference to be prepared for such consultancy service shall require candidate consultants to
state their experience and level of qualification.
• The consultancy assignment shall be based on the agreement reached through negotiation on the
technical and financial proposal of the consultant selected through evaluation of information submitted by
candidates chosen from the suppliers' list or contained in the data base of EEP.
3.4.6 Single Source Selection
EEP may procure consultancy service by means of single source selection, provided that the conditions stated
in Section 2.6Direct Procurement are satisfied.
3.5 Request for Quotation Evaluation
In request for quotation evaluation, each candidate shall be allowed to quote a firm price which may not be
changed. For the purpose of evaluation, prices offered by suppliers in response to a request for quotation shall
include taxes. No negotiation shall be allowed between EEP and the candidate on the price quoted by the
candidate. For the purpose of price verification, EEP shall refer to the current price list posted on PPA's
website, cost estimate from the user department and to the price survey carried out by Marketing and
Business Department and accepts the lowest price in respect to an item as the prevailing market price of that
item. The successful supplier shall be selected on best price basis, by comparing supplies meeting the quality
characteristics of the EEP's requirements as described in the specification.

P a g e | 40
P a g e | 41
4.0 Tender Procedure

For more information on these methods, please review Part IV of The Federal Government Public Procurement
Directive.
EEP Procurement Process
End User Department Engineering Department Procurement Department
Procurement
Planning

Receive and Prepare Annual Prepare

Aggregation of Develop
Review Consolidated Individual
Department Procurement Okay? YES
Procurement Procurement Procurement
Needs Plan
Plan Plan Plan
NO

Submit Approved
Pre-Bid

Review PR Select
Purchase Prepare Tender
Approvals and Okay? YES Procurement
Requisition and Documents
Specifications Method
Specifications
NO
Invitation to

Issue ands
Bid

Advertise Tender Record Bidder

Information
Clarifications
Bid

Receive
Answer Questions Respond
Questions
Bid Opening

Bid Opening Bid Security

Bid Evaluation

Bid Evaluation Award? NO Notify Bidders END

YES
Contract
Signing

Notify Successful
Negotiate if Provide Supplier
and Unsuccessful
Apllicable with Contract
Bidders
Management
Contract

Goods/Services/
Appoint Contract Works Delivery Evaluation
Manager Verification and
Contract Closure
Report
END
Inspection

Figure 8 - EEP procurement process.

P a g e | 42
The procurement lead-time under foreign and local procurements for the different procurement methods
shall be as follows (all time in working days):
Direct
Activity International Competitive Bidding Restricted Tender
Procurement
Preparation of bid
10-60 3-10 3
documents& publication
Floating of tender 10-45 21-45 -
Evaluation of bids 7-30 7-15 5
Review & preparation of
5-10 2-5 3
award recommendation
Approval of award 5-15 2-5 2-5
Notification of award 10 10 5
Negotiation 5-10 5-10 0-5
Issuance of purchase
3 3 5
order &signing of contract
Issuance and receipt of
5 5 5
performance bond
Opening of letter of credit 7 7 7
Shipment or delivery&
90-180 90-180 45-90
submission of work
Processing of documents
10-15 10-15 10-15
for customs clearance
Clearance transportation
4 -21 4 -21 4 -21
& handing over
Total Days 171-411 169 -331 94 -161
Table 2 – International Procurement Lead-Time

Direct
Activity National Competitive Bidding Restricted Tender
Procurement
Preparation of bid
10 2 2-10
documents& publication
Floating of tender 7-30 15-30 -
Evaluation of bids 7-15 7 3
Review & preparation of
7 7 7
award recommendation
Approval of award 2-5 2-5 2-3
Notification of award 2 2 2
Negotiation 2-3 2-3 0-1
Issuance of purchase
order &signing of 2 2 2
contract
Issuance and receipt of
5 5 5
performance bond
Shipment or delivery &
15-30 15-30 1-5
submission of work
Transportation & handing
3 3 3
over
Total Days 65-112 62-96 27-43
Table 3 – National Procurement Lead-Time

P a g e | 43
In the situation where goods and services are available near remote sites/projects and EEP is beneficial by
saving time and budget, regional offices, after communication with central procurement unit, will have the
authority to conduct their own procurement using the best suited procurement methods.

4.1 Tender Preparation

4.1.1 Initiation
Each EEP work unit prepares annual purchase plan and schedule at the beginning of new budget year. The
Purchase Request is initiated by each work units based on business plans. The budget should be considered
before Purchase Request initiation. The engineering unit prepare specification. The specification shall be
approved by managers, executive officer or chief executive officer based on the delegation of signing
authority. The procurement office selects the appropriate mode of procurement method based on the type of
items and the urgency. Tender document should approve by managers, executive officer or chief executive
officer depending on the signing authority. In general, a procurement can be initiated from the user
department but it shall be planned at the beginning of the year. If not, it shall be an emergency procurement
request signed by the respective executive officer. In both cases, the user department shall attach a
specification prepared by Engineering department or ITC Department.
For goods, a working unit requests its requirement to Logistics and Warehouse department with a Store
Requisition form (it shall be approved by the user department and verified by the Financial Planning and
Budget work unit). If the goods will be at stock, the user can obtain the goods from the store. If it is out of
stock, the LW office issues a Purchase Request (PR) to Procurement Unit. The PR will be provided with
Specification to proceed the procurement.
For works, and services, the user department shall request its procurement with a letter. The request consists
of a detail scope, specification, TOR and employer requirement of the procurement requirement. These
technical requirements shall be prepared and approved by an independent technical team. Such as EEP
Engineering, ICT or a consulting firm that hires as representative of EEP. The technical team shall be
responsible for inspecting and supervising of the work or the service against the requirement that has been
included in the request for the procurement.
4.1.2 Expression of Interest
The selection of candidates for consultancy services in a Request for Proposals, above a threshold to be
determined by a directive, shall be made after inviting candidates to submit an Expression of Interest.
4.1.3 Pre-Qualification
There is no pre-Qualification in Open Bidding, however a candidate must be both eligible and qualified to win
the award. EEP can use pre-qualification for national or international procurements as necessary. No
restriction shall be imposed in the number of bidders passing to the second stage bidding as long as such
bidders have pre-qualified.
Procurements requiring prequalification bids should satisfy at least one of the following criteria:

P a g e | 44
 Where the procurement pertains to a work of design, manufacturing or installation of a very high value or
complex nature, or
 Where the procurement pertains to a turnkey contract of works, or the acquisition of machinery or
Information technology, or
 Where the procurement pertains to supply of goods or equipment of considerable importance and
includes installation, or
 Where the cost of drawing up bidding documents is so high that only pre-qualified bidders should
participate in the bid.
Bidders under prequalification screening shall be required to produce evidence in proof of the following facts
to demonstrate their qualification:
• The experience of the bidder enterprise in producing the good, rendering the service or executing the
work required;
• The capability of the enterprise to deliver the required object of procurement, (goods, works or services,)
in terms of having adequate human power, machinery, equipment and complete infrastructure,
• The amount or quantity of works the enterprise is presently executing or goods it is manufacturing,
• That the enterprise has good reputation and financial standing that enables it to perform its obligations
under the contract
Other considerations are the following:
• EEP may allow bidders participating in a prequalification bid to compete in joint venture or partnership.
However, bidders who have prequalified individually shall not be allowed to compete in joint venture or
partnership unless it is established that the joint venture or the partnership does not narrow the scope of
the competition.
• Bidders participating in pre-qualification bid as joint venture or in partnership and pre-qualifying as such
shall not be allowed to compete individually in the next stage bidding.
• The result of the pre-qualification evaluation approved by EEP shall be disclosed at the same time to all
bidders participating in the bid, regardless of whether such bidders have prequalified.
• EEP may not sign a contract with a winning bidder if the information given by the bidder in prequalification
is found to be wrong, or if it is established, with reasonable degree of certainty, that it no longer possesses
the capability on the basis of which it prequalified.
• The rest of the procurement process shall be carried out in accordance with the national or international
competitive bidding procedures.
If Restricted Tendering is used, the invitation to bid shall as far as possible be sent to limited suppliers chosen
from among those registered in the suppliers list on the basis of the following consideration:
1. any selection shall allow opportunities for suppliers on the list,
2. the number of suppliers to whom the invitation to bid is sent shall be such that it is sufficient to ensure
effective competition and shall not as far as possible be less than five competitors.
Requests for Proposals for consultancy services shall be addressed to not less than three and not more than
seven candidates selected by EEP. This number can be achieved through prequalification.
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EEP shall Request Quotations from as many candidates as practicable, but from at least three, if possible from
among suppliers registered in the suppliers list. In cases where procurements are made using Request for
Quotation, as long as other suppliers, who can supply the same goods, services or works are available, EEP
shall not repeatedly invite the same suppliers to submit their quotations. EEP shall ensure that equal
opportunity of participation in public procurement is given to all candidates engaged in the business.
4.2 Bidding Documents Preparation
The bidding documents shall contain sufficient information to enable competition among the bidders to take
place on the basis of complete, neutral and objective terms. In particular, bidding documents must include:
1. Instructions for the preparation and submission of bids;
2. Information about the final date for receipt of bids, the address to which bids must be sent, the date, hour
and place of opening, as well as an announcement that bidders or their representatives are allowed to
attend the opening ceremony;
3. Bid submission forms and, where applicable, forms of bid security to be provided;
4. The number of copies to be submitted with the original bid;
5. The general and specific conditions of the contract;
6. Specification of requirements, including time limit for delivery or completion of the task, as appropriate; a
Request for Quotations, the request must include a clear statement of the requirements of EEP as to
quality, quantity, terms, and time of delivery of the goods, works, consultancy or other services, as well as
other special requirements.
7. Evidence to be provided by the bidder to demonstrate its qualifications as well as its fiscal and legal
standing;
8. The period during which the bid remains in force;
9. The criteria and the points given to each criterion for evaluation of bids and award of the contract; for
Requests for Proposals for consultancy services, the criteria for evaluating the proposals, the relative
weight to be given to price and other criteria, and the manner in which they will be applied in the
evaluation of proposals;
10. A reservation to the effect that EEP may reject all bids at any time prior to the notification of award; and
In Two-Stage Bidding, the solicitation documents shall call upon suppliers to submit, in the first stage of the
two-stage bidding proceedings, initial tenders containing their proposals without a tender price.
• The solicitation documents may solicit proposal relating to the technical, quality or other characteristics of
the goods, works or services as well as to contractual terms and conditions of supply, and where relevant
the professional and technical competence and qualifications of the suppliers.
In National Competitive Bidding, EEP must use the standard bidding document prepared by PPA or EEP can
revised accordingly to use the standard documents. EEP should reproduce the part of the Standard Bidding
Documents dealing with the instruction to bidders and the general conditions of contracts without change,
while making any adjustment to the other parts of the Standard Bidding Documents appropriate to the type
and nature of the procurement. Any bidding document prepared for a procurement subject to the approval of
the Procurement Endorsing Committee must be approved by the Committee before use.

P a g e | 46
In International Competitive Bidding, EEP must prepare all documents in the English language. The schedule
of requirements to be prepared shall comply with national standard and be internationally acceptable. ICB
with donor or World Bank money may require the use of other standard bidding documents.
4.2.1 Instruction to Bidders and Bid Data Sheet
EEP must ensure that bidders in National Competitive Bidding get the instruction to bidders and the bid data
sheet. The instructions to bidders must include the following:
a) A general description of the goods, works, consultancy services or other services to be procured, the full
name and address of EEP, and the source of finance of the procurement.
b) The criteria that bidders are expected to fulfill including a statement of requirement that domestic bidders
submitting bids for a contract value of Birr 100,000 and above must present value added tax registration
certificate and foreign bidders must as appropriate submit business organization registration certificate or
trade license issued by the country of establishment.
c) An indication of the address and time for submitting requests of clarification on the bidding document and
a statement that such request has to be made in writing.
d) The content of bid documents to be submitted by candidates, the language in which bid documents have
to be submitted, the type and number of necessary documents and complementary forms described in the
bidding documents.
e) An indication that the bidder has to sign on anti-bribery pledge form; a statement of undertaking to
observe Ethiopian Law against fraud and corruption and other forms that ought to be completed and
signed by him/her.
f) A statement indicating that bidders attempting to influence the bid shall be disqualified from the bid,
prohibited from participating in any future public procurement and the bid security deposited by them
shall be forfeited.
g) If bidders are required to submit samples, the place where the samples are to be delivered and if
appropriate, the time when and the place where the samples will be openly shown, as well as an indication
that samples are to be returned to the unsuccessful bidders or not.
h) The place where the bid box is available and a statement indicating that bids submitted after the bid is
closed shall not be accepted.
i) A statement indicating the methodology of evaluating bids, the criteria for the evaluation and the weight
each criterion shall have as well as the conditions for submitting further proposals to select the successful
bidder and the criteria for evaluating such proposals where two or more bidders get equal evaluation
results.
j) Whether it is possible to make price adjustment in the course of the performance of the contract and the
condition in which such price adjustment is made, if it is allowed,
k) An indication of the mode and amount of bid and performance securities required and the validity period
of same.
l) The deadline for submission of bids and the place date and hour of the bid opening.
m) The validity period of the bid as well as the place and time of delivery.

P a g e | 47
n) A statement indicating the manner of application of preference to local products and companies granted
by the Proclamation.
o) An indication whether the bids are to be submitted in a single or double envelopes, the manner in which
the envelopes are sealed, the requirements that the original and copies of the bid documents shall be
uniform, the number of copies, that all documents have to be signed by authorized persons and the seal of
the organization shall be affixed there to, the manner in which supporting documents (current tax
clearance certificate, renewed business license and other documents) should be submitted.
p) If advance payment is to be made, the amount of such payment and the mode of the corresponding
guarantee required as a prerequisite for such advance payment
q) An indication that if bidders are aggrieved by the decision rendered during the procurement process, they
have the right of complaint in accordance with Chapter 14 of the Proclamation and Articles 45 and 47 of
the Directive, and the place where such complaint may be filed. Refer Section10.7 Appeals Procedures for
more information on this topic.
r) An indication that EEP has the right to decrease or increase the quantity of the goods or services by up to
20% (twenty percent) when awarding the contract without changing the unit price offered by the bidder.
s) No change shall be allowed to the content of the instruction to bidders of the standard bidding document.
Any modification to be made to the instruction to bidders shall be indicated only in the bid data sheet.
For International Competitive Bidding, bid prices offered by foreign bidders shall be quoted and bid securities
required of such bidders shall be furnished in a freely convertible currency used for payment in international
commercial transactions. Where a foreign bidder uses local inputs to satisfy the required object of
procurement under the contract, the portion of the total contract price representing such local expenditure
shall be expressed in birr in the price schedule of the bidder.
4.2.2 Bid Form and Price Schedule
Bidders should use only the standard bid form and the price schedule provided by EEP. The price schedule
allows the bidder to clearly indicate price, tax, and other issues related to price, to facilitate transparent and
efficient bid evaluation. The bid form enables the candidate to present a clear proposal, understand the bid
procedure, and it should warn against acts of disruption of the bid process and inform the candidate that they
take full responsibility for the bid proposal submit.
4.2.3 Bid Validity Period
EEP should carefully decide the validity period of the bid and indicate this in the bidding documents. While the
validity period of bid document or bid, price varies depending on the type of the procurement, EEP shall take
the following matters into consideration in fixing the period:
• The complexity of the procurement in question and the estimated time required for the bid proceeding.
• The estimated number of candidates participating in the bid.
• The experience of EEP in evaluating bids of similar nature
• The price volatility of the procurement
The validity period should take into account the time necessary for EEP to evaluate the bid, to obtain the
approval of the Procurement Endorsing Committee or Purchase committee, to consider complaints, and to sign
P a g e | 48
a contract with the successful bidder. However, the validity period of bid shall not extend beyond 60 days
from the date of bid opening, unless EEP believes that a bid submission requires a longer review period.
Although EEP should complete bid evaluation and sign contracts with successful bidder within the bid validity
period, if for reasons beyond its control the price validity period expires before the completion of the bid
evaluation, EEP can request bidders to extend the validity period of their bid price. Any extension of bid
validity should only be for such time as is necessary to complete the remaining part of the bid evaluation.
Bidders who are not willing to extend their price validity period for whatever reason shall be disqualified from
the bid without forfeiting their bid security.
Bidders agreeing to EEP's request for extension must express in writing their agreement to such request and
for how long they are willing to extend the period. Similarly, they have to amend the validity period of their
bid security on the basis of the extension of the price validity period they have agreed to, or alternatively,
furnish new bid security to cover the extended period. Any bidder not agreeing to extend the validity period of
the bid security shall be treated as a bidder refusing EEP's request for extension of price validity period, and as
such, shall be disqualified from the bid.
4.2.4 General and Special Conditions of Contract
EEP must ensure that the general and special conditions of contract are included in the Standard Bidding
Documents with no changes made to the content of the general conditions of contract. The special conditions
of contract may be modified depending on the type and nature of the procurement. The special conditions of
contract should contain the following, although they may vary from one type of procurement to another:
• A clear indication of the duties and responsibilities of EEP and the bidder as a prospective supplier, and
legally sustainable and attainable obligations of EEP.
• Goods: Provisions for the important terms of the contract such as time of delivery, packing, responsibility
for transportation, price adjustment, payment, delivery and inspection, security and others as the case
may be.
• Works: Provisions for the important terms of the contract such as plant design, supply, installation,
erection and commissioning of the work, commencement date, construction period, completion time,
responsibility of contractor, price adjustment, payment, security and others as the case may be.
• Services: Provisions for the important terms of the contract such as commencement date, supervision
period, completion time, responsibility of consultant, price adjustment, payment and others as the case
may be.
4.2.5 Criteria for Bid Evaluation
EEP must indicate clearly the bid evaluation criteria in the Standard Bidding Documents. Selection of a
successful bidder will use either of the following two methods:
• Least Cost / Technically Acceptable: Setting the minimum technical requirement and selecting the bidder
with the lowest evaluated bid from among the bidders meeting such minimum technical requirements, or
• Best Value: Indicating clearly in the bidding document the criteria to be applied to determine the
functional or economic value of the procurement and the relative weight to be ascribed to each criterion

P a g e | 49
 and selecting the bidder with the highest cumulative result by conducting evaluation based on these
criteria. Price should not be less than 50% (fifty percent) of the total for non-consultancy. From the total
merit points to be given for proposals submitted by consultants in a bid for Procurement of consultancy
service, the share of technical proposal shall be 80% and the remaining 20% shall be the share of
financial proposal. For more information on weighting, see Section 16.5.1Prioritization of Rated Criteria.
The criteria selected for conducting evaluation as described above shall be objective and expressed in
monetary terms in respect of achieving maximum value for money wherever possible. The criteria should
consider the following conditions:
• Where the object to be procured is standard supply: whether a value can be ascribed for the object which
is useful to EEP, and whether this value can make a difference among the bidders to facilitate the selection
of the successful bidder.
• Whether extra value offered in addition to the minimum requirement would bring extra benefit to EEP,
and whether the extra benefit is significant.
• That there is no standard for the goods to be procured and whether similar goods are available which can
respond to the specification in different levels in terms of creating extra benefit to EEP.
• Life Cycle Cost Analysis: In respect of goods and plant of long term service, whether EEP has to incur
different costs of operation, maintenance and disposal on account of variation in the source of the supply.
For more information on this topic see Section 16.3.2 Life Cycle Costs Analysis.
4.3 Bid Flotation
4.3.1 Invitation to Bid
The invitation to bid shall be prepared in the language in which the bid proceeding is to be conducted. The
Invitation to Bid is not part of the Bidding Documents. The Invitation to Bid shall be prepared with the
following particulars in accordance with the standard bidding document developed by EEP:
a) the name and address of EEP;
b) the tender number
c) the price of the bidding documents and the means of payment
d) the place where the bidding documents can be obtained
e) a brief description of the goods, works or services to be procured; these will be normally through
Terms of Reference for Requests for Proposals for consultancy services; this will include the type and
to the extent possible the quantity and place of delivery of the goods or services, or the nature and the
site of the construction to be effected, or the type of the consultancy service to be rendered and the
place where such service is rendered.
f) The criteria to be satisfied by the candidates, who can participate in the bid,
g) The means and conditions for obtaining the bidding documents and the place from which they may be
obtained, as well as the price of the bid document and the means of payment
h) The amount of the bidding security.
i) The place and deadline for the submission of bids or proposals; Candidates shall be given adequate
time in which to prepare their bids or proposals.

P a g e | 50
 j) The place and time for opening of bids, along with an announcement those bidders or their
representatives are allowed to attend at the opening of bids.
k) A statement that EEP reserves the right to reject any or all bids
l) The invitation to bid shall be prepared in the language in which the bid proceeding is to be conducted
For Direct Procurement, EEP shall prepare a description of its needs and any special requirements as to
quality, quantity, terms and time of delivery, and shall be free to negotiate on price and conditions of offer
with the sole candidate. Any agreement reached to conduct the procurement shall be confirmed by a contract
signed by both parties, except in the case of shopping.
4.3.2 Advertisement
Timely notification of bidding opportunities is essential in competitive bidding. Invitation to bid shall be
advertised in at least one times in a national newspaper of general circulation which is published in the
language the bidding document is prepared. The Invitation to Bid shall be advertised in at least one times in a
national newspaper of general circulation which is published in the language the bidding document is
prepared. Where EEP finds it necessary, it may, in addition to the national newspaper, advertise the bid on a
national radio and television.
For National Competitive Bidding, the invitation to bid has to be published at least once in a newspaper that
has nationwide circulation to ensure participation of as many bidders as possible. EEP may advertise bids at
any time, as many times, and by any means of its choice as well as by on a national radio and television.
For International Competitive Bidding, the bid advertisement and the bidding documents shall be prepared in
English, the bid advertisement shall be published in a newspaper with wide circulation and accessibility to
foreign bidders, and the bid advertisement shall be posted on the EEP's website if the value of the
procurement is above the threshold below.

 For Works Greater than Ethiopian Birr 20,000,000

 For Goods Greater than Ethiopian Birr 6,000,000
 For Consultancy Services Greater than Ethiopian Birr 4,000,000
 For Non-Consultancy Services Greater than Ethiopian Birr 1,000,000

4.3.3 Bid Document Selling

Bid documents shall be made available to candidates at a price not exceeding the cost of reproduction and
delivery of such documents to candidates. The bidding document shall be delivered to candidates on working
days between the date of publication of the invitation to bid and the closing date of the bid and in the manner
specified in the invitation to bid. EEP should take into consideration the following points:
• The price of the bidding document prepared by EEP shall not be such that impedes wide competition.
• In fixing the price of any bidding document, EEP shall not seek profit or gain but aim only at recovery of
cost incurred in the preparation of the bidding document.

P a g e | 51
Where it deems it to be appropriate, EEP may make the bidding document available to candidates free of
charge, or at a price less than the cost incurred in the preparation of such document under the following
circumstances:
• Where it is thought that there will not be an adequate number of bidders otherwise.
• Where the cost incurred to prepare the bidding, document is so minimal that EEP considers recovering the
cost from bidders to be unnecessary.
• Where EEP considers that the cost estimate of the bidding document is so high that recovering the full cost
from bidders discourages competition by restraining candidates from participating in the bid.
• In case of re-advertised bid, where EEP considers it to be unfair to require candidates who bought the
bidding document to participate in the former bid to pay again for the documents.
4.3.4 Standard Bidding Documents
The EEP Procurement unit must use the standard bidding documents. The bidding documents shall contain
sufficient information to enable competition among the bidders to take place on the basis of complete, neutral
and objective terms. Accordingly, the bid documents should contain the following;
 Instructions to Bidders (ITB)
 Bid Data Sheet (BDS)
 Evaluation and Qualification Criteria
 Bidding Forms
 Eligible Countries
 Statement of Requirements or Employer's Requirements
 General Conditions of Contract (GCC)
 Draft Special Conditions of Contract (SCC)
 Contract Forms
Bidding documents prepared for procurement subject to the approval of the Procurement Endorsing
Committee or purchase committee must be approved by the Committee before use.
4.3.4.1 Instructions to Bidders (ITB)
EEP must ensure that bidders receive the Instruction to Bidders as well as the Bid Data Sheet, which is an
extension of the instruction to bidders, as parts of the standard bidding documents. The instructions to
bidders must include the following:
 A general description of the goods, works, consultancy services or other services to be procured, the full
name and address of EEP, and the source of finance of the procurement.
 The criteria that bidders are expected to fulfill including a statement of requirement that domestic bidders
submitting bids for a contract value of Birr 100,000 and above must present value added tax registration
certificate and foreign bidders must as appropriate submit business organization registration certificate or
trade license issued by the country of establishment.
 An indication of the address and time for submitting requests of clarification on the bidding document and
a statement that such request has to be made in writing.

P a g e | 52
 The content of bid documents to be submitted by candidates, the language in which bid documents have
to be submitted, the type and number of necessary documents and complementary forms described in the
bidding documents.
 An indication that the bidder has to sign on anti-bribery pledge form; a statement of undertaking to
observe Ethiopian Law against fraud and corruption and other forms that ought to be completed and
signed by him/her.
 A statement indicating that bidders attempting to influence the bid shall be disqualified from the bid,
prohibited from participating in any future public procurement and the bid security deposited by them
shall be forfeited.
 If bidders are required to submit samples, the place where the samples are to be delivered and if
appropriate, the time when and the place where the samples will be openly shown, as well as an indication
that samples are to be returned to the unsuccessful bidders or not.
 The place where the bid box is available and a statement indicating that bids submitted after the bid is
closed shall not be accepted.
 A statement indicating the methodology of evaluating bids, the criteria for the evaluation and the weight
each criterion shall have as well as the conditions for submitting further proposals to select the successful
bidder and the criteria for evaluating such proposals where two or more bidders get equal evaluation
results.
 Whether it is possible to make price adjustment in the course of the performance of the contract and the
condition in which such price adjustment is made, if it is allowed,
 An indication of the mode and amount of bid and performance securities required and the validity period
of same.
 The deadline for submission of bids and the place date and hour of the bid opening.
 The validity period of the bid as well as the place and time of delivery.
 A statement indicating the manner of application of preference to local products and companies granted
by the Proclamation.
 An indication whether the bids are to be submitted in a single or double envelopes, the manner in which
the envelopes are sealed, the requirements that the original and copies of the bid documents shall be
uniform, the number of copies, that all documents have to be signed by authorized persons and the seal of
the organization shall be affixed there to, the manner in which supporting documents (current tax
clearance certificate, renewed business license and other documents) that EEP requires should be
submitted.
 If advance payment is to be made in accordance with article 16/26 of this Directive, the amount of such
payment and the mode of the corresponding guarantee required as a prerequisite for such advance
payment
 An indication that if bidders are aggrieved by the decision rendered during the procurement process, they
have the right of complaint in accordance with chapter fourteen of the Proclamation and article 45 and 47
of this directive, and the place where such complaint may be filed.
 An indication that EEP has the right to decrease or increase the quantity of the goods or services by up to
20% (twenty percent) when awarding the contract without changing the unit price offered by the bidder.

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 No change shall be allowed to the content of the instruction to bidders of the standard bidding document.
Any modification to be made to the instruction to bidders shall be indicated only in the bid data sheet.
4.3.5 Bid Security
EEP shall include in the bidding documents a condition that bids must be accompanied by a bid security
sufficient to discourage irresponsible bidders. A bid security will be forfeited if a bidder withdraws his bid
within the validity period thereof or in the case of a successful bidder, if the bidder repudiates the contract or
fails to furnish performance security, if so required. The amount of bid security required shall be in the range
of 0.5% to 2% of the total estimated contract price, but it should not exceed 500,000 (five hundred thousand)
Birr.
In Restricted Tendering, EEP shall determine whether it is necessary to require the candidates to submit bid
security. Candidates shall not be required to furnish bid security during the first of the two stages bidding.
EEP should fix and clearly indicate in the bidding document, the amount and mode of bid security to be
required of bidders in respect of each procurement when executing procurement by means of open,
restricted, or two stage bidding for goods and works. EEP may require bidders to furnish bid security for
consultancy service if, for any reason, EEP finds it necessary to do so.
When fixing the amount of bid security, EEP shall take the following points into account:
• The volatility of the price of the required object of procurement.
• The availability of adequate number of candidates to participate in the bid,
• That the bid security required of candidates doesn't discourage them from participating in the bid.
• That the bid security urges the successful bidder to sign the contract
• That the bid security is sufficient to compensate the damage EEP may sustain as a result of the successful
bidder refusing to sign the contract.
The following conditions apply to the bid security:
• The bid security may at the bidder's option be in the form of cash, certified cheque by a reputable bank,
bank guarantee, or letter of credit.
• Local contractors engaged in construction service may provide bid security in the form of conditional
insurance bond.
• The validity period of bid security provided by bidders should extend for at least 28 days after the
expiration of bid price validity.
• The bid security furnished by foreign bidders from a bank outside of Ethiopia has to be unconditional and
certified or counter guaranteed by local banks.
The commission or omission of the following acts by any bidder may result in the forfeiture of bid security to
EEP:
• Withdrawing from a bid after the dead line for submission of bids stated in the bidding document or
before the expiration of the price validity period indicated in the bid document.
• Refusing to sign the contract or to furnish the performance security after award.

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EEP shall return to the bidders their bid security on the following conditions:
• If the successful bidder has signed contract and furnished the required contract security;
• If the bid validity period initially offered by a bidder not willing to extend such period has expired.
• If a bidder is unsuccessful.
4.3.6 Bid Submission Deadline
EEP should set the deadline for bid submission taking into consideration the following points:
• The time required for bidders to obtain the bidding documents, to gather information, to analyze the
information, to establish joint venture as necessary, to obtain certificate of manufacturer's authorization
including the power of attorney to sign and to fulfill other pre-conditions to participate in the bid, to
prepare responsive bids.
• In case of International Competitive Bidding, the time necessary for the submission of bid document to
the designated place.
• In case of procurement of works in particular, the time necessary to visit the construction site and for pre-
bid meeting.
• The floating period for the single source and proforma purchase is determined by the Procurement Unit
depending on urgency and complexity, and to give equal opportunity for bidders.
The time frame prescribed for bid submission below is the minimum period. Thus, depending on the type of
procurement and the conditions of the market, EEP may allow bidders additional time to prepare and submit
bids if deemed necessary.

Mode of Procurement
Procurement Type Complex? Open Bidding Restricted Bidding
ICB NCB LIB LNB
Yes 45 30 45 30
Works
No 35 21 35 21
Yes 45 30 45 30
Goods
No 35 15 35 15
Yes 45 30 45 30
Non-Consultancy Services
No 35 15 35 15
Yes 14 10 - -
Consultancy Services(EoI)
No 10 7 - -
Yes 45 30 35 30
Consultancy Services (RfP)
No 35 15 21 15
Table 4 - Recommended minimum period for submission of bids.

For procurements made by means of Two-Stage Bidding:

1. For the first stage, use the bid submission period for National (NCB) or International Competitive Bids (ICB)
in respect of each type of procurement.

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2. For the second stage, in which selected local or foreign bidders participate, use the period prescribed for
Restricted Bidding.
4.3.7 Bid Amendment and Clarification
At any time prior to the deadline for submission of bids, EEP may, on its own initiative or in response to an
inquiry by a candidate having purchased the bidding documents, modify the bidding documents by issuing an
addendum, which becomes an integral part of the bidding documents. Any addendum shall be communicated
promptly to all candidates having purchased the bid documents at the same time. If EEP considers it
necessary to amend the bidding documents and if it determines that there is no enough time to incorporate
the modification, it may postpone the closing date by a number of days, depending on the procurement
object, which is sufficient to enable the bidders to take the addendum into account in preparing their bids.
EEP shall not be obliged to respond to a request for clarification or modification submitted:
• Later than 10 days prior to the deadline for submission of bids, in respect of national competitive bidding
for complex procurements the minimum floating period of which is 30 days.
• Later than 21 days prior to the deadline for submission of bids in respect of international competitive
bidding.
• Later than 5 days prior to the deadline for non-complex procurements, the minimum floating period of
which is 15 days.
These requirements also apply to bid clarification:
• A reply given by EEP to a request for clarification by a candidate shall be in writing and sent to all
candidates at the same time without reference to the identity of the candidate initiating the request.
• Where EEP finds it necessary to introduce modification to a bidding document initially issued by it on the
basis of request for clarification by a candidate, EEP may modify such bidding document. Any alteration to
the content of the bidding document shall at the same time be communicated in the form of an
amendment to all candidates who purchased the bidding document.
• EEP should extend the closing date for submission of bids where it modifies a bidding document, if it is
assumed that the time remaining before the closing date is not sufficient for bidders to prepare adjusted
bid documents on the basis of such modification.
• Where EEP deems it to be appropriate, it may convene a meeting of bidders who purchased a bidding
document for clarification and discussion on the bidding document or modification thereto, and such
discussion shall be recorded in meeting minutes.
• Copies of these meeting minutes shall be delivered to the candidates who purchased the bidding
document to enable them prepare their bid documents by incorporating the content of the modification.
4.3.8 Bid Receipt
Bids shall be submitted in writing, signed and in a sealed envelope, to the location and before the deadline
stated in the invitation to bid. EEP shall give a receipt to the bidder indicating the time and date on which the
bid document was submitted, in cases where it is impossible to put the bid document in a bid box due to its

P a g e | 56
large size. Any bid document received after the deadline for submission shall be returned unopened to the
bidder. The following conditions apply to bid receipt:
• EEP should make available a bid box for collection of bid document from bidders. The bid box shall be
placed at the location stated in the bidding document and remain open throughout the bid floating period.
• The bid box shall be kept securely and the key of the box shall be in the possession of the head of the
procurement unit until the day of the bid opening.
• As far as possible, all bid documents shall be placed inside the bid box; however, where the bid box cannot
accommodate bid documents, EEP shall assign an employee to collect bid documents from bidders as of
the day of publication of the invitation to bid.
• EEP shall issue receipt for bid documents it receives from bidders in acknowledgement of receipt.
• EEP shall be responsible for the security of the bid documents received.
• Bid documents received after the dead line for submission of bids shall be returned to the bidders
concerned without the envelopes containing the bid documents being opened.
4.3.9 Bid Opening
At the time stipulated in the bidding document for opening of bids, which should follow immediately after the
deadline for submission of bids, EEP shall open all bids received before the deadline. The name of the bidder
and the total amount of each bid, discounts offered and any such information as EEP deems necessary to let
the bidders know their relative rank shall be read out aloud and recorded and a copy of the record shall be
made available to any bidder on request.
The bid:
• Shall be opened in the presence of the bidders or their authorized representatives. However, the opening
of the bid shall not be affected by the absence of the bidders on their own will.
• To the extent that it doesn't interfere with the bid opening process and there is enough space, any
representative of mass-media or any other interested observer may attend the bid opening ceremony.
• As far as possible, a representative of internal audit of EEP shall be present during the bid opening.
• At least three (3) employees from the procurement unit shall participate in the bid opening process and to
the extent possible, representatives from departments of EEP benefiting from the procurement may
attend the bid opening process.
• Any bid document not opened and read out during the bid opening proceeding shall not be considered for
further evaluation.
• No bidder shall be disqualified from a bid at the time of bid opening proceeding.
For bid documents required to be submitted in one envelope, EEP shall open each bid and read out the name
of the bidder, the bid price for the contract, the rebate offered by that bidder, the bidder's conditions for such
rebate, the amount and kind of bid security, and any other information enabling bidders to know their relative
position in the bid concerned.
Where bid documents are required to be submitted in two envelopes, the following conditions apply:

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• The envelope containing the technical proposal shall first be opened in the bid opening process and the
name and other salient points of the bid shall be read out.
• The envelopes containing the financial proposals of all bidders shall be put into one large envelope
unopened. The large envelope containing the financial proposals shall be properly sealed and labeled with
the bid identification number and a statement indicating that the envelopes therein contain financial
proposals written on it and employees of EEP executing the bid opening proceeding putting their
respective signatures on it. The large envelope containing the financial proposals shall remain sealed and
kept carefully under the custody of the procurement unit or any other unit entrusted with the custody of
the envelope until the second bid opening preceding.
• The result of the technical evaluation shall be communicated in writing to all bidders at the same time who
participated in the bid after approval by the competent body.
• A Letter of Notification should be written to the unsuccessful bidders on the technical evaluation, which
states the reason for not being chosen as the successful bidder. The unsuccessful bidders have the right of
complaint against the result of the evaluation. The procedure in accordance of which such complaints may
be lodged and reviewed shall be as provided in Section 10.7Appeals Procedures.
• The Letter of Notification to be written to bidders whose technical proposals have been accepted by EEP
shall state the time and place of opening of the financial proposals. The notification shall be sent to all such
bidders at the same time and adequate time should be given to all bidders wishing to attend the financial
envelopes opening proceeding. However, if a complaint is lodged against the result of the technical
evaluation, the financial proposals shall not be opened pending decision on such complaint.
• The financial proposals shall be opened in the presence of the bidders whose technical proposals have
been accepted and to whom letter of notification is written to attend the proceeding.
• The envelopes containing the financial proposals of bidder successful in the technical evaluation shall be
opened and the name of the bidder, the price offered, any discount given by such bidder, the conditions
for such discount, and any other information related to price shall be read out to the bidders.
• Upon disclosure of the result of the technical evaluation, the bid security and the envelopes containing the
financial proposals shall be returned unopened to the unsuccessful bidders. If, however, a complaint is
lodged against the result of the technical evaluation, the bid security and the financial envelopes shall not
be returned to the unsuccessful bidders pending final decision on such complaints.
Records of the bid opening are the following:
• The procurement unit of EEP shall record the minutes of the bid opening. Such minutes shall contain the
names of the bidders, their bid price and any other salient points raised in the bid opening proceeding.
• The minutes and the original bid documents shall be signed by employees conducting the bid proceeding.
• Bidders present during the bid opening shall sign the attendance sheet.
The technical proposal submitted by candidates during the first stage of Two-Stage Bidding shall be opened in
the absence of the candidates in the manner stated in the invitation to bid. In Two-Stage Bidding, the
envelope containing the price offered by the bidder shall be read after the evaluation of the technical
proposal, where technical and financial proposals are submitted in two separate envelopes.

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In Restricted Tendering, the time allowed for preparation of bids shall not be less than the minimum number
of days stated in the procurement directive for this method of procurement. However, if all suppliers invited
to participate in the bid have submitted their bids before the closing date, EEP may open the bid ahead of
schedule by giving bidders prior notice.
4.4 Bid Evaluation
EEP may ask bidders for clarification of their bids in order to assist in the examination and evaluation of bids;
however, no change in the substance of the bid, including changes in price, shall be sought, offered, or
permitted. Notwithstanding that provision, EEP shall correct arithmetical errors that are discovered during
the examination of bids. EEP shall give prompt notice of any such correction to the bidder that submitted the
bid. EEP may regard a bid as responsive only if it conforms to salient requirements set forth in the bidding
documents:
• Where the bid does not meet the minimum quality and other essential requirements set forth by EEP and,
therefore, is found to be non-responsive at first sight.
• Where the bidder is not willing to accept corrections of arithmetical errors.
• Where the bidder does not furnish the bid security or is not willing to furnish the performance bond
required by EEP.
• Where the bidder does not produce evidence of facts that need to be proven in connection with the
procurement.
EEP may regard a bid as responsive even if it contains minor deviations that do not materially alter or depart
from the characteristics, terms, conditions and other requirement set forth in bidding documents or if it
contains errors or oversights that are capable of being corrected without touching on the substance of the bid.
Any such deviations shall be quantified, to the extent possible, and appropriately taken account of in the
evaluation and comparison of bids.
EEP shall not award a contract when:
1. the bidder has failed to demonstrate that it is qualified;
2. the bidder does not accept a correction of an arithmetical error;
3. the bid is not responsive.
4.4.1 Margin of Preference
With the exception of request for quotation and single source procurements, preference shall be granted in
any procurement to locally produced goods, to small and micro enterprises established under the relevant
proclamation, and to local construction and consultancy companies. The margin of preference to be so
granted and applied when comparing prices during evaluation of bids shall be as follows:
• For procurement of drugs or pharmaceutical products or medical equipment 25%
• For procurement of other products 15%
• For construction and consultancy services 7.5%
The preference to be granted to drugs, medical equipment, or other products shall be effective where it is
certified by a competent auditor that no less than 35% of the total value of such products is added in Ethiopia.
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Value added in Ethiopia shall be calculated by deducting from the total value of the product in question, the
cost, exclusive of indirect taxes, of imported raw materials and other supplies used in the production of such
product, as well as services rendered abroad in connection with the production of that product.
The following conditions must be satisfied for local companies engaged in Construction or Consultancy
Services to qualify for preference:
• The company has to be incorporated in Ethiopia.
• More than fifty percent (50%) of the company's capital stock has to be held by Ethiopian natural or
juridical persons.
• More than fifty percent (50%) of members of the board of the company have to be Ethiopian nationals.
• At least fifty percent (50%) of the key staff of the company have to be Ethiopian Nationals.
For small and micro enterprises established under the relevant law:
• Preference shall be given by a margin of 3% when such enterprises compete with local suppliers in national
competitive bidding.
• When small and micro enterprises participate in international competitive bidding, only the preference
granted to local companies as per above apply.
• In lieu of bid security, performance security or advance payment guarantee, a letter of guarantee written
by a competent body organizing and overseeing small and micro enterprises shall be accepted.
• They shall be entitled to obtain bidding documents free of charge by producing their certificate of
registration.
4.4.2 Disqualification of Bidders
EEP may disqualify a bidder for any of the following reasons:
• Where a bidder offers to supply the required objects of procurement originating in a country in respect of
which the government of the Federal Democratic Republic of Ethiopia has imposed trade ban;
• Where the bidder offers to supply the required objects of procurement originating in a country under
trade embargo of the Security Counsel of the United Nations in which transacting with any business
organization or individual who is the national of that country is prohibited;
• Where the bidder commits an act of violating the provisions of this Manual, the Proclamation and the
Directive;
• Where the bidder is debarred by a decision of PPA from participating in public procurements for breach of
its obligation under previous contract;
• Where it is proved that the bidder has given or has offered to give inducement or bribe to an official or
procurement staff of EEP, engineering team members, evaluation committee members, or endorsing
committee members, to influence the result of the bid in his favor.
• Where it is proved that the bidder has committed an act of embezzlement, fraud, or connivance with other
bidders.

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 4.4.3 Approving Bids
The procurement unit or the ad hoc committee formed to conduct evaluation of bids in regard to a certain
procurement shall complete the evaluation and submit the result together with its recommendation, to the
Procurement Endorsing Committee or other body having the authority to approve bid evaluation results,
within the bid validity period offered by the bidders. The Procurement Endorsing Committee shall examine the
evaluation report in light of the procurement rules and procedures as well as against the requirements of the
bidding document and give either of the following recommendation for the final decisions:
• Approve the evaluation report as a whole and authorize the procurement to proceed accordingly.
• Reject the report and order re-evaluation. Where the Procurement Endorsing Committee or purchase
committee recommend for rejects the report, it shall state the reason for its decision and refer the case
back to the evaluation team with instruction for the team to follow in re-evaluating the bids in question.
The evaluation team shall conduct re-evaluation in accordance with the instruction of the Procurement
Endorsing Committee or purchase committee and report the result back to the committee.
• Where the Procurement Endorsing Committee finds it necessary, it may require the persons conducting
the evaluation to account for the evaluation report.
The evaluation team or a member thereof objecting to the decision of the committee and the corrective
instruction given by the committee has the right to record any dissenting opinion. However, the procurement
shall be executed in accordance with the decision of the committee.
4.4.4 Discussion with Bidders
EEP may not require nor allow bidders to change their offer in regard to price and other essential elements of
the bid, apart from seeking bidders to give it clarification on certain points of their proposal for the purpose of
evaluation after bid opening. EEP may hold discussion with bidders in a procurement proceeding only where it
encounters extraordinary situations. Such discussions are held for two purposes:
• To exchange views with bidders on minute details of a procurement;
• To arrive at a decision through negotiation with bidders on the technical requirements of a bid in
procurement to be executed by means of two stage bidding.
4.4.5 Selection of the Successful Bidder
In the process of selecting the successful bidder, EEP shall only consider substantially responsive bids for
further evaluation and comparison, as described above, in accordance with the criteria set forth in the bidding
documents.
No criterion shall be used that has not been set forth in the bidding documents. No bidder may be required to
change the price offered in his bid or otherwise modify his proposal or to assume obligation to do so except as
set forth in the bidding document.
The successful bid in Open Bidding, Restricted Tendering, and Requests for Quotations shall be:
1. Lowest Price: the bid that is found to be responsive to the technical requirements and with the lowest
evaluated price;

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 OR
2. Best Value: if EEP has so stipulated in the bidding documents, the bid offering better economic advantage
ascertained on the basis of factors affecting the economic value of the bid which have been specified in
the bidding documents, which factors shall, to the extent practicable, be objective and quantifiable, and
shall be given a relative weight in the evaluation procedure or be expressed in monetary terms wherever
practicable;
AND
3. Technically Sufficient: where it is ascertained in post evaluation of bids that the legal, financial and
technical standing of the candidate selected as the successful bidder in accordance with the terms above
conforms to the requirements stated in the bidding document.
In Two-Stage Bidding, EEP shall identify responsive bids by evaluating the proposals submitted by the bidders
at the first stage of the bid proceeding against its requirements. EEP may without prejudice to their
intellectual property rights at this stage hold discussion with the candidates on the content of their proposals.
EEP shall draw up a specification which is more appropriate to its requirements on the basis of the evaluation
against the requirements of the proposals submitted to it at the first stage of the bid proceeding. It shall then
proceed to communicate the revised specification to the candidates who submitted responsible bids at the
first stage and invite such candidates to submit proposals on the basis of the revised specification.
EEP shall draw up a specification which is more appropriate to its requirements on the basis of the evaluation
against the requirements of the proposals submitted to it at the first stage of the Two-Stage Bidding process.
It shall then proceed to communicate the revised specification to the candidates who submitted responsible
bids at the first stage and invite such candidates to submit proposals on the basis of the revised specification.
For Requests for Proposals for consultancy services, any award by EEP shall be made to the candidate whose
proposal is most advantageous, determined in accordance with the criteria and procedures for evaluating
proposals set forth in the request for proposals.
For Request for Quotations for goods, works, consultancy or other services, a purchase order shall be placed
with the candidate who meets the requirements of EEP as to quality, quantity, terms and time of delivery, as
well as other special requirements.
With any procurement method, after the opening of bids, information relating to the examination,
clarification, and evaluation of bids and recommendations for award must not be disclosed to bidders or other
persons not officially concerned with this process until the award of the contract is announced.
Additional requirements for bid evaluation are the following:
• If necessary, verification may be done in post qualification to ascertain whether a bidder has the legal
competence to transact with EEP, or possesses the necessary financial and technical qualification stated in
the bidding document.
• Unless otherwise stated, price offered by bidders in respect of procurement executed by means of
international competitive bidding and the evaluation thereof shall include taxes.

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• Where two bidders get equal merit points in the evaluation, preference shall be given to local products or
services.
• EEP may require bidders scoring equal merit points in the evaluation to submit further proposals on
certain aspects of the bid with a view to identifying the successful bidder. For the purpose of singling out
the successful bidder from among bidders getting equal points in the evaluation,
• the number of evaluation criteria shall not be more than three and shall be such that can be expressed in
figures;
• The criteria shall be stated in the bid data sheet of the bidding document.
• Bidders scoring equal merit points shall be notified of that fact and such bidders are invited to submit final
proposals in accordance with the requirements stated in the bidding document.
• The final proposals submitted by the bidders scoring equal points shall, as far as possible, be opened and
read out in their presence.
• The proposals shall be evaluated and the bidder submitting the better proposal shall be declared the
successful bidder.
• Where by reason of the bidders scoring equal merit points not submitting final proposals they are invited
to submit, or by reason of the evaluation result of the final proposals submitted by the bidders being still
equal, the successful bidder cannot be singled out, the successful bidder shall be determined by casting lot
in the presence, as far as possible, of the bidders concerned.
• To the extent that the criteria EEP applies to select the successful bidder is known, it shall be stated in the
bidding document that the quantity of goods to be supplied could increase or decrease by 20% without the
unit price offered for such goods or the terms and conditions stated in the bidding document being
changed.
• EEP shall complete and disclose bid evaluation results to bidders concerned before the expiration of price
validity period offered by such bidders. However, if EEP cannot complete the evaluation within such
period, it shall require the bidders to extend their bid price validity period.
• Where an invitation to bid attracts only one bidder, EEP may sign contract with that bidder if the proposal
submitted by such bidder is satisfactory to EEP and the price offered by the bidder is comparable to or less
than the market price of the required object of procurement; it being necessary to make sure that the
failure of the bid to attract bidders is not due to the fact that the content of the bidding document is
restrictive of open competition.
4.4.6 Bid Evaluation Report
After selection, EEP shall prepare a Bid Evaluation Report, containing a summary of the examination and
evaluation of bids. The Bid Evaluation Report should have the following contents:
a) Cover letter
b) Endorsement letter
c) Table of Contents
d) Introduction
e) General comments
f) Brief description of the project or the nature of the procurement

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 g) Basic data sheet
h) Copy of records of bid opening
i) Financial evaluations
j) Tables of submitted bid prices and points awarded
k) Table of technical evaluations and points awarded
l) Recommendation for award
Each evaluation report should be concluded with the following contents:
 "We the undersigned have fairly and faithfully conducted the examination and evaluation of the bids in
accordance to the evaluation criteria contained in the bidding documents, and we submit this report to
the Procurement Endorsing Committee under oath"
 Names and signatures of the evaluation team members
 Date of submission
4.4.7 Procurement Approval Process
The hoc Bid Evaluation Committee (which may be organized from different work units including procurement
units for complex procurements) shall be assigned by Procurement, Logistics and Warehouse Director to carry
out both technical and financial evaluation using the evaluation method described in the bidding documents
and will submit an Evaluation Report, together with its recommendation, to EEP Foreign or Local Purchase
Committee within the bid validity period specified in the bid document. The Purchase Committee shall
examine and review the Evaluation Report within the context of procurement rules and procedures as well as
against the requirements of the bidding document, and it give either of the following decisions:
 Approve and recommend to EEP Executive Management for further authorization of the evaluation
report as a whole and authorize the procurement to proceed or
 Reject the report and order a re-evaluation with comments.
Where the Purchase Committee finds it necessary, it may require the persons conducting the evaluation to
provide more information than that contained in the Evaluation Report. Where the Purchase Committee
rejects the report, it shall state the reason for its decision and refer the case back to the evaluation team with
instruction for the team to follow in re-evaluating the bids in question. The evaluation team or a member of
the team thereof objecting to the decision of the committee and the corrective instruction given by the
committee has the right to record a dissenting opinion. After reviewing the evaluation committee’s report and
purchase committees’ recommendation, Procurement, Logistics and Warehouse office shall approve the
Procurement. If the amount of the Procurement is beyond the authority of PLW office, it provides its
recommendation to the EEP Executive Management approval. If the Procurement amount is beyond the
authority limit of the EEP Executive Management, the executive management provides its recommendation
for EEP Management Board for the final approval.
In general, the final approval and decision of the Procurement process shall be done based on EEP Delegation
of Power 2016.

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 4.4.8 Negotiation
EEP may negotiate with the successful bidder on matters of contract performance not dealt within the bidding
document. In negotiations, EEP will be represented by a committee to clarify technical and other issues which
are not clear in the bidding process. Except in a Direct Procurement, EEP may not negotiate on the price
offered by the successful bidder and on other issues related to price. The salient points to focus on in the
negotiation of contracts for Direct Procurement shall be approved by the head of EEP and communicated to
the negotiators.
For Requests for Proposals for consultancy services, EEP may negotiate with the first ranked candidate with
respect to the nature, volume and organization of the services included in their proposals. The negotiation to
be held with the selected consultant shall focus on the content of the consultancy work, the method applied
to accomplish the work, the quality of the human power to be engaged by the consultant, the material to be
used by the consultant in the performance of the service, the content of the report to be submitted by the
consultant as well as the manner of submitting such report and such other issues arising from the
performance of the service, it being understood that the essential requirements of the bidding document and
the quality of the work to be delivered by the consultant is not negotiable.
In Two-Stage Bidding, EEP may engage in negotiation with the first ranking bidder concerning any aspect of its
bid, except price.
4.4.9 Letter of Contract Award
EEP shall announce the result of a bid evaluation to all bidders alike at the same time. The information to be
disclosed to the unsuccessful bidders shall be the reason why they did not succeed in their bid and the identity
of the successful bidder.
Prior to the expiry of the period of bid validity, EEP shall notify the successful bidder that its bid has been
accepted. The Letter of Contract Award shall specify the time within which the contract must be signed. A
Letter of Contract Award to be sent by EEP to a successful bidder shall not constitute a contract between the
bidder and EEP. A contract shall be deemed to have been concluded between EEP and the successful bidder
only where a contract containing detailed provisions governing the execution of the procurement in issue is
signed.
A Letter of Contract Award to be sent to a successful bidder shall contain the following information:
• That EEP has accepted his bid;
• The total contract price;
• The amount of the performance security the successful bidder is required to furnish and the deadline for
providing such security.
Where the successful bidder cannot or is unwilling to sign a contract, EEP may either declare the bidder
submitting the second most preferred bid the successful bidder and invite the second bidder to sign a
contract, or advertise the bid afresh by assessing the benefit of the two options.

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 4.4.10 Re-advertisement
EEP shall issue invitation to bid for a second time under the following circumstances:
• Where EEP finds it advisable to readvertise the bid owing to the best price offered by a bidder is
significantly higher than the market price estimate of the object of procurement made by EEP prior to the
issuance of the invitation to bid;
• Where it is concluded that noncompliance with the rules and procedures governing bids led to the failure
of the invitation to bid to attract more than one bidder, or where it is believed that modifying the bidding
document could attract adequate number of bidders.
4.5 Contracts
EEP must carefully consider the obligations and liabilities it may have to assume under a contract; it may not
sign a contract involving obligations that it cannot fulfill. The existence of a contract shall be confirmed
through the signature of a contract document incorporating all agreements between the parties. The contract
shall not be signed by EEP prior to the receipt of the notice by the unsuccessful bidders. EEP shall not sign a
contract before seven working days from the date bidders are notified of the result of their bid or of any
complaint against the bid proceeding. Unless an exceptional situation arises, the successful bidder has to sign
a contract with EEP within 15 days of notification of award.
Contracts concluded for procurements to be made by means of international competitive bidding may
incorporate standard terms and conditions applicable in international commercial transactions to the extent
that such terms and conditions are not in conflict with the Proclamation, the Directive, and other documents
governing public procurement. Unless the contract provides otherwise, disputes arising from the performance
of the contract shall be adjudicated in accordance with Ethiopian Law.
4.5.1 Contract Signing
After contract signing, the bidder will be referred to as the supplier; contractor or consultant depends on the
Procurement category. EEP must sign with the bidder a contract containing the general conditions of contract
forming an integral part of the bidding document, as well as the special conditions of contract to be agreed
upon by and between EEP and the bidder. Unless a contract is signed between EEP and the bidder, mere
notification of award doesn't constitute a contract between EEP and the bidder.
The contract to be signed between EEP and the supplier shall clearly state the obligations of the two parties
and incorporate provisions for the following matters:
• The type, quality and quantity of the goods to be supplied, the works to be executed, or the consultancy or
other services to be rendered as per the contract, the manner and schedule of delivery of such goods,
works or services, the unit and the total price to be paid for such goods, works or services and the terms
and schedule of payment.
• Identification of the party responsible for securing the provision of incidental services (Transport,
Insurance, transit, etc.) from third parties, it being necessary to obtain such services from reliable sources.
• Discount and other offers proposed by the supplier in its bid document and the application of such offers.

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• Procedure for resolution of disputes that may arise in the performance of the contract.
• The portions from the total payment to be effected in foreign and local currency for a foreign supplier,
• Procurement document forming an integral part of the contract and the scope of application of such
documents.
• The conditions giving rise to forfeiture of performance security,
• The liability of the supplier for delay in supplying the goods, performing the works or rendering the
services as per the contract.
The liability of the supplier for delay in performing his/its obligation under the contract shall be as follows:
• A penalty of 0.1% or 1/1000 of the value of undelivered item for each day of delay,
• The cumulative penalty to be paid by the supplier shall not exceed 10% of the contract price.
• If the delay in performing the contract affects its activities, EEP may terminate the contract by giving
advance notice to the supplier, without any obligation to wait until the penalty reaches 10% of the value of
the contract.

4.5.2 Performance Security

A supplier shall provide EEP with a performance security to correct any damage EEP may sustain as a result of
default by the supplier under the contract. Except for procurements executed by means of Request for
Quotation or procurement of rental services, EEP has to require a supplier under contract with it to furnish
performance security in any procurement. The successful bidder must provide performance security within
fifteen days (15) from signing a contract in the amount of at least ten per cent (10%) of the total contract
price. Unless the parties agree otherwise, the performance security furnished by a supplier shall be returned
upon complete performance of the contract.
Where a supplier fails to discharge its/his obligation in accordance with the terms and conditions of the
contract, EEP shall exercise its right over the security and demand or confiscate in whole such security, as the
case may be. The performance security may be returned to the supplier where the user department or
Technical team ascertains that the noncompliance of the supplier does not affect the interest of, or entail
additional cost on EEP, and is not due to the fault of the supplier.
EEP is required to submit any document in its possession in relation to a procurement in which it authorizes
the return of the performance security to a supplier or the contractor. Additional conditions for bid security
are the following:
• A conditional insurance bond shall be accepted as performance security in respect of construction
contracts or in respect of contracts for supply of drugs with local contractors or manufacturers of
pharmaceutical products.

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• EEP may require a consultant to furnish professional indemnity insurance in respect of consultancy service
such consultant renders to EEP under a contract, where EEP finds it appropriate to make provision for any
damage it may sustain as a result of possible default on the part of the consultant.
• Small and micro enterprises shall be required to submit a letter of guarantee from the body organizing
and overseeing them in lieu of performance security.
• Enterprises engaged in insurance business and contracting with EEP may use their reserve with the
National Bank of Ethiopia as performance security, it being necessary for such enterprises to produce a
certificate from the bank that the reserve they have with the bank is sufficient to cover the required
performance security.
4.5.3 Advance Payment
Advance payment may be effected only where a supplier furnishes advance payment guarantee in an amount
equal to the advance payment. The amount of advance payment that may be allowed to suppliers in public
procurement and the manner in which it is made available are detailed below:
• In any public procurement, advance may be paid in an amount not exceeding thirty percent (30%) of the
total contract price. The amount to be paid in advance shall be stated in the instruction to bidders and bid
data sheet of the bid document.
• Suppliers shall submit advance payment security in an amount equal to the advance payment they receive
in the form of a certified cheque or unconditional bank guarantee at their option from a reputable bank,
together with their request for advance payment as per the contract.
• Domestic contractors and manufacturers of pharmaceutical products and medical equipment may submit
conditional advance payment security from reputable insurance company.
EEP may, where appropriate, require small and micro-enterprises to open a special bank account into which
the advance payment may be deposited, which shall be withdrawn by join signature of the representative of
EEP and the supplier for payment of expenditure arising from the performance of the contract. Where the
advance payment security provided by a contractor in the performance of a construction contract is
conditional, or in respect of advance payment made in favor of a small and micro-enterprise, EEP shall enter
into special agreement for the use of the advance payment. Such agreement includes the following:
• That the advance to be paid to the contractor or the small or micro- enterprise in accordance with the
contract shall be deposited in a special bank account to be opened for this purpose in the name of the
contractor or the small or micro-enterprise.
• That the advance to be deposited in the account to be opened as per above can only be withdrawn by
joint signature of EEP and the supplier
• That payment shall be effected to the contractor or small or micro- enterprise from the amount deposited
in the special account where it is ascertained that the contractor or small or micro-enterprise has
performed part of its obligation under the contract corresponding to the payment disbursed to it/ him.
• Where the contractor takes under not to pledge or transfer to a third party, the equipment procured with
the proceeds of the advance payment before the completion of the project.

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• Where the contractor presents, before signing an agreement with EEP on the use of the advance payment,
a list of equipment to be procured with the proceeds of the advance payment and the engineer assigned
by EEP to supervise the works certifies that such equipment is necessary for the works to be executed
under the contract.
• Where the contractor undertakes not to move the equipment from the project site without the permission
of EEP.
• A subsequent installment due to a contractor under a contract shall not be disbursed to it/him unless such
contractor moves the equipment acquired with the proceeds of the advance payment to the project site
within the time frame agreed in the contract.
• Any advance payment made to a contractor or a small or micro-enterprise shall be deducted from each
payment effected to the contractor or the small or micro-enterprise against payment certificate for work
executed by the contractor or the small or micro enterprise at various stages of the contract, or for
supplies delivered to EEP as per the contract, until EEP recovers the full amount of such advance payment.

4.5.4 Managing Procurement Contracts

Unless faced with a situation preventing or postponing the execution of a contract, EEP has to implement any
procurement contract they have signed with suppliers promptly. EEP has to fulfill conditions established in a
contract to expedite the implementation of the contract as provided in the above clause. These conditions
may include the following: -
a) If the contract provides for advance to be paid to the supplier, effect such advance payment to the supplier
against advance payment guarantee in accordance with the provision of this article.

b) Open letter of credit (L/C) promptly in respect of a procurement requiring the issuance of letter of credit in
favor of a supplier.

c) Fulfill such other conditions as are stipulated in the contract.

EEP has to identify the duties of a supplier under a contract and ensure that the supplier performs such duties
in due time. EEP has to record the date on which the actual implementation of the contract has begun upon
fulfillment of precondition set forth in the contract for the actual implementation of the contract and, if
necessary, notify this to the supplier.

4.5.5 Follow Up of Performance of Contracts

EEP has to identify the party responsible for following up the performance of a contract or make sure that the
parties involved in following up the performance of a contract are aware of their duties. (Where the task is
carried out through coordination of more than one parties).

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The department within EEP responsible for monitoring performance of procurement contracts has to make
sure that the supplier delivers the principle tasks under the contract in accordance with the agreed work
schedule. EEP has to carry out the following activities of contract administration as per the contract
agreement.

a) Effect payment or payments due in installment to the supplier on time.

b) Give certificates of performance to the supplier

c) Provide legitimate support to the supplier to enable him performs his obligation under the contract.

Where it is called for, the contract may be amended in the course of its performance; it being understood that
such amendment shall not be detrimental to the interest of EEP and not favor one supplier or certain suppliers
to the prejudice of the other suppliers. In particular, EEP shall carry out the following activities in connection
with the following up of performance of contracts: -

a) Open letter of credit (L/C) in accordance with the terms and conditions of the contract.

b) Handle acceptable requests of amendment of letter of credit (L/C) promptly

c) Exercise caution and follow-up so that the validity period of a performance bond, L/C or guarantee does not
expire before the supplier fulfills his/its obligation to EEP under the contract.

d) Follow up that works are completed on schedule agreed in the contract, or Goods are supplied or services
are rendered within the time stipulated in the contract.
e) Take the necessary precaution to prevent in the performance of a contract that give rise to claims by
suppliers

EEP has to identify services to be rendered by a third party in connection with the performance of a contract
and ensure that such services are rendered in a manner that facilitates the performance of the contract.

4.5.6 Completion of a Contract

EEP has to ensure that the performance of a procurement contract is completed with the terms and
conditions of such contract being complied with and other transactions incidental to such contract being
finalized.
This involves ensuring that: -
a) The supplier has delivered the works, goods, consultancy or other services to be supplied under the
contract.

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b) Proper follow up is maintained and appropriate decision is taken in regard to securities and warranties.

c) For all payments made to the suppliers, the corresponding obligations owed by such suppliers to EEP are
satisfied and all payments due to the suppliers under the contract are effected.

All rights of EEP arising from the contract and involving third parties such as Insurance companies,
transporters, custom Authority, transistors, Banks are satisfied and EEP has performed its obligation towards
such third parties, EEP shall settle pending accounts with the suppliers and third parties involved in the
performance of the contract.

4.5.7 Foreign Procurement (International Procurement)

4.5.7.1 Threshold for International procurement and Open International Bidding
As per Procurement proclamation number 649/2009 article (59), Open international bidding shall be
used whenever in national open bidding an effective competition cannot be obtained unless foreign firms are
invited to bid or for Procurement above the threshold level for national bidding shown below. A procurement
may be effected by means of national competitive bidding notwithstanding that the cost of the procurement
exceeds the threshold established that the required object of procurement is available only locally.
When goods are procured from international market and supplied by non-manufacturers, the procuring
unit may request manufacturer’s certificate and delegation from the manufacturers. Moreover, goods
originated from China shall be accompanying with CIQ report.
4.5.7.2 Process of foreign procurement
All foreign procurements of goods, works and services should follow the same steps and procedures like those
followed with local procurements. However, the following additional steps are required to facilitate the
purchase and receipt of those goods, works and services in addition to these usual steps in local procurement:
-
4.5.7.3 Obtaining Import Permit and Foreign Currency
If the mode of payment is L/C, the procuring unit shall process and obtain foreign Exchange permit from
Commercial Bank in Ethiopia. and if purchaser is responsible to cover the insurance, then purchase the
insurance policy from reputable insurance company. The procedures on how to obtain the foreign exchange
permit shall be in accordance to the National Bank of Ethiopia's Foreign Exchange Directive.
4.5.7.4 Opening of Letter of credit (L/C)
A letter of credit is the most commonly used and acceptable payment instrument in foreign procurement. EEP
shall also use this instrument in its foreign procurement dealings except and otherwise dictated by situations
to use the other instruments. Hence, for clear understanding, the following sections shall briefly provide the
definition, types and the process of obtaining an L/C. A Letter of credit is a document issued from one bank to
another and that promises to pay a supplier on receipt of a written document on behalf of the supplier.

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The Letter of credit will be based on the agreement between EEP and suppliers. The issuing bank will inform
the correspondent bank by opening of the Letter of credit in the name of the supplier to pay the supplier on
receipt of shipping document. Consequently, the payment shall be shall be effective based on the condition
that has been stipulated on L.C. hence the correspondent bank will make the payment effective immediately
after receiving the shipping documents from the supplier. There are two types of Letters of Credit: -
Revocable, where the issuing bank has the right to cancel or amend the payment after the opening of
the Letter of Credit. This is possible only where the issuing bank informs the correspondent bank before it has
paid the contract price to the supplier. As this type fulfill its contractual obligation, it is not practical for use by
buyers; and Irrevocable, where the Letter of Credit cannot be altered, without consent of the parties /banks,
suppler and purchaser/, after it has been opened.
Furthermore, there are two types of irrevocable Letters of Credit:
 Unconfirmed, where the issuing bank is bound by Law to pay the supplier in question, whereas the
advising or correspondent bank is not bound by Law to pay the supplier if the correspondent bank does not
pay the contract price to the supplier, the supplier can only sue the issuing bank for the unpaid amount.
 Confirmed, where both parties (issuing and Advising Bank) are obliged to respect all conditions stated
on the Letter of Credit and make the disbursement effective. In such a case, the advising bank is known as the
confirming bank. The issuing bank informs the confirming bank about the opening of the confirmed and
irrevocable letter of credit and hence to give the supplier a payment guarantee. Once the Letter of Credit is
opened, if the confirming bank fails to pay the contract price to the supplier, the supplier has the right to sue
both banks,
For confirmed L/C, the international local bank cost shall be covered by the one who needs to do so. Or
Normally, EEP shall open unconfirmed irrevocable Letter of Credit. If the supplier requests for the L/C to be
confirmed, the supplier has to pay all local   and international banking costs associated with the confirmation
of the irrevocable L/C. If the extension or amendment of L/C is required it should be approved by respective
delegated executive officer and the cost of extension or amendment shall be effected as per the contract
agreement.
How to open a Letter of Credit
Letters of credit can be opened through any Commercial Bank in Ethiopia that has the permission from the
National Bank of Ethiopia to facilitate foreign procurement. To open a letter of credit, the following formalities
should be carried out:
 EEP shall apply the foreign exchange form application to obtain Import Permit and also request an
invisible permit for related services under the contract. The equivalent value of foreign currency required shall
be held as margin in Birr;
 EEP should have an insurance policy or certificate delivered by any local insurance companies that has
the capacity to insure the amount under consideration;
 Application for letter of credit should be completed by EEP stating the main points of the agreement
with the supplier, and shall be signed by authorized official of EEP and submitted to the bank;
 EEP should also have the contract agreement signed by it and the supplier;
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 Once the above-mentioned formalities are completed, the irrevocable documentary credit form should
be completed by the bank and sent to the correspondent bank. EEP shall receive a copy and sending a copy to
the supplier. The supplier / contractor can comment the draft before open the LC and send the LC to the
beneficiary bank.
 The process of opening the letter of credit ends with the sending of form /SWIFT/ to the advising bank
and when advising bank sent acknowledgement to issuing bank. Hence EEP has to follow-up until they receive
the shipping document.
Exchange permit for imports has been received. All procuring entities shall use coding system for L/C opening
to identify the procuring organs with in EEP. All this information should be advised to the beneficiary in the L/C
so that they appear on Invoice B/L and the rest shipping documents. This helps to settlement of all costs and
easy reference to identify the procuring organ.
4.5.7.5 Insurance coverage for imported goods
All foreign procurements shall have insurance coverage from Supplier’s Warehouse up to purchaser's
warehouse on all risks including war risk clause. Unless conditioned by foreign financing agreements, all
insurances shall be arranged from local insurance companies that have the capacity to give the coverage for
the value of goods under consideration.

The insurable value must be at least 110% CIF or CIP value of goods or the contract amount with the same
currency or freely convertible to replace the damage / as per International Chamber of Commerce (ICC) Guide
line Incoterm 2010. The insurance period shall have full coverage:
A/ for 60 days by sea; and
B/ for 30 days by air;
With the possible extension of periods, depending on the completion of customs clearance process. The
insurance premium should be negotiated from time to time with local insurance companies

4.5.7.6 Transportation and Shipping

Goods purchased from abroad should be transported through Ethiopian shipping Lines (ESL) or
Ethiopian Airlines (EAL) as may be appropriate and in accordance to the requirements of the bid document. If
there are forcing situations for using other shipping lines or airlines, the issue should be presented to ESL or
EAL as may be appropriate and a waiver should be secured before shipment. When the source of fund is from
foreign grant or credit, the condition under section above may not be applicable and suppliers are free to
choose any carrier. If the goods are shipped by sea the Bill of Lading; if shipped by air the Airway bill should be
received by EEP.
The goods can be transported by sea, air, on land or rail based on the contract agreement that is signed by
both parties, and the responsibility for arranging the insurance and the carrier depends upon the INCOTERMS
included in the contract. The most commonly used INCOTERMS and their meaning (as defined in INCOTERMS

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2010) is presented as follows: But also for contract signing and for arranging the transportation modality you
can refer timely updated INCOTERMS. The current updated INCOTERMS are 2010.
Where the source of the finance for the procurement is from internal sources (EEP’s own fund or
government's budgetary fund), the insurance coverage should be bought from local insurance companies who
have the capacity to insure the amount under the consideration irrespective of who is responsible (EEP or the
supplier) to buy the insurance policy.
4.6 Transit and Customs Clearance
Once the goods have reached the port of entry the process of clearing and transporting the goods to the final
destination has to start. The responsibility of clearing the goods from customs and transporting them to their
final destination shall be determined by the agreement entered with the supplier, accordance to the
agreement, if the responsibility lies with EEP clearing and transporting the goods shall be made either by using
EEP's own force or by hiring external transit and transport service providers. Whoever does the transit work
the following documents should be made    available to the transit service provider in order to carryout
customs    clearance.
a) The bank import permit;
b) Two original invoices chamber-zed by the showing goods description, quantity, unit price
and total amount,
c) The original air way bill or original negotiable, clean, on- board, Bill of loading, if it is on C &
F, CIF or CIP terms, CIQ if it is from china should include a Market "freight prepaid".
d) Bank debit and credit advice, indicating settlement of the claim.
e) The packing list,
f) Certificate of origin
g) Insurance debit note, freight invoice/freight receipt
h) Tax exemption letter, if any
4.6.1 Incoterms
The cost of transportation is a significant component of the cost of goods purchased by EEP and delivered to
the project site. It is thus an important factor in the evaluation of bids. All four basic modes of freight
transportation - road, rail, air and water - are used in international transportation for which codification has
developed over centuries. The use of INCOTERMS is encouraged, a set of rules issued periodically by the
International Chamber of Commerce, in all procurement documents for the supply of goods and equipment.
This helps avoid uncertainties in interpretation between EEP and suppliers. Commonly used Incoterms in
procurement are described below.
CIP – Carriage and Insurance Paid to (named place of destination) This term is broadly similar to the above
CPT term, with the exception that the seller is required to obtain insurance for the goods while in transit. CIP
requires the seller to insure the goods for 110% of the contract value

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CPT – Carriage Paid To (named place of destination) CPT replaces the C&F (cost and freight) and CFR terms
for all shipping modes outside of non-containerized sea freight.
DAP – Delivered at Place (named place of destination) Incoterms 2010 defines DAP as 'Delivered at Place' -
the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport
ready for unloading at the named place of destination. Under DAP terms, the risk passes from seller to buyer
from the point of destination mentioned in the contract of delivery.
DAT – Delivered at Terminal (named terminal at port or place of destination) This Incoterm requires that the
seller delivers the goods, unloaded, at the named terminal. The seller covers all the costs of transport (export
fees, carriage, unloading from main carrier at destination port and destination port charges) and assumes all
risk until arrival at the destination port or terminal.
DDP – Delivered Duty Paid (named place of destination) Seller is responsible for delivering the goods to the
named place in the country of the buyer, and pays all costs in bringing the goods to the destination including
import duties and taxes. The seller is not responsible for unloading. This term is often used in place of the non-
Incoterm "Free in Store (FIS)". This term places the maximum obligations on the seller and minimum
obligations on the buyer. No risk or responsibility is transferred to the buyer until delivery of the goods at the
named place of destination.
EXW – Ex Works (named place of delivery) The seller makes the goods available at their premises, or at
another named place. This term places the maximum obligation on the buyer and minimum obligations on the
seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any
costs included.
FCA – Free Carrier (named place of delivery) The seller delivers the goods, cleared for export, at a named
place (possibly including the seller's own premises). The goods can be delivered to a carrier nominated by the
buyer, or to another party nominated by the buyer. In many respects, this Incoterm has replaced FOB in
modern usage.
4.6.2 Inspection
Pre-shipment inspection of goods is required for imports into Ethiopia though not for all kinds of imports. It is
also essential for expensive imported goods and items likely to suffer damage or deterioration during transit if
not packed in accordance with the specifications in the contract. When pre-shipment inspection of goods is
specified in the contract, this will normally be undertaken by a nominated international third-party agent for
imported goods or by a nominated inspector for local goods. The inspector (who must be experienced and
skilled) will carry out the following tests (on a random sampling basis where appropriate) to ensure that the
goods and packing are in strict conformity with the requirements.
4.6.3 Pre-Shipment Inspection Actions
• Obtain and verify Suppliers’ Certificates of Analysis or Compliance to verify physical characteristics and
chemical details, type, batch numbers and shelf life as appropriate.

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• Where appropriate, check that the consignment has a shelf life not less than that specified in the contract
from arrival in Ethiopia, and that all necessary instructions and manuals are enclosed and are printed in
the required language.
• Check that all packages are serially numbered and complete and that labeling and marking is exactly as
specified in the contract.
• Check that dimensions of the packing are as specified in the contract and that pallet markings and handling
descriptions are clearly displayed to ensure proper handling in transit and at the delivery destination.
• Check that all individual items, internal packing and external packages are exactly as specified in the
contract.
• Check that the primary packing is not damaged, opened or tampered with and that the shipping mark
requirements are correct.
• Check the packing against appropriate transportation and commodity regulations, and ensure that it is
adequate for the safe shipment of goods by the contracted mode of transport.
• Check the stability of cartons/pallets and that all waterproofing of the packing is sufficient if the
consignment is to be transported by open truck, or left exposed during transit.
• Prepare a detailed report against each of the above items and arrange for those present at the inspection
to sign the report in agreement of the findings.
• Take photographs wherever possible and relevant and attach these to the report.
• Submit the report immediately to the public body.
• Any discrepancies found in the course of the inspection must be reported immediately.
4.6.4 Transportation Insurance
EEP is required to insure or make adequate provisions for the insurance of imported goods against hazards
incidental to the acquisition, transportation and delivery of such goods to the place of use or installation.
Indemnification should be in the contract amount or in a freely convertible currency. Suppliers are allowed to
arrange insurance from any eligible source country. However, if EEP wished to reserve insurance to national
companies or other designated sources, loan proceeds from the Bank cannot be used to reimburse insurance
costs.
Depending on the transport provisions in bidding documents, EEP or the supplier makes arrangements for
transportation, and must obtain insurance against loss or damage for internal transit and storage in
accordance with the Loan Agreement. In the cases of CIF and CIP for example, the supplier has to insure the
goods up to the port or other destination where delivery is to be made. The SBD for the Supply and Installation
of Plant and Equipment (SBDPE) for instance, requires the contractor to take out cargo insurance to cover loss
and damage to:
• equipment, including spare parts from the supplier’s or manufacturer’s works or stores until arrival at the
project site; and
• construction equipment to be provided by the contractor or its subcontractors.
If, on the other hand, procurement of goods is on FOB terms, once the goods are onboard, it is up to the
public body to arrange for the necessary insurance to cover the goods to their destination.

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 4.6.5 Collection of Goods from the Port of Entry
Port and customs clearance of goods and physical collection at the Port of Entry may be necessary in some
circumstances depending on the INCOTERMS used.
4.6.6 Before Accepting the Consignment
• Carefully examine the packages to check they are all present according to the Shipping Documents or
Airway Bill and to look for signs of any physical damage.
• Look also for signs of tampering with any of the packages e.g. cases with broken seals, or loose / open
tops.
• Have the packages re-weighed if there is any suspicion that items have been removed, and compare the
result with the shipping documents.
• Note any deficiency either in quantity or in condition on the receipt given in exchange for the goods (a
clause receipt, meaning a bill of lading that shows a shortfall or damage in the delivered goods).
• If there are shortages, in addition to a clause receipt, a short-landed or discrepancy certificate should also
be obtained to assist claims against the Supplier or insurance companies.
4.6.7 Receipt of Goods
The Logistics and Warehouse office is normally responsible for the receipt of goods except under works
contracts where construction materials are delivered direct to the site. On delivery by a supplier or carrier,
the storekeeper will:
• Receive the goods into temporary storage.
• Examine the apparent condition of the goods and packing.
• Issue an provisional receipt, noting the apparent condition, pending the meeting of an Inspections and
Receiving Committee.
• Receive and register the invoices pending processing (through the Procurement Unit) to the Accounts
Department for payment following the report of the Inspections Committee.
• Arrange notification to the Inspections and Receiving Committee and to the Supplier of the date and time
of the formal inspection of the delivery.
4.6.8 Inspection of Goods
The Inspections and Receiving Committee shall meet within two days following the arrival of the goods, and in
the presence of the Supplier’s representative if he chooses, will:
• Examine the documentation and packaging for compliance with the contract.
• Ask the Supplier to open the packages (or arrange opening of the packages at the Supplier’s expense).
• Examine and analyze the goods for conformity with the contract specifications and/or the samples
provided.
• Reject all goods that are damaged or do not conform to the required specifications or samples.
• Prepare an Inspection Report with an original and three copies, recording the delivery, and descriptions,
specifications and quantities of the goods examined, and the reasons for accepting or rejecting the goods.

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• Release accepted goods to the warehouse / Stores which will take the items on charge by issue of a Goods
Received Note and entry into the Stores Ledger
• Any rejected goods should be removed by the Supplier within one week. If the goods are not removed,
and it is specified in the contract, the Supplier may be charged a penalty for delay. If the rejected goods
are not removed after a reasonable period, the public body may apply to a Court for authority to sell the
rejected goods.
• The Inspections and Receiving Committee will follow similar procedures to examine equipment that is
delivered to a site and already installed by the Supplier.
• The Inspections and Receiving Committee will be assigned by EEP Quality Office or the user department
office or ICT office or Engineering office accordingly.
4.7 Disposal
The head of EEP shall ensure that fixed assets which are not useful to the organization are disposed of in the
manner to be prescribed in the directive to be issued by the Minister. The description and amount received
from all public property disposed of shall be included in the public accounts. Without prejudice to the
provisions of the directive to be issued by the Minister, concerning the matter, proceeds from the disposal of
public property shall be deposited into the account of the central treasury.
4.8 Document Archiving
Correspondence and communications are essential to the management of relationships with suppliers and
other bodies but communications issued by EEP may commit EEP or bind it to a course of action with legal,
contractual or financial implications. Therefore, all procurement correspondence and communications issued
by EEP shall be made by persons authorized in accordance with their duties and responsibilities.
Documentary records, both in print or electronic format, are essential for efficient and effective management
of activities, provide evidence in support of decisions and actions taken, and provide an audit trail for
verification of transparency, accountability and effectiveness. Efficient records management is essential to
ensure effective storage, retrieval and use with due regard to security, integrity and confidentiality.
All officers shall ensure they obtain, retain and maintain appropriate documentation supporting the activities
for which they are responsible. Senior officers involved in approval or authorization shall ensure that any
transactions they approve or authorize are backed by appropriate supporting documentation.
4.8.1 Filing/Record Management System
EEP has a general responsibility for maintaining Procurement Records and Contracts Registers, but each public
body must ensure that complete documentation is maintained in respect of all procurement activities and for
contracts and agreements entered into. Responsibility for the official maintenance of record files, authority to
access files and coordination of management and follow-up actions must be clearly defined in EEP to avoid:
• partial and incomplete records being held by several different units or individuals
• unauthorized access to records
• failure to take any necessary action at the right time

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All documents regarding a particular procurement case shall be kept for future reference and monitoring and
control purposes for a period of ten (10) years. The recommended filing structure for a procurement dossier
(one folder if possible) is divided into four main categories with relevant sub-categories to include the
following documentation:
4.8.1.1 Correspondence sub-category
• Original request from Originating Officer
• Correspondence with Originating Officer
• Correspondence with suppliers following procurement origination
• Internal correspondence within EEP
4.8.1.2 Tendering Process sub-category
• Request for Expressions of Interest
• Shortlist or advertisement
• Bidding documents and specifications or Terms of Reference
• Correspondence with suppliers relating to bidding
• Bids, quotations, or pro-forma invoices received
• Bid opening records
• Record of bid securities
• Bid Evaluation Report
• Submission to Procurement Endorsing Committee and relevant minutes of decisions
4.8.1.3 Order and Delivery sub-category
• Notice of contract award and publication
• Contract or Purchase Order and acknowledgement of receipt
• Delivery documentation
• Inspection and acceptance reports
• After sales warranty and performance claims
4.8.1.4 Finance sub-category
• Copy of Record of Commitment of Funds
• Copy Invoices or Certificates
• Copy Payment Vouchers
• Record of Retentions and release
• Performance Security and release.
4.8.2 Procurement Numbering System
The purpose of the procurement numbering system is to ensure each requirement is given a unique
identification to assist in the tracking, monitoring and audit of procurement, and in the tracing and
maintenance of records and files. The Procurement Number is assigned at the requisition stage and will form
the basis for document filing and management information systems. Procurement Numbers are issued from a
register maintained by a Stores Department, or the head of the User Department, Program or Project as
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 appropriate. Numbers must not be re-used, even if the original procurement is cancelled. The basic
Procurement Number consists of four parts as follows:
• EEP
• The department or project—Up to five letters used to identify the department or project
o PMO - Portfolio Management Office
o TSC - Transmission & Substation Construction
o TSO - Transmission & Substation Operations
o GO - Generation Operations
o ST - Staff Procurement
• The financial year (e.g. 2017)
• A three-digit sequence number—the sequence number allocated by the department or project within the
financial year (e.g. from 001 to 999)
Using this system, the Procurement Number for the fourth-generation operations related project of 2017
would be EEP-GO-2017-004.

5.0 Ethiopian Electric Power Organization

EEP Procurement process is done in the centralized organizational structure to take the benefit of the central
procurement. To be functional and easy for executing the procurement activities effectively and efficiently, the
Procurement of localized items shall be executed in regions and in project sites follow as the Procurement
process according to the manual. The regional offices and power plants are delegated with full responsibility
and accountability to execute the Procurement of local items and urgently needed items with the following
threshold.

1. For works Up to 500,000 Birr

2. Goods Up to 200,000 Birr

3. Non-Consultancy Service Up to 150,000 Birr

4. Consultancy Service Up to 120,000 Birr

EEP has established and approved delegation of Power (DOP) in 2016 for each work units in the company in
the delegation of power, each work unit has its authorities and responsibilities to sign and perform the
company assignments. Hence, the delegation of power shall be referred as part of this manual to perform the
Procurement activities, to approve and authorize procurements.

5.1 EEP Executive Management

The Chief Executive of EEP shall have the following additional duties and responsibilities according to the
Directive:

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1. Ensure that the procurement staff and head of the Procurement Unit of EEP have the required educational
qualification and experience in the fields relevant to public procurement.
2. Ensure that the procurement staff and head of the Procurement Unit meet high ethical standards.
3. Ensure that the unit responsible for procurement in EEP has the necessary authority and internal system in
place to enable it discharges its duties as a team.
4. Establish a Purchase committee or Procurement Endorsing Committee to approve procurements of high
value in EEP, consisting of no less than three (3) members who serve for a maximum period of three (3)
years in accordance with the following criteria:
a) Officials should be in high position of responsibility in EEP.
b) Officials need to have extensive knowledge and experience and as far as possible should be
comprised from differing professions.
5. Where appropriate, extend the service of members of the Procurement Endorsing Committee for one
additional term.
6. Ensure that members of the Procurement Endorsing Committee have adequate time and office facility
necessary to carry out their duty.
7. Ensure that the Procurement Endorsing Committee service is part of these EEP employee's regular duty, is
incorporated into their work program, and that their performance in the committee accounts for their
overall work evaluation.
8. Ensure that EEP procurement staff, the head of the procurement unit, and members of the Procurement
Endorsing Committee have in their possession the following documents
a) copies of the Ethiopian Federal Government Procurement and Property Administration
Proclamation No. 649/2009
b) copies of the Federal Government Public Procurement Directive,
c) copies of the Standard Bidding Documents
d) copies of the other necessary documents as required, such as the PPA Public Procurement Manual
and this EEP Procurement Manual, as well as relevant documentation from World Bank, African
Development Bank, etc.
9. Make training available to EEP Staff in ordered to enable them acquire adequate knowledge of the public
procurement system.
10. Follow up the activities of the Procurement Unit and the Procurement Endorsing Committee to make sure
that the procurement staff and members of the Procurement Endorsing Committee give due attention in
carrying out their duty properly, and where necessary, take corrective measures.
11. Establish ad hoc evaluation committee for procurements which are complex and require detailed technical
evaluation.
12. Examine and approve the Procurement Plan of EEP by ascertaining that the following requirements are
satisfied:
a) The Procurement Plan is in harmony with the work program of EEP.
b) Items of procurement which can be consolidated in to a single procurement package are
consolidated as such.

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 c) Procurements of EEP which can be executed together with procurements of other public bodies
under a frame work contract in accordance with the decision of PPA are identified.
d) The Procurement Plan is inclusive of all procurement needs of EEP and has secured the consent of
the Procurement Endorsing Committee.
13. Communicate in due time to the body responsible for framework procurements, complete information on
procurements of EEP which can be executed in consolidation with procurements of other public bodies
under a framework contract.
14. Concerning procurements of small value which do not need the approval of the Procurement Endorsing
Committee:
a) Delegate authority of approval of such procurements to the Procurement Unit, or
b) Delegate authority of approval to the EEP head who has direct relation to the procurement.
c) The delegation of procurement authority by the head of EEP may be given to persons with various
levels of responsibility with specified limits of procurement value.
15. Ascertain that price adjustments made in the process of procurement is in keeping with the procedure and
the requirements of price adjustment in Section 1.6.6Bid Price and Price Adjustment.
16. Consider and give decisions on complaints lodged pursuant to article 43 of this Directive and against
rejection by the Procurement Unit of request for information concerning the conduct of a particular
procurement in EEP.
17. Sign a contract or delegate authority to sign a contract where necessary, and monitor the execution of any
procurement as per the contract.
18. Authorize the outsourcing of a procurement by reason of its complexity or for lack of capacity in EEP to
handle that procurement, inconformity with the following procedures:
a) Ensure that the outsourced procurement service is rendered in compliance with the provisions of
the Proclamation and Directive.
b) Ensure that there is clear demarcation of responsibility between EEP and the entity to which the
procurement is outsourced in the execution of the procurement.
c) Ensure that all decisions taken in respect of out sourced procurements in accordance with this sub
article have secured the approval of EEP.
19. Make arrangements necessary for procurement audit or inspection to be conducted by the internal or
external body in respect of the execution of procurements by EEP, including the following:
a) Make available in due time, documents necessary for procurement audit,
b) Cause the provision of office space and facilities for employees assigned to conduct the
procurement audit.
c) Assign a staff to give explanation on the conduct of procurements made by EEP.
20. Cause information to be conveyed to the concerned tax authority regarding payments made to suppliers in
connection with procurements executed by EEP.
5.2 EEP Engineering Department
In the procurement process of EEP, the Engineering Department plays an important role. The central
engineering unit prepares detailed technical specifications, designs, drawings for new generation and

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transmission construction projects or reviews the stated items coming from remote sites related with
operations. EEP engineering units also provides related clarifications replies during tender floating period for
bidders.

5.3 EEP Procurement Units

The EEP Procurement Units shall have the following specific duties and responsibilities:
1. Identify the procurement need and prepare the Procurement Plan of EEP based on the user or respective
work units requirement;
2. Make sure that except as provided for when shopping becomes necessary, for purchase of goods made
under exceptionally advantageous conditions, and for or goods or services necessary to solve problems
encountered during travel, any public procurement is made from suppliers who are registered by the
Public Procurement and Property Administration Agency and have bank accounts.

51. Conditions for use of Direct Procurement

g) where situations arise in which shopping becomes necessary to meet the special procurement needs
of EEP. The manner of implementation of this provision shall be prescribed by the directive to be issued
by the Minister;
h) for purchase of goods made under exceptionally advantageous conditions which only arise in the very
short term. This provision is intended to cover unusual disposals by firms, which are not normally
suppliers. It is not intended to cover routine purchases from regular suppliers.
25.7 Pursuant to the provision of article 51 (2) of the proclamation
a) EEP may carry out directly from any supplier, procurement of goods or services not included in
their procurement plan, or goods or services necessary to solve problems encountered during
travel the value of which doesn't exceed birr 1500 (one thousand five hundred birr) however, the
total value of such small procurements within a fiscal year shall not exceed birr 30,000 (thirty
thousand Birr)
b) Notwithstanding the provision of article 25.7 (a) above, diplomatic missions of the Ethiopian
Government may carry out procurements of emergency requirements not included in their
procurement plan and the value of which does not exceed USD $300 (three hundred USD) in a
single purchase order. However, the total value of such small procurements within a fiscal year
shall not exceed USD $6000 (six thousand USD)

4. Prepare and submit to the Procurement Endorsing Committee or purchase committee, bidding documents
in collaboration with the procurement initiator.

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5. Make corrections to the bidding documents in conformity with the recommendation of the Procurement
Endorsing Committee or purchase committee.
6. Subject to the provision of Article 35 of the Proclamation, disclose to the public by posting on EEP's
website at the same time of publication of its bid advertisement in a newspaper, any procurement the
value of which corresponds to or is greater than that stated in this sub-article 1, including International
Competitive Bidding procurements.
a) For Works Greater than Ethiopian Birr 20,000,000
b) For Goods Greater than Ethiopian Birr 6,000,000
c) For Consultancy Services Greater than Ethiopian Birr 4,000,000
d) For Non-Consultancy Services Greater than Ethiopian Birr 1,000,000

35. Advertisements
1) Invitation to bid shall be advertised in at least one times in a national newspaper of
general circulation which is published in the language the bidding document is
prepared.
2) Where EEP finds it necessary, it may, in addition to the medium mentioned in sub
article (1) of this Article, advertise the bid on a national radio and television.
3) The time allowed for preparation of bids shall not be less than the minimum number
of days stated in the procurement directives.

7. In respect of procurements the value of which corresponds to or is greater than that specified above,
disclose the information to the public by filling it in the form provided for this purpose and posting it on
EEP's website within five (5) days of signing the contract after award.
8. Make bidding available for purchase and provide clarification on issues raised regarding the bidding
document, prepare the bid box and manage the bidding process, open bids (and invite the procurement
initiator and internal audit to attend the bid opening ceremony, if possible).
9. Make sure that the main pages of bid documents submitted by bidders are signed and stamped and
maintain minutes of the bid opening.
10. Receive, keep, and/or release, or forfeit bid securities depending on the conditions stated in the bidding
documents.
11. Ensure that copies of bid documents are promptly delivered to members of Bid Evaluation Team and that
the original bid documents are kept securely for reference.
12. Evaluate bid documents as part of the Bid Evaluation Team and submit the result to the Procurement
Endorsing Committee or purchase committee if by reason of the value of the procurement being beyond

1
Updated from Procurement Directive revised on December 2015 on focus of Construction Bids, threshold amounts, and experience
required

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 the threshold specified below [in article 24/2], it is necessary to submit the evaluation result to the
committee,

 For Works Greater than Ethiopian Birr 500,000

 For Goods Greater than Ethiopian Birr 200,000
 For Consultancy Services Greater than Ethiopian Birr 120,000
 For Non-Consultancy Services Greater than Ethiopian Birr 150,000

13. Ensure that all information provided in the bid documents is copied and calculations are made accurately
and no act is committed in favor of or against a bidder during bid review or in the bid evaluation.
14. Give clarification on issues raised by the Procurement Endorsing Committee or Purchase committee in
regard to a procurement subject to the approval of the committee.
15. Follow up and coordinate the execution of any outsourced procurements.
16. Approve procurements the value of which is below the threshold specified below in accordance with EEP
delegation of power signing authority:

 For Works Less than Ethiopian Birr 500,000

 For Goods Less than Ethiopian Birr 200,000
 For Consultancy Services Less than Ethiopian Birr 120,000
 For Non-Consultancy Services Less than Ethiopian Birr 150,000

17. Disclose the result of a bid evaluation to the successful and unsuccessful bidders.
18. Negotiate procurement contracts with successful bidders, sign contracts in accordance with the authority
delegated to it by the head of EEP or cause same to be signed by the concerned official of the EEP.
19. Ascertain that EEP has discharged its obligation and its rights have been satisfied under a procurement
contract.
20. Select candidates for procurements to be executed by request for quotation and collect quotations from
such candidates.
21. Ascertains that the price offered by successful bidders is commensurate as compared to the market price;
particularly for procurements to be conducted by Request for Quotation method of procurement.
22. Keep procurement documents and give clarifications on procurements of EEP when requested by the
appropriate bodies.
23. Except in Restricted Tendering, give information regarding the execution of the procurement for any
interested person as promptly as possible; however, if the Procurement Unit has to incur costs to provide
the information, the person seeking the information shall bear the cost.

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 5.3.1 Project Management Office
EEP procurement division has five separate teams one of which is the Project Management Office or PMO
team led by an assistant procurement manager. The team in coordination with EEP procurement manager
liaises with the central PMO office.

5.3.2 Transmission & Substation Construction

Transmission and Substation Construction constitutes another team created within EEP procurement division
and is led by an assistant procurement manager. The team in coordination with EEP procurement manager
liaises with the central TSC office and handles projects in relation to transmission and substation construction.

5.3.3 Transmission & Substation Operations

Transmission and Substation Operations constitutes another team created within EEP procurement division
and is led by an assistant procurement manager. The team in coordination with EEP procurement manager
liaises with the central TSO office and handles projects in relation to the operations of transmission and
substation projects.

5.3.4 Generation Operations

Generation Operations constitutes another team created within EEP procurement division and is led by an
assistant procurement manager. The team in coordination with EEP procurement manager liaises with the
central GO office and handles projects in relation to the operations of generation projects.

5.3.5 Staff Procurement

Staff procurement constitutes another team created within EEP procurement division and is led by an
assistant procurement manager. The team handles staff procurement such as furniture, stationaries, office
equipment, uniforms among others.

5.4 Procurement Endorsing Committee or Purchase committee

The Procurement Endorsing Committee or purchase committee has the following specific duties and
responsibilities:
1. Examination of the annual Procurement Plan prepared by the Procurement Unit of EEP and insurance that
it takes into account the following points:
a) That the identified procurement needs of EEP are in harmony with its work program.
b) That there is no other better alternative to procurement to satisfy each need.
c) That the procurement plan is prepared in such a way as to enable bulk purchase.
d) That other special requirements arising from the nature of EEP are addressed.
2. Ascertain that the bidding documents prepared by the Procurement Unit satisfy the following
requirements:

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1. They are inconformity with the Standard Bidding Documents prepared by EEP for each type of
procurement.
2. That the technical specification complies with the conditions stipulated in the Proclamation and the
Directive.
3. That the evaluation criteria are non-discriminatory, transparent, and achievable.
4. That they contain all the necessary forms and conditions which the Proclamation and the Directive
require to be stated depending on the type of the procurement, and other matters of fundamental
importance.
3. Consider and approve Bid Evaluation Reports of procurements the value of which exceeds the
threshold specified below for each type of procurement, by ascertaining that the following conditions
are satisfied:
a) That the evaluation was conducted in accordance with the bidding document,
b) That the evaluation was carried out in compliance with the provisions of the Proclamation and
Directive,
c) That the detailed evaluation leading to the recommendation given in the Bid Evaluation Report and the
overall process of procurement would result in ensuring value for money for EEP.

 For Works Less than Ethiopian Birr 500,000

 For Goods Less than Ethiopian Birr 200,000
 For Consultancy Services Less than Ethiopian Birr 120,000
 For Non-Consultancy Services Less than Ethiopian Birr 150,000
4. Implement the provisions below.
a) The Procurement Unit or the Bid Evaluation Team formed to conduct evaluation of the bids
shall complete the evaluation and submit the result together with its recommendation in a Bid
Evaluation Report, to the Procurement Endorsing Committee (or other body having the
authority to approve bid evaluation results), within the bid validity period offered by the
bidders.
b) The Procurement Endorsing Committee shall examine the Bid Evaluation Report in light of the
procurement rules and procedures, as well as against the requirements of the bidding
documents, and give either of the following decisions:
i. Approve the Bid Evaluation Reports a whole and authorize the procurement to proceed
accordingly. Where the Procurement Endorsing Committee finds it necessary, it may
require the persons conducting the evaluation to account for the evaluation report.
ii. Reject the Bid Evaluation Report and order re-evaluation of the bid submissions. When
the Procurement Endorsing Committee rejects the report, it shall state the reason for its
decision and refer the case back to the Bid Evaluation Team with instruction for the
committee to re-evaluate the bids in question. The Bid Evaluation Team shall conduct
re-evaluation in accordance with the instruction of the Procurement Endorsing
Committee and report the result back to the committee.

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 c) Notwithstanding the provision above, the Bid Evaluation Team or a member thereof objecting
to the decision of the Procurement Endorsing Committee and the corrective instruction given
by the Committee has the right to record its/his dissenting opinion. However, the procurement
shall be executed in accordance with the decision of the Procurement Endorsing Committee.
d) Any decision given by the Procurement Endorsing Committee on a Bid Evaluation Report
submitted to it should be reasonable.
5. Advise the head of EEP on ways of ensuring compliance with the Proclamation, the Directive, and other
legal documents regulating the conduct of public procurement.
6. Submit to the head of EEP reports on procurements made, problems encountered and solutions
suggested.
7. Give clarification concerning its decisions made on any procurement proceedings within its Jurisdiction
when required to do so by EEP and any other appropriate body.

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6.0 Procurement Planning

A Procurement Plan details intended purchases; proposes the procurement methods to be used; and shows
different phases of the procurement process for delivery of goods, works or services as necessary. It also
provides a guideline for monitoring procurement implementing over the period. EEP shall be required to
prepare a Procurement Plan supported by action plan enabling them to execute in due time, the procurement
necessary to implement their work program.
This plan shall be updated on an annual basis and in a rational manner having regard to expected flow of
funds. The Procurement Plan shall be incorporated into the Project Performance of the capital project and
operational assignment of the enterprises. For procurement under the recurrent budget EEP shall prepare an
Annual Procurement Plan. Preparation of the Procurement Plan is mandatory for EEP. Any procurement object
irrespective of value and/or methods should be included in the Procurement Plan. At the beginning of each
financial year EEP shall prepare Procurement Plans reflecting both updated annual plan for the capital budget
and annual plan for the recurrent budget. The Procurement Endorsing Committee or purchase committee has
overall responsibility for examination of the Annual Procurement Plan. The head of EEP or an authorized
officer shall approve the Procurement Plan.
EEP shall publish on their Notice Boards and, where applicable in their website, at the beginning of the
financial year the estimated total procurement by category of goods and related services and works and
physical services and intellectual and professional services which they intend to award during the subsequent
twelve months. This is known as the "Annual Procurement Plan" prepared in accordance with the Directive
and shall be in the format below:
Figure 9 - Annual Public Procurement Plan Submission Form.
Source of Budget for Estimated Budget
Estimated time to Procure
Procurement For Procurement**
Selected
Goods, Procure Estimated
Procurem
S. Services, o r Procurement ment time of
ent Estimated time Remark
No. Works to be Category* Type** Receiving of
Internal Method** of Tender
Procured Treasury Loan Aid Recurrent Capital ** Goods,
Revenue * Announcement/Inv
itation to Bid Services or
completion
Works
1 2 3 4 5 6 7 8 9 10 11 12 13

* Specify as Goods, Consultancy Service, Other Services, or Works.

** Specify the types of currency as Ethiopian Birr or other convertible currency.
*** Specify as Open Bidding, Two-Stage Bidding, Request for Proposal, Restricted Bidding, Request for
Quotation, or Direct Procurement.
**** Specify as National or International Competitive Bidding.
In identifying its procurement needs, EEP must take the following points into consideration:
• That the need cannot be met by using unused resource or property available in EEP.
• That the need can be met by a product or service available in the market.
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• That the need does not involve items which shall be of no use to EEP and cause EEP to incur unnecessary
cost.
• That the identification of procurement needs makes provisions for additional need that might arise in the
future, especially in regard to the procurement of goods of long term contract.
• That the procurement need is in line with standard items which are widely available in the market unless
the need requires otherwise.
• That the procurement need is environmentally friendly.
6.1 Procurement Endorsing Committee or Purchase Committee Responsibility
The Procurement Endorsing Committee has overall responsibility for examination of the Annual Procurement
Plan. It must conduct the following:
 Instruct the Procurement Unit to commence development of the Annual Procurement Plan.
 Receive and approve the draft annual procurement plan and costing from the Procurement Unit, and
forward to the head of EEP for inclusion in the Annual Budget.
 If insufficient budget funding is available, either on the advice of the head of EEP before submission to the
Budget Department and/or following notification of the approved Annual Budget, instruct the
Procurement Unit to trim the Procurement Plan according to service priorities.
 Receive and approve the final Annual Procurement Plan.
 To prepare the annual Procurement plan, the Procurement unit shall receive from each work units in EEP.
6.2 Outline of the Procurement Process
In determining its annual procurement needs arising from its various departments, EEP has to adhere to the
following procedures:
 Require end users in EEP to submit their annual procurement needs,
 Identify the need submitted by end users by type of procurement, quantity, quality and source.
 Identify goods, works and or services to which EEP gives priority and special attention.
 Ascertain that there are adequate suppliers for the needs
 Determine the cost estimate for each type of procurement.
 Ascertain that technical specification is prepared or will be prepared by end users.
6.3 Budget Preparation Process
Annual budgets are prepared each year in accordance with the procedures specified by the EEP Budget
Department. Detailed templates and instructions for the preparation of Annual Procurement Plans are
contained in this Procurement Manual. The head of EEP must coordinate the preparation of the budget for
EEP, including procurement plans based on previous consumption and estimated requirements for stores
replenishment, and the submissions of Departments, Units and Projects. Preparation of the Annual
Procurement Plan should be commenced at least three months before the start of the Financial Year to allow
sufficient time for a realistic and accurately cost estimated plan to be compiled.

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6.4 Approval of Procurement Plan and Amendment Conditions
Procurement units of EEP must submit the annual procurement plan they have prepared to the head of EEP
for approval after consultation with the Procurement Endorsing Committee of the EEP. The head of a EEP has
to monitor the execution of procurement by establishing a system enabling him/her to ascertain that the
conduct of procurement conforms to the approved procurement plan. The head of EEP shall then send a copy
of the approved annual procurement plan to the appropriate departments
EEP shall not split procurements nor deviate from the annual procurement plan once it is approved by the
head of EEP. EEP may at any time modify its procurement plan where necessary and if so EEP shall send the
modified procurement plan to the departments for which the initial procurement plan was sent.
6.5 Declaration of the Annual Procurement Plan
Any procurement plan which amount above the threshold cited in this manual item number 5.3 (6) will be
issued on EEP web site depending on the nature of Procurement /ICB or NCB/.

6.6 Prior Approval Issues

The following issues shall be gets prior approval by Executives and needs follow up by project managers and
project coordinators:

1. Price adjustment (method of price, tax issues, limits of price adjustment, change in currency)
2. Payment currency coverage (Local and Foreign proportion)
3. Bank permits of foreign currency and clearance
4. Limits of Variation Orders (VO) at project level
5. Demurrage and Liquidity damages
6. Guarantee amount and validity periods.
7. Clearance from customs and Inland Revenue after project completion

6.7 Establishing a Timeline

While making the procurement plan, by using the template formats, the procuring entity shall fix the time of
requirement for goods, services or works in the plan. For this at least take in to consideration the following:
1. The time required shall tally with the Enterprise’s plan and program.
2. The time selection shall take in to consideration the right market condition and time for the required
procurement.
3. Make sure that the fixed tender floating time is giving fair and equal opportunity for suppliers as stated in
Annex 3 and whether adequate time has been given tender preparation and for the participation of large
number of suppliers.
4. Especially for complex and large amount consuming procurements, make sure that adequate time has
been given, for tender preparation, making evaluation and approval.
All conditions stated in item number 1above kept as it is, and make sure that the fixed time is not too long to
fulfill the required procurement process.

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7.0 Market Relation

7.1 Market Surveys

Market surveys are used to survey a specific market or industry to ascertain qualified sources capable of
satisfying the user-department’s needs and to determine competition, capabilities or estimated costs with
respect to a specific good or service sought by EEP. EEP Procurement Unit should get direct assistance by the
Marketing and Business Division to conduct market surveys. However, user-departments (Engineering Unit,
Project Units) should conduct their own technical research and participate in professional meetings and
discussions to keep abreast of technological and other developments within their area of responsibility.
Any time additional information about potential methods to fulfil a requirement is necessary, the user-
department should request the Marketing and Business division to conduct a Market Survey. In addition,
before developing new Specifications or soliciting new products with which EEP is not familiar, the user-
department should request the Marketing and Business division to perform a Market Survey. A market survey
shall be based on generic and, preferably, performance-based description of the requirement to be fulfilled as
provided by the user-department.
Upon receipt by the Marketing and Business division of a request to undertake a Market Survey, the
Marketing officer shall evaluate the urgency, estimated monetary value and complexity of the procurement
and past experience with similar procurements. The Market Survey shall involve obtaining information specific
to the goods, services or works being acquired.
In conducting a Market Survey, the Marketing officer may:
a) Contact knowledgeable individuals in the industry
b) Review the results of recent Market Surveys undertaken to meet similar needs
c) Conduct internet research on the industry;
d) Obtain source lists of similar items from other agencies, trade organizations or other sources;
e) Review catalogues and other product literature;
f) Issue Request for Information’s as indicated in sub-section 7.3.6
7.1.1 Open Competition
An open competitive approach to market is EEP’s preferred approach as it provides all eligible prospective
Bidders with timely and adequate advertisement of a EEP’s user departments’ requirements and an equal
opportunity to bid for the required goods, works, or non-consulting Services. Any approach, other than open
competition, shall be justified by EEP. Any such approach shall be stated in the Procurement Plan.
7.1.2 Limited Competition
A limited competitive approach to market is by invitation only, without advertisement. It may be an
appropriate method of selection where there are only a limited number of firms or there are other exceptional
reasons that justify departure from open competitive procurement approaches.

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7.1.3 Approaching the International Market
Approaching the international market (international competitive procurement), is appropriate when the
participation of foreign firms will increase competition and may assure the achievement of best Value for
Money and fit-for-purpose results. Open international competitive procurement, for which international
advertisement is required in accordance with these Procurement Regulations, is the preferred approach for
complex, high-risk, and/or high-value contracts. EEP has set specific thresholds for this purpose.
7.1.4 Approaching the National Market
As agreed in the Procurement Plan, approaching the national market may be appropriate when the
procurement is unlikely to attract foreign competition because of:
a. the size and conditions of the market;
b. b. the value of the contract;
c. activities that are scattered geographically, spread over time, or are labor- intensive; or
d. the Goods, Works, or Non-Consulting Services are available locally at prices below the international
market.
Approaching the national market may also be appropriate when the advantages of approaching the
international market are clearly outweighed by the administrative or financial burden involved. If foreign firms
wish to participate in open national competitive procurement, they are allowed to do so on the terms and
conditions that apply to national firms.
7.1.5 Registration of Vendors
The objectives of establishing lists of suppliers are:
• To maintain database list of suppliers / contractors/ consultants;
• To maintain information on the progress, status and development of domestic suppliers/ contractors/
consultants;
• To develop different methods by learning from experience gained from relations with suppliers with the
view of increasing value for money from procurement
7.1.6 Vendor Review and Qualification of Candidates
Any supplier desiring to obtain a Registration Certificate shall have to register themselves using the form made
available for this purpose in the website of EEP and submit the same together with the following:
• Valid trade license indicating the stream of business in which the supplier is engaged;
• A certificate of professional qualification from the appropriate body, if a supplier is a consultant;
• A contractors' certificate issued by the Ministry of Works and urban Development indicating the level of
such contractor;
• A certificate issued by the Federal Transport Authority indicating the level of the garage, if a supplier is
engaged in the maintenance or repair of motor vehicles;
• A certificate issued by the Drug Administration and control Authority, if the supplier is engaged in the
provision of drugs and medical equipment.

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 7.1.7 Vendor Ineligibility
7.1.7.1 Minor Infractions
The following acts committed by a bidder or supplier shall entail suspension for a period of six months up to
two years, depending on the gravity of the fault, so that the bidder or the supplier may not participate in any
public procurement for that period:
• Where a supplier under a contract with EEP fails to complete the delivery of goods, services, works or
consultancy services under that contract, and on account of such failure of the supplier, EEP suffers direct
or consequential loss or damage or such failure retards or disrupts the operation of EEP;
• Whereupon receipt of written notification of award as a successful bidder, a bidder fails or refuses to sign
a contract with EEP and in exercising another option to acquire the required objects of procurement from
another supplier, EEP sustains loss or such failure or refusal of the bidder retards or disrupts the operation
of EEP;
• Where he/she/it omits another act entailing warning pursuant to Article 48.5.3 of the Directive, within
three years from the time when he/she/it received warning for the first such omission.
7.1.7.2 Major Infractions
If it is proved that a bidder or supplier has committed one of the acts listed below with an intention to distort
or alter the bid evaluation result or during the contract administration, he/she/it may be suspended for a
period not less than two years or for an indefinite period, so that he/she/it may not participate in any public
procurement for the period for which the suspension lasts:
• Where it is proved that he/she/it has committed an act of corruption i.e. giving to an employee in
whatever position engaged in public procurement, anything of monitory value in the form of bribe or
inducement;
• Where it is discovered that he/she/it has committed an act of fraud i.e. Providing falsified or invalid
documents or where he/she/it is found to have participated in a public procurement while a suspension
against him is in force or where it is discovered that he/she/it has supplied goods, rendered services or
delivered works of an inferior quality to that required under a contract by employing deceitful practice to
make it look like genuine or it conforms to stated requirements;
• Where it is proved that he/she/it has connived at an act of price fixing with certain bidders to deprive EEP
and the other bidders of the benefit of fair competition;
• Where it is proved that a supplier has delivered goods, services, works or consultancy services of a kind or
quality that are not in conformity with the schedule of requirements under a contract in connivance with
employees or officials of EEP;
• Where it is proved that he has inflicted or has threatened to inflict physical or bodily injury on/or used
coercive action against a procurement staff or authority of EEP;
• Where it is discovered that he/she/it has committed another act entailing suspension from the suppliers
list within two years from the date on which the suspension previously imposed upon him by the Public
Procurement and Property Administration Agency for certain misconduct in connection with the execution
of public procurement came to an end.

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7.2 Maintenance and Updating of the Register of Vendors
 All registered vendors are required to inform EEP immediately in writing of any material change in the
information or documentation provided to EEP, setting out all relevant details. A follow-up communication
or alert may be in the form of an online application update, letter, fax or email and shall include all
relevant documentation.
 Upon request of the EEP, which may occur as part of a pre -qualification or solicitation exercise, registered
vendors shall submit their updated financial documentation and other relevant documentation, such as
ISO certifications, licenses, etc.
 If a vendor changes its name, the Vendor shall submit the following to EEP:
o A certified copy of the certificate of incorporation reflecting the name change;
o Written confirmation that the Vendor’s tax identification number remains the same. If the Vendor’s
tax identification number has changed, the Vendor shall complete a new application for
registration on EEP database.
o Vendors who fail to comply with the obligations set forth above may be subject to suspension or
removal from the Register of Vendors

7.3 Common Elements of solicitation process

While any of the following methods can be employed, the Contracting Officer should choose the method,
which, considering matters of economy, provides for full and open competition.
7.3.1 Advertising and Publicizing Solicitation
• Advertising in newspapers or other print mediums of local or general circulations.
• Advertising in various trade journals or publications
7.3.2 Solicitation Mailing List
7.3.3 Pre-bid and Pre-proposal Conferences
After the IFB is issued and before bids are due, EEP may hold a pre-bid conference with prospective
contractors to discuss the project requirements and details of the IFB. The conference should be attended by
the EEP Procurement Officer and supporting technical staff. A pre-bid conference is normally conducted for
large or complex procurements. Notice of any scheduled conference should be included in the IFB. The timing
of the conference should allow bidders enough time to review the IFB before the conference and adequate
time to prepare or revise their bids before the bid opening. At the conference, the EEP Procurement Officer
should state that nothing said at the conference will change any of the terms of the IFB unless a subsequent
written amendment to the solicitation is issued. A written summary of the conference should be made
available to anyone requesting it. The summary should also be provided to all those who submitted IFBs or
solicitations, not just those who attended the pre-bid conference. Attendance by offerors at the pre-bid
conference, while desirable, should not be mandatory, and non-attendees should not be deemed non-

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responsive. EEP should consider the need for all potential bidders to attend. Attendance may not be necessary
for firm’s familiar with the work and others may be unable to schedule a representative to attend, although
they may be well qualified to do the work at a reasonable price. To impose a requirement to attend a pre-bid
conference could unnecessarily limit competition.
7.3.4 Amendment of Solicitations
If a change to the Information for Bids (IFB), e.g., specifications, plans, date or time for bid opening, etc.,
becomes necessary after it has been issued, the change must be accomplished by issuing a written
amendment, sometimes called an addendum. The amendment must indicate the IFB number, project title,
issue date of the original IFB, and formally detail each change. Each amendment must be noted on the EEP’s
solicitation log. A copy of the amendment should be mailed to each prospective bidder who was provided the
initial IFB package with acknowledgement required. If an amendment needs to be issued just before the
scheduled bid opening date, the bid opening should be postponed for an adequate period of time to permit
the potential bidders to fully analyze the change and to submit timely bids. A sample solicitation amendment
is included in the forms section.
7.3.5 Request for Expression of Interest (EOI)
To obtain Expressions of Interest (EOI), the EEP Procurement Unit shall notify a request for expressions of
interest for each contract for consulting services, which shall contain selection criteria. The time-limit for
receipt of expressions of interest shall not be less than 15 days from the date of publication.
7.3.6 Request for Information (RFI)
The procurement officer may issue a Request for Information (RFI) to Vendors, as well as other sources
identified by the procurement officer, to obtain information to help devise generic descriptions of available or
potential alternatives for fulfilling the requirement, as well as the cost and delivery time of such alternatives.
Therefore, the RFI is more oriented on seeking a technical alternative, costing range and other terms and
conditions than seeking a direct response for the market or industry.
7.3.7 Pre-Qualification
There is no pre-Qualification in Open Bidding; however, a candidate must be both eligible and qualified to win
the award. EEP can use pre-qualification for national or international procurements as necessary. No
restriction shall be imposed in the number of bidders passing to the second stage bidding as long as such
bidders have pre-qualified. For more information on Pre-Qualification, see Section Error: Reference source
not foundError: Reference source not found.
7.4 International Vendors
For more details on International Competitive Bidding, please refer to Section 2.1.2International Competitive
Bidding.
7.4.1 International Procurement Requirements
When, due to lack of capacity within Ethiopia, there is either no or only limited competition for the provision
of specific goods and related services and works and physical services, EEP shall undertake special efforts to

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improve the level of competition by seeking bids from foreign bidders to accomplish their procurement
requirements. Where appropriate, pre-qualification shall first be undertaken, followed by bidding.
7.4.2 Threshold for International Competitive Bidding
EEP may conduct procurement through international competitive bidding by means of restricted tendering,
request for proposals, request for quotation, or direct procurement, where it is ascertained that it is
impossible to carry out effective procurement without the participation of foreign companies. The use of
International Competitive Bidding is subject to the threshold level and other conditions described in
Section2.1.2 International Competitive Bidding.

 For Works Greater than Ethiopian Birr 150,000,000

 For Goods Greater than Ethiopian Birr 50,000,000
 For Consultancy Services Greater than Ethiopian Birr 7,500,000
 For Non-Consultancy Services Greater than Ethiopian Birr 21,000,000

7.4.3 Outline of International Procurement Process

Open international bidding shall respect the following procedures:
a) the invitation to bid and the bid documents shall be in the English language;
b) the invitation to bid shall be advertised in a newspaper published in English language which has worldwide
circulation and attracts foreign competition as well as on the Agency’s website in the manner prescribed in
the directive;
c) the time allowed for submission of bids shall be sufficient for the invitation to reach candidates and for
enabling them to prepare and submit bids. In any case, it shall not be less than the time prescribed by the
directive to be issued by the Minister;
d) technical specifications of the goods, works and services shall be compatible with national requirements,
and conform as far as possible with international standards or standards widely used in international
trade;
e) candidates shall be permitted to express their bids, as well as any security documents to be presented by
them in Ethiopian Birr, or in a currency widely used in international trade and stated in the bidding
documents;
f) general and special conditions of contract shall be of a kind generally used in international trade.
Other International procurement procedures are executed given the following situation:
a) Where the participation of foreign companies is believed to be necessary to carry out adequately
competitive and effective procurement, public bodies may, without prejudice to certain aspects of
National & International Competitive bidding procedures set forth in the Proclamation and Directive which
are appropriate to the particular method of procurement in question, may execute International
Procurement by means of two stage bidding, request for proposals, restricted bidding, request for
quotation or direct procurement.

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 b) In carrying out International Procurement by means other than International competitive bidding pursuant
to article above, the conditions and financial thresholds prescribed for each method of procurement shall
be complied with.

8.0 Technical Specifications

Technical specifications and descriptions laying down the characteristics of the goods, works or services to be
procured shall be prepared for the purpose of providing a correct and complete description of the object of
procurement and for the purpose of creating conditions of fair and open competition between all candidates.
The technical specifications shall clearly describe EEP's requirements with respect to quality, performance,
safety and where necessary dimensions, symbols, terminology, packaging, marking and labeling or the
processes and methods of production and requirements relating to conformity assessment procedures. The
following criteria shall be considered to prepare the technical specifications:
 EEP shall be required to draw up detailed technical specification especially for complex and high cost
procurements.
 A technical specification shall be prepared in accordance with the need of end users and in such a manner
that it allows wider competition on the basis of performance, function, technical or design characteristics
depending on the type of the procurement.
 Being an integral part of the contract, the technical specification shall be used to verify the conformity of
the supply with the stated technical requirement.
 The technical specification of goods, consultancy service, works, or non-consultancy services shall be
drawn up by the engineering department which has identified the need. For the procurement of high cost
and/or complex goods or services, EEP may seek the advice and assistance of experts outside EEP or higher
consultants.
 A specification shall not prescribe a particular product, brand or service provider. However, where it is
difficult to draw up a specification giving an accurate description of the requirement, where the
procurement is for spare parts for a particular item of proprietary plant or equipment, or where there is
known to be only one manufacturer or provider of the goods or services in question, the name of the
manufacturer or service provider and the term "Or Similar" may be incorporated in the specification.
 The technical specification should be prepared in such a manner that it incorporates values needed to
satisfy the current and future demand of EEP in question and should avoid the inclusion of non-value
adding features.
 When preparing technical specification, EEP may incorporate standards set by Ethiopian Quality and
Standard Authority or by other similar institutes depending on the type of procurement.
 Technical specification shall form part of the bidding document and shall be sufficiently detailed and
comprehensive to provide a complete and exact basis for the formulation of bids by those suppliers
wishing to participate in the bid.

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8.1 Types of Specifications
8.1.1 Design Specifications
A design specification (also called a prescriptive specification) is a detailed document providing information
about the characteristics of a project to set criteria the vendor must meet. It is also used when a good and
services or works must be specially made to meet a need. A design specification will include all necessary
drawings, dimensions, environmental factors, ergonomic factors, aesthetic factors, cost, maintenance that will
be needed, quality, safety, documentation, and description. It also may include construction, installation, and
commissioning procedures.
8.1.2 Performance Specifications
Performance specifications specify the operational requirements of a good or works after completion, without
instruction or requirement on how to accomplish that performance. Examples may include concrete strength,
power requirements, liquid flow, temperature, etc.
8.1.3 Brand Name or Equal
There shall be no requirement or reference in the technical specifications to a particular trademark or name,
patent, design or type, specific original producer or service provider, unless there is no sufficiently precise or
intelligible way of describing the procurement requirements of EEP and provided that words such as “or
equivalent” are included in the specifications.
8.2 Review and Approval of Specifications
Technical specifications form an essential part of bidding documents and should be sufficiently detailed and
comprehensive to give a correct and complete description of the goods, services or works for the purpose of:

• creating conditions for fair, open and widespread competition between all bidders,
• Providing a strong basis for formulation of bid offers by interested suppliers; and
• Allowing for the smooth and expedient evaluation of bids.
The review and approval of specifications is one of the core responsibilities of EEP engineering unit with
assistance of relevant EEP departments.
8.3 Using Consultants to Prepare Specifications
Technical specifications of major works, goods or services should be prepared by a special Virtual team of
experts drawn from user Departments and other relevant sections of EEP. The team may also include external
(local and/or international) experts, as may be necessary.

8.4 Specifications by Procurement Type

8.4.1 Specifications for goods and services
The technical specifications of major technology items and/or goods should include:
• performance oriented processes and standards,
• process based attributes, Outputs end uses of the goods or service aspects
• features relating to technical capabilities and pirating characteristics,

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• Service aspects including after sales services and knowledge transfer.
• The quality, reliability, adaptability, compatibility & scalability of goods.
• Availability of spare parts,
• Other major technical features, which are mandatory requirements for the performance of the equipment.
Standards and technical specifications quoted in bidding document shall promote the broadest possible
competition, while assuring the critical performance or other requirement for the goods and services under
procurement. As far as possible, EEP shall specify internationally acceptable standard such as those issued by
the International Standards Organization /ISO/ with which the equipment or materials shall comply. Where,
such international standards are unavailable or are inappropriate, national standards issued by the Ethiopian
Standards Authority and any relevant design codes from appropriate organ may be specified.
8.4.2 Specifications for works
Standards and technical specifications quoted in bidding document shall promote the broadest possible
competition, while assuring the critical performance or other requirement for the works under procurement.
As far as possible, the Enterprise shall specify internationally acceptable standard such as those issued by the
International Standards Organization /ISO/ with which the equipment or materials or workmanship shall
comply. Where, such international standards are unavailable or are inappropriate, national standards issued
by the Ethiopian Standards Authority and any relevant design codes from appropriate organ may be specified.

8.5 Samples
Where it is not possible to draw up technical specification, or where the better execution of the procurement
requires the presentation of samples representing the required objects of procurement in addition to
technical specification, EEP may produce or require candidates to produce samples. Where EEP produces
samples, the following conditions apply:
• The samples provided by EEP shall not be restricted to goods produced by a specific producer or under a
specific trade name. The samples presented must, as far as possible, involve acceptable specifications, and
bidders should be informed that goods of comparable quality may also be supplied.
• It is necessary to make sure that samples are displayed at a convenient place clearly visible to the
candidates, and to the extent appropriate, a professional has to be assigned to give description of the
samples presented.
• Where EEP has to provide technical specification a part from presentation of samples to demonstrate to
candidates the required object of procurement, the technical specification so provided shall, as far as
possible, be adequately descriptive of the specimen presented and in conformity with the technical
characteristics of such specimen.
Where candidates are required to produce samples in accordance with the technical specification drawn up by
EEP:
• Candidates shall be given adequate information about the samples they are required to produce as well as
the time and manner of presenting such samples.

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• While samples have to be submitted prior to opening of bids, EEP may allow additional time in respect of
sample sent by a candidate at the right time but the receipt of which was delayed in the process of
transportation for reasons beyond the control of the candidate, as long as in the opinion of EEP, allowing
extra time doesn't harm the procurement process.
• Candidates may supply evidence of their sample where they cannot supply the sample item itself and EEP
accepts the reason for a candidate's inability to do so. This evidence may include photographs or a piece of
sample item. This option may however be exercised if it is ascertained that it doesn't make a difference in
selecting the best evaluating bidder and doesn't have discriminatory effect.
• EEP has the duty to handle and examine carefully, samples supplied by candidates; however, bidders shall
not be paid compensation for samples lost or destroyed in the examination process because of their
nature. Samples that are not lost or destroyed shall be returned to unsuccessful bidders. If samples are not
claimed by unsuccessful bidders within six (6) months, they shall be forfeited to EEP.
• Unless EEP decides otherwise, a sample supplied by the successful bidder shall stay with EEP until the
completion of the procurement process to be used for checking conformity during delivery.

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9.0 Contracts

9.1 Contract Establishment

EEP must ensure that bidders get copies of the general and special conditions of contract as parts of the
standard bidding document. No change shall be made to the content of the general conditions of contract of
the standard bidding document. The special conditions of contract may however be modified depending on
the type and nature of the procurement with reference to the provisions of the general conditions of contract.
Prior to the expiry of the period of bid validity, EEP shall notify the successful bidder that its bid has been
accepted. The notification of award shall specify the time within which the contract must be signed. The
unsuccessful bidders shall also be informed as to who the successful bidder is and why they have lost the bid.
A letter of award to be sent by EEP to a successful bidder shall not constitute a contract between that bidder
and EEP. A contract shall be deemed to have been concluded between EEP and the successful bidder only
where a contract containing detailed provisions governing the execution of the procurement in issue is signed.
The existence of a contract shall be confirmed through the signature of a contract document incorporating all
agreements between the parties. The contract shall not be signed by EEP prior to the receipt of the notice by
the unsuccessful bidders and before.
A supplier shall provide EEP with a contract security to make good any damage EEP may sustain as a result of
default by the supplier under the contract.
EEP may not sign a contract with a bidder declared to successful, if the information given by such bidder in
regard to its qualification, in its prequalification bid is found to be wrong, or if it is established, with reasonable
degree of certainty, that it no longer possesses the capability on the basis of which it pre-qualified, and hence,
cannot perform the contract on the expected level.
A letter of contract award to be sent to a successful bidder shall contain the following information:
a) That EEP has accepted the bid;
b) The total contract price;
c) The amount of the performance security the successful bidder is required to furnish and the deadline for
providing such security.
The contract to be signed between EEP and the supplier shall clearly state the obligations of the two parties
and incorporate provisions for the following matters:
a) The type, quality and quantity of the goods to be supplied, the works to be executed, or the consultancy or
other services to be rendered as per the contract, the manner and schedule of delivery of such goods,
works or services, the unit and the total price to be paid for such goods, works or services and the terms
and schedule of payment.
b) Identifying the party responsible for securing the provision of incidental services (Transport, Insurance,
transit, etc.) from third parties, it being necessary to obtain such services from reliable sources, c) Discount
and other offers proposed by the supplier in its bid document and the application of such offers,
c) Procedure for resolution of disputes that may arise in the performance of the contract,
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d) The portions from the total payment to be effected in foreign and local currency for a foreign supplier,
e) Procurement document forming an integral part of the contract and the scope of application of such
documents.
f) The conditions giving rise to forfeiture of performance security,
g) The liability of the supplier for delay in supplying the goods, performing the works or rendering the
services as per the contract.
9.2 Contract Administration
Unless faced with a situation preventing or postponing the execution of a contract, EEP must implement any
procurement contract they have signed with suppliers promptly. EEP must fulfill conditions established in a
contract to expedite the implementation of the contract. These conditions may include the following:
a) If the contract provides for advance to be paid to the supplier, effect such advance payment to the
supplier against advance payment guarantee in accordance with the provision of this manual.
b) Open letter of credit (L/C) promptly in respect of a procurement requiring the issuance of irrevocable letter
of credit in favor of a supplier.
c) Fulfill such other conditions as are stipulated in the contract.
EEP must identify the duties of a supplier under a contract and insure that the supplier performs such duties in
due time. EEP must record the date on which the actual implementation of the contract began upon
fulfillment of precondition set forth in the contract for the actual implementation of the contract and, if
necessary, notify this to the supplier.
9.2.1 Advance Payment
In any EEP procurement, advance may be paid in an amount not exceeding 30% of the total contract price. The
amount to be paid in advance shall be stated in the instruction to bidders, bid data sheet and special condition
of the contract of the bid document. Suppliers shall submit advance payment security in an amount equal to
the advance payment they receive in the form of a certified cheque or unconditional bank guarantee at their
option from a reputable bank, together with their request for advance payment as per the contract.
Domestic contractors and manufacturers of pharmaceutical products and medical equipment may submit
conditional advance payment security from reputable insurance company.
In respect of small and micro-enterprises, EEP may, where appropriate, require the opening of special bank
account into which the advance payment may be deposited, which shall be withdrawn by join signature of the
representative of EEP and the supplier for payment of expenditure arising from the performance of the
contract.
Where the advance payment security provided by a contractor in the performance of a construction contract
is conditional, or in respect of advance payment made in favor of a small and micro-enterprise, EEP shall enter
into special agreement with the contractor or the small and micro-enterprise as the case may be, for the use
of the advance payment. Such agreement includes the following:

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a) That the advance to be paid to the contractor or the small or microenterprise in accordance with the
contract shall be deposited in a special bank account to be opened for this purpose in the name of the
contractor or the small or micro-enterprise.
b) That the advance to be deposited in the account to be opened as per (a) above can only be withdrawn by
joint signature of EEP and the supplier
c) That payment shall be effected to the contractor or small or microenterprise from the amount deposited
in the special account where it is ascertained that the contractor or small or micro-enterprise has
performed part of its obligation under the contract corresponding to the payment disbursed to it/ him.

9.2.2 Progress Payments

Payment for contractors in the performance of works contract shall be effected in accordance with the
following procedure, based on the progress of the work to be performed under the contract:
a) Payment for construction works shall be made on the basis of the progress of work against payment
certificate to be verified by the consulting engineer supervising the work.
b) For all construction works, in addition to what is stipulated under Section 9.2.1Advance Payment, 5% shall
be retained from payment indicated in each payment certificate.
c) 50% of the amount retained pursuant to (b) above, shall be released up on completion of the works and
issuance of provisional acceptance certificate. The remaining 50% shall continue to be retained for one-
year period of warranty. However, such sum may be released on condition that the suppliers submits
unconditional guarantee valid for 12 months.
d) The consulting engineer shall complete verification of the payment certificate prepared and submitted by
the contractor within seven days of its receipt
e) EEP shall affect the payment within 14 working days of receipt of the payment certificate verified by the
consulting engineer.
f) The consulting engineer shall be responsible for any request made by the contractor to receive additional
payment from the procuring entity due to the consulting engineer’s failure to verify the payment
certificate within prescribed period stated per (d) above. However, the responsibility of the consulting
engineer shall not exceed the service fee payable for its services.
g) EEP shall be responsible for any additional payment request made by the contractor in accordance with
the contract, due to its failure to effect payment within the period specified per (e) above without any
good reason.
9.3 Special Contract Provisions
9.3.1 Special Conditions of Contract
The special conditions of contract drawn up by EEP shall contain the following, notwithstanding that it may
vary from one type of procurement to another:
 A clear indication of the duties and responsibilities of EEP and the bidder as a prospective supplier, and
legally sustainable and attainable obligations of EEP.

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 Provisions for the important terms of the contract such as time of delivery, packing, responsibility for
transportation, price adjustment, payment, delivery and inspection, security and others as the case may
be.
The following and other relevant information shall be incorporated in a contract to be signed between EEP
and the successful bidder:
a) Goods and services or works to be produced or supplied or executed using inputs in respect of which price
adjustment may be allowed and the price adjustment procedure.
b) The source and type of documents agreed upon by EEP and the supplier for the purpose of price
adjustment.
c) That the evidence to be produced shall conform to the requirement stated in the contract and that any
evidence originating from other sources shall not be admitted.
d) That no adjustment may be allowed for price rise resulting from failure on the part of the supplier or the
contractor to perform its/his obligation at the time stipulated in the contract.
9.3.2 International Contracts
Contracts concluded for procurements to be made by means of international competitive bidding may
incorporate standard terms and conditions applicable in international commercial transactions to the extent
that such terms and conditions are not in conflict with the Proclamation, the Directive, and other documents
governing public procurement in Ethiopia. Unless the contract provides otherwise, disputes arising from the
performance of the contract shall be adjudicated in accordance with Ethiopian Law.
9.3.3 Request for Quotation
In procurement made by request for quotation, the Proforma, a supplier presents its proforma to EEP and
Purchase Order (PO) sent by EEP to that supplier constitute a contract between EEP and the supplier. Hence, it
is not necessary for EEP and the supplier to sign a contract.
9.3.4 Direct Procurement
When EEP engages in direct procurement, it shall prepare a description of its needs and any special
requirements as to quality, quantity, terms and time of delivery, and shall be free to negotiate on price and
conditions of offer with the sole candidate. Any agreement reached to conduct the procurement shall be
confirmed by a contract signed by both parties. Contracts are not necessary when EEP conducts a direct
procurement where situations arise in which shopping becomes necessary to meet the special procurement
needs of EEP or where the contract price does not exceed an amount.
9.3.5 Consultancy Service Contracts
Where the time for completion of a consultancy service under a contract is extended for a reason not
attributable to the fault of the consultant, EEP may make price adjustment, if it considers that such
adjustment is appropriate, but the price adjustment allowed for consultants shall not exceed 15% (fifteen
percent) of the total contract price.

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EEP shall state clearly in its bidding document the following and such other information as it deems necessary
for procurement of goods or supplies in respect of which price adjustment may be allowed:
a) The type of evidence that candidates are required to supply with the bid document for the purpose of
price adjustment.
b) The conditions for price adjustment, the means by which requests for price adjustment are communicated
and types of evidence and number of copies of supporting documents to be submitted together with price
adjustment requests.
c) Other relevant documents and procedures to be followed by bidders in regard to the implementation of
price adjustment.
In evaluating bids, EEP must ascertain that bidders agree to the preconditions for price adjustment stated in
the bidding document and the evidence submitted by them are admissible.
9.3.6 Framework Contracts
A Framework Contract means a general agreement of procurement establishing unit price and other terms
and conditions of contract which serves as a basis for supplies to be delivered under future specific contract.
Framework contracts may be used to fulfill similar procurement requirements of various public bodies or
recurrent procurement requirements of EEP. The framework contract shall be awarded through open bidding
procedure and may remain valid for three years.
EEP may allow price adjustment in respect of procurement made under a framework contract in accordance
with the following procedure:
a) EEP may allow price adjustment in respect only of supplies for which current price information is available
from PPA or the Central Statistical Agency.
b) Request for price adjustment for procurements under a framework contract may be filed after three (3)
months from the effective date of the contract in question.
c) The price information of the Agency or Central Statistics Agency applicable to the goods or services on the
day of the bid opening in respect of which price adjustment may be allowed and the time in which such
adjustment is made with in the period in which the framework contract is enforce shall be stated in the
contract agreement.
d) EEP shall calculate the difference between the price stated in the contract corresponding to the price
applicable on the day of bid opening, and the price applicable to the time in which adjustment is made as
indicated in the price index issued by the Agency or Central Statistics Agency and subtract or add such
difference, as the case may be, from or to the price quoted by the supplier and apply the price adjusted in
this manner until the next price adjustment.
e) For supplies in respect of which the supplier did not conform to the agreed time of delivery, price
adjustment may be made on the basis of the price applicable to the time in which such supplies should
have been delivered as per the contractual agreement.
Where the price difference resulting from price adjustment exceeds 25% (twenty five percent) of the total
contract price, the head of EEP shall be notified in order to be able to make decision on whether to proceed
with the procurement considering the economic benefit of such procurement. For any procurement in respect
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of which price adjustment is allowed, EEP shall, upon receipt of payment request from the supplier, inquire
whether there is price decrease in respect of inputs for which price adjustment is allowed as per the contract
agreement, and deduct from the sum due to the supplier the amount of the price decrease and effect
payment accordingly.
EEP shall have the following duties and responsibilities to discharge in connection with the administration of
framework contracts:
a) Monitor the performance of framework contracts by suppliers;
b) Hold performance securities furnished by suppliers, and where warranted by default of suppliers in
connection with the performance of their obligation under the framework contract, confiscate and deposit
in to the account of the treasury such securities, report such default to EEP Management and process
internal blacklisting procedure;
c) facilitate amicable settlement of disputes between a supplier and EEP in connection with the performance
of the contract;
d) Based on mutual agreement between it and the suppliers, make modifications to the framework contract;
e) give the necessary support to EEP in connection with the performance of the Contract;
f) Evaluate suppliers’ performance and release performance securities to suppliers performing their
obligation as per the terms of the contract at the end of the validity period of the framework contract.
EEP may terminate a framework contract for any of the following reasons:
a) Where a supplier fails to discharge his obligation under the contract;
b) Where the procurement requirement of EEP changes for any apparent or obvious reason;
c) Where it emerges that the gap between the value of the framework contract and the prevailing market
price is so wide that allowing the implementation of the contract to proceed places EEP concerned at a
disadvantage;
d) EEP shall give to suppliers concerned a one-month advance notice where termination of a framework
contract is intended for reasons stated in (b) and (c) above, stating the reason for termination of the
contract and the date on which such termination becomes effective.
e) EEP may not procure their requirements from another supplier during the one-month period after notice
pending termination.
When EEP is benefiting from a framework contract, on the basis of the copy of the contract sent to them by
the body administering framework contracts, issue purchase order to suppliers for requirements to be
supplied as per the contract. Where appropriate, EEP may, in consultation with the body administering
framework contracts, enter in to a supplementary contract with a supplier.
The purchase order and the supplementary contract shall not change price and other fundamental elements
of the framework contract; but, the following points may be agreed upon between EEP and the supplier in a
separate contract:
a) shorter period of delivery and payment;
b) quantity of goods to be supplied under a purchase order;
c) Notification or change of place of delivery.
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When EEP enters in to a separate contract with a supplier, EEP shall submit a copy of such contract to the
body responsible for the administration of framework contracts.
EEP shall discharge the following duties in the course of implementation of framework contracts:
a) Make sure that purchase order is issued only for items listed in the framework contract based on
the list of their requirements previously communicated to the body administering framework
procurements;
b) Make sure that a supplier has performed his obligation under a framework contract in accordance
with the terms and conditions of the framework contract;
c) Make every effort necessary to resolve amicably in consultation with the body administering
framework procurements, issues arising from the performance of the contract which may develop
in to a dispute;
d) Report in due time in writing to the body administering framework procurements, any act or
omission by a supplier constituting major default such as noncompliance with quality
requirements, shortage in the quantity of goods, failure to deliver on schedule and improper
packaging.
e) Set schedule for issuance of purchase order for their requirements embodied in a framework
contract and specify the quantity of goods to be supplied under a purchase order.
9.3.7 Recurrent Procurements
EEP may carry out procurement of recurrent requirements of similar items under the following conditions:
a) Where it is ascertained that owing to their special character, such items cannot be procured under a
framework contract for acquisition of common user items administered by the body responsible for
framework procurements,
b) Where the item or items have to be supplied frequently and continuously,
c) Where the items cannot be purchased and delivered in one episode and used continuously or where it is
not economical to procure the items in a series of bids to be issued frequently;
d) Where EEP must use the budget allocated to procurement at various times.
In carrying out procurements of recurrent requirements of similar items, EEP shall,
a) Comply with the provisions concerning open bids;
b) Not enter in to a procurement contract which shall be valid for more than two years;
c) May allow and implement price adjustments in accordance with the provision above.
9.3.8 Works Contracts
EEP may, under the following circumstances, indicate in the bidding document that price adjustments are
allowed in respect of works contracts, after twelve (12) months from the effective date of such contracts and
in respect of procurement made under a framework contract, after three (3) months from effective date of
such contract. Where the price difference resulting from price adjustment exceeds 25% (twenty five percent)
of the total contract price, the head of EEP shall be notified in order to be able to make decision on whether to
proceed with the procurement considering the economic benefit of such procurement.

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a) Where it is verified that, in respect of works contracts, the performance of the contract requires more than
eighteen (18) months, and in respect of a framework contract, where the performance of the contract
requires more than six (6) months.
b) For frame work contracts where the Central Statistics Agency issues periodic price index to use as
reference for fixing the initial price and make price adjustment.
c) Where it is ascertained that the Central Statistics Agency can issue price index or price indicators for
selected categories of items.
d) in respect of selected categories of items which EEP considers appropriate to allow price adjustment and
for which Central Statistics Agency is not in a position to issue current price index, where price information
is available from a renowned local producer or competent foreign institution.
Any price adjustment made in connection with works contract shall be calculated using the formula provided
in the standard bidding document in accordance with the following procedure:
a) Identify the major inputs necessary for the works in question and the set of items to be classified under
each major input.
b) Calculate the share of each major input from the total input of the works in question under which set of
items is classified and select the ones for which price adjustment may be allowed.
c) The price index or price indicator operating before the bid closing date should be used as basis for price
adjustment.
EEP may, subject to the following conditions, enter into a new contract or vary the initial contract for the
execution of works which have not been foreseen or not included in the initial contract.
a) EEP has to ascertain that the additional works should have been included in the initial contract, and the
separation of the additional works from the initial contract would be difficult for technical or economic
reasons.
b) The value of the additional work shall not exceed 30% of the total value of the initial contract.
c) If the unit price of the additional works can be determined by reference to the initial contract, the unit
price of the initial contract shall apply to the additional works. If the unit price of the additional works
cannot be determined by reference to the initial contract, the price to be agreed through negotiation
between EEP and the contractor shall conform to the prevailing market price.
9.4 Follow Up of Performance of Contracts
EEP must identify the party responsible for following up the performance of a contract or make sure that the
parties involved in following up the performance of a contract are aware of their duties. The department
within EEP responsible for monitoring performance of procurement contracts has to make sure that the
supplier delivers the principle tasks under the contract in accordance with the agreed work schedule.
EEP must carry out the following activities of contract administration as per the contract agreement:
a) Effect payment or payments due in installment to the supplier on time.
b) Give certificates of performance to the supplier
c) Provide legitimate support to the supplier to enable him performs his obligation under the contract.

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Where it is called for, the contract may be amended in the course of its performance; it being understood that
such amendment shall not be detrimental to the interest of EEP and not favor one supplier or certain suppliers
to the prejudice of the other suppliers. In particular, EEP shall carry out the following activities in connection
with the following up of performance of contracts:
a) Open letter of credit (L/C) in accordance with the terms and conditions of the contract.
b) Handle acceptable requests of amendment of letter of credit (L/C) promptly
c) Exercise caution and follow-up so that the validity period of performance bond, L/C or guarantee does not
expire before the supplier fulfills his/its obligation to EEP under the contract.
d) Follow up that works are completed on schedule agreed in the contract, or Goods are supplied or services
are rendered within the time stipulated in the contract.
e) Take the necessary precaution to prevent in the performance of a contract that give rise to claims by
suppliers.
EEP must identify services to be rendered by a third party in connection with the performance of a contract
and ensure that such services are rendered in a manner that facilitates the performance of the contract. EEP
must also ensure that the performance of a procurement contract is completed with the terms and conditions
of such contract being complied with and other transactions incidental to such contract being finalized. This
ensures that:
a) The supplier has delivered the works, goods, consultancy or other services to be supplied under the
contract.
b) Proper follow up is maintained and appropriate decision is taken in regard to securities and warranties.
c) For all payments made to the suppliers, the corresponding obligations owed by such suppliers to EEP are
satisfied and all payments due to the suppliers under the contract are effected.
d) All rights of EEP arising from the contract and involving third parties such as insurance companies,
transporters, custom authority, transistors, banks are satisfied and EEP has performed its obligation
towards such third parties or EEP shall ensure the contractor’s/supplier’s responsibilities arising from the
contract have been cleared if the supplier /contractor is responsible for the above issues.
EEP shall settle pending accounts with the suppliers and third parties involved in the performance of the
contract.

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10.0 Disputes and Penalties

Most minor disputes may be resolved by sensible discussion and agreement between the responsible unit and
the supplier or contractor to rectify the cause of complaint.
10.1 Records of Procurement
According to The Ethiopian Federal Government Procurement and Property Administration Proclamation
No.649/2009, EEP must maintain records and documents regarding procurement. Such information shall
include the following:
1. a brief description of the goods works or services to be procured;
2. the invitation to bid;
3. the names and addresses of suppliers that submitted bids, proposals or quotations, and the name and
address of the winning suppliers;
4. the evaluation criteria stipulated and applied and a summary of the evaluation and comparison of bids,
proposals and quotations received;
5. information on the proceeding of any decision rendered where a complaint against a procurement
process is lodged;
6. the grounds for using a procurement procedure other than open bidding.
10.2 Suspension or Removal from the Register of Vendors
PPA shall review and pass decisions on reports of misconduct of bidders or suppliers in regard to the execution
of public procurement, submitted to it by EEP pursuant to article 76 of the proclamation in accordance with
the following procedure:
 When EEP can prove that any bidder or supplier participating in a public procurement has violated the
provisions of the law governing the procurement in which it is involved, has refused to sign a contract with
EEP, has committed fraud or has provided falsified documents, has committed an act of connivance or
corruption or it has sustained damage on account of failure by a supplier to perform his/its obligation
under a contract may submit report of default to EEP management on that bidder or supplier.
 In submitting a report of misconduct on a bidder or supplier to EEP Management, EEP has to state clearly
the nature of the default in that report and attach to that report copies of the documents of the
procurement proceeding to which the report relates, and other relevant documents to the case under
consideration.
 EEP Procurement, Logistics and Warehousing Director shall notify in writing the bidder or supplier against
whom a report of misconduct is presented, to submit within 5 (five) working days, a statement of response
to that report together with supporting documents, stating briefly the content of the report and follow up
the bidders or suppliers’ compliance with the notification.
 EEP Management shall review the report presented to it by EEP procurement division against the
statement of response of the bidder or supplier, in light of the evidence presented to it by both parties and
give decision on the report in accordance with the proclamation, this directive, the bidding document and
the procurement contract, and shall communicate the decision in writing to EEP and the bidder or the
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 supplier as the case may be, and if necessary, to other entities concerned, within 15 (fifteen) working days
of the receipt of the report.
 The penalty to be imposed on a bidder or supplier by a decision of EEP shall be one of the penalties
prescribed below.
If it is proved that a bidder or supplier has committed one of the acts listed below with an intention to distort
or alter the bid evaluation result or during the contract administration, he/it may be suspended from the
supplier’s list for a period not less than two years or for an indefinite period, so that he/it may not
participate in any public procurement for the period for which the suspension lasts.
 Where it is proved that he/it has committed an act of corruption i.e. giving to an employee in whatever
position engaged in public procurement, anything of monitory value in the form of bribe or inducement.
 Where it is discovered that he/it has committed an act of fraud i.e. Providing falsified or invalid documents
or where he/it is found to have participated in a public procurement while a suspension against him is in
force or where it is discovered that he/it has supplied goods, rendered services or delivered works of an
inferior quality to that required under a contract by employing deceitful practice to make it look like
genuine or it conforms to stated requirements.
 Where it is proved that he/it has connived at an act of price fixing with certain bidders to deprive EEP and
the other bidders of the benefit of fair competition.
 Where it is proved that a supplier has delivered goods, services, works or consultancy services of a kind or
quality that are not in conformity with the schedule of requirements under a contract in connivance with
employees or officials of EEP.
 Where it is proved that he has inflicted or has threatened to inflict physical or bodily injury on/or used
coercive action against a procurement staff or authority of EEP.
 Where it is discovered that he/it has committed another act entailing suspension from the suppliers list
within two years from the date on which the suspension previously imposed upon him by the agency for
certain misconduct in connection with the execution of public procurement came to an end.
The following acts committed by a bidder or supplier shall entail suspension from the suppliers list for a
period of six months up to two years depending on the gravity of the fault, so that the bidder or the supplier
may not participate in any public procurement for that period.
 Where a supplier under a contract with EEP fails to complete the delivery of goods, services, works or
consultancy services under that contract, and on account of such failure of the supplier, EEP suffers direct
or consequential loss or damage or such failure retards or disrupts the operation of the Public Body.
 Whereupon receipt of written notification of award as a successful bidder, a bidder fails or refuses to sign
a contract with EEP and in exercising another option to acquire the required objects of procurement from
another supplier, EEP sustains loss or such failure or refusal of the bidder retards or disrupts the operation
of EEP.
 Where he/it omits another act entailing warning pursuant to the activities below, within three years from
the time when he/it received warning for the first such omission.
Any bidder or supplier omitting any of the following acts shall be warned in writing:

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 Where a supplier fails to deliver goods, services, works or consultancy services under a contract on the
agreed time and such delay retards or disrupts the operation of EEP.
 Where he/it refuses to provide a Proforma invoice to EEP intending to procure a required object.
10.3 Cancellation of Bids, Proposals, and Quotations
EEP may cancel all bids, proposals or quotations at any time prior to their acceptance. If the decision to reject
all bids is made before the closing date of the tender, bids received to the date of decision should be returned
unopened. The reasons for cancellation could be one or more of the following:
a) When the tender document is found to be incomplete and defective;
b) When the offered prices are found to be highly exaggerated in relation to the budget and it was not
possible to reach into an agreement by negotiation
c) When there is evidence of collusion or lack of competition;
d) When there is only one bidder that submitted an offer.
e) Where there is an alternative way of making the procurement to the advantage of EEP and when this is
strongly justified.
The decision to cancel all bids shall be made by the official who has the authority to approve that specific
tender. EEP shall, upon request, communicate to any bidder the grounds for Cancellation of all bids, but is not
required justifying the grounds for cancellation. EEP shall not incur any liability towards any bidder for the
reason that it has made the decision to cancel all bids.
10.4 Retendering Process
Retendering of bids will be conducted under the following circumstances:
a) Where the submissions do not contain the basic requirements by EEP
b) Where the bid prices are not reasonable compared with market price.
c) Where no bidders respond
d) Only one bid is received from prospective bidders.
Before retendering of bids, EEP shall assess why only one bid or no bid is received and check whether there
are factors that prohibit wide competition or discourage other prospective bidders. EEP must also review the
specifications and tender documents to ensure that they are complete, understandable, and reflect the real
needs of EEP. If the bid is advertised a second time and only one bidder responds, EEP can consider the
opening of one offer as appropriate. If EEP is satisfied that the proposal is reasonable, the price is competitive,
and that there were no conditions which limits the participation of other bidders, EEP can award the contracts
to the single bidder.
10.5 Performance Monitoring
The Consultant, Supplier or Contractor’s performance against the contract must be monitored on a routine
basis. For goods contract administration, that responsibility is for the Procurement, Logistics and warehouse
Department Coordinate with the respective project office or user department. For consulting or works
contracts, the work unit or the project office is responsible for that task.
Accordingly, the respective contract administration department will:
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• Notify the Supplier or Contractor immediately in writing of any failings in performance and seek an agreed
solution;
• In the case of a consultant this takes the form of comments on consultancy reports update the contract file
and Contract Register regularly to reflect the monitoring of performance;
• Ensure that the head of EEP is informed of any serious failings in performance.
The Contract may impose certain conditions on EEP which, if not complied with, may affect the Supplier or
Contractor’s performance including:
 Payment of stage payments within the contracted time limits;
 Assistance with import licenses, etc.;
 Approval of drawings or reports within the set time periods;
 Provision of storage or working facilities and access permits;
 Conditions relating to the supplier’s provision of staff services (e.g. letters of invitation for visas, provision
of office space, etc.);
 Ensure that all such obligations of EEP are planned and performed without undue delay.
10.6 Performance Delays
Delivery of goods, construction of works and the performance of services should be completed by the supplier
or contractor in accordance with the time schedule prescribed in the Schedule of Requirements. Where this is
not the case:
• In accordance with the contract conditions, the supplier, contractor, or its subcontractor, must notify EEP
in writing of the conditions delaying performance, including full details of the delay, the likely duration and
the cause(s).
• EEP will immediately assess the situation, and may at its discretion extend the supplier or contractor's time
for performance, with or without liquidated damages as specified in the contract.
• If the time for performance is extended (authorization by EEP management required), both parties shall
ratify such extension by a formal addendum to the contract subject to approval by the EEP Executive
Management with the recommendation of the respective work unit or the project office or the
Procurement, Logistics and warehouse Director.
• A delay by the supplier or contractor in the performance of his obligations may render him liable to
liquidated damages if specified in the contract document, except where:
 the delay is as a result of Force Majeure;
 there is no provision for liquidated damages in the contract;
 an extension of time is agreed between the two parties without the application of liquidated
damages.
The contract administration department in EEP will:
• Refer to the relevant clauses in the General or Special Conditions of Contract for the procedure to be
followed to apply, calculate and claim liquidated damages.
• Update the Procurement record and Contract Register to reflect any delays in the supplier’s performance.

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• Notify the end-user department immediately of all such delays.
• The final approval for application of liquidate damage shall be done by the respective authorized
department director or executive who has signed the contract
10.7 Appeals Procedures
10.7.1 Right to Complain / Resolution of Disputes
Any bidder who claims to have suffered or who may suffer, loss or damage due to a breach of a duty imposed
on EEP by the Proclamation and Directive may complain accordingly. The purpose of these complaint
provisions is to ensure that EEP performs the procurement related duties in accordance with the Proclamation
and Directive in a fair and transparent manner. It also demands that EEP personnel shall discharge their
responsibilities duly as public officers of the Government. It also provides bidders the opportunity to challenge
erroneous documents or undue process by EEP, thus ensuring a fair and effective operation of the public
procurement system. Align with PPA complaint procedure; EEP shall follow the following procedures to
review the complaint.
Working
Action Preconditions
Days
From the date when candidate became aware of or should have been
Submission of complaint
5 aware of the reason giving rise to the complaint or from the date when
to EEP
EEP disclosed the result of a bid evaluation.
EEP's written decision on
10 From the date of submission of the complaint by the complainant.
the complaint
Submission of complaint From the date of notification in writing of the decision of the head of
5
to the EEP Board EEP on that complaint if the complainant is not satisfied by the decision.
EEP Board's written
15 From the date of receiving complaint by the complainant.
decision on the complaint

10.7.2 Complaint Submission

A candidate or a bidder who claims to be aggrieved or is likely to be aggrieved on account of EEP inviting a bid
not complying with the provisions of the Proclamation or Directive in conducting a bid proceeding may submit,
in the first instance, a complaint in accordance with the procedures set forth herein to the head of EEP or to
the Secretariat of the Board to have the bid proceeding reviewed or investigated, if not satisfied with EEP's
decision or if its decision is not issued within ten (10) days after submission of complaint. The bidder or
candidate may lodge it in writing, in person or send it by registered mail.
The date of submission of the complaint is:
(a) The date of submission of registered letter at the post office when a complaint is lodged by using post, or
(b) The date of receipt of a complaint by EEP, if a complaint is delivered in person. In such a case, EEP should
issue to the complainant receipt confirmation with indication of the time of receipt by EEP.

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Bidders in the procurement procedure as well as candidates who have a legal interest in being awarded the
contract, or who suffered or may suffer damages resulting from the alleged infringements of their rights, are
eligible to submit a complaint. In other words, the Proclamation and Directive ensure protection of rights not
only of the bidders that participated in the public procurement procedure, but also natural or juridical persons
that would be interested in taking part in the procurement procedure and being awarded the contract, but
due to some actions or failure to take an action by EEP they have been prevented from application for a
contract in the public procurement procedure.
The three different types of participants in the complaint procedure are as follows:
a) Active party to the procedure, which is the entity at whose request the complaint procedure is launched
(bidder eligible to submit a complaint);
b) Passive party, against which a complaint procedure is conducted (EEP);
c) Interested party, who is entitled to participate in the procedure to protect its rights or legal interests (any
candidate which has a legal interest in being awarded the contract)
A complaint may not be lodged regarding the following conditions:
a) The selection of procurement method carried out in accordance with the conditions established in the
proclamation;
b) The selection of bidders for procurement to be made by means of restricted tendering or request for
quotation or on the evaluation criteria set forth in the bidding document beforehand;
c) The preference given to Domestic Providers pursuant to Article 25 of the Proclamation and article 16.20.1
of the Directive;
d) Decisions given to reject bids, bid documents, or price quotation, pursuant to Article 30 of the
Proclamation;
e) No complaint presented to the head of EEP after five (5) working days have elapsed from the date on
which EEP disclosed the result of a bid evaluation, or no complaint presented to the Board after five (5)
working days have elapsed from the date on which EEP responded to the complaint shall be accepted;
f) No complaint shall be accepted after a contract was signed, provided that such contract was signed after
seven working days from the result of the bid evaluation being disclosed as provided in sub article 46.3 of
the Proclamation and article 45.1 (a) of the Directive.
The subject of the complaint procedure may be all decisions, actions or failure to take an action by EEP which
was obliged to take the action according to the Proclamation or Directive, provided that it constitutes
infringement of the public procurement procedures required by Proclamation or Directive or infringement of
rights of bidders or candidates.
It means in practice that subject to the review procedure may be not only incorrect decision or action of EEP
but also the lack of action when EEP is obliged to take this action. It means also that the review procedure may
concern the actions and decisions taken during the contract award procedure as well as before launching the
procedure, provided that they violate rights of bidders or candidates as a result of breaching of any of the
rules determined in the Proclamation or Directive. The subject of the complaint procedure should be
understood as broadly as possible in order to prevent any possible violation of rights of interested parties and

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violation of basic principles of public procurement such as transparency, equal treatment, nondiscrimination,
and competition rules.
10.7.3 Complaint Contents
A complaint should include the following information:
a) Information on the bidder or candidate (the first and last name, company name or title, address of
habitual residence, registered office, telephone and facsimile number);
b) Information on the representative or agent with a power of attorney;
c) The name, company name and registered office of EEP;
d) The number and date of the Invitation to Bid and information concerning the contract award notice;
e) The number and date of the contract award decision, the cancellation decision or other decisions made by
EEP;
f) Other information concerning actions, failures to act or procedures of EEP which are the subject of the
complaint procedure, information concerning the subject-matter of procurement, and the procurement
reference number, a description of the state of facts;
g) A description of the infringements and an explanation;
h) The proposed evidence;
i) The claim for remedy;
j) The claim for the compensation of procedural costs; and
k) The signature of the authorized person and seal.
If a complaint does not contain minimum required information specified above, EEP should ask the bidder or
candidate to supplement a complaint and it should set up the time limit for it. If the bidder or candidate does
not supplement required information his complaint will be dismissed as irregular, unless its content allows
further procedure and the complaint contains the claim for remedy.
Bidders or candidates who do not have their registered office in the territory of the Federal Democratic
Republic of Ethiopia should designate an agent with a power of attorney or an agent for the service of
documents within the territory of the Federal Democratic Republic of Ethiopia or provide for a different way of
service of documents, which shall not result in the stalling of the procedure.
10.7.4 Evidence
During the complaint procedure, parties have to present all facts on which they base their request, their
decisions, actions or lack of actions. All facts they claim should be supported by presentation of proper
evidence. The role of EEP in the complaint procedure is to present and prove all facts and circumstances, on
the basis of which it took or omitted to take decisions concerning individual rights of participants of public
procurement procedure which are subject of complaint procedure. On the other hand, the complainant
should prove or indicate reasonable facts justifying submission of complaint and all infringements of the
procurement procedure or violations of the Proclamation or Directive referred in the complaint he/she is
aware of.

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10.8 Contract Amendment
Contract amendment may become necessary as a result of the application of price variations specified in the
contract, the resolution of disputes, additional or reduced requirements by EEP, agreements to extend the
time schedule, or from accepted increases or decreases in prices. The contract may allow EEP to modify
contract values by a pre-determined percentage when this is in the public interest and essential for the work
of EEP. All other amendments to costs, quantities, time periods, and other terms and conditions of the
contract must be approved by the head of EEP and confirmed in a formal contract amendment or addendum.
The Procurement Unit or Project Manager or the respective work unit will:
• Identify and agree with the supplier or contractor the specific clauses in the contract which need to be
changed, and the new values or terms and conditions which are to apply;
• Prepare a draft contract amendment document for approval by the Procurement Unit together with a
report justifying the reasons for the amendment.
Following approval by the EEP Executive Management:
• Record any change in contract value in the Commitment Register and in the Contract Register;
• Record any other contractual changes in the Contract Register;
• Obtain from the supplier/contractor any necessary addition to the performance security;
• Arrange for signature of the contract amendment in four copies;
• Distribute copies in the same way as the original contract.
10.9 Termination of Contract
Contracts should not normally be terminated without examining all possible alternatives, unless the
termination is agreed by all parties to the contract. Examine the Contract carefully to be aware of all contract
conditions and penalties relating to the Termination of Contract. The parties to the contract normally have the
right to terminate the contract, but to protect EEP, advice of the EEP Legal department and PPA may be
sought if EEP is considering such action.
EEP may terminate a framework contract for any of the following reasons:
a) Where a supplier fails to discharge his obligation under the contract;
b) Where the procurement requirement of EEP changes for any apparent or obvious reason;
c) Where it emerges that the gap between the value of the framework contract and the prevailing market
price is so wide that allowing the implementation of the contract to proceed places EEP at a disadvantage;
d) EEP shall give to suppliers concerned a one-month advance notice where termination of a framework
contract is intended for reasons stated in (b) and (c) above, stating the reason for termination of the
contract and the date on which such termination becomes effective.
e) EEP may not procure their requirements from another supplier during the one-month period after notice
pending termination.
10.10 Liquidated Damage Penalties
Typical liability of the supplier for delay in performing his/its obligation under the contract are as follows:

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 • He/it shall pay a penalty of 0.1% (or 1/1000) of the value of the undelivered item for each day of delay,
• The cumulative penalty to be paid by the supplier shall not exceed 10% of the contract price.

11.0 Requirements Definitions

11.1 Terms of Reference

A TOR is a description of the scope of work for services generally indicating the work to be performed, the
level of quality and effort, the timeline and the deliverables. TOR are mostly used to define the performance
requirements for expert and advisory services which are not easily quantified, e.g. where a solution to a
requirement offered, but may also be used to define a complex requirement for goods or combination of
goods and services.
The TOR is often the supplier’s first and main introduction to the assignment. A clear TOR without any
contradictions will force the supplier to prepare a clear and detailed proposal. This should lead to successfully
implemented projects and limit the risk of dispute or claims. The TOR should plainly state the desired level of
sustainability that the procurement entity wishes to implement.
Terms of Reference are the initial statement to the consultant of the services to be performed and should
therefore be clear and precise and should contain the following sections:
1. Title
2. Background
3. Objectives of the assignment
4. Scope of the Services
5. Special conditions
a. Training (where appropriate)
b. Social and environmental requirements
6. Reports and Time Schedule
7. Outputs
a. Inception Report: At the outset of the consultancy that details methodology, timeline,
anticipated outputs and etc.

8. Data Services, Personnel, and Facilities to be provided by the Client

9. Terms of Payment
11.2 Statement of Work
The SOW is a requirement specification for work assignments outlining the specific services and/or goods a
contractor is expected to perform, generally indicating the type, level and quality of service, as well as the
time schedule. The SOW cannot be used for the requirements definition for infrastructure and works
requirements. The SOW usually includes detailed requirements and pricing requirements. For example, a SOW
is a good tool for hardware or software solutions where services can be quantified and broken-down item by
item.

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11.3 Technical Specifications
Technical specifications are mainly used for the procurement of goods, but may also apply to straightforward,
quantifiable services. Specifications are the description of the technical requirements for a material or
product. They usually refer to defined requirements for materials or products, but in some instances, they can
also relate to requirements for services. Specifications give a description of what the organization wants to
buy and what the supplier is required to provide. Specifications can be simple or complex depending on the
need. The specification forms part of the invitation to bid, request for proposal, or request for quotation.
Three types of defining needs (or a combination of the three) can be included in the specification:
1. Functional specifications, defining what the goods/services are required to do;
2. Performance specifications, defining the output of the goods/services;
3. Conformance specifications, defining the physical characteristics and dimensions of the goods.
11.4 Design Documents
The design documents provide the necessary background and detailed information for construction works.
They describe the scope of works and include all requirements and information needed to carry out the works,
e.g. technical requirements, drawings, and bills of quantities. The project specific information resulting from
the design documents must be inserted into the schedules that form part of the tender. The schedules
describe the project specific and technical information that must be incorporated prior to issuing the tender. It
is imperative that the schedules are completed in sufficient detail to enable bidders to understand EEP
requirements for the project and their obligations. This will facilitate tender evaluations, enable bidders to
provide realistic prices and also reduce the likelihood of requests for further information and extensions to the
bid closing date.
A number of returnable schedules are included in the tender. Once bidders have completed the required
information specified in the tender and the tender process is completed, the information contained in these
schedules from the successful contractor will become part of the signed contract. Guidance notes are included
in the returnable bid schedules instructing bidders on what information they must submit with their bid. These
instructions must be amended for each project to ensure the requested information is consistent with the
technical and commercial requirements of the project.

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12.0 Ethics and Corruption

It is a serious breach of the public trust to subvert the public procurement process by directing procurement
to a favored vendor or to otherwise tamper with the competitive bidding process, whether it's done for
kickbacks, friendship, to procure a particular brand, or for any other reason. The Government also requires
ethical conduct from those who do business with the government. Contracts will contain a clause stating that
any efforts to influence an employee to violate the standards of the code are grounds to void the contract.
Vendors to the government are required to certify that they will not attempt to influence any employee to
violate the code.
Public employees must discharge their duties impartially so as to assure fair competitive access to
governmental procurement by responsible contractors. Moreover, they should conduct themselves in such a
manner as to foster public confidence in the integrity of EEP.
12.1 General Ethical Standards
• Personal gain: It shall be a breach of ethics to attempt to realize personal gain through public employment
by any conduct inconsistent with the proper discharge of the employee's duties.
• Influence: It shall be a breach of ethics to attempt to influence any public employee to breach the
standards of the ethical conduct set out in the code.
• Nepotism: It shall be a breach of ethics for any employee to participate directly or indirectly in a
procurement when the employee knows that the employee or any member of the employee's immediate
family has a financial interest pertaining to the procurement. A business or organization in which the
employee, or any member of the employee's immediate family, has a financial interest pertaining to
the procurement; or any other person, business or organization with whom the employee or any
member of the employee's immediate family is negotiating or has an arrangement concerning prospective
employment is involved in the procurement.
• Gratuities: It shall be a breach of ethics to offer, give or agree to give any employee or former employee,
to solicit, demand, accept or agree to accept from another person, a gratuity or an offer of employment in
connection with any decision, approval, disapproval, recommendation, preparation of any part of a
program requirement or purchase request, influencing the content of any specification or procurement
standard, rendering of advice, investigation, auditing, or in any other advisory capacity in any proceeding
or application, request for ruling, determination, claim or controversy, or other particular matter
pertaining to any program requirement or a contract or subcontract, or to any solicitation or proposal
therefore pending before this government.
• Kickbacks: It shall be a breach of ethics for any payment, gratuity or offer of employment to be made by or
on behalf of a subcontractor under a contract to the prime contractor or higher tier subcontractor for any
contract, or any person associated therewith, as an inducement for the award of a subcontract or order.
• Contract Clause: The prohibition against gratuities and kickbacks prescribed above shall be conspicuously
set forth in every contract and solicitation therefore.
• Inside Information: It shall be a breach of ethics for any employee or former employee knowingly to use
confidential information for actual or anticipated personal gain, or for the actual or anticipated gain of any
person.
12.2 Conflicts of interest
The following cases may have potential for conflict of interest:

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• An individual or a firm, (or its associates or affiliates), which was involved in preparation of specifications
for a particular bid, shall not be eligible to participate in providing the procurement requirements for that
particular bid, as it is likely that such earlier involvement will be perceived to, or will actually, result in a
biased or non-efficient outcome of the procurement transaction thus adversely impacting on the interest
of EEP.
• Neither Consultants (including their personnel and sub-Consultants) nor any of their affiliates shall be
hired for any assignment that, by its nature, may be in conflict with another assignment of the
Consultants.
• Consultants hired to prepare engineering design for an infrastructure project shall not be engaged to
prepare an independent environmental assessment for the same project.
• Consultants assisting a client in the privatization of public assets shall neither purchase, nor advice EEP
of, such assets.
• Consultants hired to prepare Terms of Reference (TOR) for an assignment shall not be hired for the
assignment in question.
• Candidates for consultancy assignments must exclude themselves from procurement of goods and works
which may follow as a result of or in connection with the consultancy agreement.
EEP officials, who may have an interest, directly or indirectly, with a firm or individual that is Bidding for a
procurement requirement issued by that entity shall declare any relevant relationship with that firm or
individual and consequently not participate in any proceeding concerned with that specific procurement at
any stage from setting specifications, qualifications, evaluations and any kind of decisions until supply or
completion of contractual obligations.

12.3 Corrupt, Fraudulent, Collusive, or Coercive Practices

The Government of the Federal Democratic Republic of Ethiopia represented by the Public Procurement and
Property Administration Agency (PPA) requires EEP, as well as bidders to observe the highest standards of
ethics during the procurement and the execution of contracts. In pursuance of this policy, the Government
defines, for the purposes of this provision, the terms set forth below as follows:
• Coercive practice is harming or threatening to harm, directly or indirectly, persons or their property to
influence their participation in a procurement process, or affect the execution of a contract.
• Collusive practice is a scheme or arrangement between two or more bidders, with or without the
knowledge of EEP, designed to establish prices at artificial, non-competitive levels; and
• Corrupt practice is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to
influence improperly the action of a public official in the procurement process or in contract execution;
• Fraudulent practice is any act or omission, including misrepresentation, that knowingly or recklessly
misleads, or attempts to mislead, a party to obtain financial or other benefit or to avoid an obligation;
• Obstructive practice is deliberately destroying, falsifying, altering or concealing of evidence material to the
investigation or making false statements to investigators in order to materially impede the Federal Ethics
and Anticorruption Commission, the Federal Auditor General and EEP or their auditors investigation into
allegations of a corrupt, fraudulent, coercive or collusive practice; and/or threatening, harassing or
intimidating any party to prevent their from disclosing their knowledge of matters relevant to the

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 investigation or from pursuing the investigation, or acts intended to materially impede the exercise of
inspection and audit rights provided for below.
EEP will reject a recommendation for award if it determines that the bidder recommended for award has,
directly or through an agent, engaged in corrupt, fraudulent, collusive, coercive or obstructive practices in
competing for the contract in question;
The Government of the Federal Democratic Republic of Ethiopia will debar a bidder from participation in
public procurement for a specified period of time if it at any time determines the bidder has engaged in
corrupt, fraudulent, collusive, coercive or obstructive practices in competing for, or in executing, a contract.

The List of Debarred Bidders is available on the EEP's Website http//www.eep.gov.et. and PPA’s website
In pursuit of the policy defined in Sub-Clause 2.9.1, EEP may terminate a contract for goods, works or services
if it at any time determines that corrupt or fraudulent practices were engaged in by representatives of EEP or
of a bidder during the procurement or the execution of that contract.
Where it is proved that the bidder has given or has offered to give inducement or bribe to an official or
procurement staff of EEP to influence the result of the bid in his favor shall be disqualified from the bid,
prohibited from participating in any future public procurement and the bid security deposited by them shall be
forfeited. EEP will have the right to require to inspect the supplier accounts and records relating to the
performance of the contract and to have them audited by auditors appointed by EEP.
12.4 Offences and Punishment
1. Every person appointed to or employed by EEP in carrying out the provisions of the Proclamation who:
a) receives any payment for the performance of his official duty, except as provided by law;
b) who defrauds EEP, conspires or colludes with any person to defraud EEP or provides an opportunity for
any person to defraud EEP in regard to a public procurement or property disposal proceeding;
c) contravenes or intentionally permits any contravention of this Proclamation;
d) willfully makes or signs any false entry in any document or willfully makes or signs false certificates;
is liable on conviction to a fine not less than Birr 25,000 and not more than 35,000 and to a rigorous
imprisonment for a term of not less than ten (10) years and not more than fifteen (15) years.
2. Every person appointed to or employed by EEP who:
a) directly or indirectly asks for or receives in connection with any of his duties, a payment or gift,
whether pecuniary or otherwise, or promise or security for that payment or reward; or
b) enters into or acquiesces in an agreement to do or to abstain from doing, permit, conceal, or connive
at any act or thing whereby the procurement or property disposal is or may be defrauded or which is
contrary to the provisions of this Proclamation or to the proper execution of the procurement officer's
duty;
c) commits an offence and is liable on conviction to a fine of not less than 50,000 Birr and to
imprisonment for a term of not less than ten (10) years and not more than twenty (20) years.
3. Every person who, promises, offers or gives any bribe to any person appointed to or employed by EEP with
intent:
a) to influence the decision or action of that person on any question or matter that is pending, or may be
brought before him in his official capacity; or
b) to influence that person to commit, or aid or abet in committing any fraud on the procurement, or to
connive at, collude in or allow or permit any opportunity for the commission of any such fraud;
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is guilty of an offence and liable on conviction to a fine of not less than Birr 50,000 and to rigorous
imprisonment for a term of not less than ten (10) years and not more than twenty (20) years,
4. Any candidate who, with the intention of deriving unlawful advantage, presents falsified documentary
evidence or conceals any evidence which he should have disclosed or connives at an act of fake
competition shall upon conviction be punishable with fine not less than 20,000 Birr and with rigorous
imprisonment of not less than five (5) years and not more than ten (10) years.

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13.0 Disposal of Assets

The head of EEP shall ensure that fixed assets which are not useful to the organization are disposed of in the
manner to be prescribed. The description and amount received from all public property disposed of shall be
included in the public accounts. Without prejudice to the provisions of the directive to be issued by the
Minister, concerning the matter, proceeds from the disposal of public property shall be deposited into the
account of the central treasury.
13.1 Deletion
Where public property is considered to be of no use in EEP or elsewhere, and has no- scrap value, it shall be
deleted. Deletion of public property shall be recorded when losses take place from inventory shortages,
destruction, theft or any other reason. The description and book value of all public property deleted shall be
included in the public accounts in accordance with the directives to be issued by the Minister.
13.2 Transfer
The Minister shall determine by directive the manner in which property which is not useful to the Federal
Government may be transferred gratis to regional governments, city administrations or any other body
carrying on activities complementing the responsibility of the government.

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14.0 Acronyms

ATSM American Standard Testing Method

BAFO Best and Final Offer
BD Bidding Documents
BDS Bid Data Sheet
BDS Bidding Data Sheet
BOO Build Own Operate
BOOT Build Own Operate Transfer
BOT Build Own Transfer
DCS Delivery and Completion Schedule
DDP Delivered Duty Paid
EEP Ethiopian Electrical Power
EOI Expression of interest
EQC Evaluation and Qualification Criteria
EXW Ex Workshop
FAC Final Acceptance Certificate
FBS Fixed Budget Selection
GCC General Conditions of Contract
ICB International Competitive Bidding
ICC International Chamber of Commerce
IFB Invitation for Bids
INN International Nonproprietary Name
ISO International Standards Organization
ITB Invitation to Bid
ITC Invitation to Consultants
JV Joint Venture
JVCA Joint Venture Consortium or Association
LC Letter of Credit
LCB Limited Competitive Bidding
LCS Least Cost Selection
LGRS List of Goods and Related Services
LOI Letter of Invitation
LOI Letter of Intent
LTA Long-Term Agreement
MOFED Ministry of Finance and Economic Development.
MoU Memorandum of Understanding
NCB National Competitive Bidding
OCB Open Competitive Bidding
PAC Provisional Acceptance Certificate
PE Procuring Entity
PO Purchase order
PPA Public Procurement and Property Administration Agency
QBS Qualification Based Selection
QCBS Quality and Cost Based Selection

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RFI Request for Information
RFP Request for Proposals
RFP Request for Proposals
RFQ Request for Quotations
SBD Standard Bidding Documents
SCC Special Conditions of Contract
SOW Statement of Work
SOR Statement of Requirement
TIN Taxpayer’s Identification Number
TOR Terms of Reference
TSCS Technical Specification Compliance Sheet
UNDB United Nation Development Business
VAT Value Added Tax

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15.0 Definitions

The starred definitions found below (*) are provided in The Ethiopian Federal Government Procurement and
Property Administration Proclamation No.649/2009. The two-starred definitions found below (**) are
provided in The Federal Government Public Procurement Directive. Other definitions are standard terms in
international procurement.

Applicant means a person who wishes to become pre-qualified in response to an Invitation for Pre-
qualification or to be considered for enlistment as a potential bidder for the purposes of the Restricted Bidding
Method or to be short-listed in response to a Request for Expressions of Interest. If successful in its submission
of application the applicant will become either a bidder or a Consultant. In this context, a person in addition to
a specific individual also means a firm, company, association or any other organization.

Approving authority means the authority that makes decision on an award of procurement contract under the
Delegation(s) of Financial Powers or an authority/officer authorized by the Head of EEP under such delegation
to take decision on award of procurement contract.

BAFO is Best and Final Offer.

Best Value Continuum. EEP can obtain best value in negotiated acquisitions by using any one or a
combination of source selection approaches. In different types of acquisitions, the relative importance of cost
or price may vary. For example, in acquisitions where the requirement is clearly definable and the risk of
unsuccessful contract performance is minimal, cost or price may play a dominant role in source selection. The
less definitive the requirement, the more development work required, or the greater the performance risk,
the more technical or past performance considerations may play a dominant role in source selection.

Bid* means a stage in the procurement process extending from advertisement of or invitation to bid up to
signing of contract.

Bidder* means a natural or juridical person submitting a bid.

Bidding Documents* mean the documents prepared by EEP as a basis for preparation of bids, which contain a
specification of the desired object of procurement.

Bid Proposal* mean a document submitted by bidders to participate in a bid on the basis of the bid document
prepared by EEP in respect of that procurement.

Bill of Lading is a legal document between the shipper of goods and the carrier, detailing the type, quantity,
and destination of the goods being carried. The bill of lading also serves as a receipt of shipment when the
goods are delivered at the predetermined destination. This document must accompany the shipped goods, no
matter the form of transportation, and must be signed by an authorized representative from the carrier,
shipper and receiver.

Birr is the unit of currency of Ethiopia.

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Board* is an entity established under the Proclamation No.649/2009 to review and decide on complaints from
candidates in regard to the conduct of procurements and disposal of property of the Federal Government.

Candidate* means a natural or juridical person invited to take part in public procurement or seeking to be so
invited.

Claused Receipt also called a Claused Bill of Lading, this is a bill of lading that shows a shortfall or damage in
the delivered goods. Typically, if the shipped products deviate from the delivery specifications or expected
quality, the receiver may declare a claused bill of lading.

Competitive Dialogue is a World Bank selection method for goods, works, or non-consulting services through
an interactive multistage selection arrangement that allows for dynamic engagement with proposers. It may
be used only for complex or innovative procurement. Competitive Dialogue may be appropriate:

a) where a number of solutions that satisfy EEP's requirements may be possible, and where the detailed
technical and commercial arrangements required to support those solutions require discussion and
development between the parties; and

b) due to the nature and complexity of the procurement, EEP is not objectively able to:

i) adequately define the technical or performance specifications and scope to satisfy its
requirements and/or

ii) adequately specify the legal and/or financial arrangements of the procurement.

Concessionaire* is a person who enters into a contract with EEP under a public private partnership.

Concession Contract means a contract with combined public and private financing for the provision and
operation of public utilities and other public services, e.g. construction and commissioning of water treatment
plant including distribution of water supply. However, concession contracts may be made with full private
financing, the private company or organization builds and manages the infrastructure facility and operates it
at its own commercial risk and also accepts investment obligations. Such contracts are fixed for terms of say
25 or 30 years to allow the operator to recover expended capital. At the end of the contract, the asset may
either remain indefinitely with the private company or be transferred back to Government ownership,
sometimes at a predetermined price or fee.

Build Operate Transfer (BOT) concession contract: a private Contractor builds and operates a new facility and
then transfers ownership to the Government or public authority at the end of the concession period. The
Government or public authorities usually provide revenue guarantees through long-term contracts for the
purchase of the product / services provided by the Contractor. There is usually an option in the original
contract for the Contractor to purchase the facility.

Build Own Operate (BOO) concession contract: a private Contractor builds, owns and operates a new facility
at its own risk. The Government or public authorities usually provide revenue guarantees through long-term
contracts for the purchase of the product/services provided by the Contractor.

Build Own Operate Transfer (BOOT) concession contract: a private Contractor builds, owns and operates a
new facility and then transfers ownership to the Government or public authority at the end of the concession

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period. The Government or public authorities, usually provide revenue guarantees through long-term
contracts for the purchase of the product/services provided by the Contractor and shall purchase the facility at
the end of the concession period or allow the Contractor to continue to own and operate it, but not
necessarily with the previous revenue guarantees. In such cases, a separate contract may be made at the end
of the first concession period.

Conflict of interest means perceiving a potential for conflict of interest, where personal or business interests
of any party in a public procurement transaction would adversely affect the interests of EEP in achieving best
value for money, transparency, fairness and/or equitable treatment of bidders.

Contract Award is the point at which EEP issues the Letter of Award to a successful bidder.

Custodial Responsibility* is the responsibility conferred on a civil servant by the head of EEP or by a person
delegated by him to protect and maintain public property until it is disposed or written off, or transferred to
the custody of another civil servant or EEP;

Days means calendar days, unless the text of either the Proclamation and Directive or the Manual specifically
refers to working days.

Disposal* mean the transfer of public property to another person by sale or other means or the act of getting
rid of public property by burning or burying.

Enlistment means persons and/or firms who are registered by PPA as qualified potential bidders, maintained
on a list and who are eligible to participate in bid for procurement of goods and related services and/or
procurement of works and physical services under Restricted Bidding Method. The list and the qualifications of
such persons and/or firms are reviewed and updated on an annual basis.

Ethics means the moral principles and rules of conduct that shall be followed and that are applicable to all
personnel of EEP involved in public procurement. However, these shall also be applicable for applicants,
bidders, Suppliers, Contractors and Consultants who are expected to observe the highest standard of ethics
during the implementation of procurement proceedings and the execution of subsequent contracts.

Fixed Asset* mean a tangible asset the value of which is determined by a directive to be issued by the
Minister, that is in operational use and that has a useful economic life of more than one year, such as
furniture, computers, heavy equipment, vehicles, ships and aircraft, buildings, roads, sewers, bridges,
irrigation systems, dam and the like

Framework contract* means a general agreement of procurement establishing unit price and other terms and
conditions of contract which serves as a basis for supplies to be delivered under future specific contract.

Framework Contract Supplier* is a supplier who has entered in to a contractual obligation to supply goods or
services under a framework contract;

Goods* mean raw material, products and equipment and commodities in solid, liquid or gaseous form,
marketable software and live animals as well as installation, transport, maintenance or similar obligations
related to supply of the goods if their value does not exceed that of the goods themselves. It includes
commodities, raw material, machinery, equipment, vehicles, plant, and related services such as
transportation, insurance, installation, commissioning, training, and initial maintenance.

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Government means the Government of the Federal Democratic Republic of Ethiopia (GFDRE).

Head of EEP means the Secretary of EEP, the Head of a Government Department/Directorate; or the Chief
Executive, by whatever designation called, of an Autonomous/Semi-Autonomous body or Corporation or Local
Government agencies e.g. City Corporations, Municipalities.

Incoterms International/ Commercial Terms

In writing means communicated in written form and delivered against receipt.

Intellectual and professional services are those services which provide output of advisory, design and know-
how transfer nature rendered by the Consultants.

International Standard is a standard adopted by an international standards organization and made available
to the public.

Juridical Person is an entity other than a natural person created by law and recognized as a legal entity having
distinct identity, legal personality and duties and rights.

Life Cycle Cost Analysis (LCCA) is a tool to determine the most cost-effective option among different
competing alternatives to purchase, own, operate, maintain and, finally, dispose of an object or process, when
each is equally appropriate to be implemented on technical grounds.

Life-Time Approach* is a system of effective management and control of public property which takes in to
account all associated activities and costs, namely, planning, acquisition, receipt, use, maintenance,
consumption or disposal or deletion of public property.

Minister or Ministry* means the Minister or the Ministry of Finance and Economic Development respectively.

Person* means natural or juridical person.

Post-qualification is a process undertaken by EEP at the end of the bid evaluation stage to ascertain the
capability of the least evaluated bidder to perform the contract. Post qualification assessment may be done
for prequalified bidders. The purpose of the post qualification is to ascertain that the lowest evaluated bidder
is still capable to perform the contract.

PPA is the Public Procurement and Property Administration Agency accountable to the Ministry of Finance and
Economic Development (MOFED).

Pre-Qualification is a means for attracting potential bidders to participate, in which potential bidders are
invited by EEP to submit documentation that shows the person/firm is capable of meeting the requirements of
a specific future bid.

Procedure means the mandatory procurement implementation requirements framed and issued by the PPA
that will ensure proper compliance with the Proclamation and Directive by public bodies, applicants, bidders,
Suppliers, Contractors, and Consultants.

Proclamation** is the Ethiopian Federal Government Procurement and Property Administration Proclamation
No. 649/2009.
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Procurement* means obtaining goods, works, consultancy or other services through purchasing, hiring or
obtaining by any other contractual means.

Procurement Directive* means the Directive issued by the Minister of Finance and Economic Development in
accordance with the Proclamation.

Procurement Unit** is the body responsible for procurement within EEP without prejudice to the particular
organizational structure appropriate to the nature of their duties.

Project Procurement Strategy for Development (PPSD) is a project-level strategy document, prepared by a
World Bank Borrower, that describes how procurement in IPF operations will support the development
objectives of the project and deliver Value for Money.

Proposals are the technical and/or financial proposals submitted to EEP by short-listed consultants. The term
proposal is used because, unlike most forms of bids for goods, works and related or physical services, it
normally details the manner in which the bidder 'proposes' to undertake the intellectual and/or professional
services and tasks described in the RFP. A proposal can only be submitted in writing in accordance with the
instructions contained in the RFP.

Public Body* means any Public Body, which is partly or wholly financed by Federal Government budget, higher
education institutions and public institutions of like nature.

Public Fund* means any monetary resource appropriated to EEP from the Federal Government treasury or aid
grants and credits put at the disposal of EEP by foreign donors through the Federal Government or internal
revenue of EEP.

Public Private Partnership* mean investment through private sector participation by a contractual
arrangement between EEP and a private sector enterprise, as the concessionaire, in which the concessionaire:

o undertakes to perform or undertake any construction project or service or lease concession;

o assumes substantial financial, technical and operational risks in connection with the performance
of a public function or use of government property; and

o receives consideration for performing a public function or utilizing government property, by way of
fees from any public funds, user levies collected by the concessionaire from users or customers for
a service provided by

Public Procurement* means procurement by EEP using public funds.

Public Property* mean any property of the Federal Government other than public fund and land.

Quotations are the simplified forms of obtaining priced offers from a selected number of suitable bidders in
response to a direct request by EEP in order to procure low-value, off-the-shelf, standardized goods and
related services and/or works and physical services.

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Regional States* mean member states of the Federal Democratic Republic of Ethiopia listed under Article 47
of the Constitution of the Federal Democratic Republic of Ethiopia and for the purpose of this Proclamation
include the Addis Ababa and Dire Dawa City administrations.

Related services* include services such as transportation, commissioning, insurance, installation, training, and
initial maintenance:

Services (Non-Consultancy) * mean any object of procurement other than works, goods and consultancy
services such as maintenance, security, janitorial, electricity, telecommunication, water supply, drilling, aerial
photography, satellite imagery, mapping, and similar operations.

Service (Consultancy)* means a service of an intellectual and advisory nature provided by consultants using
their professional skills to study, design and organize specific projects, advise clients, conduct training and
transfer knowledge. Advisory and project related consulting services include feasibility studies, project
management, engineering services, finance and accounting services, training, and development.

Short-list is a list of persons and/or firms who are selected to be invited to submit proposals following the
evaluation of applications submitted by the persons and/or firms, in response to a Request for Expressions of
Interest. Short-lists are used in case the Requests for Proposals for intellectual and/or professional services.

Special Procurement* mean a procurement of sizable volume carried out in bulk by a decision of the Minister
on account of the national significance of that procurement or to fulfill similar requirements of various public
bodies or requirements of EEP within a given period of time

Specification* means a document describing the quality, type and standard with which the required goods,
services, works or consultancy services should comply.

Standard is a document, established by consensus and approved by a recognized body, that provides, for
common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the
achievement of the optimum degree of order in a given context.

Standard Bidding Document** means the document prepared by the Agency to serve as a point of reference
in the preparation of bidding documents by EEP.

Standard Procurement Documents (SPDs) are procurement documents issued by the World Bank to be used
by borrowers for IPF financed projects. These include, GPN, SPN, EOI, REOI, Prequalification document, Initial
Selection documents, RFB, and RFP documents.

Stand-alone services are those services which can be procured independently without being incidental to
goods, works or intellectual and professional services. Such services include catering services, security
services, courier services, etc. In such cases a modified RFP document shall be used.

Substantially Responsive Bid is a bid that is assessed to be complete and without major deviations from the
eligibility, technical and commercial requirements in the procurement documents.

Supplier* means a natural or juridical person under contract with EEP to supply goods, works or services.

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Supplies* means all public property other than fixed assets, which can be consumed within one year of use
and the value of which is determined by a directive to be issued by the Minister.

Technical Specifications** are documents describing the quality, type and standard with which the required
goods, services, works or consultancy services should comply.

Terms of Reference*: In Requests for Proposals for Consultancy Services, this is the description of the services
required.

Total Price** means payment made by EEP in respect of a particular procurement which includes taxes and all
other incidental costs.

Value Engineering is a systematic and organized approach to provide the necessary functions in a project at
optimal cost. Value engineering promotes the reduction of time or the substitution of materials, methods or
less expensive alternatives, all without sacrificing the needed functionality, longevity or reliability. Value
engineering should normally enhance performance, reliability, quality, safety, durability, effectiveness or other
desirably characteristics. Request for bids/request for proposal documents may allow the application of value
engineering. The mechanism for application of value engineering during contract execution shall be as
specified in the contract documents.

Value for Money (VFM) represents the optimum combination of total cost of ownership and quality (or fitness
for purpose) to meet the EEP's requirements. VFM means the effective, efficient, and economic use of
resources, which requires the evaluation of relevant costs and benefits, along with an assessment of risks and
of non-price attributes and/or life-cycle costs, as appropriate. Price alone may not necessarily represent VfM.

Works* mean all work associated with the construction, reconstruction, up grading, demolition, repair or
renovation of a building road, or structure, as well as services incidental to works, if the value of those services
does not exceed that of the works themselves and includes build-own-operate, build- own-operate-transfer,
and build-operate-transfer contracts.

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16.0 Appendix 1 – World Bank Evaluation Methods

The following methods are derived from the July 2016 World Bank Procurement Guidance Evaluation Criteria;
Use of evaluation criteria for procurement of Goods, Works, and Non-Consulting Services using RFB and RFP.
These procedures are appropriate to non-World Bank procurements at EEP.
16.1 Substantial Responsiveness
16.1.1 Preliminary Examination
The evaluation process should begin immediately after opening of the submissions with a preliminary
examination to verify the overall completeness of the submissions received as required in the bidding
documents before undertaking detailed examination or evaluation. All submissions should be subjected to a
preliminary examination. This action enables evaluation committee to identify and reject submissions that are
incomplete, invalid, or substantially non-responsive.
The results of preliminary examination should be presented in the Evaluation Form. If the submission fails
preliminary acceptance, the reasons must be clearly explained. Since rejection at this stage puts the
submission out of any further considerations, it should be ensured that the decision to reject is justifiable.
In the preliminary examination, attention should be directed toward deficiencies that, if accepted, would
provide unfair advantages to the bidder. Sound judgment must be used, for example, simple omissions or
mistakes arguably due to human error should not be grounds for rejection of the submission. Justification to
reject must therefore be based on the existence of one or more major deficiencies or deviations which cannot
be permitted to be rectified or accepted in any case, and rejection would be justified and sustainable.
A material deviation is one which:
 has an effect on the validity of the bid; or
 has been specified in the bidding documents as grounds for rejection of the bid; or
 is a deviation from the commercial terms or the technical specifications in the bidding documents whose
effect on the bid price is substantial but cannot be given a monetary value.
The following checks should be applied:
 Verification: The validity of the submission requires that all relevant forms be signed by authorized person
or persons. If the submission is a joint venture, the joint venture agreement must be submitted; if the
submission is an agent, an authorization from the supplier or manufacturer must be provided in addition
to any documentation required of the supplier or manufacturer itself.
 Eligibility: All goods and services shall originate from eligible source countries. In the case of plant and
equipment, this eligibility test is applied only to the finished product offered in the submission and to its
major and clearly identifiable components.
 Bid Security: The SPD may require submission of a bid security. If so, the bid security must conform to the
requirements of the SPD, and it must accompany the bid.

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 Completeness of Submission: Unless the SPDs have specifically allowed bidders to quote for only select
items or for only partial quantities of a particular item, bidders not offering all of the required items should
ordinarily be considered nonresponsive. However, under works contracts, missing prices for occasional
work items are typically considered to be included in prices for closely related items elsewhere.

16.1.2 Technical and Commercial Qualifying Criteria

Technical and Commercial Qualifying criteria are the minimum / maximum requirements in the bidding
documents that are normally evaluated on a pass/fail basis. Qualifying (pass/fail) criteria should be stated in
such a way that an assessment can determine whether the submission is substantially responsive to the
technical and commercial requirements. However, EEP should be careful not to limit market competition
through unnecessary or unduly onerous qualifying criteria.
Material deviations to the commercial requirements and technical specifications are a basis for the rejection
of a submission. As a general rule, material deviations are those that, if accepted, would not fulfill the purpose
for which the submission is requested, or would prevent a fair comparison with submissions that are properly
compliant with the bidding documents.
Examples of material deviations include:
• Refusing to bear important responsibilities and liabilities allocated in the bidding documents, such as
performance guarantees and insurance coverage;
• Inability to meet the critical delivery schedule or work schedule clearly specified in the bidding documents;
• Failure to comply with minimum experience criteria as specified in the bidding documents;
• Failure to meet major technical requirements (e.g., offering completely different types specified, plant
capacity well below the minimum specified, equipment not able to perform the basic functions for which it
is intended;
• Failure to bid for the required scope of work (e.g., for the entire works or a complete package or a
complete schedule) as instructed in the bidding documents, where failure to do so has been indicated as
unacceptable.
16.2 Pre-Qualification and Initial Selection
Pre-Qualification and Initial Selection are processes used to shortlist applicants in the procurement of goods,
works, and non-consulting services. These processes ensure that only those with appropriate and adequate
capacity, capability, and resources are invited to submit.
The assessment of qualifications assesses only the firm that submitted the application. The assessment does
not take into consideration the qualifications of other firms such as its subsidiaries, parent entities, affiliates,
subcontractors (other than specialized subcontractors if permitted in the Pre-Qualification/Initial Selection
document), or any other firm different from the submitting firm.

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 16.2.1 Pre-Qualification
Prequalification is normally used with World Bank Requests for Bids and is optional depending on the nature
and complexity of the goods, works, or non-consulting services. In prequalification, minimum requirements
are normally assessed on a pass/fail basis against such criteria as:
1. Eligibility
a. Nationality
b. Conflict of Interest
c. Bank Eligibility
d. United Nations resolution or Borrower’s country law
2. Historical Contract Non-Performance
a. History of Non-Performing Contracts
b. Suspension Based on Execution of Proposal Securing Declaration by the Employer
c. Pending Litigation
d. Litigation History
3. Financial Situation and Performance
a. Financial Capabilities
b. Average Annual Turnover
4. Experience
a. General Experience
b. Specific Experience
All applicants to a pre-qualification that substantially meet the qualification requirements are invited to
submit.
16.2.2 Initial Selection
Initial selection is normally used with World Bank Request for Proposals and for all competitive dialogue
processes. It enables EEP to invite only the highest ranked applicants to submit proposals. Initial selection
involves a two-step process. The first step is similar to the prequalification process described above, and all
applicants are assessed against minimum pass/fail qualification requirements such as those listed in Section
16.2.1Pre-Qualification.
Applicants that substantially meet the meet the qualification requirements are then assessed against the rated
type criteria in the Initial Selection document in order to be ranked on merit.
1. Management capability (policy, systems, practice)
a. Management facilities
b. Financial management
c. Risk management
d. Health and safety management
e. Innovation
f. Sustainable business
2. Contract / Project Management Capability (policy, systems, practice)
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 a. Contract/Project management
b. Scope of human resources and structure assigned to contract/project management
c. Budget and financial management
d. Risk processes to mitigate and manage
e. Value engineering, continuous improvement.
3. Employer’s requirements
a. Full understanding of the Employer’s Requirements
b. Practical and realistic preliminary approach and methodology
c. Realistic preliminary timeline/delivery schedule
d. Effective risk identification.
4. Sustainable Procurement
a. Sustainable procurement (policy and systems)
b. Track record of delivering successful sustainable procurement result/s (actual examples to be
provided)
c. Sustainable procurement accreditation from a recognized body
d. Sustainable procurement award from a recognized body.
After ranking the combined rated criteria scores the Borrower selects the highest ranked applicants to submit
proposals. EEP must state in the initial selection document, the range of applicants that may be initially
selected.
16.2.3 Post-Qualification
If bidders have not been prequalified or initially selected, EEP shall specify appropriate qualification
requirements in the SPD to verify that a bidder that would be recommended for contract award has the
capability and resources to effectively carry out the contract. As with pre-qualification, the assessment of a
firm’s qualifications shall not take into consideration the qualifications of other firms such as its subsidiaries,
parent entities, affiliates, subcontractors (other than specialized subcontractors if permitted in the bidding
documents), or any other firm different from the firm that submitted the bid.
16.3 Evaluation of Bid/Proposal Cost
As specified in the bidding documents, quoted costs are evaluated against monetarily quantifiable criteria.
This allows EEP to compare and evaluate costs of each bidder. EEP's selection of method for the evaluation of
submission cost shall be guided by the factors that will be considered for the purpose of evaluation besides
the quoted costs.
• If factors selected can be quantified in monetary terms, then an RFB approach that uses monetarily
quantifiable criteria should be selected.
• If factors cannot be monetized, then an RFP approach using rated type criteria should be selected.
When setting monetarily quantifiable evaluation criteria, the bidding documents shall specify the relevant
factors, in addition to price, that are to be considered in cost evaluation, and the manner in which they will be
applied for the purpose of determining the evaluated cost of each submission.

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Examples of where monetarily quantifiable methodology can apply include the following:
1. domestic margin of preference;
2. time schedule adjustment;
3. payment schedule adjustment;
4. life cycle costing;
5. functional guarantees min/max adjustment; and
6. discounts for multiple lots.
16.3.1 Adjusted Bid/Proposal price
Adjusted Bid/Proposal price forms part of the evaluated cost of each proposal. Adjustments of bid price
include arithmetic correction, any discounts, and other adjustments specified in the bidding documents for
evaluation purposes.
• Price adjustment provisions that are used in long-term contracts instead of a fixed price are not considered
in the evaluation.
• Discounts that are conditional on the award of more than one lot shall not be considered for evaluation.
The proposal prices should be adjusted for the purpose of comparison of evaluated cost for each proposal.
Only those deviations which are minor and which can be translated fairly into monetary values should be
adjusted. The calculation of financial adjustment should be in the manner consistent with the bidding
documents. All the adjustment factors and the basis of price comparison specified in the bidding documents
must be taken into account during the evaluation. Factors or other criteria not listed in the bidding
documents shall not be introduced during the evaluation.
16.3.2 Life Cycle Costs Analysis
Evaluation of proposal cost may also include an assessment of life cycle costs. The principle of Value for
Money does not necessarily mean selecting the lowest price, but rather total cost of ownership (or lifecycle
cost) over a specified period, generally the useful life of an asset. VFM represents the optimum combination of
total cost of ownership and quality (or fitness for purpose) to meet the EEP's requirements. It allows the
relative benefits of different proposals to be measured by taking into account all costs including for example:
1. purchase price or upfront costs of acquisition;
2. installation and commissioning costs;
3. cost of operation and maintenance including costs of materials, servicing, spare parts, etc. over the
useful life;
4. sustainability savings e.g. lower fuel consumption; and/or
5. decommissioning and disposal costs.
Life-cycle costing should be used when the costs of operation and/or maintenance over the specified life of
the goods or works are estimated to be considerable in comparison with the initial cost and may vary among
different proposals. It is evaluated on a net present value (NPV) basis.
When using life-cycle costing, EEP shall specify the following information in the bidding documents:

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 a. number of years used in the life-cycle cost determination;
b. the discount rate, in percent, to be used to calculate the net present cost of future costs over the life-
cycle period specified; and
c. the factors and methodology to be used for calculating the operation, maintenance, and residual value
costs, including the information and functional guarantees to be provided by the bidder/proposer in
the bid/proposal.
EEP should take extra care in setting the discount rate and the number of years to ensure they are suitable for
the specific contract.
An example Life-cycle cost calculation is shown below, using a discount rate of 5% and a ten-year analysis
period:

1 - ( 1 + .05 )-10 800,000

Proposal 1 NPV= 15,000,000+900,000 · [ .05 ] +
(1 + .05)10
=22,440,692

For efficient calculation, the free software PTC MathCAD is recommended.

Proposal 1 Proposal 2 Proposal 3 Proposal 4
Initial Price 15,000,000 7,000,000 6,400,000 12,000,000
Yearly O&M Costs 900,000 1,750,000 2,300,000 1,000,000
Residual Value 800,000 200,000 150,000 500,000
Net Present Value 21,458,431 20,635,819 24,252,077 20,028,692
Financial score evaluation = 20,028,692 / 20,028,692 / 20,028,692 / 20,028,692 /
NPVlow ÷NPVproposal x 50 22,440,692 x 50 20,635,819 x 50 24,252,077 x 50 20,028,692 x 50
Financial Score (out of 50%) 44.6% 48.5% 41.3% 50.0%
In the example above, Proposal 4 has the best technical score of 50% out of a maximum of 50%.

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 16.3.2.1 Recurring Cost, Present Value Formula (for Yearly O&M Costs)
This formula is used to bring repeating future values, such as fuel or energy costs, back to present value.

1- ( 1+i )-n
V present = V future · [ i ]
Vpresent is the present value
Vfuture is the annual future value
i is the discount rate
n is the number of years in the study
16.3.2.2 Non-Recurring Cost, Present Value Formula (for Residual Value)
This formula is used to bring a future value, such as a pump replacement, back to present value.
V future
V present =
(1+i) n
Vpresent is the present value
Vfuture is the future value
i is the discount rate
n is the number of years in the study
16.4 Unbalanced, front loaded and abnormally low bids and proposals
When the evaluation of Bids/Proposals has been completed, EEP shall check if the evaluated cost is
reasonable, whether it may be identified as unbalanced, front loaded or abnormally low.
16.4.1 Abnormally low bids and proposals
For Goods, Works, and Non-Consulting Services, an abnormally low bid is one in which the price, in
combination with other elements of the proposal, appears so low that it raises material concerns with EEP as
to the capability of the bidder to perform the contract for the offered price. Where EEP identifies a potentially
abnormally low bid, EEP shall seek written clarifications from the bidder, including detailed price analyses of its
proposal price in relation to the subject matter of the contract, scope, proposed methodology, schedule,
allocation of risks and responsibilities, and any other requirements of the request for bids/request for
proposals document. If, after evaluating the price analyses, EEP determines that the bidder has failed to
demonstrate its capability to deliver the contract for the offered price, EEP shall reject the proposal.
16.4.2 Seriously Unbalanced or Front-loaded Bids/Proposals
For works and plant, if the bid that results in the lowest evaluated cost or best evaluated proposal is, in EEP's
opinion, seriously unbalanced or front-loaded, EEP may require the bidder to provide written clarifications,
including detailed price analyses to demonstrate the consistency of the prices with the scope of works,
proposed methodology, and schedule. After evaluating the detailed price analyses (for contracts subject to
prior review, with the Bank’s no-objection), EEP may as appropriate:

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• accept the bid;
• require that the total amount of the performance security be increased, at the expense of the proposer, to
a level not exceeding twenty percent (20%) of the contract price; or
• reject the bid.

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16.5 Rated-Type Criteria
Rated-type criteria are used to assess non-price attributes using merit points. They are normally used in an RfP
process when attributes or differences in attributes among different proposals may not be quantifiable (or the
evaluation criteria cannot be expressed) in monetary terms, or where EEP wishes to differentiate proposals
using merit points. Rated criteria can be used:
• in conjunction with pass/fail criteria in order to rank and initially select applicants; and
• in the evaluation of proposals (and exceptionally of bids) to identify the most advantageous proposal or
bid.
When using rated criteria at the proposal stage of an RfP, rated criteria are assessing the extent to which the
firm is able to meet and exceed the requirements to perform the contract, rather than past performance. At
the proposal stage rated criteria may include, but are not limited to, the following features as relevant:
• to what extent the performance, capacity, or functionality features meet or exceed the levels specified in
the performance / functional requirements and/or influence the life-cycle cost;
• quality of Technical Proposal in terms of method statement, key personnel, access to key equipment, site
organization, safety, quality assurance, mobilization schedule, implementation schedule and any other
activities as specified by EEP; and
• ability to meet and exceed any sustainable procurement requirement if specified in EEP's requirements.
16.5.1 Prioritization of Rated Criteria
Rated-type criteria, and sub-criteria as appropriate, are prioritized, assigned merit points, and weighted
according to their relative importance in meeting the requirements. The number of criteria and sub-criteria
should be kept to the essential minimum. The scores to be given to each criteria and sub-criteria are specified
in the data sheet, and in Section III of the World Bank SPDs. To help prioritize the rated criteria a simple
prioritization matrix may be used:
• Start by creating a table with each criterion identified as a letter in alphabetical order:
Relevant Experience A
Management Team B
Past Performance C
Work Plan D
• Insert the criteria into the matrix twice – one in the horizontal rows and once in the vertical columns.
• Determine which of each two compared against each other is more important in this procurement:
compare criterion A against B. If the team decide that ‘B’ is most important then insert the letter ‘B’ in the
box. If the evaluation team decides that both criteria are equal, insert A and B:
A
A B
B B C
C C B
D D D D
• Count the total number of A's, B's, C's, etc.

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 A 0
B 2
C 1
D 3
• The letter with the highest count is the most important and the letter with the lowest count is the least
important.
• Prioritize as 1st, 2nd, 3rd etc. on the basis of the highest count so that each criterion is ranked against the
other.
D 1st Work Plan
B 2nd Management Team
C 3rd Past Performance
A 4th Relevant Experience
• Discuss and agree points or percentage weightings. When combining with price, the total weightings of all
rated criteria other than price should normally not exceed 30% but it may be set as high as 50% if justified
to achieve Value for Money.
18% Work Plan
15% Management Team
12% Past Performance
5% Relevant Experience
16.5.2 Evaluation of Technical scores
The total technical points assigned to each proposal in the Evaluated Proposal Formula will be determined by
adding and weighting the scores assigned by an evaluation committee to technical features of the proposal in
accordance with the criteria below.
a. The technical features to be evaluated are generally defined below and specifically identified in the
Proposal Data Sheet (PDS):
i. to what extent that the performance, capacity, or functionality features meet or exceed the levels
specified in the performance / functional requirements and/or influence the life-cycle cost and
effectiveness of the Plant.
ii. quality of Technical Proposal in terms of method statement, key personnel, access to key
equipment, site organization, safety, quality assurance, mobilization schedule, Implementation
Schedule and any other activities as specified by the Employer and based on the proposer's
experience.
iii. Any sustainable procurement requirement if specified in the Employer’s Requirements.
b. Each technical feature may include sub criteria as specified in the PDS. The scores to
During the evaluation process, the evaluation committee will assign each desirable feature a whole number
score as stated in the bidding documents. For example, a score from 0 to 4 may be used, where:
i. 0 means that the feature is absent;
ii. 1 for the feature being present but showing deficiencies;
iii. 2 for meeting the requirements;

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 iv. 3 for marginally exceeding the requirements; and
v. 4 for significantly exceeding the requirements.
As an example, the bidding documents indicate a technical requirement of Past Performance: Number of
similar contracts as three contracts completed in the last five years. As simple table as shown below can
allow EEP to rate performance that is above the technical requirement:
Number of successfully >5 4 3 2 1
completed similar contracts. contracts contracts contracts contracts contract
Score 4 3 2 1 0
The maximum score is 4 points, which is worth 12% in the previous Section 16.5.1Prioritization of Rated
Criteria.
Category Proposal 1 Proposal 2 Proposal 3 Proposal 4 Best Score
Work Plan 4 2 2 3 4
Management Team 2 3 2 2 3
Past Performance 3 2 2 3 3
Relevant Experience 3 2 2 3 3
The weighted score for each proposer is calculated as follows:

T
Score= ×w
T high

T is the technical sore awarded (0-4) to the proposal

Thigh is the highest technical score achieved
w is the % weight for the category as specified in Prioritization of Rated Criteria
Category Proposal 1 Proposal 2 Proposal 3 Proposal 4 Total
Work Plan 4÷4·18= 18 2÷4·18 = 9 2÷4·18 = 9 3÷4·18 = 13.5 18%
Management Team 2÷3·15 = 10 3÷3·15 = 15 2÷3·15 = 10 2÷3·15 = 10 15%
Past Performance 3÷3·12 = 12 2÷3·12 = 8 2÷3·12 = 8 3÷3·12 = 12 12%
Relevant Experience 3÷3·5 = 5 2÷3·5 = 3.3 2÷3·5 = 3.3 3÷3·5 = 5 5%
Technical Score (out of 50%) 45% 35.3% 30.3% 40.5% 50%
In the example above, Proposal 1 has the best technical score of 45% out of a maximum of 50%.
To calculate the combined technical and financial score, the total scores are added and the Proposal with the
highest score is determined as the Most Advantageous Proposal.
Category Proposal 1 Proposal 2 Proposal 3 Proposal 4
Financial Score (out of 50%) 44.6% 48.5% 41.3% 50.0%
Technical Score (out of 50%) 45% 35.3% 30.3% 40.5%
Combined Score (out of 100%) 89.6% 83.8% 71.6% 90.5%
The analysis of the results shows that Proposal 4 has the best combined score of 90.5% out of a maximum of
100%. Proposal 4also has the lowest evaluated cost. The contract shall be awarded to Proposal 4 as it has the

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highest combined score and is therefore the Most Advantageous Proposal with the best overall Value for
Money.

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17.0 Appendix 2 –Transformer Procurement

17.1 Life Cycle Cost Analysis for Transformers

Transformer LCCA is straightforward compared with analysis of other technical equipment 2. This is because
operating cost can be calculated very easily using the self-consumption of the unit in watts, and also because
Maintenance Costs are insignificant compared to electrical efficiency. In addition, Initial Cost can be limited to
purchase price, as delivery, installation, and commissioning will be similar between different brands, assuming
that International Competitive Bidding is used to procure the unit. This is also true of decommissioning.
LCCtransformer = IC + OC + RMC + DC
≈ PP + OC
≈ PP + (100% · A · Po + 80% · B · Pk) · 8760 hours/year · 20 years
IC is Initial Cost, including price, delivery, installation, and commissioning
OCis Operation Cost from items such as energy, insurance, and wages
RMC is Repair and Maintenance Cost
PP is Purchase Price
DC is Demolition Cost
A is the assigned cost of no-load loss per watt (typically $1-$8/Watt, EPP is using $4.122)
Pois therated no-load loss
B is the assigned cost of load losses per watt (typically $0.2-$5/Watt, EPP is using $1.524)
Pkis the rated load loss
Load losses are proportional to the transformer load (square of current), and are mostly heat losses in the
winding materials created by resistance of the conductor to the flow of current or electrons. Resistance is
decreased by using a material such as copper with low resistance per cross-sectional area or by increasing the
cross-sectional area of the conductor.
No-load losses are caused by magnetization of the core as long as the transformer is energized, and they are
constant and independent of the transformer load. No-load losses can be reduced significantly by improved
materials and design. There are five types of no-load losses: hysteresis losses in the core laminations; eddy
current losses in the core laminations; resistance losses due to no-load current; stray eddy current losses in
core clamps, bolts and other core components; and dielectric losses. Hysteresis losses are the largest part of
no-load losses, and they arise from magnetic resistance in the core lamination molecules to the alternating
magnetic field, which results in heat from the magnetic flux lag behind the magnetic force. The size and type
of core material can reduce hysteresis losses.
It is assumed that the transformer will be operational 100% of the year for computing No-Load Losses, and
80% is a typical value for Load Loss. 20 years is a typical evaluation period. These calculations should be
made using NPV, discounting future cash flows based on the prevailing discount rate. This value has not yet
been identified in Ethiopia.

2
See IEC 60076-20 for more information.

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 days W
A=
(
SC + EC ∙ 8760
year )
∙ 0.001
kW
FC
= Cost of No-Load Loss in $/watt

SC is the annual cost of system capacity in $/kW-year, or the levelized annual cost of generation,
transmission and primary distribution capacity required to supply one watt of load to the distribution
transformer coincident with the peak load
EC is the Energy Cost, or the levelized annual cost per kWh of fuel, including inflation, escalation, and
any other fuel related components of operation or maintenance costs that are proportional to the
energy output of the generating units
FC is the Fixed Charge on capital per year, or the levelized annual revenue required to carry and repay
the transformer investment obligation and pay related taxes, all expressed as a per-unit quantity of the
original

days W
A=
(
((SC ∙ RF) + EC ∙ 8760
year )
∙ LF ) ∙ PL2 ∙ 0.001
kW
FC
= Cost of Load Loss in $/watt

RF is Peak Loss Responsibility Factor, or the composite responsibility factor that reduces the system
capacity requirements for load losses since the peak transformer losses do not necessarily occur at peak
time.
LF is the Annual Loss Factor, or the ratio of the annual average load loss to the peak value of the load
loss in the transformer.
PL is the Uniform Equivalent Annual Peak Load, or the levelized peak load per year over the life of the
transformer. Transformer life cycle is defined as the useful life of the asset and is usually assumed to be
30-35 years.
17.2 Transformer Efficiency
S ∙ cosφ
efficiency=
S 2
S∙cosφ+P o +P k ∙( )
SB
S is the actual load power rating in VA (volt amperes)
SB is the full load power rating in VA (volt amperes)
cosφ is the power factor (i.e. 1.0, 0.8, etc.)
Pois therated no-load loss

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 Pkis the rated load loss
In an example of a 630 kVA 20/0.4 kV step-down transformer with 1200 W no-load losses and 9300 W load
losses, the transformer efficiency at full load and power factor 1.0 is 98.36%. These calculations can be made
easily in the free software MathCAD.

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