NPS Procurement SOP

1. Purpose
This SOP outlines the procedure to follow for approval of purchase of non-production goods and
services procured locally. This kind of spend is known as Non Production Spend (NPS).

2. Scope
This document applies to:
 All Procurement of Non Production goods and services in IHPL.
This document does not apply to:
 Strategic Contracts, Purchase/sale of land and buildings, expense vouchers, reimbursements
or cash advances.

3. Purchase Requisition
 Capital Goods:
All CAPEX items to be purchased subject to that they have been budgeted for and prior written
consent to be obtained from the GM.
 Non capital goods and services
For goods and services that are not capital in nature, Purchase Requisition should be raised
by the user (budget holder) department and must be authorised in accordance with authority
matrix (department head).

4. Quotation Requirement
For non-frequent / one off purchases
 No quotation required for less than Tk 15,000 spends as one time.
 Three quotes for Spending greater than Tk. 15,000 as one time.
This is strictly applicable to only non-frequent / one off purchases (including CAPEX items) but
shall not include items purchased time and again.
For frequent regular items
 Frequent regular purchases such as machinery tools and spares, lubricants, toners, A4 papers,
cleaning items, worker T Shirts, safety shoes, tea powder, detergents, admin booklets, regular
civil work, engineering services etc. the following method will be applicable.

Purchase categories (spares, admin, housekeeping etc.) are to be fixed and vendors are to be
invited at least semi-annually to tender for supply for the next 6 months. Respective user
departments will be in charge to inform / communicate with suitable vendors however
anyone may contribute in this manner for company’s best interest.

Tenders are to be directly submitted to the finance department in person by a vendor

representative or via tender box.

Industrial Hand Protection Ltd.

Exceptions to the above are as per below:
 Spare parts material procured directly from Original Equipment Manufacturer (OEM),
distributor, authorised agents or any other persons or entity appointed by manufacturer.
 Supplies from Government/State owned agencies.
 Services from authorised agents/OEM.
 Material/Services that are proprietary and/or where less than three reliable vendors are
available.

5. Potential Vendor Assessment

 User department is responsible for searching potential bidders.
 User is responsible for evaluating the capability of the potential bidders.
 User is responsible that potential bidders have clear understanding of the scope before
submitting quotes/bids.
 User is responsible for conducting the technical bid analysis (TBA) of the bids against the
proposed scope of work, eliminate any gaps, clarify all doubts to the bidder and normalize the
bids before commercial negotiation is started. Any bidder failing to meet technical criteria will
be disqualified from the bidding process
 User shall also ensure that bidders are fully compliant with all relevant statutory and legal
requirements before seeking any quotes/bids from them.
 If any confidential information is required to be shared with any bidder, user needs to ensure
that Non Disclosure Agreement (NDA) is signed before such information is disclosed.
 All bidders must be given equal/sufficient time to respond to ensure process is fair.

Vendor Selection One Off / Non Frequent cases:

 For purchases below BDT 100,000/= (or USD equivalent) the Finance Head will have the
authority to select vendors. The finance head may consult anyone for technical assistance.
Finance head may engage in further negotiations where ever necessary.
 For purchases above BDT 100,000/= (or USD equivalent), vendor selection will be subject to
Purchase Committee Approval.
Vendor selection through tender:
 All vendors to be selected through purchase committee approval. The committee may engage
in further negotiations where ever necessary.
 A prescribed approval form with summary should be prepared by the user department and
forwarded to the PO releasing authority.
 Selection of vendor shall also be dependent on but not limited to
o Compliance to IHPL standards (Code of business conduct, Anti Bribery, Quality
assurance) etc
o Total Cost of Ownership
o Payment terms
o Lead time
o Warranty
o Liability

Industrial Hand Protection Ltd.

6. Purchase Orders
 All Purchase Orders (POs) are to be created and approved through existing authority
matrix built into the SAP system.
 User department will be responsible for compiling all documentation along with
relevant vendor approval forms and submitting it to respective PO approval authority.
 All approval authority will be responsible to ensure that proper procedures have
been followed above and that all documentation has been maintained.
 Following kind of spends will not require Purchase Orders
o Payment of Govt taxes and duties, charges and fees to statutory authorities, payment
of utility invoices.
o Regular contractual spends e.g. Rent, Retainer fees, canteen spends etc provided
there is valid underlying contract.
o Payment of contractual labour invoices provided there is valid manpower contracts.
o Employee cash expenses and reimbursements.
o Petty Cash spends below BDT 5,000/= strictly not related with regularly purchased
goods and services.
 Invoices not requiring Purchase Orders will have to be approved by respective user
department heads.
 All POs above BDT 100,000/= shall by default have payment terms of Payment after
30 days of bill receipt or goods / service received, whichever is later. Below BDT
100,000 it will be on requirement basis.
 All approved POs to be issued (either in hard copy or electronically) strictly by the front
desk officer who shall strictly put an initial on all out going POs.

7. Bills and GR/IR

 For all supplies, bills are to be submitted to the front desk admin representative. Bills
are to be acknowledged by receiving date.
 All bills are to be forwarded to respective department representatives. After their
acknowledgement and signing, bills should be sent to the finance department along
with other commercial documents.
 All NPS inventorial items to be received by the warehouse department and they shall
be the custodian like the rest of the inventory. Goods shall be issued as per usual policy
of IHPL.

8. Purchase Committee
A three member purchase committee is to be assigned every year with the discretion of
the GM. One member should always be from the finance team and the other two
members maybe be from any other relevant department. For approval issues, the sign of
any two existing members of the committee will suffice. The purchase committee should
be changed annually.

Industrial Hand Protection Ltd.

9. Exception management
 Exceptions to this SOP needs to be addressed through a “Justification note” detailing rationale
behind the deviation. Notes may be maintained case to case along with other commercial
documents or via copies of emails.
 For purchases up to BDT 50,000/= the finance head will have the authority to go ahead. For
purchases beyond BDT 50,000/=, GM approval will be required to go ahead.

Industrial Hand Protection Ltd.