Session: M1-2 Session: M1-2

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Act [Section -11]

Procurement Planning

Rules [ Rule-15,16 & 17]

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Procurement Session: M1-2
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Definition

“Procurement” means the purchasing or

hiring of Goods, or acquisition of Goods
through purchasing and hiring, and the
execution of Works and performance of
Services by any contractual means

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Planning Procurement Session: M1-2
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Planning requires a number of steps & options

Approaches to Planning

In order to stimulate thinking, to create options and to

assist planning consider the following questions;
 What is to be done?
 When it is to be done?
 How it is to be done?
 Who is to do it?
 What resources are required?
 Who should know about it?

If you plan , you will be in control of the situation, rather than

having the situation in control of you
CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Procurement Planning
Session: M1-2
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Preparation of PP shall be mandatory for all PEs

Procurement Planning should aim at attracting

maximum competition for the benefits of the PE

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Act and Rules Session: M1-2
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Procurement Planning is regulated by:

 Frequency
 Approval
 Publication
PPA
2006
 Splitting into packages/lots

 Nature & size of the Procurement

 Source of funding
 Limits & conditions
PPR
2008  Forms

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Benefits of Procurement Planning Session: M1-2
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Careful & detailed procurement planning is essential for

quality project execution

Speeds up the
procurement process
& reduces project
implementation
delays
Contributes to
enhanced project
Reduces possibility quality & efficiency
of error & reduces
subsequent work

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Package, Lots & Methods Session: M1-2
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PE decides

Splitting/Assembling Applicability of the

packages Procurement methods

…considering the nature & size of the Procurement, by carefully

reviewing the proposed Procurement activities & issues
CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 …in the case of Goods Session: M1-2
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PE takes into account the following when determining the

method of Procurement & consolidating of Goods packages

Availability
Estimated
Quality
cost

Others Price levels

GOODS
Type Capacity

Risks Competition
Urgency

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 …in the case of Works Session: M1-2
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PE considers the following, in the case of determining the

method of Procurement for Works

Prevalent
conditions
Estimated
Capacity
cost

WORKS Expected
Others
competition

Completion Geographic
date location

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 …in the case of Services Session: M1-2
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PE considers the following, in the case of determining the

method of Procurement for Intellectual & Professional Services

Nature

Estimated
Complexity
cost
SERVICES

Others Capacity

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Procurement Methods Session: M1-2
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Intellectual &
Goods & related Services,
Professional
Works & Physical Services
Services

QCBS
OTM LTM TSTM RFQM DPM
Open Limited Two-Stage Request for Direct
&
Tendering Tendering Tendering Quotation Procurement FBS
Method Method Method Method Method &
Other Methods
OSTETM
One Stage
Two Envlope

Taking into account the thresholds

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Splitting Procurement Object Session: M1-2
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Four key terms

Item
A single article or unit in a list
With an identified quantity … 1,2,3 etc

Lot
A multiple number of items grouped together
Any number of items can form a lot

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Splitting Procurement Object Session: M1-2
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Package
 A multiple number of Lots
grouped together
 Usually No package can have
more than 5 lots (Cross discount)

Contract
Agreement through which the
Item/Lot/ Package is purchased

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Package/lot options Session: M1-2
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Consider the following Procurement object as an example:

Office equipment consisting of 36 items, namely 10 PC, 5 Printers, 1 Server,
4 Executive desks, 6 Office desks, 4 Executive chairs and 6 Office chairs
Office
Office equip.
equipment
IT Furn.
Office equipment equip. equip.
IT Furniture
equipment equipment Exec. Office
PC PrintersServer
furn. furn.

One Package Two Packages Five Lots

for for for
One Contract Two Contracts Five Contracts

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Packages Few & large or more & small Session: M1-2
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Arguments in favour of
Grouping into large Procurement Packages
 Benefits from economies of scale – achievement of economy &
efficiency
 Management aspects (PE’s capacity to manage the whole project)
 Risk aspect (where failure of a sub-supplier may unduly affect critical
path)
 Benefits from participation of large international Tenderers

Splitting into small Procurement Packages

 Time element (procurement items are needed at different times)
 Business structure (some goods or services are not available from a
single source)
 Administrative costs of tendering

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Packages Few & large or more & small Session: M1-2
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What about competition?

 Do large packages improve participation or

favour collusion among Tenderers?

 Does splitting items into small lots encourage

maximum competition from local suppliers or
facilitate Tenderers in ‘sharing the cake’?

Answers to these questions depend on a careful analysis

of the underlying market structure
CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Procurement Scheduling Process Session: M1-2
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Seven Key Steps in preparing the Procurement Plan

 List objects to be acquired under the Project or
Programme, categorizing procurement into:
Goods
(raw materials, products, equipment and objects in solid,
liquid or gaseous form, electricity & related services)

Works
(construction, reconstruction, site preparation,
demolition, repair, maintenance or renovation railways,
roads, highways or a building etc as well as physical
services)

Services
(goods related services, physical services, or intellectual &
professional services)

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Procurement Scheduling Process Session: M1-2
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 Consider time scale and determine target dates when

each object of plant, equipment vehicles, fertilizers,
books, works, services should be ready for use,
within the overall project implementation framework
 Identify interrelationships between the processing of
these procurement objects
 Decide on the content of individual Procurement
Packages

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Procurement Scheduling Process Session: M1-2
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 Determine the procurement lead times for each

package & schedule the target date for each event in
the procurement process (taking administrative,
manufacturing & construction delivery lag times into
consideration)
 Prepare Implementation Schedule - Table, Bar Chart
or List identifying key dates for each package (Gantt
Chart)
 Develop a Monitoring System to ensure timely
procurement decisions & implementation follow-up
actions

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Key Issues Session: M1-2
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Planning:

 Classified by category such as Goods, Works and

Services

 Separate for Development Project and Revenue Budget

 Total Procurement Plan for the entire project period in

the Formats prescribed by the Government from time
To time for DPP or TPP

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Other Key Issues
Session: M1-2
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Planning:

 PE updates the Procurement Plan for Development

Project at each beginning FY
 PE prepares annual Procurement Plan for Revenue
Budget at each beginning FY
 Updated annual Procurement Plan and Annual
Procurement Plan requires approval of HOPE or AO
 Formats prescribed in Part A, Part B, Part C, Part D, &
Part E as applicable of Schedule V

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Other Key Issues Session: M1-2
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Planning:
 PE arranges to publish the Procurement Plans on their
notice boards, and where applicable in their websites
& in the websites of the concerned Department or
Directorate or organisations, bulletins and reports.
 PE shall, for its own purposes, updates the Procurement
Plan on a quarterly basis to accommodate delays, re-
tendering & other unforeseen changes or constraints.
 PE keeps CPTU posted online or off-line, if online is not
possible, with the Procurement Plans, above the
threshold specified in Schedule II (G/W-10 M,S/Phy.S-
Tk.5 M), which shall be published on a regular basis in
CPTU’s website as well.

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Other Key Issues
Session: M1-2
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Planning:
 PE shall not generally split a Project components with the
intention of avoiding either method or the approval of a
higher authority
 PE shall not usually split a package into more than five
(5) lots for keeping cross - discounts application simple
 PE shall take into account the following aspects for
splitting single object of Procurement
 the capacity of the local & international
markets in submitting responsive Tenders
 the convenience of implementation with due
regard to geographical location of sites
for potential Works contracts

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Important Session: M1-2
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HOPE or AO shall approve splitting smaller packages &

lots on justifiable grounds

Single object or Procurement split into more than one

Package & Packages when split into more than one (1)
Lot—
Tenders for each of those packages or lots shall be
placed for approval before the authority competent to
approve the sum total of those packages or lots--
prior to the issuance of NOA for any one (1) of those
packages or lots

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Session: M1-2
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Appendix I
Formats
FOR FUTHER READING ONLY

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Total Procurement Plan for Session: M1-2

Development Project/Programme Slide N0.26/31

Schedule V – Part A in the Rules shows how to complete the

Total Procurement Plan, which identifies the packages for
Goods, Works & Services that are required under the
development project/programme. It identifies each
Procurement package, giving it a unique code & considers
the expected cost of the package (as per the DPP/TPP), as
well as the anticipated dates when the Procurement
package will be supplied.

A separate Schedule, completed as shown in the next slides,

should be provided for Goods, Works & Services.

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Total Procurement Plan for Session: M1-2

Development Project/Programme Slide N0.27/31

Schedule Format
Part A

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Total Procurement Plan for Session: M1-2
Development Project/Programme Slide N0.28/31

Schedule Format
Part B

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Total Procurement Plan for Session: M1-2

Development Project/Programme Slide N0.29/31

Similar for Goods

(Works) and Services

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Annual Procurement Plan for Session: M1-2

Development & Revenue Budgets Slide N0.30/31

Schedule V – Part B in the Rules shows how to complete the Annual Procurement
Plan, while Part C, Part D and Part E prescribe the formats for Goods, Works and
Services, respectively.

Time bound Procurement assists a Procuring Entity to effectively plan its Procurement
requirements and is an important and useful tool used to monitor the progress of
Procurement:
(a) to ensure that it does not go astray;
(a) to ensure that early problems with slippage can be dealt with promptly; and
(a) can form a useful Annual Plan for Procurement.
A separate Schedule, completed as follows, should be provided for Goods, Works
and Services. Also a separate schedule should be used for Development or Revenue
Budget.

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB
 Annual Procurement Plan for Session: M1-2

Development and Revenue Budgets

Slide N0.31/31

Similar for Goods

(Works) and Services

CPTU-IMED (PPRP II) Three-Week Training on Procurement of Goods, Works & Services Fineurop-ESCB