Procurement of Works and

Selection of Consultants

Frew Bekele
Procurement Policies and
guidelines

Frew Bekele
A. Procurement Definitions

The purchasing, hiring or obtaining by any other

contractual means of goods, works and services.
(Proc. No. 430/2005)

The acquisition of goods or services at the best

possible total cost of ownership, in the right quality,
at the right time, in the right place for the direct
benefit or use of government, corporation or
individuals generally via, but not limited to a
contract. (wikipedia.org/wiki/procurement)

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B. Public and commercial (private)
Procurement: Comparison

Differences
 Length and intimacy of relationships
 Transparency
 Policy objectives – public includes social and
political objectives
Similarities
 Economy
 Organisation
 Systematic approach to planning, selection and
follow-up

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C. Public procurement Organisation

Essential requirements:
Procurement Arm
 Respect for Regulations
 Record of Actions/Decisions
 Proper Accounts
Enforcement/Review Arm
 Prior Review
 Audit

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C. Public procurement Organisation
(cont.)

Monitoring Body
 control of major procurements
 draft/update regulations
 general guidance to contracting agencies
 staff development and training

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Fundamental Principles of Procurement
 Value for money
• Economy,
• Efficiency,
• Effectiveness
 Transparency
 Non discrimination (fairness)
 Accountability
 Preferential treatment of local companies
 Risk Management
D. Procurement Principles
1. Economy and Efficiency

 Purpose of procurement is to get value

for money whether measured in lowest
initial price or life-time cost
 Efficiency means procurement must
achieve prerequisites of right time, right
quality, right quantity, right source and
delivery to right destination.

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 D. Procurement Principles
(cont.)

2. Fairness
 Offering level playing ground for all bidders:
advertising, time for bid submission, cost of bid
security
 Letting bidders know upfront the evaluation criteria
 Accessibility
 Impartiality
 Non-discrimination (issue of different criteria for local and foreign)
 Consistency in application of procedures
 Reliability
 Formality

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 D. Procurement Principles
(cont.)

3. Transparency
 Establishment and maintenance of rules
and procedures that are accessible and
unambiguous e.g. public bid opening
 Elimination of arbitrariness
 Checks and balances on discretionary
powers
 No negotiation before award

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 D. Procurement Principles
(cont.)

4. Accountability and ethical standards

 Procurement staff are responsible for
enforcing and obeying the rules
 Make staff subject to challenge and
sanction for neglecting and bending rules
 Key bribe to individual and institutional
honesty
 A avoidance to collusion and corruption

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 D. Procurement Principles
(cont.)

5.0 Promotion of Domestic Industry and

Employment

 Preferences (domestic/regional/groups)
 Packaging/Choice of Technology
 Reserved Procurement
 Relaxed Criteria?

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 E. Essential Features of Public
procurement

Eligibility: All members

Advertising: Mandatory. Must be
effective and allow all eligible bidders
opportunity to bid.
Qualification criteria: Rational and non-
discriminatory
Technical specifications: Broad,
Performance-based, Not favour a specific
supplier
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 E. Essential Features of Public
procurement (Cont.)

Bidding
 Competitive
 Non-restrictive/discriminatory
 Clear and objective evaluation criteria in
the instructions to bid
 Transparent process
 Award to the LEB using stated criteria
and without prior negotiation

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 F. DIFFERENCES IN PROCUREMENTS

Goods and works Consulting Services

Product based Knowledge based
Open competition
Shortlist
Cost major factor
Specifications
Quality major factor
Single or two stage Terms of reference
procedures Two stage procedure

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 G. Procurement Documents
Legal Framework
Federal AA
Proclamation No. 649/2009 Proclamation No. 17/2009
Directive, June 2010 and የግዢ አፈፃፀም መመሪያ ቁጥር
amendments 3/2002 እና ማሻሻያ

Financiers Guideline

Standards prepared under the above Frameworks

Procurement Modernization manual

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 H. Procurement Methods

Open bidding
Restricted bidding

Request for quotations

Single source/ direct procurement

Request for proposal, and

Two stage bidding

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 H. Procurement Methods

 Open bidding
 competition will lead to an Employer getting value
for money
Advertised on widely circulated media

Enables any qualified suppliers to bid

Almost all government tenders are procured

through this method

 Disadvantage:
 It is time taking than the other methods
 may end up with less performing provider

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 H. Procurement Methods

 Restricted bidding
Shortlist of say, six bidders is invited to tender
may bring qualified supplier than open tendering

May scale-up quality of works

There is threshold as per PPA/AA based on the

procurement type

 Disadvantage:
 The selection process may not be transparent
 May brought collusion among bidders

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 H. Procurement Methods

 Single source/ direct procurement

Inviting a single bidder to submit its offer
may bring qualified supplier than open tendering

May scale-up quality of works

There is restriction as per PPA/AA directive for this

method

 Disadvantage:
 the selection process may not be transparent
 Open negotiation among the supplier and the Employer
including price

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 H. Procurement Methods

 Two stage bidding

 Applied when the employer is not clear on the detail of
its requirement
 to draw up detailed schedule of requirements based on
proposals from candidates
 the Public Body may also hold discussion with all, some
or one of the candidates as necessary
the second stage bidding shall as far as possible comply
with the procedure of competitive bidding
Invitation shall be sent to the candidates whose
proposals have been accepted in the first stage

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 H. Procurement Methods

 Request for proposal

 Through invitation for expression of interest
 The shortlisting should not be less than three
The bidding document shall be prepared in
conformity with the standard bidding document
 competitive bidding procedure shall apply
 submitted in two envelopes; technical and financial
Negotiation held with the selected on the content of
the consultancy work

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 H. Procurement Methods

 Request for quotations

 To procure goods, works or services the need of which can
not be foreseen, or
which can not be included in the Public Body’s bulk
purchase of needed items, or
 which are needed for immediate use and the estimated
value of which is within the threshold
not less than three candidates shall be selected
No negotiation shall be allowed
 it is not necessary for the Public Body and the supplier to
sign a contract

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 I. Procurement Types

 International Competitive Bidding (ICB)

For contracts above ETB 150 million (PPA or AA)
Foreign bidders shall quoted in a freely convertible currency
 The bid advertisement shall be published in a media
accessible to foreign bidders
local inputs shall be expressed in birr
 incorporate standard terms and conditions applicable in
international commercial
 National Competitive Bidding (NCB)
Almost similar procurement procedures like ICB
Only paid in local currency

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 J. Procurement Procedures
Works
- Pre-Qualification (Only
qualification)
- Post-Qualification (single
envelop)-one stage (open
tender) (Qualification and
bid in a single envelope)
- Modified Post-Qualification
(two separate envelop for
Qualification and Bid)-
- Direct Negotiation
- Force Account
Services
- Quality and Cost Based Selection
(QCBS);
- Quality Based Selection (QBS);
- Selection under a Fixed Budget
(SFB);
- Least Cost Selection (LCS);
- Selection Based on Consultant’s
Qualifications (SBCQ);
- Single Source Selection (SSS);
and
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 K. CONFLICT OF INTEREST

OBJECTIVES

 Protect client’s interest

 Ensure objectivity
 Fairness in competition

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K. CATEGORIES OF CONFLICT OF
INTEREST

Activities by consultants that are by nature

in conflict:
 Works implementation bidding for designs
prepared by its consultant.
 Downstream conflicting activities eg.
investment banker advising govt on
privatisation and then funding client.
 Design consultant doing EIA
 Working for conflicting clients

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 L. Procurement Ethics

 Ethics – Moral Principles and values which

govern our beliefs, actions and decisions
 Cleanliness of the procurement system

 Integrity of procurement process

 Need to respond societies trust in the

procurement system and its administration

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 L. Importance of Ethics in
Procurement

1. Procurement staff play front-line role in

dealings with contractors and suppliers
2. Contractor / supplier and buyer require a
strong on-going relationship founded on
goodwill and ethical conduct
3. Strong exposure to temptations requires
procurement staff to act ethically

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 L. Ethical Conduct requires the
following

Declaration of Interest
Any personal interest which might impinge or
might reasonably be deemed by others to
affect your impartiality should be declared
Confidentiality and accuracy of
information
Confidential information received in course of
duty should not be used for personal gain.
Give out fair and accurate information

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L. proposed way to enhance Ethics

Leader as role model

Ethical awareness
Compulsory for training
Standard code of ethics
Heavier penalties

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