Introduction To Procurement

SESSION 1: GENERAL INTRODUCTION TO PUBLIC PROCUREMENT
Topic 1. Glossary of Terms
• LAW N° 12/2007 OF 27/03/2007 ON PUBLIC PROCUREMENT

LAW N°05/2013 OF 13/02/2013 MODIFYING AND COMPLETING THE LAW
N°12/2007 OF 27/03/2007 ON PUBLIC PROCUREMENT
 LAW N°62/2018 of 25/08/2018 Law governing public procurement (NEW)
 Website: www.rppa.gov.rw
Public Procurement and Contract Management 1

TOPIC 2. PROCUREMENT: SCOPE AND MEANING
 DEFINITION:
Procurement refers to the function of purchasing goods, works

or services from an outside body or private company.
There are two categories of procurement that involve public

and private procurement.

Definition of Public Procurement System
• The Public Procurement System is a function of government

that involves using government resources (pubic funds) to
obtain goods, works and services to meet the needs of the
government as it carries out its responsibilities to the
citizens.

Fundamental Procurement Principles
• Why the Principles?
The public procurement system should be fair, open and

transparent . It should provide a means to obtain needed
goods, works and services in a timely, effective manner at
efficient prices/costs that are competitive.


Procurement Principles
 Efficiency
 Fairness
 Openness
 Competition
 Transparency
 Accountability
I. Efficiency and Effectiveness
 Obligation to spend public funds efficiently- value for

money. minimizing resources and time needed to
complete a process
efficiency is ("doing the thing right")
 Obligation to obtain goods, works and services needed
for the intended purpose:
effectiveness is ("doing the right thing").

 - effectiveness and quality considerations
Efficiency
The state or quality of being efficient, or able to accomplish
something with the least waste of time and effort; competency
in performance
Accomplishment of or ability to accomplish a job with a minimum
expenditure of time and effort:
Effectiveness
Adequate to accomplish a purpose; producing the intended or
expected result:

II. Fairness
System needs to operate in a manner that is perceived as offering

an opportunity for all participants to win contracts/procurement
opportunity in accordance with an agreed set of rules that are
not “prejudiced” against participants without a reasonable
explanation.
• Fairness is the quality of making judgments that are free from
discrimination. Judges, umpires, and teachers should all strive to
practice fairness.
• Impartial and just treatment or behaviour without favouritism or
discrimination
III. Openness
Relates to fairness, but is more specific as to ability of a wide
range of participants to participate in a competition
An example of lack of openness might be restricting participation

to small business only.
Openness is characterized by an emphasis on transparency and
free, unrestricted access to knowledge and information, as well
as collaborative or cooperative management and decision
making rather than a central authority.
Openness can be said to be the opposite of secrecy.

IV. Competition
 Having multiple demands for limited resources creates
competition.
 Having more than one participant trying to win creates the

potential for a competition.
Competition refers to a high number of private

companies/competitors which ensure a highest quality of goods,
works or services at the best price.

V. Transparency
The ability to understand and see through the process to
determine if the process has adhered to the principles
and achieved the objectives that the system is trying to
implement.
It refers to the ability of all interested participants to know and

understand the actual means and process by which contracts
are awarded and managed.
This implies strong rules and regulations to ensure equal

treatment/opportunities for all bidders.

VI. Accountability
• Assuming responsibility for actions taken and being held to
account for those actions.
Accountability in Public procurement

• Public institutions and their officers must be accountable for
their effectiveness, efficiency, legal and ethic manner in which
they conduct procurements.
• They can be asked and should be able to explain at all times

their way of operating/decisions which is not applied in private
sector (in normal circumstances)

VII. Economy
Economic criteria focus mainly on price but also include other
criteria which provide economic benefits to the contracting
authority, such as:
• - fitness for purpose (i.e. quality);

• delivery and availability;
• - life – cycle costs (e.g. maintenance and operating costs);
• - on-costs (e.g. transport and storage); and
• - the administrative cost of the procurement activity.

Economy (cont’d)
The most economic contract does not therefore always mean the
cheapest price. Best “value for money” (VFM) should be the
economic objective and can be summarized in the following
“Five Rights”:
To buy
1. the RIGHT quantity
2. of the RIGHT quality
3. at the RIGHT price
4. for the RIGHT place
5. at the RIGHT time.

Activity One:
• Work in groups and identify how Rwanda public procurement

law observes the above mentioned principles of public
procurement. Each group shall appoint a spokesperson to
present the findings.

Procurement planning

• Every Procuring Entity shall produce an Annual Procurement
Plan indicating the objectives to be achieved in accordance with
procurement regulations. It ensures budget allocation.
Respecting regulations governing budget execution also is a
must.

Any procurement begins with the planning decision to make the
purchase.
This involves in the first place, deciding whether there is a need for
the particular good, works or services (eg. Is a new computer
software needed?).
Procurement Planning Procurement process Execution/Delivery

• The second phase of the procurement is then to choose which
firm or private company is to be the supplier/contractor or
service provider of the goods, works or services required, and
to conclude a contract (procurement) with that party.
• This phase involves many things and has to respect the main
objective of the procurement management.

SESSION 2: CODE OF CONDUCT FOR
PROCUREMENT OFFICIALS

• Anti-corruption Measures
• An official or former employee of the procuring
entity or any other procurement authority cannot
– Solicit directly or indirectly or be offered
• A bribe in any form
• An offer of employment
• Other services or any valuable
• Any bidder’s offer will be rejected by the Tender

Committee where it is proven that a corruptor
fraudulent practice took place during the
procurement process
Conflict of Interests
• Members of Cabinet, Heads of procuring entities

and Civil Servants shall not participate in public
tenders
• It is prohibited for any member of tender
committee to participate in tender award process if
the following persons are involved:
– A relative up to the second degree
– A former employer
– A person committed in the same financial interest
– A bidder can become potential employer
Conflict of Interests – cont.
• Consultants involved in tender preparation shall not be involved in

provision of goods, works or consultancy services
• Any employee of the procuring entity, or member of Board of Directors
of the Tender Committee who has interest with respect to a
procurement shall:
– Not take part in the process
– Disclose his/her interest
– Not take part in any action during contract execution
• For breaches of the above provisions, sanctions may be imposed by the
procuring entity in addition to contract cancellation

Confidentiality
• During and after procurement proceedings

information shall be kept confidential
• Allowed disclosures
– to the Accounting Officer
– in respect of the Law
– in case of review or procurement audit
– pursuant to Court decision

Debarment of Bidders
• RPPA has the power to debar a bidder from participation in
public procurement
• Decision to debar can be taken on the following grounds:
– False information during tender submission or prequalification (2
years)
– Collusion between bidder and a public official (3 years)
– Fraudulent pricing (3 years)
– Breach of Laws (3 years)
– Poor or non-performance (1 year)
• Repeat occurrence leads to indefinite debarment

Procedures for Debarment
• Bidder notified in writing prior to RPPA decision

to debar
• Notification to include
– Under which ground the intention to debar is based
– Bidder’s right to a hearing
– Time and place for hearing
– Period of suspension for investigation (max. 6
months)
Procedures for Debarment – cont.
• Procedures to apply:
– Bidder has the right to a hearing and to defence and may be
represented by a Lawyer
– Hearing to be recorded and records retained
– Witnesses to take oath
• Suspension takes effect upon written decision to debar
and within 30 days of bidder hearing/defence Suspended
bidders are ineligible to participate in public tenders
• A list of debarred bidders and their debarment period to
be kept updated by RPPA and published in newspapers

Fostering Accountability
• Conduct of Public Officials

A central theme of any procurement reform is the commitment to
high standards for professional conduct of the public officers
involved in procurement.
Such ethical standards are usually set out in an Employee Code of

Conduct, which is especially applicable to officials involved in
public procurement.
The effective dissemination of standards of conduct to participants

and stakeholders is also an aspect of transparency.
2. Conduct of Suppliers and Contractors
• Procurement integrity depends upon good conduct by the

community of suppliers and contractors as well as public
officials.
• For this reason a modern procurement law should clearly
proscribe certain conduct, most especially corrupt or fraudulent
conduct.
• The law should also address the offering or giving of improper
inducements intended to influence a procurement process or
the execution of a contract.

2. Conduct of Suppliers and Contractors(Con’t)
• Additionally, collusion between bidders should also be
forbidden.
• Bidders should be restricted from participating in a
procurement action where the bidder was previously
responsible for preparing the specifications or bidding
documents.

Code of Ethics and Anti‐corruption Measures
• The legal context related to anti-corruption and code of ethics in
public procurement in Rwanda is regulated by
• the “Law on Public Procurement” N. 12/2007 of 29703/2007

(Art. 15-19 & Art. 176-178) and by the Ministerial Instruction N.
001/11/10/TC of 24/01/2011 (Rwanda Ministry of Planning and
Economic Planning) which establishes the “Professional Code of
Ethics Governing Public Agents involved in Public Procurement”.
• The aim of such documents is to promote ethical behavior that
ensures impartiality, accountability and transparency in public
procurement in Rwanda.

Reality of Fraud and Corruption
Identification of fraud and corruption
Fraud and corruption are clearly defined in the Ministerial Instruction N.
001/11/10/TC of 24/01/2011 under Article 2 “Definitions”:
•Bribe: money or something of value pursuant to or promised in order to

influence the decision or conduct of staff in the procurement process or
contract execution
•Coercion: the practice of compelling a person or manipulating them to
behave in an involuntary way (whether through action or inaction) by use
of threats, intimidation or other form or pressure or force in order to
influence their participation in the procurement process, or affect the
execution of a contract
•Collusion: an agreement, usually secretive, which occurs between two or
more persons to deceive, mislead, or defraud others of their legal rights, or
to obtain an objective forbidden by law, typically involving fraud or
gaining an unfair advantage or to establish prices at artificial,
noncompetitive levels,Public Procurement and Contract Management 31
•Conflict of Interest: a real or potential situation in which a public agent is in a
position to exploit a professional or official capacity in some way for his or her
personal benefit and compromise his or her independence and impartiality necessary
for the assumption of a public agent duties, it also refers to the occasion whereby a
public agent is involved in multiple interests one of which could possibly corrupt the
motivation for an act in the other during the procurement process.
•Corruption: the offering, giving, receiving or soliciting, directly or indirectly, of
anything of value to influence the action of a public official in the procurement
process or in contract execution
•Fraud: the intentional, false representation or concealment of a material fact for the
purpose of inducing or influencing another to act up on it to his/her detriment
•Gift: anything that has monetary value, received without the need for compensation
•Laundering: the fact of facilitating by whatever means, the justification of the
source of property and revenue as well as profit obtained by the author of an offence
provided for by laws.

According to these definitions procurement corruption and fraud
may appear in several ways
For example in the form of:

• Purchasers - service or agent – ordering items or services for
their own use from suppliers, and either not paying for them or
paying for them at their government’s expense;
• Purchasers setting up their own companies, or companies in the

name of a friend or relative, to sell to the government;
• Suppliers delivering less than the ordered quantity, or

overcharging for the delivered quantity, with or without the
consent of the purchaser;
• Suppliers taking advantage of weak or inexperienced
procurement organizations or staff,
• Purchasers and suppliers short-circuiting the competitive

bidding process or giving preferential treatment to one supplier
to the detriment of others;
• Purchasers receiving gifts or payment in return for awarding

contracts or for extending existing contracts; or
• Purchasers threatening to remove suppliers from

prequalification or shopping lists or consultants from shortlists
unless favours are received.
Areas of risks and preventive measures in public
procurement
Fraud and corruption may unfortunately occur at every step of the

procurement process.
Therefore, at each stage measures should be taken to mitigate

these risks.
Typical fraud and corruption risks and corresponding preventative
measures can be summarized as follows:

Stage 1: Identification of requirements
Area of risks
• Requirements can be “invented” or falsified.
Fraud and corruption risks
• False reports suggesting that expenditures is justified or based on inflated
operational requirements;
• False requirements for capital expenditure;
• Malicious damage to equipment to justify a need to buy new equipment
or spares;
Preventative measures
• Requirements should not be established by the same people who are
responsible for the contracting and ordering activity or for paying the
invoice;

Stage 2: Preparation of specifications and terms of
reference
Area of risks
• Specifications and terms of reference can be written to favour a particular
supplier, contractor or consultant;

• Fraud and corruption risks
• Releasing advance information to a favoured supplier, contractor or
consultant;
• Setting false accounting standards to benefit a favoured supplier,
contractor or consultant;
• The technical specifications and terms of reference should be checked by
an independent person or body;

Bids and proposals evaluation criteria
Area of risks
• Evaluation criteria can be written or amended after receipt of bids or proposals to
favor a favoured supplier, contractor or consultant;

• Defining or revising evaluation criteria after bids or proposals have been received;
• Evaluation criteria must be established during the preparation of bidding
documents and request for proposals, and no change permitted;

Pre/post‐qualification and short list
Area of risks
• This process can be used to limit the field of competition, in some
instances to single source action, to give a favoured supplier, contractor or
consultant an advantage;

• Giving favoured suppliers, contractors and consultants advance
information;
• Insisting that the favoured supplier, contractor or consultant is the only
one who can meet the requirements;
• Maintenance of good performance records of suppliers, contractors and
consultants,
Invitation of bids and request for proposals
Area of risks
• The process can be used to give the illusion of competition
where it does not really exist;
• Not sending out invitations to bid or to quote and requests for
proposals to all companies or to the wrong addresses, making
it appear that suppliers, contractors and consultants declined
to bid;
• - Use of standard procedures which are subject to audit;

Evaluation of bids and proposals
Area of risks
• Fraud at this stage occurs mainly when objective and clearly defined
evaluation criteria have not been agreed in advance. It can also occur
where technical staff and evaluators are able to use their specialist
knowledge to mislead other members of the evaluation team;

• Acceptance of an unrealistically low bid or proposal from the favoured
supplier, contractor or consultant on the secret understanding that
specification or requirement changes will allow a price increase;
• Objective and clearly defined evaluation criteria must be agreed before
the issue of invitations to bid or requests for proposals and must be made
known to bidders and consultants at the time of inviting bids or proposals,
and not changed after the submission of bids or proposals;

Contract negotiations
Area of risks
• Favoured suppliers, contractors or consultants can be assisted or given
useful information during negotiations

• Agreeing with the favoured supplier, contractor or consultant that it will
reduce the price to get the order, but be able to increase it during contract
negotiations;
• Strict control and audit of negotiations;
• Never allow one individual to negotiate on his or her own;

Contract award
Area of risks
• Opportunities for fraud by the supplier, contractor or consultant either
through deliberately fraudulent acts because of the incompetence of the
purchaser, the owner or the client;

• Losing the contract documentation or supporting correspondence, making
any subsequent claims impossible to sustain;
•
• Preventative measures
• The use of standard terms and conditions of contracts;
• Suppliers, contractors and consultants submitting their terms and
conditions should be formally asked to withdraw such conditions;

Post award changes to specifications or
requirements
Area of risks
• Allows supplier, contractor or consultant to increase profits, particularly
when the contract was
• awarded on an attractively low bid or proposal price,

• Inventing problems that mean that specifications or terms of reference are
changed;
• Requests for post award changes should always be challenged and written
justification provided;

Goods receipt, works and services acceptance
Area of risks
• Fraud in this area almost always requires the compliance of procurement
staff:
• Allowing deficiencies or default in delivery or acceptance, or non-
compliance to specifications or requirements;
• Drafting false delivery or acceptance certificates;
• Proper procedures for receipt of goods and acceptance of works or
services;
•

Invoice certification and payments
Area of risks
• Collusion by procurement employees is again required to allow the many
possibilities for fraud available in this area;

• Deliberate overcharging;
• Over billing of time, materials and other inputs,
• Backdating order to allow the favoured supplier, contractor or consultant
to benefit from price changes;
• Matching of invoices to orders and goods receipt or works or services
acceptance certificates;

CHAPTER 3: LEGAL AND INSTITUTIONAL
FRAMEWORK OF PUBLIC PROCUREMENT

• This section will focus on the theoretical and
practical knowledge required for the
procurement law and guidelines to enable the
procuring entities while dealing with the
procurement of goods, works and services.

The module will include
• Rwanda public procurement law, rules and regulations on
procurement of goods, works and services,
• East African procurement law, rules and regulations,
• COMESA Directives, guidelines of multilateral development
banks regulating the procurement practices on their funded
projects,
• GATT and WTO in international trade,
• UNCITRAL as the model for each individual country’s
procurement law and ;
• Government Procurement Agreement (GPA).
Government Procurement Agreement (GPA)
• Intended to facilitate access to each other’s public

procurement markets.
• In 1994, an improved and extended Agreement on

Government Procurement was signed, coming into effect on
January 1st, 1996 under the active leadership of the new
World Trade Organization (WTO)

United Nations Commission on International Trade
Law(UNCITRAL)

• The United Nations Commission on
International Trade Law (UNCITRAL) began work
in 1986 on the development of a model law on
public procurement which would ensure the
application of the agreed principles of public
procurement through the legal framework in
participating countries

World Bank Role in Procurement
• Procurement practices developed in the context

of international financing institutions have
played an important role in shaping generally
accepted principles for public procurement.

• An organization such as the World Bank seeks to

promote good procurement practices for a
variety of reasons including:
• Fiduciary responsibilities of the institutions;
• Principles of fair and open trade and equal
opportunity for the private sector companies;
• As well as the growing interest in increasing the
development contribution of an efficient and
effective procurement system.
Public Procurement and Contract
53
Management
• In this context, the Bank has formulated and expressed in its

Guidelines, Procurement under IBRD Loans and IDA Credits
and
• Selection and Employment of Consultants by World Bank
Borrowers, a set of rules for international competitive bidding
which have gained recognition in all areas of the world.

The African Development Bank Group
• The African Development Bank adopted procurement guidelines modeled

on those of the World Bank and contributed to the reform of national
procurement regimes in their respective regions of operation along the lines
of internationally recognized public procurement norms.
• On 7 May 2008, the Bank adopted the new Rules for the Procurement of
Goods, Works and Consultancy Services.
• The adoption of these Rules was the culmination of a long revision process
which started in 2005 within the framework of harmonization with other
Multilateral Development Institutions and the recommendations and
concerns of the Regional Member Countries. The new Rules entered into
force on 1 November 2008
The African Development Bank Group
• One of the major changes is the requirement to prepare and submit to the
Bank for approval, prior to the start of loan or grant agreement negotiations,
a Procurement Plan preferably covering the project implementation period.
• In order to improve and simplify the procurement process the new Bidding
Documents (BD) and a detailed handbook on the Rules have being prepared.
•
• As the premier African development finance institution, the AfDB has been
mandated to play the leading role in promoting and supporting the
development of more effective public procurement systems in the member
state countries.

COMESA (Common Market on Eastern and
Southern Africa)
• The COMESA Council at its Twenty-Sixth Meeting held from 2 to 4 June 2009
issued Legal Notice No. 3 of 2009 on “COMESA Public Procurement Regulations”,
which filled an important gap in its regional integration process and is a legally
binding instrument.
The objectives of these Regulations include:

• To foster competition and openness in public procurement procedures;
• To foster fair management systems in procurement;
• To promote accountability, transparency, and value for money in public
procurement process for national development; and
• Promote harmonization of public procurement laws and practices for the
enhancement of intra COMESA Trade.

Legal Framework of Public
Procurement in Rwanda
• Law No. 12/2007 of 27/3/2007 on Public
Procurement and Law N°05/2013 of 13/02/2013
Law modifying and completing the Law n°12/2007
of 27/03/2007 and Law N° 62/2018 of 25/08/2018
governing public procurement in Rwanda
• Law establishing the association of procurement
professionals
• Ministerial order establishing the professional code
ethics governing public agents involved in public
procurement 58
Legal Framework of Public Procurement in
Rwanda (Cont…)
• Ministerial order n°001/08/10/min of
16/01/2008 establishing regulations on public
procurement and standard bidding documents
for goods, small works, large works and
consulting services.
• Ministerial order regulating Made in Rwanda
• Ministerial order regulating assets disposals
• Circulars.
PSCM2131: Introduction to Procurement
59
and Supply Chain Management
• Class activity:
• This session will require participants to review the current
public procurement law and regulations and thereby identify
the role and responsibilities of Rwanda Public Procurement
law in Rwanda in influencing the performance of public
procurement proceedings.

SESSION FOUR. Procurement Methods
The Choice of Procurement Method.
The choice of procurement method is critical to the
success of the procurement action.
 The differences between the methods are significant

in terms of formality, level of competition, duration,
and complexity for bidders and the procuring entity.
 The choice should be made with a view to

maximizing competition to the greatest extent
possible
Procurement Methods (Cont’d)
The following are recommended methods BY
DEFAULT:
1. Open Competitive Bidding (OCB) for Goods and

Works:
1.1 National Competitive Bidding (NCB)
1.2 International Competitive Bidding (ICB)

Other Methods for the acquisition of Goods and
Works :
1. Prequalification
2. Restricted Tendering (RT):
2.1 National Restricted Tendering (NRT)
2.2 International Restricted Tendering (IRT)
3. Request for Quotations (RFQ)

4. Two stage tendering
5. Single-source (SS)
6. Force Account (FA)

7. Simplified Methods (SM)
8. Community Participation
1. Open Competitive Bidding-OCB
 Open Competitive Bidding (OCB) is the recommended method for procuring
Goods, Works and Services.
 Except where it is absolutely impractical the procuring entity

shall apply open competitive bidding to supplies, works, and
other services.
 Bidders from different foreign countries shall be allowed to participate in the
Open Competitive bidding if they are willing to do so.
NB: Any other methods can be applied based on particular conditions or
justifications.
Open Competitive Bidding (Cont’d)
1.2 International Competitive Bidding (ICB)

 Tenders shall be made international tenders if they
are for works and their estimated value exceeds one
billion two hundred million Rwandan francs (RWF
1,200,000000),
 For goods and other services ICB is used when the

estimated value exceeds six hundred million
Rwandan francs (RWF 600,000,000);
Open Competitive Bidding (Cont’d)
1.2 International Competitive Bidding (ICB)-Cont’d
and for consultant services the estimated value should

exceed one hundred million Rwandan francs (RWF
100,000,000).
Note: Depending on its nature, any tender may be made an

international tender regardless of its size
International Competitive Bidding-ICB (Cont’d)
Conditions for the use of ICB
Two conditions are mandatory:
1. Bid size and;
2. Technical capacity and expertise that may not
be available in the country.
When conducting procurement process under ICB or IRT, the following shall
apply:
 Availability of a Tender Notice (TN) and Bidding Document (BD) in both
languages English and French;
 Advertisement in international newspaper with widespread circulation and

on website like digital market, etc…
 Publication period: Between 45 and 90 days from the day of newspaper

publication.
International Competitive Bidding-ICB (Cont’d)
 Standards:
International standards widely used in
international trade shall be observed;
 General and Specific Conditions (IncoTerms)

Any general or special condition to which the BD or Contract is
subject shall be of a kind generally used in international trade.
2. Restricted Tendering (RT)
A Procuring Entity may use restricted tendering for a

procurement if:
 the goods or construction are of highly complex or

specialized nature, or
 are available only from a limited number of

suppliers or contractors
Restricted Tendering (Cont’d)
How to use a Restricted Tendering Method
This involves basically 3 steps:
Step 1. Identifying potential suppliers through
The PE asks bidders to express their Interest by issuing
Prequalification document with information for application
and criteria based on:
 Qualification of bidder’s staff

 Qualification of bidder’s equipment
 Qualification of bidder’s financial capacity
 Similar previous experience
How to use a Restricted Tendering Method (Cont’d)
Step 2. Conducting Supplier Appraisal
Step 3. Prequalify suppliers
Note: Following the outcome of the evaluation, only

prequalified bidders shall be provided with the tender
document inviting them to submit their bids on a specified
date and time and when the business is available.
Restriction of tender enables an entity to receive

manageable tenders.
The Restricted Tendering Method is applied for tenders

within the range of :
RWF 2,000,000-RWF 5,000,000;
The Duration of publication should be at least 14 days

3. Request for Quotation (RFQ)
Used mainly for low value procurement i.e. RWF300,000-
RWF2,000,000
 Number of bidders to invite should not be below three and the

time required to submit an offer/proposal should not be below 3
days.
 Depended on the item being well defined and thus suppliers
meet the specifications such that competition is on price (lowest
price) i.e the Contract is awarded to lowest priced quotation
meeting the required quality standards and delivery period of a
PE
Request for Quotation (Cont’d)
Conditions for Using Request for Quotations
1. For readily available goods or services;
2. For works with standard specifications and with a low

cost;
3. Thresholds specified in the regulations.
Note: Tenders shall not be split in order to meet the

above conditions
Single-Source Procurement/Direct Contracting
The PE may procure the goods, works and services by soliciting a
price quotation from a single qualified bidder when the following
conditions are fulfilled:
Conditions for use of single-source method:

1. Goods, works or services are available only to one supplier, or if a
particular supplier has exclusive rights in respect of the needed
item(s) and no reasonable alternative or substitute exists.
2. The total cost of the required need does not exceed Rwf 300,000
Single-source Procurement Method(Cont’d)
Conditions for use of single-source method (Cont’d)
3. There is an urgent/Emergency situation that needs

the goods, and engaging in tendering proceedings or
any other method of procurement would be
impractical, provided the urgency was not foreseen
by PE or it was caused by its carelessness.
4. owing to a disaster, force majeure, there is an urgent

need for the goods, works or services, making it
impractical to use other methods of procurement
because of the time required in using those methods;
When to use Single-source Method
5. there are additional activities that cannot be technically

separated from initial tender. The value of such additional
activities shall not exceed twenty per cent (20%) of the initial
tender and shall be subject to an amendment to the contract;
6. The PE seeks to enter into a contract with the

service
provider that is working or teaching in a higher
learning institutions or research institutions in
the country for the purpose of research,
experiment or study.
Single-source Procurement Method (Cont’d)
Note:
Single source procurement shall not be justified
on the grounds that only one bidder has the
capacity or the exclusive right to manufacture
or deliver goods, works or services if
functionally equivalent goods, works or
services from other bidders would satisfy the
needs of the PE.
Force-Account/Departmental Execution
Construction with recourse(choice) to civil servants

and the use of public equipment.
• However, Force-Account may be determined to

be the only option when:
1. repeated bidding and other methods fail to identify a suitable
contractor, or where urgency is a consideration;
2. Emergencies;
3. Works to be completed in any case following contractor’s non‐
performance
Simplified Method (Rwanda procurement law)
A simplified method is a method of public

procurement used between the threshold for
the RFQ and NCB thresholds, as stated by
procurement regulations, it may be national
open or restricted tendering, in which the
preparation of bids is easy and the technical
specifications are not complex.
How to use a Simplified Method
1. When used, a shorter bidding document or request
for proposals shall be used.
2. The bidding period may be reduced to not less than
eight (8) working days for national open tendering or
five (5) working days for national restricted
tendering.
The coming Public Procurement Regulations shall

determine thresholds for use of simplified methods
for works, goods and other services and for consultant
services (Art.2 bis of the Revised Law)
Community Participation
1. The beneficiary community may participate in the
delivery of services if it is established that it will
contribute to the economy, create employment and
enhance their involvement in the activities of which
they are beneficiaries.
2. The procuring entity and a beneficiary community

shall sign a contract specifying the obligations of
each party.
3. A procurement contract may be awarded to the
beneficiary community if its value does not exceed
twenty million Rwanda francs (RWF20,000,000).
Summary: Methods of Procurement
Method When used (eg. RPP system) Essential features
IOCB >600m Rwf Goods and other - Min. time to bid: 45days.
(International) services;
-Advertise in media that has
>1,200m Rwf for Works sufficient circulation at
international level.
>100m for Consultant services
-SBDs should be in both English
or French
OCB (National) Under international threshold, if -Min. time to bid: 30days

adequate national bidders are
available. -Advertise in at least 1
newspaper of wide circulation &
website.
Eg. If >10m Rwf
-SBD
Restricted Few suppliers available - Min. time for bid: 21days for
tendering international ad 14 days for
(national & Complex/special projects National
international)
84
Methods of Procurement (Cont’d)
Simplified Methods Goods , works and services >2 Min. time for bid is :
million RWF < 10Mo RWF 8 days for international
and 5 days for national
Request for Quotation Standard of the shelf items of -Min. time for bid: 3 days;
small value -Min. 3 quotations;
-Not to be repeated
Goods and works less than 2 m within 3 months for same
RWF item(s).
85
Method When used (eg. RPP system) Essential
features
< 300,000 RWF;
-Additional works (of max. 20%) that cannot Negotiation is

be technically separated from allowed to
Single Source/Direct initial tender. ensure Value
contracting for Money
-Force Majeure/Emergency
(unforeseeable)
-Items available only from a monopolist.
-Consultancy Services
86
Force account -Work unidentified in advance;
-Emergencies
-Procuring entity to complete works

delayed by the contractor.
Community Participation contribute to the May be > 20m Rwf if for

Participation economy, create employment and making terraces, anti
enhance their involvement in activities erosion trenches or
of which they are beneficiaries. planting trees. In this
case, the procuring
Normally < 20m Rwf entity shall hire an
expert, to support the
community in the
particular activity.
87
SESSION 5: THE PROCUREMENT CYCLE

THE PROCUREMENT CYCLE(con’t)
1. Recognition of need;
2. Availability of budget;
3. Identification of detailed requirements;
4. Development of specifications;
5. Preparation of requisitions;
6. Approval of requisitions;
7. Selection of procurement method;
8. Preparation of bidding documents;
9. Pre-qualification of bidders;
10.Invitation of bids;
THE PROCUREMENT CYCLE(con’t)
1. Receipt and opening of bids;
2. Evaluation by Technical Evaluation Committee;
3. Consideration/ approval of evaluation by Tender Committee;
4. Award of Tender by a Tender Committee;
5. Negotiation of Tender;
6. Signing of Contract;
7. Receiving and inspection of goods;
8. Certification of supplier invoices;
9. Monitoring and reporting;
10.Closing of procurement file; and
11.Review and evaluation.
Procurement
Planning
91
Procurement Planning
Definition Of Project Scope And Completion Time
Identify Required Civil Works,

Goods And Services
Determine Implementation
Sequence And Schedule (Technical)
Select Equipment Packages
Choose Method of Procurement
Procedure as per Rwanda PP Law 92

Procurement Planning – cont.
 Procurement plan linked to project

implementation schedule:
 Consulting services
 Goods and/or works
 Major contracts
 Phasing of contracts
 Critical path
93
Procurement Planning – cont.
Separate
 Consulting services
 Works
 Goods
94
Procurement Planning: Packaging
Decide contract packages

 What
(like items, large, small,
values slice and packages)
 How
(Procurement methods)
 When
(each step, each package)
 Who
(to do, to review) 95
Procurement Planning: Timing
 Timing
(Preparation, approvals, delays)
 Constraints
(technical, Procuring Entity’s staffing,
legal, training, other)
96
Procurement Planning: Timing -
cont.
Determine Lead Time
 Administrative
 Manufacturing
 Delivery
 Construction Period
97
98
Procurement Planning: Timing – cont.
LEAD TIME
ADM. TIME DELIVERY TIME INSTALLATION
* Advertise * Receive L/C * Unload Ship

* Prep. Bid Docs * Package * Clear Customs
* Approvals * Arrange * Load Truck
* Issue Bid Docs Shipping * Deliver Site
* Evaluate Bids Insurance * Unload &
* Approvals * Deliver to STORE (Protect)
* Sign Contract Port * Install
* Receive Perf. * Arrive at Port * Test
Security * Acceptance
Warranty period (12 - 18 months)
99
Procurement Planning: Timing

cont.
4w 3w 2w 6w 8w 3w 2w 1w 3w
1 2 3 4 6 7 8 9 11 12
5 10
tot. 32 weeks
Legenda:
1. Advertise prequal 5. Pre-bid conf. 9. Letter of acceptance
2. Prequal. Exercise 6. Bid Opening/Evaluation 10. Discuss. with LEB pre cont. award
3. Approval 7. Approval 11. Contract signed
4. Issue Bid docs 8. Approval 12. Contract effectiveness
Procurement Planning: Schedule
 Critical dates for each package

 Tabulate / prepare Bar Chart
 Periodically update
 Use of monitoring system
100
101
Planning: Sample Plan for Airport Construction

Contracts :
1. Runways OCB construction
2. Terminal OCB construction
3. Radar and telecom manufacturing

Equipment OCB & installation
4. Support equipment delivery &

OCB installation
5. Access roads parking lot

OCB construction
Planning: Sample Plan for Power Station – S&I
DAM
ACCESS ROAD CW NCB
DIVERSION TUNNEL CW NCB
DAM CONS. CW OCB
POWERHOUSE CW
TURBINES S&I OCB
GENERATORS S&I OCB
TRANSFORMERS S&I OCB
CRANES S&I OCB
POW. HSE. CONS. CW OCB
TRANSMISSION SYSTEM
TOWERS S OCB
CABLES S OCB
INSULATORS S OCB
SUBSTATIONS TRANSF. S OCB
SWITCHGEAR S OCB
INSTALLATION/ERECTION S OCB
IMPLEMENTATION (YEARS) 1 2 3 4 5 6
102
CLASS WORK
Preparation of a Purchasing/procurement plan
Tender: Acquisition of 100 computers

Unit price: Rwf 250,000
Advert: 01/12/2014
Source of funds: Government
Question:
1. what could the method of procurement?
2. Prepare a procurement plan using the template provided
103
SESSION 6: PUBLIC PRIVATE PARTNERSHIPS (PPPs)

PPP
• PPPs is one of the ways for financing capital projects and develop
public infrastructure
• PPP is a major new user of project financing techniques that cover

infrastructure traditionally financed and managed by governments.
• Demand for infrastructure has been growing faster than
government funding available, particularly in emerging economies.
• Recent trend has been to involve the private sector in the supply
and provision of these services for example: Roads, Bridges and
Tunnels, Light Rail Networks, Airports and Airport control Systems,
Water and Sanitation, Electricity Generation, Hospitals, Schools,
Prisons
• For a PPP to be successful there has to be a clear benefit for
both the public and the private partners.
• In the spectrum of public sector verses private sector service

delivery, PPPs lie somewhere between simply the government
contracting –out of a set of service delivery to the private
sector and
• a complete private market to plan, design, build and operate a
facility that provides the service
•
Basic conditions for PPPs
Private sector involvement requires commercial rates of return
Projects have to lend themselves to generating these returns.
The public partner typically gains in the sense that a desired project is
implemented without any financial strain on the budget
In many instances, the governments receive tax payments from the
project, and in certain cases, a share of the profits.
The structure of the partnership can vary along a spectrum from a

leading private sector role to a marginal one. 107
Public-Private Partnership Models
Design-Build (DB): Under this model, the government contracts with a private partner to
design and build a facility in accordance with the requirements set by the government.
After completing the facility, the government assumes responsibility for operating and
maintaining the facility. This method of procurement is also referred to as Build-Transfer (BT).
Design-Build-Maintain (DBM): This model is similar to Design-Build except that the private
sector also maintains the facility. The public sector retains responsibility for operations.

108
Public-Private Partnership Models
Design-Build-Operate (DBO): Under this model, the private sector
designs and builds a facility.
Once the facility is completed, the title for the new facility is transferred to
the public sector, while the private sector operates the facility for a
specified period.
This procurement model is also referred to as Build-Transfer-Operate (BTO).
Design-Build-Operate-Maintain (DBOM): This model combines
the responsibilities of design-build procurements with the operations and
maintenance of a facility for a specified period by a private sector partner.
At the end of that period, the operation of the facility is transferred back to
the public sector. This method of procurement is also referred to as Build-
Operate-Transfer (BOT).
109
Build-Own-Operate-Transfer (BOOT): The government
grants a franchise to a private partner to finance, design, build and
operate a facility for a specific period of time.
Ownership of the facility is transferred back to the public sector at the

end of that period.
Build-Own-Operate (BOO): The government grants the right to

finance, design, build, operate and maintain a project to a private
entity, which retains ownership of the project.
The private entity is not required to transfer the facility back to the
government.
110
Why PPPs have become an alternative to
traditional methods for the provision of public
services?
Competition (Private sector firms compete to do project)
Scarce Skills: Private sector has skills not available in the

public sector. Allocate certain tasks to a private partner who
has the skills.
Poor Labor Relations: Private sector through the forces of

competition may offer a skilled, efficient and flexible labor
force.
Innovation: Some parts of the project may need new 111

Risk: Major risk can be managed better by private sector (example:
construction-delay risk, being contractor and operator give incentive to
minimize such risk).
Economies of scale: Private sector is taking advantage of economies of

scale from the operation of similar project in other jurisdictions, the PPP
option becomes more attractive
Observability and measurability of quality. Concerns about the

quality of services. The partnership agreement should specify the required
quality, provide the measurement of verification of quality and provide for
enforcement of the contracts’ requirement.
Constrains on public sector borrowing. Being in depth and

further borrowing risk on deteriorating of government, credit rating cost of
borrowing increases.
112
PPPs involve a range of risks:
 Construction risks: relate to design problems, building cost overrun and

project delays
 Financial risks: variability in interest rates, exchange rate and other factors
affecting financing costs
 Availability risks: relate to continuity and quality of service provided and in turn
depend on “availability” of an asset
 Demand risks: relate to ongoing need for the service
 Residual value risk: relate to future market price of assets
113
•Risk Transfer and Financing Costs
• Various sources of financing will determine how this risk will be allocated
• Governments transfer it to taxpayers in general
•Pricing of Risk
• To use PPPs, government must compare cost of public investment
and provision of service with using PPPs to provide the service
• PPPs sometimes are an efficient way for government to relieve its

risks
• Government has to pay for the risks that it transfers to the private
sector
114
SESSION 7: GREEN PUBLIC PROCUREMENT(GPP)
Public Procurement and Contract Management

GREEN PUBLIC PROCUREMENT
Green Public Procurement (GPP) is defined as Public
procurement for a better environment.
Procurement for a better environment is “a process whereby

public authorities seek to procure goods, services and works
with a reduced environmental impact caused by public sector
consumption and how to use GPP to stimulate innovation in
environmental technologies, products and services.
GPP is widely recognized internationally as an effective means

for public administrations to manage the balance between
cost effectiveness and sustainable development.
What is Environment?
The environment is our surroundings. This includes living and

non-living things around us.
The non-living components of environment are land, water

and air; The living components are, plants, animals and
people;
The components are interacting and dependents to each

other.
Better environment
We need to protect our environment to live happily and

safely.
For a better environment, we need to take good care of our

land, water resources, forests, atmosphere and protect
them from pollution and destruction.
Green Products & Services ?
Environmentally preferable (green) products and services are

products with reduced negative effects on human health and
the environment when compared to other products and services
that serve the same purpose.
These products are:
 Are recyclable or Contain recyclable content
 Are less toxic
 Do not create hazardous waste
 Are biodegradable
 Contain less packaging
 Use less energy or natural resources over their useful lives
Green Procurement?
Green procurement is an approach to procurement in which

environmental impacts play an important role in procurement
decisions, using procurement procedure which are designed
to benefit the environment
→Purchasing decisions are based on the environmental
impacts that occur throughout the product’s entire life cycle.
→It is also known as “affirmative procurement” or “green
purchasing”
GP inclusion by example
Energy
• Purchased Electrical equipments should meet energy saving standards
• Copiers and printers purchased shall be compatible with the use of
recycled content and remanufactured products.
• Remanufactured toner cartridges should be used in all copiers and
printers whenever feasible.
Toxins and Pollutions

• Cleaning solvents and detergents should be biodegradable, phosphate
free, meet green seal certification standards and their use will not
compromise quality of service and cleaning products
Bio-Based Products
• Bio-based plastic products that are biodegradable and compostable,
paper products and construction products made from non-wood, are to
be encouraged.
Biodegradable: capable of being decomposed by bacteria or other living
organisms and thereby avoiding pollution.
GP inclusion by example(Cont’)
Recycling
• All recyclable materials are to be recycled , this includes, but
is not limited to: paper, newspaper, cardboard, plastic bottles
and steel.
• When specifying material for construction projects, recycled,
reusable shall be used whenever possible and
• Products that are durable, long lasting, reusable are preferred

whenever feasible.
GP inclusion by example(cont’)
Packaging
• Packaging that is reusable, recyclable or compostable is most preferred.
Green Building and construction

• Green construction concepts shall be integrated into architectural
designs.
• Bio-based products to be considered in service and
construction contracts
• Environmental Impact Assessment required for all projects
Electronic Procurement
• Use of E-Procurement wherever possible, this electronic methods
reduce the waste of paper and energy usage (printing, transport).
Citizens need to be sure that what is purchased on their behalf has
minimal harmful effects on the environment and society.
At the same time, these goods, services and works must represent
both short-term and long-term value for money.
This provides public sector with significant influence

to stimulate the provision of more resource-
efficient, less polluting goods, services and works
within the marketplace
Green Procurement Guidance for the public sector
Setting priorities and targets for GPP
Introducing GPP into procurement practices will typically require a step-by-
step approach. One approach is to select a small range of product and
service groups to focus on initially.
Guidance on green procurement is a document designed to assist

procurers to build green criteria into public tenders. It covers eight sectors:
Road transport vehicles and services
Energy
Construction
Food and Catering services
Cleaning products and Services
Textiles and Uniforms
Office IT Equipment
Paper
125
Availability of criteria
For many product and service groups, green purchasing
criteria have been developed which can be inserted directly
into your tender.
The EU GPP criteria cover 18 product and service groups and

are available in both core and comprehensive versions.
In many EU countries national or regional criteria are also

available.
126
Sources of GPP criteria(cont’)
The term “GPP criteria” includes not only selection and award
criteria, but also specifications and contract performance
clauses which can help green your contract.
Identifying sources of GPP criteria is an important step in GPP

implementation.
The EU has developed GPP criteria for a number of product

and service groups, which are regularly reviewed and
updated.
127
Sources of GPP criteria(cont’)
The core criteria are those suitable for use by any contracting authority across
the Member States and address the key environmental impacts. They are
designed to be used with minimum additional verification effort or cost
increases.

The comprehensive criteria are for those who wish to purchase the best
environmental products available on the market. These may require additional
verification effort or a slight increase in cost compared to other products with
the same functionality.

Eco-labels
Eco-labels set out the environmental requirements which must be met by
products or services in order to carry the label.
128
Eco-labels
"Ecolabelling" is a voluntary method of environmental

performance certification and labelling that is practised
around the world.
An ecolabel identifies products or services proven
environmentally preferable overall, within a specific
product or service category.
Eco-labels set out the environmental requirements which
must be met by products or services in order to carry the
label.
129
Using eco-labels and GPP criteria

Eco-labels can be used in two different ways in the context of
technical specifications:
 To help you draw up your technical specifications in order

to define the characteristics of the goods or services you are
purchasing.
 To check compliance with these requirements, by

accepting the label as one means of proof of compliance with
the technical specifications

130
SELECTING SUPPLIERS AND SERVICE PROVIDERS
Selection criteria

1. Environmental technical capacity
Environmental technical competence could include technical

competence in minimizing waste creation, avoiding
spillage/leakage of pollutants, reducing fuel consumption or
minimizing disruption of natural habitats.
131
Environmental technical capacity(cont’)
It concerns questions such as those listed below.
• Does the company have previous experience with executing

environmental contracts?
• Does the company employ or have access to personnel with the

required educational and professional qualifications and experience to
deal with the environmental elements of the contract?
• Does the company own or have access to the necessary technical

equipment for environmental protection?
• Does the company have the means to ensure the quality of the
environmental aspects of the contract (e.g. access to relevant technical
bodies and measures)? 132
Selection criteria

2. Environmental management systems
Environmental management systems are organization-related

tools, aimed at improving overall environmental performance
of the committing organization.
133

EVALUATING TENDERS
General rules for awarding a contract
134
Award criteria
Applying environmental award criteria
Weighting approaches: The weighting given to each award criterion

determines the influence it has in the final evaluation
Using eco-labels: One approach is to use certain eco-label criteria as

minimum requirements in the specifications
Using environmental management systems: In some cases an

environmental management system may also serve as evidence when
assessing award criteria
Life-cycle costing (LCC): It means considering all the costs that will be
incurred during the lifetime of the product, work or service:
Purchase price and all associated costs (delivery, installation,
commissioning, etc.) 135

Class work
1. What types of green procurement policies are contemplated or
being implemented in Rwanda?

2. Are there legislative or regulatory provisions dealing with green
procurement issues?

3. To what extent has the legislative and regulatory framework in
Your country focused on green issues? Give some examples of
developments.

4. What are the most significant obstacles to planning and
implementing green procurement initiatives?

5. To what extent are people with technical expertise relevant to
green procurement active on those types of issues in Rwanda? 136

SESSION 8: METHODOLOGY FOR ASSESSING
PROCUREMENT SYSTEMS
Public Procurement and Contract Management

METHODOLOGY FOR ASSESSING PROCUREMENT
SYSTEMS
• Under the auspices of the joint World Bank and OECD Development
Assistance Committee (DAC) Procurement Round Table initiative,
developing countries and bilateral and multilateral donors worked
together to develop a set of tools and standards that provide guidance for
improvements in procurement systems and the results they produce.
• The Methodology for Assessing Procurement Systems provides a common

tool which developing countries and donors can use to assess the quality
and effectiveness of procurement systems
BASELINE INDICATORS

PILLAR I – LEGISLATIVE AND REGULATORY FRAMEWORK
INDICATOR 1
Public procurement legislative and regulatory framework

achieves the agreed standards and complies with applicable
obligations.
INDICATOR 1
a) Sub-indicator 1(a) – Scope of application and coverage of the
legislative and regulatory framework
b) Sub-indicator 1(b) – Procurement Methods.
c) Sub-indicator 1(c) – Advertising rules and time limits
d) Sub-indicator 1(d) – Rules on participation
e) Sub-indicator 1(e) – Tender documentation and technical
specifications
f) Sub-indicator 1(f) – Tender evaluation and award criteria
g) Sub-indicator 1(g) – Submission, receipt and opening of tenders
h) Sub-indicator 1(h) – Complaints
INDICATOR 2
Existence of Implementing Regulations and Documentation.

• This indicator verifies the existence, availability and quality of
implementing regulations, operational procedures, handbooks, model
tender documentation, and standard conditions of contract.
• Ideally the higher level legislation provides the framework of principles

and policies that govern public procurement. This indicator consists of six
sub-indicators (a-f).
•
INDICATOR 2
a) Sub-indicator 2(a) – Implementing regulation that provide defined

processes and procedures not included in higher-level legislation
b) Sub-indicator 2(b) – Model tender documents for goods, works, and
services
c) Sub-indicator 2(c) – Procedures for pre-qualification
d) Sub-indicator 2(d) – Procedures suitable for contracting for services or
other requirements in which technical capacity is a key criterion.
e) Sub-indicator 2(e) – User’s guide or manual for contracting entities
f) Sub-indicator 2(f) – General Conditions of Contracts (GCC) for public
sector contracts covering goods, works and services consistent with
national requirements and, when applicable, international requirements
PILLAR II. INSTITUTIONAL FRAMEWORK AND MANAGEMENT
CAPACITY
INDICATOR 3. THE PUBLIC PROCUREMENT SYSTEM IS MAINSTREAMED
AND WELL INTEGRATED INTO THE PUBLIC SECTOR GOVERNANCE
SYSTEM.

This indicator looks at the procurement system to:
a) determine its suitability to discharge the obligations prescribed in the
law without gaps or overlaps;
b) whether the necessary links with other sectors of government
affecting procurement exist;
c) whether procurement operations are constrained by other external
institutional factors; and
d) whether the managerial and technical capacity of the system are
adequate to do procurement without unnecessary cost or delay.
INDICATOR 3
a) Sub-indicator 3(a) – Procurement planning and associated expenditures are
part of the budget formulation process and contribute to multiyear planning.
b) Sub-indicator 3(b) – Budget law and financial procedures support timely

procurement, contract execution, and payment.
c) Sub-indicator 3(c) – No initiation of procurement actions without existing

budget appropriations.
d) Sub-indicator 3(d) – Systematic completion reports are prepared for

certification of budget execution and for reconciliation of delivery with
budget programming.
INDICATOR 4. THE COUNTRY HAS A FUNCTIONAL
NORMATIVE/REGULATORY BODY.
• One agency may be responsible for policy while another can be doing the
staff training and another might be taking care of the statistics. There are
four sub-indicators (a-d) to be scored.
INDICATOR 4
a) Sub-indicator 4 (a) – The status and basis for the normative/regulatory
body is covered in the legislative and regulatory framework.
b) Sub-indicator 4(b) – The body has a defined set of responsibilities that

include but are not limited to the following.
c) Sub-indicator 4(c) – The body’s organization, funding, staffing, and level

of independence and authority (formal power) to exercise its duties
should be sufficient and consistent with the responsibilities.
d) Sub-indicator 4(d) – The responsibilities should also provide for

separation and clarity so as to avoid conflict of interest and direct
involvement in the execution of procurement transactions.
146
INDICATOR 5. EXISTENCE OF INSTITUTIONAL
DEVELOPMENT CAPACITY.
The objective of this indicator is to assess the extent to which the country
or agency has systems to support and monitor the performance of the
entire system, and to formulate and implement improvement plans.
This requires among other things the availability of information systems, a

capacity for analysis, feedback mechanisms and planning capacity for
implementation of improvements.
It is very important that responsibilities are clearly assigned and are being
performed. This indicator has four sub-indicators (a-d) to be scored.
147
INDICATOR 5
a) Sub indicator 5(a) – The country procurement information, including
contract award information.
b) Sub-indicator 5(b) – The country has systems and procedures for

collecting and monitoring national procurement statistics.
c) Sub-indicator 5(c) – A sustainable strategy and training capacity exists to

provide training, advice and assistance to develop the capacity of
government and private sector participants to understand the rules and
regulations and how they should be implemented.
d) Sub-indicator 5(d) – Quality control standards are disseminated and used

to evaluate staff performance and address capacity development issues.
148
PILLAR III. PROCUREMENT OPERATIONS
AND MARKET PRACTICES
This Pillar looks at the operational effectiveness and efficiency of the
procurement system at the level of the implementing entity responsible
for issuing individual procurement actions.
It looks at the market as one means of judging the quality and

effectiveness of the system when putting procurement procedures into
practice.
149
INDICATOR 6. THE COUNTRY’S PROCUREMENT OPERATIONS
AND PRACTICES ARE EFFICIENT.

This indicator looks at the efficiency of the operations and operational

practices as implemented by the procuring agencies.
Efficiency is considered to mean that the operational practices result in

timely award of contracts at competitive market prices as determined by
effective and fair implementation of procurement procedures.
There are four sub-indicators (a-d) to be rated under this indicator.
150
INDICATOR 6
a) Sub-indicator 6(a) – The level of procurement competence among
government officials within the entity is consistent with their
procurement responsibilities.
b) Sub-indicator 6(b) – The procurement training and information programs

for government officials and for private sector participants are consistent
with demand.
c) Sub-indicator 6(c) – There are established norms for the safekeeping of

records and documents related to transactions and contract
management.
d) Sub-indicator 6(d) – There are provisions for delegating authority to

others who have the capacity to exercise responsibilities.
151
INDICATOR 7. FUNCTIONALITY OF THE PUBLIC
PROCUREMENT MARKET.

The objective of this indicator is primarily to assess the market response
to public procurement solicitations.
This response may be influenced by many factors such as the general

economic climate, the private sector development environment and
policies, the existence of strong financial institutions, the attractiveness of
the public system as a good reliable client, the kind of goods or services
being demanded, etc.
There are three sub indicators (a-c) to be scored.
152
INDICATOR 7
a) Sub-indicator 7(a) – There are effective mechanisms for partnerships
between the public and private sector.
b) Sub-indicator 7(b) – Private sector institutions are well organized and

able to facilitate access to the market.
c) Sub-indicator 7(c) – There are no major systemic constraints (e.g.

inadequate access to credit, contracting practices, etc.) inhibiting the
private sector’s capacity to access the procurement market.
153
INDICATOR 8. EXISTENCE OF CONTRACT ADMINISTRATION
AND DISPUTE RESOLUTION PROVISIONS.

This indicator’s objective is to assess the quality of contract administration
practices which begin after contract award and continue to acceptance
and final payments.
This is an area that many procurement systems fail to consider. It is also a

period where many issues arise that can affect the performance of the
contract and impact on service delivery.
This indicator covers three sub-indicators (a-c) to be scored.
154
INDICATOR 8
a) Sub-indicator 8(a) – Procedures are clearly defined for undertaking
contract administration responsibilities that include inspection and
acceptance procedures, quality control procedures, and methods to
review and issue contract amendments in a timely manner.
b) Sub-indicator 8(b) – Contracts include dispute resolution procedures that

provide for an efficient and fair process to resolve disputes arising during
the performance of the contract.
c) Sub-indicator 8(c) – Procedures exist to enforce the outcome of the

dispute resolution process.

155
PILLAR IV. INTEGRITY AND TRANSPARENCY OF THE PUBLIC
PROCUREMENT SYSTEM.
Pillar IV covers four indicators that are considered necessary to provide for
a system that operates with integrity, has appropriate controls that support
the implementation of the system in accordance with the legal and
regulatory framework and has appropriate measures in place to address
the potential for corruption in the system.
This Pillar takes aspects of the procurement system and governance

environment and seeks to ensure that they are defined and structured to
contribute to integrity and transparency.
156
INDICATOR 9.THE COUNTRY HAS EFFECTIVE
CONTROL AND AUDIT SYSTEMS
The objective of this indicator is to determine the quality,

reliability and timeliness of the internal and external controls
preferably based on risk assessment and mitigation.
a) Sub-indicator 9(a) – A legal framework, organization,
policy, and procedures for internal and external control
and audit of public procurement operations are in place
to provide a functioning control framework.
b) Sub-indicator 9(b) – Enforcement and follow-up on
findings and recommendations of the control framework
provide an environment that fosters compliance. 157
INDICATOR 9.THE COUNTRY HAS EFFECTIVE
CONTROL AND AUDIT SYSTEMS (Cont…)
c) Sub-indicator 9(c) – The internal control system provides

timely information on compliance to enable management
action.
d) Sub-indicator 9(d) – The internal control systems are
sufficiently defined to allow performance audits to be
conducted.
e) Sub-indicator 9(e) – Auditors are sufficiently informed about
procurement requirements and control systems to conduct
quality audits that contribute to compliance.
158
INDICATOR 10. EFFICIENCY OF APPEALS MECHANISM.
The appeals mechanism was covered under Pillar I with

regard to its creation and coverage by the legal regulatory
framework. There are five sub indicators (a-e) to be scored.
a) Sub-indicator 10(a) – Decisions are deliberated on the

basis of available information, and the final decision can
be reviewed and ruled upon by a body (or authority) with
enforcement capacity under the law.
b) Sub-indicator 10(b) – The complaint review system has the
capacity to handle complaints efficiently and a means to
enforce the remedy imposed. 159
INDICATOR 10. EFFICIENCY OF APPEALS
MECHANISM. (Cont…)
c) Sub-indicator 10(c) – The system operates in a fair
manner, with outcomes of decisions balanced and
justified on the basis of available information.
d) Sub-indicator 10(d) – Decisions are published and made
available to all interested parties and to the public.
e) Sub-indicator 10(e) – The system ensures that the
complaint review body has full authority and
independence for resolution of complaints.
160
INDICATOR 11. DEGREE OF ACCESS TO INFORMATION.
This indicator deals with the quality, relevance, ease of access and
comprehensiveness of information on the public procurement system.
Sub-indicator 11(a) – Information is published and distributed through

available media with support from information technology when feasible.
161
INDICATOR 12. THE COUNTRY HAS ETHICS AND
ANTICORRUPTION MEASURES IN PLACE.
a) Sub-indicator 12(a) – The legal and regulatory framework for procurement,
including tender and contract documents, includes provisions addressing
corruption, fraud, conflict of interest, and unethical behaviour and sets out (either
directly or by reference to other laws) the actions that can be taken with regard to
such behavior.
b) Sub-indicator 12(b) – The legal system defines responsibilities, accountabilities,
and penalties for individuals and firms found to have engaged in fraudulent or
corrupt practices.
c) Sub-indicator 12 (c) – Evidence of enforcement of rulings and penalties exists.
d) Sub-indicator 12 (d) – Special measures exist to prevent and detect fraud and
corruption in public procurement.
e) Sub-indicator 12(e) – Stakeholders (private sector, civil society, and ultimate
beneficiaries of procurement/end-users) support the creation of a procurement
market known for its integrity and ethical behaviors.
f) Sub-criteria 12(f) – The country should have in place a secure mechanism for
reporting fraudulent, corrupt, or unethical behavior.
g) Sub-criteria 12(g) – Existence of Codes of Conduct/Codes of Ethics for participants
that are involved in aspects of the public financial management systems that also
162
provide for disclosure for those in decision making positions.
SESSION 9: PROCUREMENT AUDIT
164
Procurement Audit
•Internal or External verification of compliance with

established laws, rules and regulations governing the
execution of the procurement process as well as
achievement of VFM (Value for Money)
•Needs to follow the Audit Manual prepared by the
RPPA
165
Procurement Audit – cont’

 Procurement Audit is a major cornerstone in the overall
assessment of the Government’s/Organization’s
performance since it includes examining:
 The adoption of a competent management system
 The effectiveness of and compliance with established
procurement laws and regulations Procurement laws
are in harmony with the overall financial regulations
 The achievement of the best VFM in the procurement
of Goods, Works, and Services
166
Types of Procurement Audit

 Procurement Audit could be external (by independent
specialist procurement auditor or by the office of the
Auditor General) or
 internal (Internal Audit Department) and it is divided into
two types according to the objective:
 Auditing compliance with the laws and regulations
 Auditing the overall performance (procurement

proceedings and results are line with the general
objectives while obtaining the right quality at the right
time within the best competitive price)
Audit Planning
in Public Procurement
168
Audit Planning
In each audit, the first step should be the
development of Audit Plan.
169
Audit Planning
The Importance of the Audit Plan :
 Development of the plan is the vehicle for reconciling

the work to be done with the resources available for
accomplishing it
 It is a vital phase in the audit process. Auditing

involves the collection and analysis of facts and data
sufficient to reach reliable and valid conclusions
about the subject of the audit.
 The overall objective of Audit Planning is to ensure a

highly effective and economical Audit with high
competence and efficiency and at the right time
170
Audit Planning
The plan should be developed with careful regard to :
1 2 3
The number and The time and The risks that
skills of the financial may be
staff available and other encountered in
for the audit; resources the audit
171
Audit Planning
Risk of Not Planning :
Overlooking important audit

considerations.
Time wasted on trivial aspects .
Misuse of resources .
Substandard work .
172
Assessment of Internal Control System in Public

Procurement
Main Components of Internal Control

System
An effective organizational structure
Compliance with rules and
appropriate procedures
Qualified human resources
Performance monitoring/quality
control
173
Assessment of Internal Control System in Public Procurement :
Assessment of the internal control systems during the Procurement

Process:
 Procurement needs analysis.
 Procurement planning .
 Selection of procurement method and Tendering Phase.
 Evaluation of bids.
 Execution of procurement – contract management
(Segregation of duties within the procurement department)
174
Objectives
To review procurement, contracting and implementation

processes for a selected sample of contracts and check if the
procuring entity complied with the law and regulations.
The sample percentage can apply across the nature of

contracts i.e. goods, works, services contracts and consultant
services, complexity of contracts, value (low medium and
high) and methods of procurement
Audit Execution: Sample Selection of
Different Types of Procurement Contracts
Sample
“Sample” is a part or proportion of the

whole representing the whole.
Examining a sample allows the
identification of the whole and its
characteristics and to extrapolate
conclusions about the whole without
examining it entirely.
Note. Selecting Audit Samples as per the
RPPA Manual
Sample selection
Choosing a sample of the Contracts under investigation:
 Contracts above certain threshold
 Contracts of special procurement
 Contracts of relative importance
 Contracts awarded with a specific Bidder/Consultant
 Contracts prepared by a specific Officer
 Contracts with complaints
 Contracts of an implementation cost exceeding the allocated
budget
 Contracts awarded for specific timeframe
 Contracts of an implementation time exceeding original
 Contracts of substantial modifications arising upon
implementation
 Contracts with Change Orders
Selecting Audit Samples as per the RPPA Manual
In addition, the following tenders will be included in the sample:
• All tenders that RPPA receives complaint from bidders about its
awarding decision and which the appeal against this decision was
not lodged before independent review panel
• All tenders for which appeal was introduced to the Independent

review panel and the letter reject the appeal due to appeal
procedures irregularity
• All tenders awarded during the last months of the fiscal year
preceding the audit for the sampled procuring entities plus all
tenders awarded during the last months of the current fiscal year
in which the audit takes place but not exceeding 6 months.
179
Audit Execution
• Before starting the audit, the principal auditor should

ensure that:
– Those involved in the audit understand the plan as a

whole and the tasks assigned to each person;
– Each person involved in the audit has the skills needed
to carry out the assigned tasks; and
– There are no conflicts of interest or other factors that
would impede any person involved in the audit from
carrying out the assigned tasks in a competent and
objective manner.
180
Audit Execution
•Audit documentation is being properly

kept ;
•Audit evidence is sufficient, relevant and

appropriate;
•Audit evidence procedures are properly

The principal auditor followed;
should ensure
that appropriate •The planned audit approach remains
measures are appropriate in the light of information
taken in the gathered in the audit.
following areas:
•Internal control systems of the auditee
are properly documented, evaluated and
tested
181
Executing the Audit as per the RPPA Manual
Procedures of Audit Tests :
1. Survey of employees
2. Inspection of documents and reports.
3. Monitoring the implementation of the
procedures.
4. Inspection of Assets.
182
Collection and Analysis of Evidence
Source of Evidence:
The Organisation under Audit
Auditor
External
Parties
183
Obtain Evidence
Documents verification in the Procurement File confirming the
sound implementation of the process (time frames, approvals)
with focus on:
 Procurement Plans and Monitoring;
 Advertising;
 Pre/Post Qualification;
 Bid Opening;
 Bidding Documents;
 Evaluation and Awards;
 Bid Validity Extensions;
184
Obtain Evidence-cont.
Documents verification – cont.:
 Protests from Bidders/Contractors;

 Signed Contracts;
 Contract Amendments and Change/Variation Orders;
 delays in payments; actual contract payments vs. contract award
amount;
 Securities (for Bid, Performance, Advances, Insurance, Liability,
etc.);
185
Obtain Evidence-cont.
Documents verification – cont.:

 Contractors’ Claims/ Contractual Disputes and their Resolution;
 Damages and Penalties for Delays, non-compliance with Functional
Guarantees, etc.;
 Reasons for Slow Progress of Completion;
 Imports, Customs, etc. if any;
 List of deliverables and completion (date, description, quantity,
location of goods or works): certificates of acceptance/completion,
defects list, tests;
 Physical inspection
Audit Findings &Recommendations
Effective supervision is achieved by:

Involvement into the work processes .
Solving problems
Motivation and assistance.
Follow up.
Creating good work environment.
Comparison between the plan and the achievement
Coordination between the administration and the
staff
187
Writing/Discussing
Observations & Conclusions
Observations Must Be……

Constructive
Based on relevant data
Convincing
Clear & Comprehensible
Focused
188
Report Writing
Report Design In Compliance with

INTOSAI Standards
The International Organisation of Supreme Audit Institutions (INTOSAI) operates
as an umbrella organisation for the external government audit community.
www.intosai.org
• Title.
• Subject Identification.
• Period covered by the procurement audit.
• The entity the report is addressed to
• Signatures.
189
Report Writing
Content of Reports in Compliance with INTOSAI
Standards:
Objectives and Scope of Audit
– Completeness of Information.
– Legal basis.
– Compliance with Standards.
189
1
9
0
Audit Reporting
Highlights :
• Audit reports should be clear,
timely, concise and objective .
• They should provide a fair

summary of all the relevant facts
• All findings and conclusions must

be supported by adequate,
reliable and fair audit evidence in
the audit working papers
• Reported audit issues need to be

properly analyzed and concluded
191
SESSION 9:PROCUREMENT MANAGEMENT

FOR GOODS
PART 1: Preparation of Schedule of

Requirements and Technical Specifications
192
Schedule of requirements
 Item identification
 Goods and associated services
 Item, lot, package, component
 Description: brief and reference to technical
specifications
 Quantity & physical unit
 Place or port of destination (INCOTERMS)
 Delivery schedule (goods)
 Initial date
 Due period for shipment
 Partial shipment
193
Purpose of technical specifications

 Define requirements
 Foster competition among eligible qualified bidders :

 Group together lots which are technically similar and
can be offered by the same bidders
 Allow bidders to offer one or more lots to attract
bidders who cannot offer for all lots
194
Purpose of technical specifications – cont.
Factors ensuring satisfactory execution of the contract

 Technical Specifications
 Clear
 Comprehensive
 Project staff, end users and / or consultants
must have knowledge and
experience to prepare TS
195
Purpose of technical specifications – cont.
 Capability and resources of supplier checked

 By post-qualification of lowest evaluated bidder
 For complex equipment and installation pre-
qualification of bidders also
Successful bidder to provide performance security
196
General principles: clarity and consistency
 State clearly and comprehensively

 Performance requirements
 Design requirements
 Standards
 Environmental constraints
 Tests and methods used to assess
conformity
 Technical factors to be used for evaluation
197
General principles: clarity and consistency – cont.
 Ensure consistency
between different sections
 Avoid redundant information
 Ensure specification is clearly understood by
bidder
WHAT IS SPECIFICATION ?
• Specification is a statement of a set of requirements to be

satisfied by a product, material or process, indicating,
whenever appropriate, the procedures by means of which it
may be determined whether the requirements given are
satisfied.
• In other words, specification describes the requirements for a

particular product, material or process and how can we tell if
these requirements have been met?
WHY CLEAR SPECIFICATION IS REQUIRED
KEY PRINCIPLES OF PREPARING SPECIFICATIONS
• The objective of a specification is to promote competition for a

requirement. The specification must not therefore favour one bidder; it
must allow as many bidders as possible to bid/tender.
• Specifying is an upstream procurement process. Invest time in getting the

specification right in relation to your requirement. The investment will pay
dividends during the delivery of the requirement downstream.
• Contract management is less problematic if the specification meets the

needs.
• DO NOT ALLOW BIDDERS to help you develop specification. It is an

UNETHICAL BEHAVIOR.
KEY PRINCIPLES OF PREPARING SPECIFICATIONS
• Use simple language; Avoid words or phrases that are not specific or that may
lead to ambiguity, e.g.: Should , High , Maybe , Normal ,Reasonable ,
Approximately , Could ,Possible , Not likely to etc.
• DO NOT USE TECHNICAL JARGON (slang) or else you will have to explain or
define it in the specification.
• Define terms, symbols and acronyms (DDP = Delivery Duty Paid, INCOTERMS
2010);
• Write in simple terms. Do not expect the specification to be read only by

experts;
• Use an attractive format. This will reflect your professionalism and
encourage potential bidders to read the specification;
• Use a logical structure;
• Be as concise(brief) as possible without reducing understanding;

• Aim to define each aspect of the requirement in one or two paragraphs;
202
Types of specifications
 Design
 Functional
 Performance
1. DESIGN SPECIFICATION
• Define in detail the materials to be used and the manner in

which the work is to be performed.
• These specifications may provide drawings, measurements,

tolerances, testing procedures and other specific details.
• Design specifications are used when the procuring entity

wants to ensure the quality and performance of a required
item or needs standardization of products.
• Using a design specification, the procuring entity will get the

goods exactly as it requests, but also bears the risk of any
problems or defects in the design.
2. PERFORMANCE SPECIFICATION
• Normally less defined than design specifications.
• Describe the performance desired from what the procuring entity

is buying without specifically directing how the contractor should
design or make the item.
• These specify measurable capabilities the end product must

achieve in terms of operational characteristics. The risk of
performance is on the contractor.
• For instance, the performance specification might state that the

procuring entity desires a device that can produce 60 copies per
minute.
• The supplier is then asked to find the best solution to achieve this
result.
3. FUNCTIONAL SPECIFICATION
• Are similar to performance specifications in that they place
responsibility for the design on the supplier.
• But, rather than stating the needs in terms of performance

standards, focus on the purpose or use of the object.
• For example, the supplier is asked to provide a car that can carry 20
people safely across dirt roads in both sunny and rainy conditions.
• Generally, performance and functional specifications are preferred

because the risk of performance is shifted to the supplier.
• If the supplier chooses a method of performance that does not

produce the desired results, it must then try another method until
the supplier accomplishes the contract requirements.
PRINCIPLES OF PERFORMANCE-BASED SPECIFICATION
• Performance based specifications focus on outcomes or results

rather than process, and the required goods and services rather
than how the goods and services are produced.
• Design specifications outline exactly how the contractor must

perform the service or how the product is made.
• Performance based specifications allow respondents to bring their

own expertise, creativity and resources to the bid process without
restricting them to predetermined methods or detailed processes.
• This allows the respondents to provide the product or service at

less cost and shifts some of the risk to the contractors.
Examples
• Performance Based Specification: Contractor shall provide media services
for Rwanda Tourism which shall increase the tourist dollars by a minimum
of three percent(3%) in the next fiscal year.
• Visits by out of state tourists shall increase a minimum of ten

percent(10%). These figures will be measured as reported by the Rwanda
Chamber of Commerce.
• Design Specifications: Contractor shall conduct at least seven (7) media

campaigns for Rwanda Tourism during the fiscal year. Three (3) of these
campaigns must be directed to out of state tourists.
• Mixed Specifications: Contractor shall provide media services for Rwanda

Tourism which shall include a minimum of seven (7) media campaigns
during the fiscal year.
• Media services shall provide for a minimum increase of three (3) percent
in the next fiscal year as measured and reported by the Rwanda Chamber
of Commerce.
Functional vs Performance Specifications:
• Functional and Performance specifications are at times

used interchangeably but there is some difference.
• Whereas functional specifications refer to what the

product is to be used for, i.e. what it is supposed to do or
achieve,
• a performance specification goes further to mention
“how well” the function is to be achieved.
Class activity –specification i
The university staff restaurant must provide appropriate hot meals from
12:00hrs to 19:30hrs each day and there must be three choices of main meal,
including one healthy meal. Additionally, there must be a vegetarian option.
A range of hot and cold drinks, made freshly, must be available from 07:30 to
17:30 each day and fruit, snacks and confectionery must be available to
employees for the same duration.”
Questions
• What type of specification is provided above?
• Can you propose any additional points?
• What is the advantages and disadvantages of using the above specification?
• If you were the potential bidder about to tender for the services specified
above, what questions would you ask the procuring entity? Are there any
areas of concern in the words used? Are any words less than precise?
Class activity –specification ii
You are a procurement officer, and you have asked the head of ICT in your
organization to provide specifications of his/her needs so that you prepare
the bidding documents and call for bids.
This requirement for procuring networking equipment is on the

procurement plan. The head of ICT has specified the wires category as 6E
(which is a generic specification of the latest generation of wires) but adds
that the wires and related accessories must be Cisco certified.
Questions
• What type of specification is provided above?
• Can you propose any additional points?
• Identify the fault with this specification.
• What do you think are the ICT head’s concerns and how would you address
them?
Specification for services
• Use more of functional or performance specification. Services, like

goods, are required to satisfy specific needs, and specifications
should be written so that the output provided by the service is
measurable.
• However, a service has an intangible nature, which makes it more

difficult to specify and even more difficult to measure.
• Details of services to be provided;

• Time and point of service provision;
• Required response times;
• Required documentation;
• Supervision and sign-off acceptance.
Features of good specification
Good specification should:
1. state the requirement specification completely, clearly, concisely, logically and
unambiguously;
2. focus on outputs not how they are to be met;
3. contain enough information for potential suppliers to decide and cost the
goods
4. or services they will offer, or in the case of negotiated route arrive at realistic
budgetary costs;
5. permit offered goods or services to be evaluated against defined criteria by
6. examination, trial, test or documentation;
7. state the criteria for acceptance by examination, trial, test or documentation;
8. contain only the essential features or characteristics of the requirement;
9. provide equal opportunity for all potential suppliers to offer a product or
service
10. which satisfies the needs of the user and which may incorporate alternative
technical solutions;
213
Example of good specifications
Bicycle Technical Specifications
write
detailed
specifications
214
Bicycle specifications
 Frame : steel, aluminium

 Alloy construction : welded
 Type : racing, mountain or street
 Style : ladies’ or men’s
 Two wheel (spokes or disc)
 Brakes : front and rear
 Handle bars (type)
 Number of speeds
 Seat (type)
215
Bicycle specifications – cont.
 Fenders : both wheels

 Wheel / tyre size
 Lights : electric gen. or battery
 Carrier : front / rear
 Basket : front / rear
 Kick stand
 Reflectors
 Accessories
 Colour
216
Bicycle specifications – cont.

 Mirror
 Tail light / reflector
 Fender laps
 Pedal : removable, with straps,
surface
 Roller bearings
 Delivered:
 Knocked down
 Instructions to assemble
 Language
 Warranty
217
Tendering for Goods

Bid Evaluation and Contract Award
218
Bid Evaluation
 Objective
 Secure goods/services at most economical cost
 Price only one factor
 Other factors
 Time of delivery / completion
 Terms of payment
 Terms of guarantee
 Technical merits, capacity, productivity
 Operating cost
 Maintenance cost
 Efficiency
 Resale value
21
9
Evaluation Methodology Commercial Features
 Price
 Adjust basic price for features, options, etc.
to make bid prices comparable
 Price adjustment over contract period

 Ignore
 Delivery point
 Add local transportation
220
Evaluation Methodology Commercial Features –

cont.
 Time of delivery
 Evaluate loss or gain by late or early delivery
 Warranty
 Evaluate variation
 Payment terms
 Evaluate variations at specified interest/
discount rate
221
Evaluation Methodology
Technical Features
 Operating cost
 Fuel
 Training
 Maintenance cost
 Standardisation
 Resale value /depreciated cost
 Life cycle cost
 Ownership cost
 Capacity
 Productivity
222
Minimum Technical Specifications
PASS/FAIL CRITERIA
 Minimum requirement
 Below minimum: rejected
 No credit for better spec
 Responsive = LEB
 Maximum requirement
 Range parameters (max <>min)
223
Life Cycle Cost Methods
 Cost to own and operate item during its useful life

 Initial purchase price
 Adjusted for extras, delivery, variations in payment terms, etc.
 Value for adjustments added to bid price
 Operating cost during life of item
 Fuel, spare parts, maintenance (x years)
 Annual cost discounted to NPV
 Ownership cost during life of item
 Economical useful life (x years)
 Resale or scrap value discounted to NPV
224
Life Cycle Cost Methods – cont.
 Efficiency cost method

 Capitalise differences in efficiency in operation of
items i.e. boiler, turbine, transformer, etc. during
life
 Productivity cost method
 Determine life cycle cost per unit of output for
comparison purposes
 Life cycle cost of plant (x years)
NPV divided by total unit output of plant
225
Multiple Lots
 Lots include all items

 Incomplete lots
 > 10% rejected
 < 10% price to be adjusted
 Evaluation of each lot (1, 2, …) from each bidder (a,
b, c, …)
 Cost of all combinations of lots
 A(1) + b(2) + c(3)
 A(1+2) + b(3)
 A(1+2+3)
 Lowest evaluated cost combination
226
Post-qualification
 Only for selected bidder
 Criteria
 Capacity
 Technical capability
 Product reputation
 Financial resources
 Parts and services
 Past performance
 If there was pre-qualification, confirm that
bidder’s status is substantially same as at pre-
qualification
227
Bid Evaluation Report
 Content
 Summary
 Reason for rejecting each bid
 Received after bid opening
 Incomplete
 Non responsive
 Commercial responsiveness
 Delivery
 Completion date
 Payment terms
 Warranty
228
Bid Evaluation Form (cont’d)
 Qualifications/alternatives
 Errors (arithmetic)
 Currency conversion
 Include publication of official exchange rates
 Technical comparison
 Each criteria listed and compared
 Responsive bid comparison
 Selection of lowest evaluated bid
 Recommendation for contract award
229
Contract Award
 During bid validity period

 To qualified bidder with responsive lowest
evaluated bid
 No price negotiations but agreement on
acceptable deviations (e.g. payment terms,
adjudicators)
230
Rejection of All Bids
 When procurement proceedings have been overtaken

by events and are no longer required

 If prices offered are higher than the planned budget
 If it is established that there was fraud and lack of

fairness in tendering process
 If all bids are considered non responsive

231
Notification and Publication of Award
 Within bid validity, Procuring Entities will notify all

bidders of bid evaluation results
 Upon contract signature the final award will be
notified to unsuccessful bidders
 Procuring Entities will post / display evaluation
results on:
 Their websites
 RPPA website
 Their notice board
232
PART 2: Execution of the contract for

supplies
233
Delivery Period and Multiple Procurement

Contracts
• Delivery period is determined by the contract

• If SB (Successful Bidder) has previously been
awarded a similar tender (with expired delivery
terms), but supplies had not been yet delivered,
first assignment shall be given preference provided
delivery terms for second assignment remain
unchanged
234
Planning for the Execution

of the Contract
• In tenders for large supplies, bidding

document will define if SB is required to
present a plan for contract execution,
before starting
• Bidding documents will also define
deadlines for presentation of plans and
PE comments
235
Suspension of the Contract, its Duration and

Security of Supplies during Suspension Period
• PE may – at any time –give written instructions to SB to

suspend:
– Further manufacturing of supplies
– Delivery of supplies at the place of reception
• Reasons for above suspension must be explained to SB
• Suspension must not exceed 60 days
• If suspension exceeds 60 days and is not responsibility of SB,
SB has the right to request contract cancellation, indicating
all negative factors resulting from such suspension
• SB is responsible for security of supplies during suspension
period
236
Additional Costs Caused by the Suspension

of the Contract
• To be added to contract amount following
written request by SB
• Exceptions:
– Different provisions established in the contract
– Weather conditions caused the change in place
of destination
– SB failures
– Security of supplies
237
Preliminary Technical Acceptance
• Tender documents define whether technical

acceptance is needed and specify
methodology
• PE has right to require the replacement of
supplies (or their materials), if inspection
reveals mistakes or defects
238
Responsibility of the Successful Bidder
• Tender documents define where

and when inspection should take
place
• SB is responsible for the supplies
until acceptance report is signed by
PE
239
Place of Delivery
• Tender documents define delivery location
and requirements
• If it is not feasible to fit the supplies in the
indicated place of delivery, PE will notify SB of
another delivery location
• Transport and handling costs to be at PE’s
expense
240
Delivery Note
• To be prepared by SB on the day of delivery
• The note indicates:
– Supplies
– Quantities
– Type
– Number
– Weight
– Mode of transport
• Responsibility for loading, unloading and final
placement of supplies defined in tender documents
241
Acceptance of Supplies
• Defined in tender documents
• Partial acceptance:
– May be final or provisional
– Where final acceptance is not provided, supplies can
be used by PE after partial acceptance, which is
deemed as final acceptance and requires a final
acceptance report
– Where final acceptance is provided, SB will be
required to repair or replace damaged items for the
duration of the guarantee period
242
Acceptance of Supplies – cont.

• Provisional acceptance
– Whenever tender documents require a final acceptance
– Guarantee period starts from the day of provisional acceptance
• Final acceptance
– After provisional or partial acceptance
– After delivery and verification of goods compliant to requirements
– To take place 20 days prior to provisional acceptance guarantee
period deadline
– Report required showing how tender requirements were executed
243
Rejection of Delivered Supplies

• If inspection reveals that supplies do not conform to requirements,
PE:
– Rejects supplies
– Informs SB within 20 days
– Sets a deadline for SB to collect faulty supplies
• If SB fails to fulfil the requirements before above deadline, PE is
allowed to take all necessary measures including selling the supplies
by public auction
• Proceeds of the sale will be used to cover the costs related to the
public auction and any debt incurred by SB during tender execution
• PE will deposit positive balances in SB’s account
• SB will bear the difference in event of a negative balance
244
Slight Reduction of Price due to Change of

Quantity or Quality
• PE may accept supplies differing slightly from requirements in
return for a price reduction
• If delivered supplies are only partially in good condition, PE
will either:
– Reject all supplies
– Sort and accept the supplies in good condition and reject the rest (sort
costs at SB expense)
• If quantity of supplies is less then required, PE may:
– Reject all supplies
– Accept only the delivered quantity
245
After Sale Service and Final Statement

• Repair, maintenance or spare parts to be provided
in due time
• Within 30 days from final acceptance report
signature, SB shall submit to PE a proposal of final
statement of supply delivery approved by the
supervising official
24
6
SESSION 10: Procurement of

Consultant’s services
Articles 60-67
24
7
Scope of Applications and Exclusions
• The PP Law applies to all public

procurement of goods, works, consulting
services and other services
• Exclusions are made for procurement of

items meant for national defence and
security (Art. 3)
The Term “CONSULTANTS” includes:
 PRIVATE SECTOR
 individual
 partnership
 limited liability (corporation)
 joint venture
 PUBLIC SECTOR
 government owned
 government subsidized
TYPES OF CONSULTANTS (cont.)
 OTHER
 universities
 research institutes
 UN agencies
 non-government organizations
 divisions of manufacturers / contractors
Types of consulting services
Preparation Implementation Advisory services

(pre- services
investment)
services
Sector studies Bidding documents Policy and strategy
Master plans Procurement assistance Reorganization/privatization
Feasibility studies Construction Institution building

supervision
Design studies Project management Training/knowledge transfer
Quality management Management advice

Commissioning Technical/operating advice
ASSOCIATIONS BETWEEN CONSULTANTS
 consultants may associate with each other in the form of joint

venture or of a sub consulting agreement to complement areas
of expertise
 joint venture: jointly and severally liable
 contracting authority to approve associations (joint venture or

sub-consultancy) among short-listed firms
 contracting authority may encourage associations with national

firms (not mandatory)
 all joint venture members must sign the contract
 the association should be represented by an appointed firm

Article 63 of the PP Law:
Selection Method and Criteria
The procuring entity shall, in order to select successful
proposal, use one of the following procedures which must have
been notified to bidders in a request for proposals, by doing the
following:
1. Quality and cost-based selection (QCBS) shall be the

method of default;
2. Quality based selection (QBS); applicable where quality is

the paramount factor;
3. Selection under a fixed budget may be applied when the

assignment is simple and can be precisely defined and when
the budget is fixed;
Article 63 of the PP Law: Selection Method and
Criteria
4. Least cost selection may be applied when selecting

consultants for assignments of a standard and routine
nature, where well established practices and standards exist
and in which the contract amount is small;
5. Selection based on consultant’s specific qualification.

Detailed procedures for the use of these methods shall be
outlined in the procurement regulations.
PROCUREMENT METHODS/CONSULTANT SERVICES
Quality Cost Based Selection (QCBS)

• Quality and Cost Based Selection (QCBS) is the standard method
of selecting consultants through competition between pre-
qualified short-listed firms.
• Selection is based on the technical quality of the consultants, the

quality of the proposal, and on the cost of the services to be
provided.
• The relative weights given to the technical quality and cost of
each proposal are determined for each case depending on the
nature of the assignment.
Quality and cost based selection (QCBS)-Cont’
• Quality and Cost Based Selection (QCBS) is a method based on the quality of the
proposals and the cost of the services offered. It is the method most frequently
used to select consultants.
• The type of services required is common and not too complex;

• The scope of work of the assignment can be precisely defined, and the TOR are
clear and well specified;
• The client and the consultants can estimate with reasonable precision the staff
time, assignment duration as well as the other inputs and costs required of the
consultants;
• The risk of undesired downstream impacts is quantifiable and manageable,
• The capacity building program is not too ambitious and easy to estimate in
duration and staff time effort; and
• Feasibility studies and designs where the project is simple and well defined, known
technical solutions are being considered, and the evaluation of the impacts from
the services or from design mistakes are not substantial and not difficult to
estimate.
Quality Based Selection (QBS)
• Quality Based Selection (QBS) may be appropriate for complex or highly specialised
assignments, or those which invite innovations. The selection is based solely on the
quality of the proposal without consideration of the cost.
QBS is suitable for the following types of assignments:

• Complex or highly specialized assignments where it is difficult to define precise TOR
and the required input from the consultants, and for which the client expects the
consultants to demonstrate innovation in their proposals.
For example, country economic or sector studies, multi-sector feasibility studies,
design of a hazardous waste remediation plant or of an urban master plan, financial
sector reforms;
• Assignments that have a long term impact and in which the objective is to have the
best experts available (for example, feasibility and structural engineering design of
such major infrastructure as large dams, policy studies of national significance,
management studies of large government agencies); and
• Assignments that can be carried out in very different ways, and therefore proposals
may not be directly comparable (for example, management advice, or policy studies
in which the value of the services depends on the quality of the analysis).
QBS Procedure via RFP
• Request for Proposals (RFP) should not indicate the estimated budget, but
may provide the estimated number of key staff and time, specifying that
this information is given as an indication only, and that consultants are
free to propose their own estimates.
• The RFP may require submission of a technical proposal only (without a

financial proposal), or request submission of both technical and financial
proposals at the same time, but in separate envelopes (two-envelope
system).
• Only the financial envelope of the highest ranked technical proposal is

opened. The rest are returned unopened to the bidders, after the
negotiations are successfully concluded.
Fixed budget
• Fixed Budget Selection (FBS) is where the organization seeks to obtain the best
technical proposal from pre-qualified short-listed consultants within a pre-
determined budget limit. This method is only appropriate when:
• The assignment is simple and can be precisely defined; and
• The budget is fixed.
• The RFP will indicate the available budget and request the consultants to provide
their best technical and financial proposals in separate sealed envelopes, within
the stated budget. The TOR must be carefully prepared to ensure that the budget
is sufficient for the consultants to perform all of the expected tasks.
• Technical proposals will be evaluated and bidders who pass the minimum technical
score will be invited to a public opening of their financial envelopes.
Fixed budget-cont….
Bidders whose technical proposals fail to meet the
minimum technical score will have their financial
envelopes returned unopened.
• Any financial proposals that exceed the indicated

budget shall be rejected.
• The Consultant who has submitted the highest ranked

technical proposal within the budget will be selected
for award of contract.
Least cost selection
• This method is more appropriate to selection of consultants for
assignments of a standard or routine nature (audits, engineering design of
non complex works, and so forth)
• where well-established practices and professional standards exist, and

when the contract value is small.
• A minimum qualifying score for the required quality is established and is

stated in the RFP. Shortlisted bidders are required to submit technical and
financial proposals in separate envelopes.
• Technical envelopes are opened first and evaluated. Those bids scoring less
than the minimum qualifying score are rejected. The financial envelopes of
the remaining bidders are opened in public. The firm with the lowest price
is selected for contract award.
Selection for consultant qualification
• This method may be appropriate for very small assignments

where the need for submission and evaluation of detailed
competitive proposals is not justified.
• Expressions of interest and information on the consultants’

experience and competence relevant to the assignment are
requested.
• The firm with the most appropriate qualifications and references

is selected. The selected firm is invited to submit a combined
technical and financial proposal, and then invited to negotiate the
proposal and the contract.
Single source selection
• Single-source selection of consultants lacks the benefit of competition in
regard to quality and cost, is not transparent in selection, and may encourage
unacceptable practices.
• Therefore, single-source selection should only be used in exceptional

circumstances. The justification for single-source selection must be examined
carefully to ensure economy and efficiency. The conditions for the use of direct
procurement should be noted before using this selection method.
• Single-source selection is only appropriate if there is a clear advantage over

competitive selection:
• for tasks that are a natural continuation of previous work carried out by the
firm;
• where rapid selection is essential (for example, in an emergency situation);
• for very low value assignments;
• when only one firm is qualified or has the necessary experience for the
assignment.
Individual consultants’ selection (ICS):
• Individual consultants’ selection (ICS): This method is appropriate

when:
(a) teams of personnel are not required,
(b) the experience and qualifications of the individual are the
paramount requirement.
• The consultant is selected on the basis of qualifications for the

assignment. Advertisement is not required; however, in some cases
the Client may consider the advantage of advertising as an option.
• The procuring entity selects Consultants through comparison of

qualifications of at least three candidates among those who have
expressed interest in the assignment or have been approached
directly by the Clients.
SUMMARY - SELECTION OF CONSULTANTS METHODS
SELECTION WHEN TO BE USED CONDITIONS TO BE THRE-
METHOD FULFILLED SHOLD
- when both the quality and cost -preparation of TOR - - No limit

QCBS need to be taken into account. - - preparation of
(Quality Main method to be used whenever shortlist of consultants
appropriate. - Technical & financial
and Cost
proposal opened at
Based
different times
Selection) - public opening of
financial proposal
-for complex or highly specialized -The RFP shall provide No limit
QBS assignments where estimated budget or
(Quality - Precision of TOR is difficult ; number of key staff
Based - the procuring entity expects time
consultants to demonstrate - Only Financial offer of
Selection)
innovation in their proposals - highest ranked
assignments that can be carried out technical proposal is
in substantially different ways, such opened
that proposals will not be
comparable
264
SELECTION WHEN TO BE USED CONDITIONS TO BE THRE-
METHOD FULFILLED SHOLD
LCS (Least -assignments of a -Minimum qualifying mark has THRESHOL

Cost standard or routine to be indicated in the RFP D TO BE
Selection) nature where well ( 70%) RECOMME-
established practices - All proposals above the NDED
exist e.g. audits minimum qualifying mark
compete only on cost
FBS (Fixed -when assignment is -RFP shall indicate the available THRESHOL
Budget simple and can be budget D TO BE
Selection) precisely defined -ToR should be well prepared to RECOMME-
- when budget is fixed make sure that the budget is NDED
sufficient for consultants to
perform expected tasks.
- proposals that exceed the
indicated budget shall be
rejected.
CQS -for small assignments -prepare ToR, request EOI, THRESHOL
(Consultant for which the need for - select firm with the most D TO BE
Qualification preparing and appropriate qualifications and RECOMME
Selection) evaluating competitive experience. NDED
proposals is not - selected firm shall be asked to
justified. submit a combined technical 265
2
6
6
Proposal Opening and Evaluation

Of consultancy services
2
6
Evaluation of Quality 7
By committee of 3 or more specialists

 Specific experience of firms ( 5 - 10 points)
 Relevant assignments, similar size, complexity, technology,
environment
 Methodology (20 - 50 points)
 Schedules, responsiveness to TOR, logistics, level of detail
 Qualification of Key Staff (30 - 60 points)
 Team composition, professional qualifications/experience,
suitability, local knowledge, language, training, permanent staff
 Transfer of knowledge (0 - 10 points)
 Extent of participation by nationals amongst key staff (0 - 10
points)
2
6
Evaluation of Quality - cont. 8
 Interviews for team leader/key staff may be

conducted
 Reject non-responsive proposals or those
scoring below quality threshold established in
RFP
 Evaluation report of Quality of Proposals:
establishes relative ranking of proposals and
explains weaknesses/strengths (Relative
Marks sheets to be kept until project
completion and its audit)
2
6
Evaluation of Cost 9
After Quality Evaluation:

 Return unopened the financial envelopes of
non- responsive consultants and those scoring
below threshold
 Notify consultants scoring above threshold of
date and time set for opening of financial envelopes
(not less than 2 weeks from notification)
 Announce name of consultant, quality score
and offered price and prepare minutes of public
opening
 Correct arithmetical errors, convert to single
currency as per RFP
2
7
Evaluation of Cost – cont. 0
 For evaluation purposes cost excludes local

taxes but includes reimbursables, etc.
 A direct proportional or other methodology (as
established by RFP) may be followed to
allocate marks for the cost element
 Proposal with highest total score is selected
and invited for negotiations
The weight for cost is allocated depending on complexity of
assignment but normally between 10 and 20 (not to exceed 30)
Evaluation process to be confidential
2
Technical Evaluation 7
Summary Evaluation (Example) 1
Firm I Firm II Firm III

Item WT Points Rating Points Rating Points Rating
a b* axb c axc d* axd
1. Experience 0.10 80 8 90 9 75 7.5
2. Methodology 0.30 70 21 75 22.5 90 27
3. Key Staff
 Team leader 0.20 75 15 70 14 80 16
 Economist 0.10 60 6 65 6.5 60 6
 Engineer 0.10 80 8 70 7 80 8
 Fin. Analyst 0.05 70 3.5 60 3 60 3
 Management 0.05 60 3 70 3.5 80 4
exp.
4. Skills Transfer 0.10 50 5 60 6 70 7
TOTAL 1 69.5 71.5 78.5

* out of 100
2
Evaluation Report (Example) 7
2
Combined Technical Scores and Price (Summary)
Firm Technical X 90% Price Price X 10% Total

Evaluat. (a) (CU) Points * (b) Score
Points (a) + (b)
A 92 82.80 9000 77.78 7.78 90.58
B 90 81.00 8000 87.50 8.75 89.75
C 85 76.50 7300 95.89 9.59 86.09
D 78 70.20 7000 100.00 10.00 80.20
** If price of B is 7000 CU then the score is:
B** 90 81.00 7000 100.00 10.00 91.00
*LP x 100/ FP FP = Firm’s Price CU= Currency

LP= Lowest Price
273
Execution of tenders for services

274
General Regulations for the Successful Bidder
• SB for services shall at all times be accountable for its

advice to PE
• In particular, SB shall refrain from:
– Revealing information on services provided without prior
PE approval
– Engaging in any act in contradiction of the contractual
obligations
• SB is not allowed to take any decision on PE’s behalf
without prior written consent
• SB shall not compromise his/her independence at
work
275
Restrictions on Remunerations and Professional

Secrecy
• SB and his/her staff shall not receive any

remuneration related to tender execution other than
from PE
• SB and his/her staff shall:
– Maintain professional confidentiality until contract
completion
– Not disclose any confidential information without prior
written consent of PE
– Not use received information to detriment of PE
276
Tenders for Project Design
• SB shall:
– Prepare project document & drawings with
the latest techniques
– Prepare non-discriminatory technical
specifications and/or drawings in order to
enhance competition
277
Right on ownership of reports and

documents
• All documents and drawings produced by SB are
confidential and property of PE
• All documents are to be submitted to PE after
contract completion
• No documents related to the contract can be
published by SB, no information can be disclosed
without PE’s written consent
278
Sanction for Breaching Rules of Conduct by the

Successful Bidder
• Breach of rules of conduct will lead to

automatic contract termination
279
Principle of Non-modification of Contract Execution

Methodologies
• SB is required to perform the required

services with staff and methods
prescribed in the contract
280
Liability of the Procuring Entity and its

Representatives
• SB is accountable for mistakes made during contract
execution
• On PE demand, SB will be required to correct the
above mistakes
• SB is not liable for claims / losses due to:
– PE ignoring advice
– PE instruction leading to a mistake
– PE inaccurately implementing SB recommendation
281
Staffing
• In case of a technical assistance contract, SB is

responsible for staff put at disposal and their
competence
• PE may request replacement of SB staff
following incompetence or misconduct
282
Working Hours and Days Off
• SB staff put at PE disposal shall observe PE

working hours and calendar
• Leave is allowed unless differently provided in
tender documents
283
Suspension of
Service Contract Execution
• PE has the right to suspend the contract execution whenever

deemed necessary
• Suspension reasons shall be explained to SB
• Suspension period shall not exceed 60 days
• If suspension period exceeds 60 days and suspension reasons
are not due to a SB negligence, SB may request contract
cancellation
• PE shall make a decision about cancellation within 15 days
from the request
• Consequences from contract cancellation shall be at PE
expense
284
Reports or Documents to be Produced and Final

Statement
• Type and number of reports determined by RFP

• PE to comment on report within 60 days from submission
• If PE is silent after 60 days, the report is considered as
approved
• In of non acceptance, PE shall give SB a period to modify the
report for approval
• Within 30 days from the final approval of services, SB shall
submit a proposal of final statement of the execution of the
contract, approved by the supervising official
285
Successful Bidder’s Death
• In such an event, if SB is an individual contract

shall be terminated
• beneficiaries of individual SB may continue the
execution of the contract
• If tender had been awarded to several persons, PE
shall consider whether to terminate the contract
or continue with it based on agreement among
the remaining consultants to complete the
assignment
• Propose evaluation criteria for procurement of
the following non- consulting services:
• Catering services (restaurant, coffee bar,
catering for meetings,)
286
SESSION 12: PROCUREMENT MANAGEMENT FOR
WORKS

288
COMMENCEMENT OF WORKS
• PE issues written instructions for the date of

commencement of works
• If instructions are not issued within 60 days
from contract signature, the SB may refuse to
execute the contract and claim compensation
289
INSURANCE FOR WORKS
• Based on bidding documents requirements, SB

must submit evidence of insurance covering
injuries to persons or property during contract
execution
• If requested, proof of payment of insurance
premium(s) shall be made available
290
Planning for the Execution of Works
• Before the commencement of works, the SB

shall submit a work-plan for the activities to be
undertaken during contract execution
• Contents of the work-plan:

– List of planned activities
– Deadlines for submission for approval of layouts /
drawings
– A 3 month cash-flow forecast
291
Procuring Entity’s Additional Instructions
• If required, tender documents shall

determine the time limit for additional
instructions
• If tender documents are silent,
additional instructions may be given
within 30 days from their request
292
Demarcating the Site for Works
• The works site must be clearly demarcated

• The SB is responsible for demarcation which
must be completed before the commencement
of works
• PE to be informed in writing and has 15 days to
inspect the site demarcation
• If PE does not inspect site demarcation will be
deemed to be approved
293
Supervision
• SB must provide an office available to the

supervising official named by PE
• The supervising official will monitor the works
on a daily basis
• Works shall not be executed / completed
without supervising official approval
• Supervising official may be member of PE or a
consultant hired by PE
294
Security at Site
• The SB will take the following security measures during

contract execution:
– Security of bidders staff, PE representatives and any visitors
authorised by PE
– Compliance with existing Law in force in respect of where works
shall be executed
– No access to unauthorised persons
– River water flows, drainage of waters, etc. to prevent any accident
– Protection of landmarks
– Safeguard of neighbouring persons and properties
295
Daily Site Log book and Statement
• The supervising official will maintain a log book regarding works

completed according to the contract and inspections performed, with
the following records:
– Quantities of works actually completed
– Number of worked hours
– Equipment rented
– Materials / supplies received
– Days of bad weather
• Records to be signed by the SB within 5 days
• The SB shall submit a daily statement to the supervising official detailing
the work executed, materials delivered and the number of workers
involved
296
Materials from Demolition
• Materials and objects resulting from demolition

become property of the SB
• If the bidding documents define that such materials
become property of the PE, the SB will ensure no
damage to them
• The SB will be responsible for any damage during
demolition
• The supervising official will instruct the SB on where to
transport and store such materials (not more than 100
metres from the site)
297
Discoveries During the Execution of Works
• Discovery of any object of value during

execution of works must be notified to
PE
• Such objects will be considered as
• Property of the PE and handed to
298
Approval of Materials to be used
• Any material to be used by the SB must be

approved in advance by the supervising
official
• PE may use any means to determine quality
and quantity of materials
• In event of disagreement an independent
assessment will be performed
299
Fraud and Defect
• In event of suspicion of fraud or defect,

the SB may be asked to demolish the
work executed and reconstruct it
• Costs will be borne by SB or by PE on
whether suspicion is found to be true or
not
300
Temporary Suspension of Works
• Suspension decision may be taken

– by PE for public interest
– by SB in accordance with provisions of law
• Temporary suspension no longer than 30 calendar days
• Contract duration shall be extended accordingly
• A temporary suspension longer than 30 calendar days
leads to contract cancellation
• If PE suspends for more than 30 days, SB has right to
claim compensation
301
Measures to be Taken in Case of Temporary

Suspension
• When a temporary suspension

occurs, the SB shall make sure that
works already completed are well
protected
302
Unexpected Circumstance
• It is assumed that SB knows soil conditions at the site

and that tender proposal was prepared accordingly
• Therefore all costs incurred due to ground conditions
will be borne by SB
• If unforeseeable technical or geological obstacles are
encountered during contract execution, potential
additional costs or extension of execution period shall
be taken into consideration
303
Failure of the Successful Bidder
• Contractual obligations are not met by SB if:

– Works are not fully completed within prescribed period
– Works are suspended and will not be executed within prescribed
period
– Contraventions to written instructions take place
• Failure must be communicated to the contractor in writing by
the supervising official
• SB has 15 days to reply justifying the failure in writing
• If SB does not reply, acceptance of report content is assumed
and SB has to rectify the failure
304
Replacement of the Successful Bidder
• In event provisions of previous article are not

fulfilled within 15 days, the PE may complete the
works by force account, using SB materials and staff
• Alternatively PE may decide to sign a contract with
another firm and the cost will be charged to the SB
• Before implementing any of the above actions, PE
shall discuss with SB and prepare a report showing
works’ progress and materials at the site
305
Types of Official Acceptance of Works

– Partial provisional acceptance
– Provisional acceptance
– Final acceptance
306
Types of Official Acceptance of Works – cont.
• Partial provisional acceptance

– Relates to part of works to enable PE to take possession
and utilise part of the works accepted
– From the moment of acceptance, SB shall only be
responsible for repairs resulting from construction
defects or poor workmanship (as covered by durability
guarantee)
• Provisional acceptance
– Shall concern the entire works
– Same provisions as for partial provisional acceptance
307
Duration of the Guarantee for Works
• One year from the provisional

acceptance date, unless otherwise
defined in bidding documents
308
Date of Provisional or Partial Provisional Acceptance

of Works
• Takes place within 20 days of the date foreseen for

works completion, upon written request by SB
• In event of earlier or delayed work completion, SB
must inform the supervising official in writing
• Within 20 days from acceptance request, PE must
accept or refuse to accept the works
• After this period, PE shall pay SB 0.5% of the amount
due for payment after acceptance for every week of
delay, not exceeding a total of 5%
309
Works which may not be accepted
• Refusal to accept the works shall occur if:

– Requirements are not met
– Works were not executed professionally
– Works were executed using materials not
approved by PE
• Provisional or partial provisional acceptance
of works can only take place after the above
failures have been rectified
310
Final Acceptance of Works
• Relates to the entire works and must take place:

– Within 20 days before expiry of:
• Guarantee period for provisional acceptance
• The last period of guarantee if several partial provisional acceptances were
established
– Within 20 days following rectification of mistakes reported in the minute
of acceptance
– If mistakes are not fully rectified, PE refuses the final acceptance in writing
– SB then informs PE about rectification of all mistakes and requests final
acceptance
– A final acceptance certificate is released to SB stating that contractual
obligations are have been met
– Works are deemed finally accepted if PE does not respond to SB’s request
for final acceptance
311
Cleaning the Site
• After provisional or partial provisional

works acceptance SB is required to
remove items or equipment no longer
required
• Upon final acceptance, SB is
responsible for clearing the site
312
Final Statement
• Within 90 days from final acceptance, SB

must provide PE with a draft statement
of each party’s obligations in view of
contract termination
• The statement is to be signed by the
313
Ten-years Accountability
• SB accountable to PE for the durability of

all executed works
• SB accountable for any failure arising from
design and construction for a period of 10
years from final acceptance date
Class activity :
1. Procurement Planning
You are requested to prepare the procurement plan for the construction of a school in
Kibuye. The following information is given to you:
a) Construction time 12 months.
b) The time needed from advertising the tender until a contract is signed is 4 months.
c) The date for official commencement of study in this school is 1/09/2014.
d) Today’s date is April 1st, 2013.
e) The maintenance period is 12 months.
f) Commencement date is 2 months after contract signature.
2. Evaluation criteria
What Qualification Criteria would you recommend for procurement of 50 km 2-lane
asphalt Road Project with a 800m bridge over a river (estimated cost USD 25
million)?
314
SESSION 13: ADVANCED CONTRACT
MANAGEMENT

CONTRACT ADMINISTRATION
• Contract administration and execution is legislated under

Chapter V of the Rwanda Public Procurement Law (no.
12/2007 of March 2007).
• The Law, under Chapter V, deals with all issues occurring after
contract award and in contract execution, such as;

What is Contract Administration?
• Contract Administration is the process of review, verification
and assurance of all aspects of the Bid and Contract
Documents.
• TIME, MONEY & QUALITY are the main items which are
assured by the Construction Administrator. The Administrator
ensures that all members of the Project Team are performing
their responsibilities

RISK ALLOCATION IN CONTRACTS

Basic Principles
• The problem of risk allocation in construction contracts can be simplified if

one sets out from the following principles:
• a. In the absence of a contract, all risks are the Owner’s.

• b. Contracting is a process of risk allocation between the two contracting
parties: the Employer and the Contractor.
• c. The more risks are transferred to the Contractor the higher the Contract
price is. There are many RISKS relating to Construction Contracting.

Sources of Risk in Construction Projects
The following are the sources of Risk in Construction Projects:
Physical-Environmental-Design-Logistics-Financial-Legal-Political-Construction-
Operational
• Physical:
• Loss or damage by fire, earthquake, flood, accident, landslip.
• Environmental
• Ecological damage, pollution, waste treatment.
• Design
• New technology, innovative applications, reliability, safety
• Detail, precision and appropriateness of specifications

Logistics
• Loss or damage in the transportation of materials and equipment
Financial
• Availability of funds, adequacy of insurance
• Losses due to default of contractors, suppliers
• Exchange rate fluctuations, inflation
• Taxation
Legal
• Liability for acts of others, direct liabilities
• Local law, legal differences between home country and home countries of
suppliers,

Political
• Political risks in countries of owner and suppliers, contractors – war,
revolution, changes in law
Construction
• Feasibility of construction methods, safety
• Climate
• Quality and availability of management and supervision
Operational
• Fluctuations in market demand for product or service
• Maintenance needs

Types of Risks in Construction Projects
First: Risks relating to Physical Works
Adverse weather and natural disasters : volcanic activity,
Second: Risks relating to Delay

Shortage of Staff, Labour, Plant, Materials, Finance
Third: Risks relating to Direction & Supervision

• a. Incompetence, Inefficiency, Unreasonableness
• b. Lack of Communication
• Fourth: Risks relating to Damage to Property
• a. Due to negligence or breach of warranty of contractor/ subcontractor/ supplier in
designing
• d. Due to matters outside the parties’ control, but which are not insurable (e.g. war)
•
•
Types of Risks in Construction Projects
• Fifth: Risks relating to Government Policy & Public Interest
• a. Changes in taxes, labour and safety or other laws
• Sixth: Risks relating to Conflict

• Malicious damage, intimidation
• Seventh: Risks relating to Labour Demands

• a. Labour disputes and strikes
• b. Quality of labour
• Eighth: Risks relating to Payment
• Cash flow or funding constraints.
•
• Ninth: Risks relating to Inflation / Escalation
Any element of cost or profit not covered by a price fluctuation clause.
•
Tenth: Risks relating to Disputes: Delay and cost of resolving disputes
Risk Assessment and Allocation
• Risk assessment can be done through the evaluation of the
probability of occurrence and the potential severity of the Risks.
• The general principle is that all risks are Employer's risks except
those that are explicitly or implicitly (e.g. by law) transferred
(allocated) to the Contractor in the Contract against a
reasonable price.

• Some Risks Borne by the Contractor
• Availability and cost of labour, materials, and equipment
• Timely completion
• Default of subcontractors and suppliers
• Errors in construction and non-complying work
• Protection of the works
• Delayed payments

Some Risks Borne by the Employer
• Safety, security and environmental protection with regard to
work carried out by employer.
• Damages to the works resulting from the employer's risks.
• Suspension of work.
• Justified extension of the time for completion.

PREPARATION & EVALUATION OF CLAIMS

BASIC REQUIREMENTS IN CLAIMS
There are seven basic requirements that any claim must incorporate. These are as follows:
a. Claims must be based on contract clauses;
b. Timely notice of claims must be given prior to their submittal
c. Claims must incorporate proof of right
d. Claims must incorporate proof of damages
e. Claims must incorporate a proof of cause-effect relationship
f. The burden of proof in claims is upon claimant
g. Claims must comply with mitigation requirements
•
Types of construction contracts
Lump Sum Contract
• With this kind of contract the engineer and/or contractor agrees to do

a described and specified project for a fixed price.
• Also named "Fixed Fee Contract". A Fixed Fee or Lump Sum Contract is
suitable if the scope and schedule of the project are sufficiently defined
to allow the consulting engineer to estimate project costs.

Unit Price Contract
• This kind of contract is based on estimated quantities of items included in

the project and their unit prices.
• The final price of the project is dependent on the quantities needed to carry
out the work. In general this contract is only suitable for construction and
supplier projects where the different types of items, but not their numbers,
can be accurately identified in the contract documents.
• It is not unusual to combine a Unit Price Contract for parts of the project
with a Lump Sum Contract or other types of contracts.
•,
Cost Plus Contract
• A contract agreement wherein the purchaser agrees to pay the cost of all
labor and materials plus an amount for contractor overhead and profit
(usually as a percentage of the labor and material cost). The contracts may
be specified as:
• These types of contracts are favored where the scope of the work is
indeterminate or highly uncertain and the kinds of labor, material and
equipment needed are also uncertain.
• Under this arrangement, complete records of all time and materials spent
by the contractor on the work must be maintained.

• Cost + Fixed Percentage Contract
• Compensation is based on a percentage of the cost.
• Cost + Fixed Fee Contract

• Compensation is based on a fixed sum independent of the final project cost.
The customer agrees to reimburse the contractor's actual costs, regardless
of amount, and in addition pay a negotiated fee independent of the amount
of the actual costs.
• Cost + Fixed Fee with Guaranteed Maximum Price Contract

• Compensation is based on a fixed sum of money. The total project cost will
not exceed an agreed upper limit.

Introduction To Procurement

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Introduction To Procurement

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SESSION 1: GENERAL INTRODUCTION TO PUBLIC PROCUREMENT

Topic 1. Glossary of Terms

• LAW N° 12/2007 OF 27/03/2007 ON PUBLIC PROCUREMENT

Public Procurement and Contract Management 1

Procurement refers to the function of purchasing goods, works

There are two categories of procurement that involve public

Public Procurement and Contract Management 2

• The Public Procurement System is a function of government

Public Procurement and Contract Management 3

The public procurement system should be fair, open and

Public Procurement and Contract Management 4

 Obligation to spend public funds efficiently- value for

effectiveness is ("doing the right thing").

Public Procurement and Contract Management 7

System needs to operate in a manner that is perceived as offering

An example of lack of openness might be restricting participation

Public Procurement and Contract Management 9

 Having more than one participant trying to win creates the

Competition refers to a high number of private

Public Procurement and Contract Management 10

It refers to the ability of all interested participants to know and

This implies strong rules and regulations to ensure equal

Public Procurement and Contract Management 11

Accountability in Public procurement

• They can be asked and should be able to explain at all times

Public Procurement and Contract Management 12

• - fitness for purpose (i.e. quality);

Public Procurement and Contract Management 13

Public Procurement and Contract Management 14

• Work in groups and identify how Rwanda public procurement

Public Procurement and Contract Management 15

Public Procurement and Contract Management 16

Procurement Planning Procurement process Execution/Delivery

Public Procurement and Contract Management 17

Public Procurement and Contract Management 18

Public Procurement and Contract Management 19

• Any bidder’s offer will be rejected by the Tender

• Members of Cabinet, Heads of procuring entities

• Consultants involved in tender preparation shall not be involved in

Public Procurement and Contract Management 22

• During and after procurement proceedings

Public Procurement and Contract Management 23

Public Procurement and Contract Management 24

• Bidder notified in writing prior to RPPA decision

Public Procurement and Contract Management 26

• Conduct of Public Officials

Such ethical standards are usually set out in an Employee Code of

The effective dissemination of standards of conduct to participants

• Procurement integrity depends upon good conduct by the

Public Procurement and Contract Management 28

Public Procurement and Contract Management 29

• the “Law on Public Procurement” N. 12/2007 of 29703/2007

Public Procurement and Contract Management 30

•Bribe: money or something of value pursuant to or promised in order to

Public Procurement and Contract Management 32

For example in the form of:

• Purchasers setting up their own companies, or companies in the

• Suppliers delivering less than the ordered quantity, or

• Purchasers and suppliers short-circuiting the competitive

• Purchasers receiving gifts or payment in return for awarding

• Purchasers threatening to remove suppliers from

Fraud and corruption may unfortunately occur at every step of the

Therefore, at each stage measures should be taken to mitigate