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Tips of the day…..
What lies behind us and what lies
before us are tiny matters compared to
what lies within us…
Holmes
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9.1 INTRODUCTION Supply management system is vital
towards on time supply of equipments & goods in government sector.
To ensure all government programmes & activities can operate efficiently to meet their objectives.
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9.2 IMPORTANCE OF SUPPLY MGT SYSTEM
To ensure effectiveness of the public service operations
To avoid dishonesty & misuse of money, power
To minimize government expenditure To minimize maintenance cost To ensure the positive national economy
growth
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9.3 PUBLIC PURCHASINGPROCUREMENT
SUPPLY MANAGEMENT
Purchase in supply mgt. is to procure goods & services for specific purpose.
Planning, negotiations, training & good understanding about rules & regulations in public purchasing are components of good Public Purchasing practice
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All purchasing systems need 5 essential ingredients
1. honest and competent personnel 2. centralisation 3. regulations 4. effective purchasing procedures 5. effective inventory procedures ( reference- Charles K.Coe, Public financial
Management, 1989)
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9.4 TYPES OF PUBLIC PURCHASING
Casual purchase - less than RM50k Quotation - RM 50k – RM500k Tender - more than RM500k Emergency Purchase - AP 173b Foreign Purchase - ssp 18/77
Based from Treasury Circular
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Casual Purchase-less than RM50,000
Amount not exceeding RM50,000 per year. Goods purchased normally used by that
department examples are stationary & office equipment.
Purchase order will be prepared by the department by identifying: the type of goods, size, quality quantity supplier.
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Casual Purchase-less than RM50,000
Head of Department can make the casual purchase
Two situations: Below RM10,000 per year RM10,000 – RM50,000 per year
FORM
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Casual Purchase-less than RM50,000
Procedures: Prepare the purchase order Submit to suppliers Suppliers must revert within 14 days Below RM10,000, can purchase from any
vendor/supplier RM10,000 – RM50,000 to Bumiputera suppliers
– registered –reasonable price Payment will be made after the goods are
received accordingly and purchase order & invoices have been prepared & signed by both parties.
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Quotation - RM 50,000 – RM200,000
Quotation is a procurement of goods ranging from RM50,000 – RM500,000.
Example, facilities, equipments for organizations’ operation
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Quotation - RM 50,000 – RM500,000
Procedures: Identify the goods or services Invite at least 5 Bumiputera suppliers that
registered with MoF. Form Suppliers submit the quotation Departments’ Quotation Committee (at lest 3)
will evaluate the quotation & will make a decision to accept it based on:
cost, quality & purpose.
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Tender - more than RM200,000
It is procurement of goods that is more than RM500,000.
Specification of tender must be made comprehensively.
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Tender - more than RM500,000
Procedures: Advertise in Malay newspaper (at least one
major circulating newspaper) Tender deposit must be prepared by tender
bidder to reflect their commitment. Department must set procedures regarding
submission of tender, dateline and reference no on top of the envelope.
The decision to select the best tender is rested to controlling officer.
He/she must ensure that the tender is beneficial to the government by obtaining the quality of goods at the lowest price.
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Emergency Purchase-AP 170/171/172 It is made during emergency period / to be
made immediately, whereby the delay in procurement will affect national interest.
Purchase during emergency period must serve emergency requirement only.
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Emergency Purchase-AP 170/171/172
Procedures: Limited only to fulfill the emergency
needs. Must prepare the report of the
emergency purchase To be submitted to the Controlling
Officer Submit the report to the Secretary
General of Treasury (Federal) or State Financial Officer (State)
Within one month
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Example of emergency purchase, in the event of war, heavy floods or natural disaster.
Emergency Purchase-AP 170/171/172
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Foreign Purchase Purchase of goods that are not offered by
local suppliers.
Advertisements are made by local suppliers.
Advertisements are made locally & externally to publicize the offer.
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9.5 MAIN CRITERIA IN PROCUREMENT
Reasonable price Reasonable Quality Accurate Quantity Valid and registered supplier Timely
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Misuse of power Misuse of public money Time consuming Corruption / bribery Problems in specification for highly
specialised goods In foreign buying, there is a need to look
into Malaysias foreign policy
9.6 PROBLEMS IN PROCUREMENT