Procurement Planning

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

Session: M1-2Slide N0.1/31

Procurement

Planning

Act [Section -11]

Rules [ Rule-15,16 & 17]

Session: M1-2


Session: M1-2Slide N0.2/31Procurement

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

Definition


Session: M1-2Slide N0.3/31Planning Procurement

Planning requires a number of steps & options

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

having the situation in control of you

Approaches to Planning

In order to stimulate thinking, to create options and to assist planning consider the following questions;

What is to be done? When it is to be done? How it is to be done? Who is to do it? What resources are required? Who should know about it?



Preparation of PP shall be mandatory for all PEs

Procurement Planning should aim at attracting maximum competition for the benefits of the PE

Procurement Planning


Session: M1-2Slide N0.5/31Act and Rules

PPA2006

PPA2006

Frequency Approval Publication Splitting into packages/lots

Nature & size of the Procurement Source of funding Limits & conditions Forms

PPR2008

PPR2008

Procurement Planning is regulated by:


Session: M1-2Slide N0.6/31Benefits of Procurement Planning

Speeds up the procurement

process & reduces project

implementation delays Contributes to

enhanced project quality & efficiency

Reduces possibility of

error & reduces subsequent work

Careful & detailed procurement planning is essential for quality project execution


Session: M1-2Slide N0.7/31 Package, Lots & Methods

PE decides

…considering the nature & size of the Procurement, by carefully reviewing the proposed Procurement activities

& issues

Splitting/Assemblingpackages

Applicability of the Procurement methods


Session: M1-2Slide N0.8/31…in the case of Goods

Estimated cost

Estimated cost

OthersOthers

TypeType

RisksRisksUrgencyUrgency

CompetitionCompetition

CapacityCapacity

Price levelsPrice levels

QualityQualityAvailabilityAvailability

GOODSGOODS

PE takes into account the following when determining the method of Procurement & consolidating of Goods

packages


Session: M1-2Slide N0.9/31…in the case of Works

Estimated cost

Others

Completiondate

Geographiclocation

Expected competition

Capacity

Prevalent conditions

WORKS

PE considers the following, in the case of determining the method of Procurement for Works


Session: M1-2Slide N0.10/31…in the case of Services

Estimated cost

Others Capacity

Complexity

Nature

SERVICES

PE considers the following, in the case of determining the method of Procurement for Intellectual &

Professional Services



Goods & related Services,Works & Physical Services

Intellectual &Professional

Services

OTMOpen

TenderingMethod

QCBS&

FBS&

Other Methods

LTMLimited

TenderingMethod

TSTMTwo-StageTendering

Method

RFQMRequest forQuotationMethod

DPMDirect

ProcurementMethod

Procurement Methods

Taking into account the thresholds

OSTETMOne Stage

Two Envlope


Session: M1-2Slide N0.12/31Splitting Procurement Object

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

LotA multiple number of items grouped togetherAny number of items can form a lot

Four key terms


Session: M1-2Slide N0.13/31Splitting Procurement Object

Package A multiple number of Lots

grouped together Usually No package can have

more than 5 lots (Cross discount)

Contract Agreement through which the

Item/Lot/ Package is purchased


Session: M1-2Slide N0.14/31Package/lot options

Office equipment

Office equipment

IT equipment

Furniture equipment

Officeequip.

ITequip.

Furn.equip.

PCExec.furn.

Officefurn.

PrintersServer

One Packagefor

One Contract

Two Packagesfor

Two Contracts

Five Lotsfor

Five Contracts

Consider the following Procurement object as an example: Office equipment consisting of 36 items, namely 10 PC, 5 Printers, 1 Server, 4 Executive desks, 6 Office desks, 4 Executive chairs and 6 Office chairs


Session: M1-2Slide N0.15/31Packages Few & large or more &

small

Grouping into large Procurement Packages

Benefits from economies of scale – achievement of economy & efficiency Management aspects (PE’s capacity to manage the whole project) Risk aspect (where failure of a sub-supplier may unduly affect critical path) Benefits from participation of large international Tenderers

Splitting into small Procurement Packages

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

Arguments in favour of


Session: M1-2Slide N0.16/31Packages Few & large or more &

small

Do large packages improve participation or favour collusion among Tenderers?

Does splitting items into small lots encourage maximum competition from local suppliers or facilitate Tenderers in ‘sharing the cake’?

Answers to these questions depend on a careful analysis of the underlying market structure

What about competition?


Session: M1-2Slide N0.17/31Procurement Scheduling Process

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

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

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

Seven Key Steps in preparing the Procurement Plan



Consider time scale and determine target dates when each object of plant, equipment vehicles, fertilizers, books, works, services should be ready for use, within the overall project implementation framework

Identify interrelationships between the processing of these procurement objects

Decide on the content of individual Procurement Packages



Determine the procurement lead times for each package & schedule the target date for each event in the procurement process (taking administrative, manufacturing & construction delivery lag times into consideration)

Prepare Implementation Schedule - Table, Bar Chart or List identifying key dates for each package (Gantt Chart)

Develop a Monitoring System to ensure timely procurement decisions & implementation follow-up actions



Classified by category such as Goods, Works and Services

Separate for Development Project and Revenue Budget

Total Procurement Plan for the entire project period in the Formats prescribed by the Government from time To time for DPP or TPP

Key Issues

Planning:


Session: M1-2Slide N0.21/31Other Key Issues

Planning:

PE updates the Procurement Plan for Development Project at each beginning FY

PE prepares annual Procurement Plan for Revenue Budget at each beginning FY

Updated annual Procurement Plan and Annual Procurement Plan requires approval of HOPE or AO

Formats prescribed in Part A, Part B, Part C, Part D, & Part E as applicable of Schedule V



PE arranges to publish the Procurement Plans on their

notice boards, and where applicable in their websites & in the websites of the concerned Department or Directorate or organisations, bulletins and reports.

PE shall, for its own purposes, updates the Procurement Plan on a quarterly basis to accommodate delays, re- tendering & other unforeseen changes or constraints.

PE keeps CPTU posted online or off-line, if online is not possible, with the Procurement Plans, above the

threshold specified in Schedule II (G/W-10 M,S/Phy.S- Tk.5 M), which shall be published on a regular basis in CPTU’s website as well.

Planning:



PE shall not generally split a Project components with the intention of avoiding either method or the approval of a higher authority PE shall not usually split a package into more than five (5) lots for keeping cross - discounts application simple PE shall take into account the following aspects for

splitting single object of Procurement

the capacity of the local & international markets in submitting responsive Tenders the convenience of implementation with due regard to geographical location of sites for potential Works contracts

Planning:


Session: M1-2Slide N0.24/31Important

Single object or Procurement split into more than one Package & Packages when split into more than one (1) Lot—

Tenders for each of those packages or lots shall be placed for approval before the authority competent to approve the sum total of those packages or lots--

prior to the issuance of NOA for any one (1) of those packages or lots

HOPE or AO shall approve splitting smaller packages & lots on justifiable grounds



Appendix IFormats

FOR FUTHER READING ONLY



Total Procurement Plan for Development Project/Programme

Schedule V – Part A in the Rules shows how to

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

A separate Schedule, completed as shown in the next slides, should be provided for Goods, Works & Services.




Sch

ed

ule

Form

at

Part

A




Sch

ed

ule

Form

at

Part

B




(Works)Similar for Goods

and Services



Annual Procurement Plan for Development & Revenue Budgets

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

Time bound Procurement assists a Procuring Entity to effectively plan its Procurement requirements and is an important and useful tool used to monitor the progress of Procurement:

(a) to ensure that it does not go astray;

(a) to ensure that early problems with slippage can be dealt with promptly; and

(a) can form a useful Annual Plan for Procurement.

A separate Schedule, completed as follows, should be provided for Goods, Works and Services. Also a separate schedule should be used for Development or Revenue Budget.



Annual Procurement Plan for Development and Revenue Budgets

(Works) Similar for Goods

and Services

Documents

Procurement Planning