KEY STEPS IN THE PROCUREMENT PLANNING PROCESS

Forecasting
Forecasting is the first, and arguably the most important step in the procurement process because it provides the opportunity to link the procurement plan to the overall business strategy and objectives of the ministry/project and the national budget. When forecasting, consideration should be given to the following:

• Defining your procurement requirements;
• Assessing the capacity for implementation;
• Determining the time frame of project implementation;
• Presenting realistic three-year budget forecast (external/counterpart funds) for project

implementation;

• Seeking approval at the Ministerial levels and the Ministry of Finance financing
• Identifying all items that have to be procured;
• Creating sound financial justification for procurement.

Initiating the procurement process

• Prioritize the procurement/work plan.
• Conduct market analysis to gain awareness of the products/services that are available for procurement.
• Perform a make vs. buy analysis.
• Estimate investment costs of the Procurement Plan.
• Set clear and reasonable timelines for delivery or implementation.
• Based on the Procurement Plan, obtain authorization to proceed from appropriate levels of approval authority (e.g., CEO or accounting Officer, Procurement, Finance, IT, etc.).

At this Step the appropriate Project Plan approvals for a Project should be obtained (e.g., ensure that sufficient funds are available and approved for the project and that agency management officially supports and or approves the project)

• Prepare Statement of Work (SOW) which clearly identifies and documents the details of the work to be performed. The SOW should contain the following characteristics:
• A detailed statement of the purpose, objective or goals to be undertaken by the contractor.
• The job classification or approximate skill level of the personnel to be made available by the contractor.
• An identification of all significant material to be developed by the contractor and delivered to the client.
• An identification of all significant materials to be delivered by the client to the contractor.
• An estimated time schedule for the provision of these services by the contractor.
• Completion criteria for the work to be performed.
• The name or identification of the contractor‘s personnel to be assigned.
• The contractor’s work hours required to accomplish the purpose, objective or goals.
• The contractor’s billing rates per work hour (as provided in the contract documentation).
• Contractor’s total cost.

2. Requisition Step

• Verify that necessary specifications have been provided.
• Establish evaluation criteria. Write clear, concise definitions for each criterion to facilitate a good understanding of its meaning.
• Develop a detailed, mathematically sound scoring plan that explains how proposals will be evaluated, and provides specific meaning of the scoring methodology. (For example, if a certain criteria is worth X points, a description should follow of what the points mean.)
• Determine if pre-solicitation conference will be used.
• Develop a change request management plan.
• Develop a vendor payment plan.
• Prepare solicitation package.
• Utilize standard solicitation documents;
• Review by procurement team and, with final approval of the RFP by the responsible approval authority, send solicitation to the respective Donor or Approval Board for review and approval

3. Solicitation – Selection Step

• Issue the Request for Proposal document (RFP) via advertisement or through selective tendering.
• Answer questions received from vendors in a public forum.
• If necessary, prepare for vendor product demonstrations, or oral presentations.
• Form an Evaluation Team.
• Receive and evaluate Technical Proposals (by Evaluation Team)
• The Evaluation Team Should:
  Gather the facts,
  Develop objectives (min-max positions);
  Seller minimum willingness to accept,
  Buyer maximum willingness to pay.
  Evaluate each vendors competitive position,
  Define your strategy and tactics,
  Perform a complete cost analysis,
• Receive and evaluate financial proposals using scoring method to select Best Value.
• Make selection recommendation to the responsible Procurement Officer.
• Procurement Officer reviews recommendation and drafts contract then forwards to the respective Donor or relevant authority for review and approval.
• Agency awards and signs contract, then issues procurement order once the requisite approval is obtained.

4. Contract Administration Step
The purpose of the Contract Administration Step is to ensure that the contractor (vendor) and the products or services delivered comply with the contract requirements. Each project should be assigned a Contract Administrator, who will perform the following functions:

• Interpret specifications.
• Ensure that quality of the product or service is maintained
• Manage product warranties.
• Manage sub-contractors (if required by the contract).
• Direct change management:
  Administrative changes,
  Budgetary changes,
  Contract modification (if necessary) and associated change order (get proper approvals),
  Manage smaller, incidental contracts for work associated with the project.
• Resolve contract disputes:
  Part of the work may be accepted, or
  All of the work may be rejected, or
  Work may be accepted with provisions for corrections in the future.
• Completion of the project:
  Ensure that all project requirements are complete per contract,
  Product is technologically out of date (contract language should guarantee current technology),
• Terminate the contract:
  Default of contract:
  o Contractor fails to perform any provision of the contract including:
• Failure to deliver by scheduled date,
• Failure to make progress (endangers performance of the contract).
  Termination for Convenience (e.g., project canceled)
  Document contract problems and file formal vendor complaint with Agency Procurement Office, e.g., liquidated damages, opportunity cost, etc. (if necessary).
• Manage contract risk associated with the project.

5. Contract Closeout Step

• Verify product and services meet acceptance criteria.
• Complete fiscal activities:
  o Approve final payment (notify appropriate accounts payable office),
  o Update project and activity records,
  o Close procurement order (notify appropriate procurement office),
  o Update contract file.
• Archive contract file (include completed Procurement Plan with Project Plan).