Session 7Procurement and Tendering Methods

/ Total Session Time:215minutes (125 minutes for lecture/discussion, 90minutes for group activity)

Objectives: By the end of this session, participants will be able to:

•Describe different procurement methods

•Know factors affecting the choice of procurement method

•List monetary procurement value thresholds for the different methods

•Define tendering

•Describe tendering processes

•Describe the preparation of tendering documents

•Explain awarding and evaluation of tenders

Session Overview

Step / Time / Activity/
Method / Content / Resources
Needed
1 / 05 minutes / Presentation / Introduction to Session, Presentation of Learning Objectives (Slides 1-2) / LCD or Overhead Projector
2 / 25 minutes / Presentation / Procurement Methods, International & National Competitive Tendering, Restricted Tendering, Competitive Quotations(Slides 3-12) / LCD or Overhead Projector
3 / 15 minutes / Presentation / Single Source Procurement, Minor Value, Force Accounts, Procurement Method Choice, Monetary Procurement Thresholds(Slides13-17) / LCD or Overhead Projector
Handout 7.1
4 / 40 minutes / Group Work / Choice Procurement Method (Slide18) / LCD or Overhead Projector
Worksheet 7.1
5 / 75 minutes / Presentation / Tendering Process, Need, Procedures, Prep of Tender Documents, Opening of Tenders, Tender Eval Sequence, Preliminary Examination,Negotiation, Approval of Award of Contract (Slides19-46) / LCD or Overhead Projector
Handout 7.2
Handout 7.3
6 / 50 minutes / Group Work / Tendering Process (Slide 47) / Worksheet 7.2
7 / 05 minutes / Presentation / Key Points (Slides48-49) / LCD or Overhead Projector
/ Resources Needed
•Flip Chart, paper, and markers
•LCD or Overhead Projector
•Slides
•Handout 7.1: Monetary Procurement Thresholds-Second Schedule
•Handout 7.2: Advertising, Modifying and Custody of Tenders
•Handout 7.3: Detailed Evaluation and Post Qualification
•Worksheet 7.1: Choice of Procurement Method
•Worksheet 7.2: Tendering Process

Beginning the Session

/ Trainer Instructions: Step 1 (5 minutes)

Present Slides 1-2 using trainer notes to guide the presentation.

Slide 1 / / INTRODUCE the session to participants.
Slide 2 / / READ or ASK participants to volunteer and read the learning objectives and clarify.
ENCOURAGE participants to ask questions about any of the concepts that will be presented during this session
/ Trainer Instructions: Step 2 (25 minutes)

Present Slides 3-12 using the trainer notesto guide the presentation.

Slide 3 / / EXPLAINto participants that, where competitive tendering would not be the most economic and efficient method of procurement and where other methods of procurement are considered to be more appropriate, the regulations allow the use of other procurement methods as specified in the Second Schedule.
In this Session, the different methods of competitive procurement will be discussed.
Slide 4 / / EXPLAIN to participants that, Tender Notice shall be advertised nationally and internationally.
The procuring entity should use International Competitive Tendering in the following situations:
•where it is desired to attract tenders from the widest range of suppliers or contractors, regardless of the estimated value of goods or works to be procured.
•where payment for the contract is to be made in whole or in part in foreign currency.
Slide 5 /
Slide 6 /
Slide 7 / / EXPLAIN to participants that this method involves inviting tenders from few selected potential suppliers or contractors and the invitation may be preceded by either the pre-qualification or shortlisting of suppliers or contractors.
Slide 8 / / CLARIFY to participants thatthe first bullet sub bullet that, however, the circumstances giving rise to the urgency should be such that could not have been foreseen and have not been caused by dilatory conduct on the part of Procuring Entity.
Slide 9 / / EXPLAIN to participants that, competitive quotation method can be used by a procuring entity for minor maintenance works and repair contracts and contracts for services. It is an appropriate method for procuring readily available off-the shelf goods or standard specification commodities that are small in value.
Slide 10 / / EXPLAIN to participants that, competitive quotation method can be used by a procuring entity for minor maintenance works and repair contracts and contracts for services. It is an appropriate method for procuring readily available off-the shelf goods or standard specification commodities that are small in value.
NOTE that this method can also be used where the goods can be purchased either locally or internationally.
Slide 11 / / GO to the next slide to see more cases when Single Source Procurement is used.
Slide 12 /
/ Trainer Instructions: Step 3 (15 minutes)

Present Slides 13-17using the trainer notesand Handout 7.1to guide the presentation.

Slide 13 / / EXPLAIN to participants that under this procurement method, the procuring entity may procure goods or minor works directly from a supplier or contractor where no advantage is likely to be obtained by seeking further quotations.
TELL participants that this method is appropriate where the price quoted is reasonable and the value of the goods does not exceed 10,000,000/=, or the value of the minor works does not exceed Tsh. 20,000,000/= or the value of the non-consultancy services does not exceed Tsh. 10,000,000/= as specified in the Second Schedule of these Regulations.
Slide 14 /
Slide 15 /
Slide 16 /
Slide 17 / / REFER participants to Handout 7.1: Monetary Procurement Thresholds- Second Schedule on page XX of participant handbookfor a larger table to view.
/ Handout 7.1: Monetary Procurement Thresholds-Second Schedule

Methods of Selection and Limit of Application

Source: PPR, 2005, G. N 97

/ Trainer Instructions: Step 4 (40 minutes)

Present Slide18 using the trainer notes and Worksheet7.1to guide the group work.

Slide 18 / / Total activity time: 40 minutes
ASK participants to work in groups of 3.
REFER participants to Worksheet 7.1: Choice of Procurement Method on page XX of participant handbook for the group work.
ALLOW 20 minutes for them to complete the worksheet, identifying which procurement methods should be used.
REQUEST small groups share portions of their worksheet answers and discuss as a large group for 20 minutes.
/ Worksheet 7.1: Choice of Procurement Method

Below is a list of 10 examples of procurement needs. Work in groups of 3 and take 20 minutes to use the flow chart to assist you in and identifying which procurement methods should be used. Tick the appropriate box. Be prepared to justify your answers.

Activity/Task / MVP / SSP / CQ / RT / NCT / ICT / comments
1 / 4 computers and 2 printers estimated value Tshs. 11M / √
2 / 9 4WD vehicles, estimated value Tshs. 200M / √
3 / Vehicles spares estimated value 20M / √
4 / 500 reams of paper, estimated value Tshs. 2.8M / √
5 / Bridge repairs following flooding, estimated value Tshs. 25M / √
6 / A scanner that is compatible with the Hospital’s X-ray machine at Tshs. 12M / √
7 / Extension of an existing contract for road construction at Tshs. 400M / √
8 / Telecoms equipment for the switchboard, estimated value Tshs. 3.5M / √
9 / Rehabilitation of health care Centre estimated value Tshs. 2450M / √
10 / Software to develop and enhance a financial auditing computer package bought last year, estimated value Tshs 8M
11 / Construction of a three story building valued at Tshs 3.4 billion / √
/ Trainer Instructions: Step 5 (75 minutes)

Present Slides 19-46 using the trainer notes and Handouts7.2 and 7.3to guidethe presentation.

Slide 19 /
Slide 20 / / ASK participants “what is tendering”?
ALLOW few participants to respond and record them on the board or flip chart before you proceed to next slide.
Slide 21 / / CLARIFY to participants that, tendering may be used in procuring works such as the construction of health centers in districts or provision of services, such as the provision of security services.
Slide 22 / / EXPLAIN to participants that Heads of Department in each department in a procuring entity (user departments) compile lists of their requirements every year, with clear specifications of the nature of goods, services or works needed and then submit them to PMU for action in accordance with the procurement plan and within the annual budgetary provisions.
Slide 23 /
Slide 24 / / EXPLAIN to participants the following:
•Tender documents are media through which a Procuring Entity communicates with the potential suppliers and contractors on how to prepare tender bids.
•Tender documents are important because they describe the goods, works and service to be procured, they establish the legal, technical and financial conditions under which the bidding will take place, and they also establishes the evaluation criteria.
Slide 25 / / EXPLAIN to participants the following:
•Invitation for Tender is either advertised in the newspaper or website or sent directly to bidders. The way it is sent to bidders depends on the type of tender. If it is an open tender, such as an International or National Tender, the letter is issued as an advertisement in the media. For Restricted Tenders, it is issued directly to the respective bidder.
•The Invitation for Tender contains information regarding goods, works or services, the address of the procuring entity, the method of procurement to be used, whether there is any requirement for a tender fee, where to obtain bids, the date and time of the deadline and the opening of bids, and where to submit the tenders.
Slide 26 / / EXPLAIN to participants that the Instructions to tenderers shall also provide additional clarifying information where necessary.
Slide 27 / / EXPLAIN to participants the following:
•Each type of procurement (Goods, Works, Services and Non-Consultancy Services) has its own conditions.
•Generally, this part of the tender document describes the conditions under which the contract will be implemented.
•It is therefore important it is included in the Tender Document so the potential bidders know the conditions and requirements.
Slide 28 / / EXPLAIN to participants that those who do not confirm compliancy are rejected.
Slide 29 / / EXPLAIN to participants that these forms serve as guidelines to bidders. All forms, especially the bid form, become part of the contract for that bidder who eventually wins the tender. The sample letter of acceptance and contract forms are also used by the PE to accept the tender and prepare the contracts.
Slide 30 / / EXPLAIN the following to participants:
•For Section 8, regarding Technical Specifications: The bidder is required to indicate compliance with the Technical Specifications by indicating the goods or works that will be supplied. In the case of goods, the bidder shall indicate the brand name, where possible, of the goods to be supplied.
•For Section 9, regarding Security Forms: The Bid Security protects the buyer from the risk of having the acceptance of the bid rejected within the bin validity period.
Slide 31 /
Slide 32 / / EXPLAIN to participants the following:
•Procuring entities are required use the appropriate standard tender documents issued by the Public Procurement Regulatory Authority with minimum changes, acceptable to the MTB as necessary to address project specific issues.
•Tender documents and tender notice should be approved by the Tender Board before they are issued.
•PMU should submit the draft texts of the invitation to tender and of the tender documents to the Tender Board for comment and approval.
•If there are any amendments agreed with the appropriate Tender Board, it should be incorporated in the final text.
•Tender Notice or Tender Documents that have not been approved by the Tender Board is not going to be considered as sufficient and adequate to satisfy the requirement of the Regulations.
REFER participants to Handout 7.2: Advertising, Modifying and Custody of Tenders on page XX of participant handbook for more information.
Slide 33 / / EXPLAIN to participants the following:
•Procuring entities are required use the appropriate standard tender documents issued by the Public Procurement Regulatory Authority with minimum changes, acceptable to the MTB as necessary to address project specific issues.
•Tender documents and tender notice should be approved by the Tender Board before they are issued.
•PMU should submit the draft texts of the invitation to tender and of the tender documents to the Tender Board for comment and approval.
•If there are any amendments agreed with the appropriate Tender Board, it should be incorporated in the final text.
•Tender Notice or Tender Documents that have not been approved by the Tender Board is not going to be considered as sufficient and adequate to satisfy the requirement of the Regulations.
REFER participants to Handout 7.2: Advertising, Modifying and Custody of Tenders on page XX of participant handbook for more information.
Slide 34 / / EXPLAIN to participants the following:
•All tenders submitted before the deadlineshall be opened in publicin the presence of the tenders or their representatives and other parties with legitimates interest in the tender proceedings.
•Names of all those present at the tender opening and the organisation they represent should be recorded by the secretary of the tender board.
•Last tender opened should be endorsed ‘and the last’ and initialled by the members of the tender opening committee in the presence of tenderers or their representatives.
Slide 35 /
Slide 36 / / EXPLAIN to participants that the establishment of a tender evaluation committee should be based on the recommendations of the PMU.
Slide 37 / / EXPLAIN to participants that tender evaluation should be consistent with terms and conditions set forth in tender documents and such evaluation shall be carried out using criteria explicitly stated in tender documents
Slide 38 /
Slide 39 / / EXPLAIN to participants the following;
•The committee will determine whether the required guarantees have been provided, signed and whether the tenders are otherwise generally in order.
•Procuring entity may regard a tender as responsive even if it contains minor deviations that do not materially alter or depart from the characteristics, terms, conditions and other requirements set forth in the tender document.
REFER participants to Handout 7.3: Detailed Evaluation and Post Qualification on page XX of participant handbook.
Slide 40 /
Slide 41 /
Slide 42 /
Slide 43 /
Slide 44 /
Slide 45 / / EXPLAIN to participants that before submitting the evaluation report to the tender board, PMU is supposed to go through it and clear any doubt on issue (s) that need further clarification from the committee.
Slide 46 / / EXPLAIN to participants that the Secretary of the tender board shall send a copy of the decision of the tender board to the Chief Executive Officer of the Authority, the Controller and Auditor General, the Attorney General and the Technical Audit Unit of the Ministry of Finance.
/ Handout 7.2: Advertising, Modifying and Custody of Tenders

Advertising of Tender and the Issuing of Tender Documents

  • Tender documents should be issued immediately after first publication of the Tender Notice.
  • All suppliers, contractors, service providers or assets buyers who are going to respond to the Tender Notice in accordance to the Tender Notice in accordance with the procedures and requirements specified in the notice should be issued with the Tender Documents.
  • Tender period for various tendering methods is given in the Third Schedule of the Regulation for Goods, Works and Non-Consultancy Services.
  • Tender document may be sold in order to recover costs but the price should be calculated to cover only those costs related to printing, copying and distribution and should not include element of profit.
  • Tender Board should approve the price of solicitation documents prior to issue of tender notice.

Clarification and Modifications of Tender Documents

  • The supplier, contractor, serviced provider may request a clarification of the Tender Document for the procuring entity.
  • The procuring entity should respond to any request for clarification of the Tender documents that is received at least two weeks prior to the deadline for submission of tenders.
  • Procuring entity should respond to the query within three working days of receipt so that to enable the supplier to take into account the clarification received in the preparation of its tender.
  • Procurement entity for any reason, whether on its own initiative or as a result of a request for clarification by a supplier/contractor, modify the Tender documents by issuing an addendum.
  • Without identifying the source of the request, the procuring entity should communicate the clarification to all suppliers who were provided with Tender Documents
  • The addendum should be communicated promptly to all suppliers, contractors, or service providers who were issued with the Tender documents.
  • The procurement entity should extend the tender period if deemed necessary

Submission and Custody of Tenders

  • The place for and a specific date and time as the deadline for submission of tenders should be clearly stated in the Tender documents.
  • Tenders should be delivered by mail or by hand to the address, within the time limit and in the form and manner indicated in the invitation of tender and stipulated in the tender documents.
  • Where requirement for tender security has been stated in the tender documents, it should be delivered not later than closing date and time for the deposit or submission of the tenders in the amounts and in form and manner stipulated.
  • Only tenders received within time limit announced in the invitation to tender shall be eligible for consideration
  • Tenders received after deadline for the submission of tenders should not be opened and not be considered. They should be returned to the supplier, contractor or service provider that submitted it.
  • Received tenders should wherever possible be paced in a locked tender box or in secure office space
  • In some cases the envelopes containing tenders may be too large to be placed in the tender box, or no such box is available.
  • In such cases, all tenders that are not placed in a tender box should be kept unopened in a secure place until the deadline time for opening the tender.
  • The secretary of the tender board shall be responsible for holding securely the keys to its tender box or boxes.

/ Handout 7.3: Detailed Evaluation and Post Qualification

Detailed Evaluation

  • During detailed evaluation, the evaluation committee will evaluate and compare only the tenders determined to be substantially responsive.
  • The committee will evaluate and compare tenders basing on the criteria stated in the tender documents.
  • The procuring entity shall correct purely arithmetical errors that are discovered during the examination of tenders and the procuring entity shall give prompt notice of any such correction to the supplier, contractor, service provider or asset buyer that submitted the tender;
  • The successful tender shall be the one with the lowest evaluated tender cost but not necessarily the lowest price.

Post-qualification