procurement and supply manual

7/28/2019 Procurement and Supply Manual

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iREA Operational Manual: Procurement and Supply

RURAL ELECTRIFICATION AUTHORITY

REA OPERATIONAL MANUAL:

PROCUREMENT AND SUPPLY

March 2009

Plot No. 1613

Sheki Sheki Road

Post Net Box 349

Private Bag E891LUSAKA


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ii REA Operational Manual: Procurement and Supply

TABLE OF CONTENTSPAGE

ABBREVIATION AND TERMS USED iv

1.0 INTRODUCTION 1

PART A- GENERAL

2.0 PROCUREMENT AND SUPPLY MANUAL 2

2.1 Purpose and Use of the Manual 2

2.2 Organization, Intent and Modication of the Manual 3

3.0 ORGANIZATION AND FUNCTIONS OF THE PROCUREMENT AND SUPPLIES UNIT 3

3.1 Introduction 3

3.2 Procurement and Stores Unit 3

3.3 Rea Management Tender Committee 4

3.4 Technical Evaluation Committee 6

4.0 REA STAFF ETHICS AND PROFESSIONAL RESPONSIBILITY 6

PART B OVERVIEW OF THE PROCUREMENT PROCESS

5.0 REGISTRATION OF SUPPLIERS 7

5.1 Introduction 7

5.2 Supplier Registration Process 7

5.3 Evaluation of Supplier Application 8

5.4 Suppliers Recommendation 8

5.5 Supplier Performance Rating 8

5.6 Suspension or Removal from Supplier Data Base 9

5.7 Criteria for Suspension 9

6.0 PROCUREMENT PLANNING 106.1 Introduction 10

6.2 Short Term Planning 10

6.3 Long Term 10

6.4 Annual Plan 10

6.5 Contents of the Procurement Plan 10

7.0 PROCURING 11

7.1 Purchase Requests Specications 11

7.2 Procurement Strategy 11

7.3 Submission of Request to the Procurement Ofcer 12

8.0 PREPARATION AND ISSUANCE OF TENDERS 12

8.1 Introduction 128.2 Preparation of the Tender document 12

8.3 Identication of Potential Recipients of Requests for Bids Methods of Solicitation 12

8.4 Methods of Tendering 13

8.5 Low Value Procurement/Informal Tendering 13

8.6 Formal Methods of Tendering 14

9.0 OPENING, EXAMINATION, EVALUATION AND COMPARISON OF FORMAL TENDER 15

9.1 Opening 15

9.2 Examination 15

9.3 Evaluation 16

9.4 Report on Evaluation 16

9.5 Extension of Validity of Tenders 16

9.6 Clarication or Alteration of Tenders 179.7 Exceptions to Tender Procedures 17


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iiiREA Operational Manual: Procurement and Supply

10.0 ORDERING 18

11.0 RECEIVING OF GOODS AND SERVICES 18

11.1 Returning Materials to Supplier 19

11.2 Control over Good Received 19

11.3 Issues from Stores 19

PART C

12.0 GENERAL PROCUREMENT CYCLE AT REA 20

PART D

13.0 APPENDICES 22


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iv REA Operational Manual: Procurement and Supply

ABREVIATIONS AND TERMS

GRV Goods Received Voucher

GRN Goods Returned Note

MTC Management Tender Committee

PSU Procurement and Supplies Unit

LPO Local Purchase Order

CEO Chief Executive Ofcer

MAF Manager Administration and Finance

ZESCO ZESCO Ltd

REA Rural Electiricacation Authority

ZPPA Zambia Public Procurement Authority

RFP Request for Proposal

RFQ Request for Quotation

IFB Invitation for Bid

CONTRACT A Contract is a written document, containing the Agreement, and the Terms and

Conditions, between the REA and the Supplier, which serves as proof of theobligation.

DELIVERABLES Goods or Services delivered or to be delivered to the REA pursuant to the Terms and

Conditions of a Contract.

REQUISITIONER REA staff, who is responsible for submitting to the PSU, for their action, an approved

purchase requisisition.

SUPPLIER Provider of Goods, Services and Works to the REA.


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1REA Operational Manual: Procurement and Supply

1.0 INTRODUCTION

In November 2003, Parliament passed a new law entitled the Rural Electrication Act Number 20 of 2003.

The law was passed to lend impetus to Governments determination to improve the effectiveness in the

implementation of the rural electrication program. The Rural Electrication Authority established by the Act

is intended to be a special purpose vehicle for promoting the rural electrication agenda as the national utility,

ZESCO Limited, which has hitherto been implementing the program on behalf of Government, is encouraged

to concentrate on commercially viable ventures and projects.

REA has been mandated to carry out several functions as outlined in the ACT. In the course of carrying

out these functions, REA would be required to do procurement that would be acceptable both locally and

internationally.


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2 REA Operational Manual: Procurement and Supply

Part A. - GENERAL

2.0 PROCUREMENT AND SUPPLY MANUAL

This Procurement and Supply Manual has been developed to assist the REA carry out procurement in

a consistent, efcient and transparent manner. The manual is applicable to all types of procurement

(goods, works and services) and derives its authority from the Zambia Public Procurement Authority

(ZPPA) ACT No. 12 of 2008 of the Laws of Zambia. The tenders for all goods, works and services

shall be invited, examined and evaluated. The Contract shall then be awarded in accordance with the

procedures specied herein.

2.1 PURPOSE AND USE OF MANUAL

The Rural Electrication Authority (REA) needs to procure goods, services and works to support

its activities or projects throughout the country. The Procurement and Supply Unit (PSU) is in

charge of the procurement of goods, services and works.

The Procurement Ofcer is responsible for the procurement activities. However, the REA may

from time to time, depending on the value of services to be procured, request the Zambia

Public Procurement Authority (ZPPA) to perform the procurement on its behalf, as is stipulated

in the ZPPA Act.

(a) The Zambia Public Procurement Authority ACT No. 12 of 2008 of the laws of Zambia,

and the Financial and Accounting regulations of the REA govern the procurement

activities of the REA.

(b) This Procurement and Supply Manual claries the principle of segregation of

responsibilities between requisitioners and the procurement ofce by specifying

several separate and distinct functions within the procurement process. Moreover

cooperation between the requisitioners and the procurement ofce is essential and of

utmost importance to ensure the REA obtains good quality goods, services and works

that meet the specications at competitive prices within the required time frame in

order to further the statutory mandates of the organization.

(c) The Procurement Ofcer is responsible for the purchase of products, services and

works on behalf of the organization for both budgeted funds allocated to the REA, and

projects actions funded by other sources of nancing.

(d) The Requisitioners (e.g. budget holders) are responsible for identifying the needs of

the REA and developing of generic specication to fulll such needs.

(e) This manual is intended to provide guidance on procurement policies and procedures

to all REA ofcers involved in various stages of procurement action conducted by the

REA.

(f) The procedures in this manual are designed to ensure that such ofcers can give

those seeking to conduct business with the REA condence that their submissions are

considered in a fair and transparent manner. It will also assist stakeholders to have

condence that the funds entrusted to the REA will be utilized as intended.


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(g) Given the commercial environment and technological changes over time, this manual

will be updated and rened from time to time.

(h) All REA ofcers will be required to be familiar and comply with the provisions of this

Manual.

2.2 ORGANIZATION, INTENT AND MODIFICATION OF THE MANUAL

(a) This manual brings together policies, procedures and activities dealing with the REA

procurement processes, and consists of four parts namely General Introduction,

Overview of the procurement Process, General Procurement Cycle at REA and

Appendices & Forms.

(b) The main intent of this manual is to allow for efcient REA Procurement actions.

Some procedures contained in this manual may require modication, depending on

the task at hand.

(c) As indicated earlier, this manual will require modications from time to time as

deemed necessary.

General or specic comments and suggestions to this manual for improvements or additional

provisions that may be needed should be addressed to the Chief Executive Ofcer of the REA.

Any specic or general suggestion to modify it would be discussed at appropriate forum and

feed back would be made known to all REA staff.

3.0 ORGANIZATION AND FUNCTIONS OF THE PROCUREMENT AND SUPPLY UNIT

3.1 INTRODUCTION

The REA Procurement Ofce shall ensure efcient, effective and economical administration of

the procurement activities and related support services.

The Chief Executive Ofcer is authorized to establish policy and procurement related procedures

and direct activities of the REAs Procurement and Supply Unit. In additional, the CEO shall:

(a) Provide execution, direction, planning and management of the operations of the

PSU.

(b) Develop and coordinate a responsive and coherent policy for procurement activities.

(c) Provide appropriate reporting information to the overseeing bodies.

(d) Overview and review the preparation of submission to audit observation, reports and

management letters relating to procurement activities.


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3.2 PROCUREMENT AND STORES UNIT (PSU)

The PSU comprises the Procurement Ofcer and any staff reporting to him/her.

The PSU shall:

(a) Plan and Manage Procurement activities in accordance with the requirements of the

REA activities.

(b) Process and expedite requisitions, solicitation documents, submissions, contractual

instruments and invoices.

(c) Prepare and submit written reports on pending activities on procurements for review

and advice.

(d) Negotiate, prepare and administer contracts for goods, services and works.

(e) Liaise with requisitioners in developing technical specication/drawings/BOQs for

goods, services and works to be procured.

(f) Monitor Supplier performance evaluations in conjunction with other related sections of

the REA.

(g) Maintain records of every Contract entered into by the REA.

(h) Arrange and coordinating MTC meetings and drafting of minutes of the same, and

maintaining a permanent record of all minutes/recommendation and cases reviewed

by it.

(i) Responsible for administering and maintaining the Suppliers database.

(j) Conduct bid opening functions as and when needed.

(k) Perform any other duties assigned by the Chief Executive Ofcer from time to time.

3.3 REA MANAGEMENT TENDER COMMITTEE

3.3.1 GENERAL FUNCTION OF THE REA MANAGEMENT TENDER COMMITTEE

The formal responsibility of the REA Management Tender Committee is to ensure

that proposed procurement actions are based on fairness, integrity and transparency,

and that such are impartial and unambiguous. The Management Tender Committee

reviews presentations and provides advice to the Procurement Ofcer on whether the

proposed procurements are in accordance the ZPPA.


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It is the duty of the Management Tender Committee to:

(a) Ensure that general policy laid down by the ZPPA regarding the procurement of

goods, works and services is adhered to.

(b) Standardize goods, equipment and services procured in the interest of efciency,

economy, quality and reliability and ease of maintenance; and

(c) Encourage many eligible registered Suppliers to participate in tenders.

3.3.2 COMPOSITION OF THE REA MANAGEMENT TENDER COMMITTEE (MTC)

TheMTC shall be composed of six voting members from the following ofces:

(a) The Chief Executive as Chairperson

(b) The Senior Manager Planning & Projects

(c) The Manager Administration & Finance

(d) The Manager Public Relations

(e) The Legal Ofcer

(f) Two external members approved by ZPPA

(g) The Procurement Ofcer shall serve as the Secretary to the MTC and shall have no

voting rights.

3.3.3 DUTIES OF THE REA MANAGEMENT TENDER COMMITTEE

(a) The Management Tender Committee will from time to time be convened to review

and provide advice on whether proposed procurement actions of values within the

threshold authorized by the ZPPA are in accordance with the ZPPA regulations.

(b) Two thirds of the members of the committee will form a quorum. The quorum shall

always include the two external members who are not REA staff. Members of the

committees are required to study the committee documents before the meeting.

Therefore, the documents shall be circulated to the members at least 24 hours before

the meeting.

(c) All members of the MTC are obliged to attend all MTC meetings. In their absence, the

proxies delegated in writing shall attend.

(d) If deemed necessary, any requisitioning ofcer initiating the procurement action that

require the MTC review shall attend, in a non-voting capacity during the MTC reviewand consideration of the said procurement action.


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(e) The MTC may invite any other ofcer whose presence is, in its opinion, desirable to

attend and to participate in the deliberations for the purpose of advising the committee

on the suitability of a particular purchase or specic matter. However, such a person

will have no vote.

(f) In case of a perceived of actual conict of interest, the concerned member should

disclose the matter to the committee, and excuse himself or herself from consideration

of that matter. The Chairman of the MTC shall ask members with interests in mattersunder considerations to leave the meeting.

(g) Minutes of the Tender Committee proceedings shall be recorded, maintained in sequential

order, and submitted to the ZPPA within seven (7) days after comrmation.

3.4 TECHNICAL EVALUATION COMMITTEES

The REA shall from time to time constitute Technical Evaluation Committees. Their duties

shall be to give advice to the Procurement Ofcer and the MTC on matters of highly technical

nature.

The Committee may also meet with the requisitioner and the Procurement Ofcer at the

time of formulation of the draft tender document so as to ensure all necessary technical

parameters are adhered to.

4.0 REA STAFF ETHICS AND PROFESSIONAL RESPONSIBILITIES

(a) All staff of REA involved in the procurement processes are expected to exercise loyalty and

discretion in the execution of the duties entrusted to them and to discharge these functions

and regulate conduct in the interest of the public.

(b) Procurement Unit of the REA is obliged to comply with the Financial Regulations and Laws of

the Republic of Zambia as set out by the ZPPA. It is absolutely essential that all procurement

activities are above reproach, with complete impartiality and with no preferential treatment.

(c) REA shall endeavor to deal with Suppliers that adhere to highest ethical standards both during

the bidding process and the execution of the contract.

(d) REA staff shall not allow any Suppliers access to information on a particular acquisition

before such information is available to the business community at large. Staff shall not

intentionally use unnecessarily restrictive or tailored specication or statements that restrict

competition.

(e) The REA procurement process that includes the preparation of specications and scope

of work, tendering or identication of potential Suppliers, evaluation of bids and award of

Contracts to successful bidders, is designed to enable bidders compete for REA business on

a fair basis. Staff associated with the procurement function, therefore, are responsible for

protecting the integrity of the procurement process while maintaining fairness in the REA

treatment of its bidders.

(f) Ofcers involved in the procurement processes are not allowed to accept any gift from

suppliers regardless of the value and whether the supplier is soliciting dealings with REA or

not. Ofcers shall decline gifts, drinks, meals, transportation or any other form of benet. Inthe event that there is any doubt, the matter should be brought to the attention of the CEO.


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Part B OVERVIEW OF THE PROCUREMENT PROCESS

5.0 SELECTION OF SUPPLIERS

5.1 INTRODUCTION

Performance of the REA in terms of execution of projects depends greatly on the quality and

delivery performance of its Suppliers, Contractors and Consultants.

In order to maintain reliable and regular sources of goods, services and works, REA will

assess the database of Suppliers who are registered with the ZPPA, and or National Council

for Construction (NCC) for specic categories of goods, services and works.

Consultants recommended by Cooperating Partners funding specic projects will be contracted

from time to time depending on conditions laid down.

However, the REA may purchase goods, services and works from Suppliers who are not

registered with the ZPPA or NCC depending on the procurement method employed and nature

of goods, services and works sought. This would only happen after REA uses established

criteria to evaluate information provided by prospective Suppliers, and determines compliance

to conditions set forth by the REA and in accordance with the ZPPA guidelines.

A proper and updated data base of registered Suppliers is required to be kept by the PSU

at any one time. This will include information on services provided by each supplier, general

particulars of the Suppliers, telephone and fax numbers, email address, physical address

and any other relevant detail. This would also include details regarding evaluation of supplierperformance.

5.2 SUPPLIER INVITATION PROCESS

The REA shall invite applications from would be Suppliers for its goods, services and works

on an annual basis.

The following are the minimum documents to be provided at the registration stage:

(a) Completed application forms

(b) Copy of certicate of incorporation (privately owned companies)

(c) Latest certied/audited nancial statements

(d) General information about the rm and its products/services

(a) Letters of reference from at least two clients to whom the rm has provided goods,services and works in the recent past.


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(b) Letter of Registration from the ZPPA or NCC.

(c) VAT registration certicate.

5.3 EVALUATION OF SUPPLIER APPLICATIONS

Where a pre-qualication of is considered necessary,the Technical Tender Committee of the

REA, in consultation with the appropriate user department, would evaluate the applicationsreceived.

Evaluation criteria would include:

(a) Relevance to the product/service required by REA.

(b) Financial capacity and stability

(c) Applicant business capacity and experience

(d) Technical competence

The REA shall use established criteria to evaluate information provided by prospective suppliers,

and determine the compliance of the conditions set forth by the ZPPA and the REA.

Registration or refusal shall be granted by the REAs Technical Tender Committee and shall be

communicated to the applicant within twenty one (21) working days from date of opening.

5.4 SUPPLIERS RECOMMENDATIONS

(a) As a general rule, requisitioners and users may recommend suppliers. However while

this can undermine the principle of segregation of responsibility between requisitioning

and procurement ofces it will be the ultimate responsibility of the Procurement Ofcer

to ensure that those suppliers invited to bid are independent of REA, have no links

business or personal with members of staff of REA and that they are the suppliers lest

able to respond to the bid requirements.

(b) A consultant engaged to prepare or review technical specication and/or assist in the

evaluation of bid or proposal concerning a particular requirement, shall not be allowedto recommend any supplier or submit a bid or an offer.

5.5 SUPPLIER PERFORMANCE RATING

REA shall from time to time evaluate Supplier performance in accordance with the following

guidelines:

(a) Fulllment of delivery schedules.

(b) Compliance with contractual terms and conditions.


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(c) Quality of goods or services provided.

(d) Timely response to the REA requests to rectify discrepancies and resolve conicts.

(e) Failure to disclose information which can affect performance of the Suppliers.

(f) Undue delay of the performance under the contract.

5.6 SUSPENSION OR REMOVAL OF SUPPLIER

A member of the REA or its related organizations may report and recommend to

the REA Tender Committee, as appropriate whether to suspend a Supplier for a

specic period of time or indenitely. If the circumstances warrant suspension, the

period of suspension must be clearly dened so as to afford the Supplier with an

opportunity to correct the deciency that lead to the suspension.

5.7 CRITERIA FOR SUSPENSION

The criterion for suspension or removal is as follows:

Based on substantial and documented evidence, that the Supplier has failed to adhere(a)

to terms and conditions of a contract with the REA so serious as to justify suspension

or removal from the database such as:

i. Failure to perform in accordance with the terms and conditions of the

contract.

ii. Lack of response or acknowledgement to three invitations to submit a bid.

iii. The Supplier has been convicted of any criminal activity (e.g. fraud).

iv. Abusive, unethical or unprofessional conduct, including corrupt practices and

submission of false information.

v. Any documented or compelling proof of misconduct which would negatively

tarnish the REA reputation to its Cooperating Partners.

Notication by any reputable institution or other authoritative source that a Supplier(b)

has been charged with committing a criminal offence or fraud.

A criminal conviction or civil judgment issued against a Supplier indicating business(c)

dishonesty or lack of integrity.

However, non performance shall not automatically translate in suspension or removal from the

database. Mitigating factors shall be thoroughly considered by the REA prior to recommending

suspension or removal.


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6.0 PROCUREMENT PLANNING

6.1 INTRODUCTION

Procurement Planning is essential for the effective and timely solicitation of bids or proposals,

award of contract and delivery of goods, services and works required. Requisitioners together

with the Procurement Ofcer are responsible for developing procurement plans yet maintain

their separate roles. Overall responsibility of acquisition of goods, services and works rests

with the procurement ofce.

6.2 SHORT-TERM PLANNING

In order to ensure that REA obtains good quality goods, services and works at competitive

prices the requisitioners shall ensure rational and optimal use of funds throughout the

budget. However last minute requisitions should be discouraged unless in very exceptional

circumstances as this hampers the REAs ability to ensure transparent, open, efcient and

timely procurement process.

6.3 LONG-TERM PLANNING

The requisitioning ofce and the procurement ofce shall from time to time perform long term

planning covering the bulk of the budgetary period. This helps to lay the foundation on the

best procurement terms for the Authority and will also serve to demonstrate the REAs ability

to manage funds in a professional and transparent manner for the benet of the public.

6.4 ANNUAL PLAN

The requisitioning and procurement ofce shall communicate and meet to set up Procurement

Plan for the forthcoming budget year. Such plans, shall be to the extent possible help achieve

economies of scale and other benets to the REA.

Proposed revisions to the Procurement Plan may be done at the beginning of every quarter so

as to ensure continuity of operation without impacting negatively on the budget.

6.5 CONTENTS OF THE PROCUREMENT PLAN:

(a) Item No.

(b) Type of goods, services and works.

(c) Purpose of Procurement

(d) Estimated quantity (number of units) or term (number of months)

(e) Specication and Description

(f) Method of Procurement


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(g) Estimate value in Kwacha

(h) Delivery date or expected quarter when the goods would be required to be

delivered, or services and works required would commence.

(i) Any other relevant information.

7.0 PROCURING

7.1 PURCHASE REQUISITION SPECIFICATIONS

1. The requisitioner must prepare a detailed purchase requisition and specication in time,

bearing in mind all the steps of the procurement processes set forth in this manual, in order

to initiate the process of fullling the said need in due time.

2. The requisitioner is required to make preliminary contact with the Procurement Ofcer for the

forthcoming requisition in order to gain insight into the typical time required to complete the

procurement process.

3. The requisitioner shall allow adequate lead time for the procurement ofce to properly conduct

the procurement process. This process will normally commence upon receipt of a sufciently

funded, completed and authorized purchase requisition including specication, from the

requisitioner and ends with contract award.

4. When planning, the requisitioner should take into account the time required for preparation of

bid documents, expression of interest, submission of bids by Supplier, evaluation of submissions,submission to and review by the MTC or the ZPPA (which ever would be applicable) and the

need for negotiations and drafting of the contract.

5. Requisitioners shall contact Administration and Finance to ensure that sufcient funds are

available for the applicable purchases prior to submitting a purchase requisition to the

procurement ofce.

7.2 PROCUREMENT STRATEGY

1. For large and/or complex procurements to be performed by the REA, the requisitioner together

with the Procurement Ofcer shall establish a procuring strategy setting forth the various

steps in the procurements process and key issues to be resolved at each of these steps.

2. The strategy should address a high level description of needs to be fullled, an estimate of the

time to fulll the process and other issues of higher importance to the process. Procurement

strategy may also include special procurement techniques which bring value for money and

best performance practices from Supplier

3. Once agreed the nal procurement strategy shall be submitted to the CEO by the Procurement

Ofcer.


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7.3 SUBMISSION OF PURCHASE REQUESTIONS TO THE PROCUREMENT OFFICER

The requisitioner shall submit to the Procurement Ofcer an approved Purchase Requisition,

supported by a comprehensive description of goods, services and works to be delivered or

performed, including detailed specication of construction and installations required, and

architectural drawing, if appropriate.

The specication should also specify the reasonable time within which the work or service is to

be performed and the time limit for delivering the goods. The requisitioner is further required,

as a priority, to provide assistance and cooperation in nalizing information for the Bidding

Documents as and when requested by the Procurement Ofcer.

8.0 PREPARATION AND ISSUANCE OF TENDERS

8.1 INTRODUCTION

The Procurement Ofce shall evaluate purchase requests received and should identify any

issues which do not conform to the general requirement of the REA or the ZPPA procurementguidelines. Such issues should be brought to the attention of the requisitioner who must

correct the requisition accordingly.

Typical issues that do not strictly conform to REA or ZPPA requirements are:

1. Requirements designed to limit or do away with competition.

2. Unjustied or persuasive request for exemptions from effective competition.

3. Unrealistic short delivery period.

4. Unrealistically low budget estimates.

8.2 PREPARATION OF TENDER DOCUMENT

The requisitioner in consultation with the Procurement Ofcer and the Legal Counsel shall

prepare the Tender Document or Tender Enquiry.

The document, shall among other things, contain (depending on the purchase) Instructions

to Bidders, Specications, drawings and Bill of Quantities. The Tender Document shall need tobe approved by relevant authorities prior to issuance.

8.3 IDENTIFICATION OF POTENTIAL RECIPIENTS OF REQUESTS FOR BIDS

Duly registered Suppliers who conform to the general conditions as set out by the ZPPA or

Cooperating Partners shall be contacted.

In accordance with this manual, all tenders for capital projects would be invited by advertising.

Potential Suppliers shall be identied, by placing an advertisement or by selective Tendering.

Tendering shall be undertaken in a transparent manner to ensure integrity of the process andthe condence of all involved.


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Limitation of number of invitees may be allowed under the following:

(a) When the list is unduly long for the PSU.

(b) Single source.

(c) Security reasons.

(d) Low value purchases.

(e) Other exceptional circumstances as the situation warrants.

As a general rule, a minimum of three Suppliers should be invited for any particular purchase.

However, jurisdiction should be used with due consideration to costs usually associated with

tendering process. The PSU should always strive to ensure equitable issuance of tenders.

8.4 METHODS OF TENDERING

Basically, there are two methods of tendering. These are Informal Methods of Tendering and

Formal Methods of Tendering.

The method to be employed largely depends on the nature and value of the items or services

to be procured and also on the time frame in which to fulll the need.

Informal Methods are purchases in which the PSU shall obtain quotes from registered suppliers

(via fax, email, or in personal), evaluate them, make a recommendation and submit thequotes for approval to either the CEO or the MTC for approval.

Formal Methods are purchases in which the Requests for quotes are invited by either public or

selective means, and the quotes are received as sealed bids. Opening of these bids shall be

strictly as stated in the bid documents and bidder representative might be required.

8.5 LOW VALUE PROCUREMENT/INFORMAL TENDERING

Low value purchases of less than one million kwacha do not need competitive bidding and the

following procedures shall be followed:

(a) The Procurement Ofcer shall check if there is a current contract for the provision ofrequired item or service. If the contract is in place, the purchase shall be made under

this contract.

(b) If REA has standardized purchases of certain goods, services and works with specicSuppliers, those goods, services and works shall be procured from those Suppliers.

(c) The Procurement ofcer shall invite at least three prospective Suppliers via phone, fax,and email or in person. The request for quotes shall include all requirements (quantity,

delivery times etc.) In order to ensure economy, efciency and fair market prices, the

Procurement Ofcer needs to assess that s/he is getting the best possible value.


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(d) The Procurement Ofcer shall document the assessment by issuing a memo to the casele, stating that s/he has obtained the best possible value.

In the above cases, the Procurement Ofcer shall issue a Local Purchase Order or Contract.

8.6 FORMAL METHOD OF TENDERING

An Invitation to Bids (ITB) shall be used for the procurement of goods, services and works of

standard and rm specication (very clearly dened and continuously used deliverables) of

total estimate in excess of ve hundred million kwacha, and shall be undertaken through open

or public (formal) tenders.

The requisitioner shall prepare a purchase request and submit to the PSU, upon approval by

relevant head of department and conrmation of availability of funds.

(a) The PSO would prepare the draft tender document with the help of the requisitioner and

the Legal Counsel who shall provide technical specication for the required item.

(b) All formal tenders shall be advertised in the Government Gazette and at least one English

language Zambian mass circulation daily newspaper.

(c) The use of selective or restrictive tenders shall be limited to exception cases as provided

for in the ZPPA regulations.

(d) All formal tender undertaken shall be subjected to prior review. This means REA shall

need to obtain a no-objection from the ZPPA to the draft tender document before issuing

to prospective bidders.

(e) A no-objection shall also be obtained from the ZPPA before the evaluation and

recommendation for contract award for purchases above the MTC threshold.

(f) Request for Proposal (RFP) shall be used for procurement of deliverables that cannot

be quantied or qualitatively expressed in sufcient detail to allow use of ITB the time

Solicitation is Issued such as profession services or similar services.

(g) An RFP shall also be used when outsourcing non-core activities and service. An RFP shall

also be used to purchase complex goods using a functional specication when proposals

from invitees are preferred. Specication shall be clear, comprehensive and preferably

performance oriented, in order to ensure fair and equal treatment of prospective

Suppliers.

(h) For RFP, the contract shall be awarded to the qualied proposer whose proposal, all

factors considered, is the most responsive to the requirements set forth in the solicitation

documents.

8.6.1 INSTRUCTIONS TO TENDERERS

The invitation/notice for tenders must state details of the required supplies, services

or works, the name and location of the ofcer from whom the documents are available,

the tender conditions and, in particular the following:

(a) Closing date and time;


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(b) Period of validity of tender;

(c) That no tender will be considered unless it is delivered by the closing time andat the place specied in the tender documents.

(d) Whether there will be a public opening and, if so the appointed time and place;and that is not bound to accept the lowest nor any tender.

8.6.2 ADEQUATE NOTICE

Advertising of public tenders must provide adequate time for the bidders to formulate;

price and return their quotation to the REA.

8.6.3 EXTENSION OF TIME FOR TENDERING

Any formal request for an extension to the tender period must be received by at leasttwo weeks for National Competitive Bidding (NCB) and four weeks for International

Competitive Bidding (ICB), before the tender expiry date, and, if acceptable to the

relevant Tender Committee, extension shall be communicated to all bidders.

8.6.4 RECEIPT OF TENDERS

Tenders received by the Secretary to Tender Committee will be numbered, then

initialed by him/her with the date and time of receipt and deposited in the appropriate

tender box.

Any tender received by the Secretary of Tender Committee through the normal post

or placed in a tender box, or received by any other means after closing date and time

shall be returned, unconsidered and unexamined, to the bidders with the date and

time when it was received.

9.0 OPENING EXAMINATION, EVALUATION AND COMPARISON OF FORMAL TENDERS

9.1 OPENING

Prospective Suppliers who submit Tenders may designate one attendee to be present at the

Tender Opening. Such attendee shall act as observers, and not as active participants in theopening process.

All received Bid Submissions to ITBs shall be recorded, and publicly opened at the time and

place specied in the Solicitation Documents.

All received Submissions to RFPs shall be recorded, and publicly opened for the sole purpose

of registering the details as provided in the Tender Abstract. Price information of proposals for

RFPs shall not be announced at the Tender opening, as the nature of the Tender Document

and Submission does not lend itself to a direct comparison of prices.

9.2 EXAMINATION


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Following the opening it should be ascertained whether material errors in computation have been

made in tenders, whether the tenders are substantially responsive to the tender documents,

whether the required sureties, guarantees or warranties have been provided whether the

documents have been properly signed and whether tenders are otherwise generally in order.

If a tender is not substantially responsive to the tender documents, or contains unacceptable

qualication, it should be rejected, unless it is an alternative tender permitted or requested

under the tender documents. A technical analysis should then be made to evaluate each

responsible tender and to enable tenders to be compared.

9.3 EVALUATION

The specic number and types of evaluation criteria, as well as their relative importance shall

depend on the nature of the requirement and shall be developed by the evaluation committee.

The evaluation criteria shall be determinant, not merely important. They shall be documented

in writing prior to the release of the Tender Document.

In general the relationship between the weight given to the price versus the technical factor

should be determined by various several factors, e.g. the complexity of the requirement, the

level of detail, and objectively to be used for conducting the technical evaluations

The purpose of the source selection process is to identify the Suppliers(s) to whom the

contract(s) is to be awarded, i.e. the process from the receipt of Tender Submission, through

the evaluation of such submission to the decision to award the contract. Suppliers are qualied

and evaluated as to their Responsiveness.

In order to ensure that the procurement process is fair, objective and transparent, the source

selection process shall also give due consideration to a balancing of the following general set

forth.

(a) Best value for money

(b) Fairness, integrity and transparency;

(c) Effective international competition;

(d) The interest of REA

9.4 REPORT ON EVALUATION

A detailed report on the evaluation and comparison of tenders setting out the specic reasons

on which the decision for the award of the contract, or rejection of all tenders, is based should

be prepared by the Chairman of the Management Tender Committee. If a consultant has

been employed to evaluate a tender, an individual assessment and recommendation from the

relevant Chairman must accompany the consultants report.

9.5 EXTENSION OF VALIDITY OF TENDERS

In the event of the assessment of tenders not being within the period of the validity of the

tenders, an extension of time may be requested from the bidders. In these circumstances,

REA should re-negotiate the validity period by exchange of letters or fax. Those who are

willing to extend the period of validity of their tenders should neither be required nor permittedto modify their tenders.


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9.6 CLARIFICATION OR ALTERATION OF TENDERS

Except as otherwise provided in this procedure, no bidders shall be permitted to alter his/her

bid after his/her tender has been delivered to the REA. The REA, however, after the tenders

are opened, may ask any bidders for a clarication of his/her tender but may not ask any

bidders to change the substance or price of his/her tender.

The Tender Committee may reject any tender or part thereof; it need not accept the lowest

tender if it is considered not to be in interest to do so; details of the reasons for not accepting

the lowest tender should be recorded in the minutes.

The award of a contract should be made within the period specied for the validity of tender

to the bidder whose tender has been determined to be most advantageous to the REA and

who meets the appropriate standards of capability and nancial resources.

The award of the contract shall be affected by the issue of a Purchase Order or by a formal letter

or acceptance signed by the authorized ofcers, incorporating the Contract/Tender Reference

and the value of the award.

9.7 EXCEPTION TO TENDER PROCEDURES

For contracts exceeding the Management Tender Committee authorisation limit, any request

for exemption from tender procedures should be made in writing to the Zambia National Tender

Board, accompanied by full details to justify the exemption, and supported by Suppliers

quotations where applicable. The ZPPA subject to the limits may approve purchases without

reference to tender procedures in the following instances:

(a) Where the goods and/or works required are of a specialized or proprietary nature and

there is no compatible alternative, or there is a clearly establish policy of standardization

(i.e. standardization of equipment or spares may require purchases from the originalsupplier in order to be compatible with the existing equipment);

(b) Where the good and/or works required are proprietary in essential after-sales services

cannot be obtained without purchase from one source;

(c) Where tenders have been invited and no offers have been received or it is evident that

tenders are collusive or unreasonable; and

(d) Where urgency or the exigencies of the service prelude tendering. The exigency or the

cause for the urgency must be established and place on record in the application for

approval.

(e) When the proposed procurement contract is the result of co-operation with other in-

progress works.

(f) When offers for identical goods, services and works have been obtained competitively

within a reasonable period and the prices and conditions offered remain competitive;

(g) When the value of the procurement is below the monetary threshold established for

formal methods of solicitation.


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(h)When the proposed procurement contract relates to obtaining services that cannot beobjectively evaluated.

10. 0 ORDERING

This section covers the ordering of goods, services and works, both of capital and revenue nature. The

Purchase Order (PO) is a contract. It is generally used for acquisitions that follow the issuance of a

request for quotation or an invitation to bid, such as for goods standardized items or simple services

The Head of Department must approve a Purchase Requisition before the Purchase Order can be

raised. Purchase Orders must be used for all goods, services and works, with the exception of regular

services such as telephone and electricity charges. Purchase Orders are not required where formal

contracts are being executed and for petty cash purchases.

A Procurement ofcer shall raise a Purchase Order, after approval of the purchase. A Purchase Orders

must contain the prices and/or rates that are agreed upon with the supplier, as well as the quantity and

detailed description of the goods or services ordered, and the delivery schedules. The Procurement

Ofcer may add special instructions to the PO.

The order comes in triplicate copies; the rst copy goes to the Suppliers, the second copy goes to

Accounts and the third copy remains in the Purchase Order book.

Purchase Orders for capital expenditure shall not be issued until the REA has committed funds for

such expenditure, even though such items are included in the budget approved by the Board.

Purchase Orders may not be split to circumvent the authority limits.

Under exceptional circumstances, the Approving Ofcer may delegate a subordinate ofcer to sign the

Purchase Orders on their behalf, provided such Purchase orders are countersigned by the authorized

ofcer immediately on their return.

11.0 RECEIPT OF GOODS, SERVICES AND WORKS

The Stores Ofce is responsible for co-coordinating the receipt,inspection and the certication of

acceptance or rejection of delivered goods, services and works in consultation with the Procurement

Ofce and the requisitioning ofces.

Products and equipment that have been received, inspected and accepted or rejected are so certied

on a Receiving and Inspection report.

No payment shall be effected for projects, products, equipment or services that have been rejected,

provided such rejection takes place prior to the REAs obligation to pay under the terms and conditions

of the Contractual

instrument.

The REA, however, cannot unduly withhold inspection in order to prolong the payment terms. Therefore,

such Inspection shall be performed as soon as possible after the delivery, as dened in the contractual

terms and conditions, since this action commences the payment obligation.

When deliverables are satisfactorily furnished, a receipt and/or Inspection are required to certify

complete delivery or partial delivery of the order or contract.


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For services, the requisitioner or any appointed staff shall inspect to ensure that the services have

been provided satisfactorily.

Goods Received Voucher (GRV) must be completed for all goods received by the person receiving

certifying that the goods received are in agreement with the orders placed.

In the case of services, the requisitioner for the service shall sign the invoice to conrm that the

services ordered have been done to his/her satisfaction.

In the case of works, contract documents shall be authorized by the CEO prior to their issue. The PSU

shall manage the contracts and oversee contracts management by the designated contracts manager.

The PSU shall verify contractor invoices prior to payment. On completion of works the contracts

manager shall issue a completion certicate and a copy shall be retained by the PSU.

11.1 RETURNING GOODS TO SUPPLIER

When it is necessary to return goods to a Supplier, the Procurement Ofcer shall issue a Goods

Return Note.The Goods Return Note shall include:

(a) Reference to the original Purchase Order number;

(b) A description of the item to be returned;

(c) The value of the items as shown in the Purchase Order;

(d) An indication of the reason for the return of the items;

(e) Additional remarks, if required, to explain the reason(s) for the return of the items;

(f) Instruction to Supplier on the action required by the REA, i.e.,replacement of the

returned goods or the issue of an appropriate credit or refund in respect of its value;

(g) And whether the cost is to be borne by the REA or the Supplier.

11.2 CONTROL OVER GOODS RECEIVED

A Goods Received Voucher (GRV) must be completed for all goods received by the Stores Ofcer

certifying that the goods received are in agreement with the orders placed. Goods received in stores

shall be stored properly, in appropriate locations with Bin Cards describing the nature of the items,

last receipt, last price, number of items, Supplier and condition.(Refer to appendix 5).

11.3 ISSUES FROM STORES

All goods issued from stores must be done after producing of a duly signed Stores Requisition Note.

Only quantities sufcient to meet the immediate need or requirements of a user should be issued. The

Stores Ofcer shall ensure that all goods are issued with care to avoid abuse.


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Part C

12. GENERAL PROCUREMENT CYCLE AT REA

The following in the summarized procurement cycle of steps/tasks that shall be executed in performing

the procurement functions:

(a) Each department or section shall ll in a Purchase Requisition Form (Refer to Appendix 1)

clearly specifying its requirements and submit the requisition to the Procurement and Supplies

Unit.

(b) The PSU shall enter the requisitions details on a Procurement Indent Register serially according

to departments or section from the beginning to the end of the nancial year. The PSU will

assign tender numbers to each requisition;

(c) For informal tenders, the PSU shall invite tenders through Tender Enquiry Form and receive

tenders (quotations) from at least (3) prospective Suppliers.

(d) For formal tenders, the PSU in conjunction with the user department shall advertise the tender

in at least one Zambian newspaper of mass circulation or submit to Zambia National Tender

Board depending on the prevailing threshold.

(e) Bids or tender enquiries shall be closed and opened at the exact time and place mentioned in

the invitation to bid or tender enquiry and in public in case of formal tenders. Any interested

individuals are free to attend the tender opening meeting and shall enter details such as;

their names, signature, institutions they represent, the tender number of the tender they are

witnessing and date on the tender opening attendance register.

(f) The Chairman shall proceed to opening the bids while numbering them sequentially according

to the order of opening and read out relevant information e.g. name of a bidder, bid sum

(inclusive or exclusive of VAT), Bid Security amount and its source, delivery period or completion

period and samples. The Chairman shall stamp bid forms and price schedules of each bid using

the Chairmans Bid Opening Date Stamp. The Secretary of the tender opening meeting shall

prepare minutes of the opening for record keeping. The Secretary shall ensure that all pages

of all bids are stamped using the PSU date stamp immediately after opening;

(g) A Tender Evaluation Committee shall be constituted to evaluate the tenders (quotation) received

using Tender Evaluation Form, where applicable and recommend procurement in accordance

with nancial limits. For procurements within the departmental or Chief Executive nanciallimits, the Procurement and Supplies Unit shall recommend approval of purchase to the Head

of Department or the Chief Executive as the case may be;

(h) For procurements above the departmental nancial limits, the Procurement Unit shall prepare

a Tender Committee Paper and attach relevant documents e.g. quotations, for submission to

the Management Tender Committee, for consideration;

(i) The Secretary to the Tender Committee, in consultation with the Chairperson shall arrange for a

Tender Committee Meeting to consider authorizing procurements. The decisions for the Tender

Committee shall within seven days after the meeting be communicated to the applicants.

(j) Immediately upon receipt of the Tender Committees approval the Legal Ofcer in consultation


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with the user departments shall prepare a contract or the PSU can issue Local Purchase

Order(Refer Appendix 2) and have it signed by designated personnel;

(k) Upon signing the Contract, the Supplier/Contractor, where applicable, shall within fourteen

days of signing the contract furnish the REA with a signed performance guarantee.

(l) Once the performance guarantee has been submitted and accepted, the supplier/contractor/

consultant, where applicable, shall submit a bank guarantee for advance payment from a

stated source;

(m) Upon receipt of the goods, the PSU, user department and a hired expert, where necessary,

shall inspect the goods. The PSU shall issue a Goods Received Voucher (Refer Appendix 3).

Donated goods shall also be received and entered accordingly;

(n) Rejected goods will be returned to the supplier as outlined on the Goods Return Note (Refer to

Appendix 4). Returned goods note should be written in red to avoid confusing it with the goods

received note;

(o) Accepted goods shall be entered on the Bin Card (Refer to Appendix 5) and issues shall be

entered progressively from thereon;

(p) The goods shall be issued upon the user submitting correctly signed Stores Requisition Note to

Stores Section (Refer to Appendix 6);

The PSU shall maintain consolidated registers and records for the following:

i. Purchase requisitions;

ii. Purchase orders;

iii. Tender Evaluation Forms;

iv. Management Tender Committee Decisions; and

v. Any other documents which may relate to procurement and supplies function.


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Part D

13.0 APPENDICES

Appendix 1 Purchase Requisition Form

Appendix 2 Local Purchase Order (LPO)

Appendix 3 Goods Received Voucher (GRV)

Appendix 4 Goods Returned Note (GRN)

Appendix 5 Bin Card

Appendix 6 Stores Requisition/Issuing Voucher


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APPENDIX1

RURALELECTR

IFICATIONAUTHORITY

PURCHAS

EREQUISITION

To:P

rocurement

Ofcer

Date

___________________

Ite

m

No.

DescriptionofGoo

ds,ServicesandWorks

Qty

Required

EstimatedValue

PurposeofExpenditure

Raise

dby:

Nam

e:

________________________

_______

Manager-

Adm

in&Finance

______

________________

(BudgetApp

roval)

Sign

ature:____________________________

Appr

ove

dby

_____________________________

(Hea

do

fDepartment)

No.__________


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Appendix 2


Plot Number. 1613, Sheki Sheki Road, Post Net Box 349, Private Bag E891

Lusaka, Zambia

PURCHASE ORDER ORDER No._________

Messrs____________________________________ Date__________________________

___________________________________________ Your Quotation No.______________

ItemNo. Description Quantity Unit Price Total Amount

Validity: 30 days from date of issue Sub Total

VAT

Grand Total

Procurement Ofcer____________________________ Approved by___________________________

Supplier: ____________________________________

This Order is subject to the following conditions:

All invoices must clearly indicate this order number.1.

Subsequent alterations in prices/specications of goods to be supplied must be communicated and agreed upon in2.

writing with REA.

A delivery Note must accompany the goods supplied.3.

Payment shall be made within 30 days.4.

This order is valid when authorized by all signatories.5.

Distribution of copies: 1. White copy Original: Supplier/Contractor

2. Pink copy Duplicate: Accounts/Payments

3. Blue copy Triplicate: Book copy


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Appendix3

RURALELEC

TRIFICATIONAUTHORITY

GOODS

RECEIVEDVOUCHER

Nam

eo

fSupp

lier_

________________

_______________________

Da

te_________________________

_

____

__________________________________________________

Invo

ice

No.____________________

Purc

hase

Order

No._______________

_______________________

De

livery

Note

No._______

__________________________

Ite

m

No.

Description

Qty

Ordered

Qty

Received

Unitof

Receipt

UnitPrice

Tota

lCost

Good

srece

ive

dby

________________

_______________

Date

________________________________

Veri

edby

______________________

_______________

Date

________________________________

Com

ments

byveri

fyingo

fcer:

________________________________

___________________________

___________________________________________

No._______

___


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Appendix 4


GOODS RETURNED NOTE

To: ______________________________________ Date__________________________

_________________________________________ GRN No._______________________

ItemNo.

DescriptionQty

ReturnedUnit Price Total Cost

Goods Returned by______________________ Date _______________________

Received by___________________________ Date_______________________

Reason for returning: ____________________________________________________________________

______________________________________________________________________________________


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Appendix5

BIN

CARDNo._________

FIFO

Sto

ckItem__________________

________________________

_____

DATE

RECEIPTS

ISS

UES

BALANCE

SUPPLIER

LPO

QTY

UNIT

PRICE

TOTAL

C

OST

DATE.

Dept..

Stores

Requisition

No

QTY

QTY

SIGNATURE


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Appendix 6


STORES REQUISITION NOTE

Department/Unit:. Date Required:.

Requested by:

Name:.. Signature

Item

no.

DescriptionUnit of

Issue

Quantity

Requested

Qty Issued

Approved/Not approved Issued by Received by

(Head of Dept/Unit)

Name: Name: Name:..

Signature: Signature: Signature:

Date:.. Date:.. Date:.