Session: M1-2
Session: M1-2 Slide No.1/30
Steps in Procurement Cycle
Risk Factors
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Steps in Competitive Process Session: M1-2
Slide No.2/30
Identification of Need, Estimated Cost, Availability
Public Procurement Process
Procurement Planning
Tender/Proposal Documents Preparation
Advertisement
Tender/Proposal Preparation and Submission
Tender/Proposal Opening
Tender/Proposal Evaluation/(Negotiation) /Approval
Notification of Award/Signing
Contract Administration and Management
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Risk in Procurement Session: M1-2
Slide No.3/30
Each Procurement Step is connected with risk
Method:
Analysis of probability
Identification of risk occurring and
of risk factors likely consequences
Action Plan for Allocation & Mitigation of risk:
Avoiding, eliminating, reducing
Accomodating
Transfer (insurance, security)
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Risk Analysis Session: M1-2
Slide No.4/30
We will go through the Steps in the
Procurement Cycle and discuss
some Risk Factors
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Procurement Preparation Slide No.5/30
All procurement starts
with good Preparation …
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Elements of Procurement Preparation Slide No.6/30
Identification of needs
Object, quality, quantity,
delivery time, place, price
Choice of Procurement Method
Contract value (packages, lots)
Attracting maximum competition
We’ll discuss details of Procurement Planning later on
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Risk Factors (examples) Slide No.7/30
Under-/overstatement of needs
Misinterpretation of user needs
Insufficient funding
Selecting inappropriate procurement method
Insufficient knowledge of Market
Lack of offers from suitable tenders
Under-estimating costs & time frame
More risk factors –
Actions for allocation/mitigation – discuss!
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Reducing Risk – Action Slide No.8/30
Analyse need accurately
Improve consultation with users
Make careful cost estimation
Carry out Market Analysis and
communicate (objectively)
with potential tenderers
Use functional and performance requirements
Obtain appropriate budgetary approvals
before undertaking the process
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Next step: Design & Specification Slide No.9/30
Main purpose:
Clear, unambiguous standard descriptions
compliant with PE requirements
Enough information for tenderers to prepare
offer and tender price
Equal opportunity to all suppliers
Opportunity for alternate technology
Enable evaluation against defined criteria
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
In particular: No Trade Marks Slide No.10/30
No reference to a particular trade mark or
trade name, patent, design or type, specific
country of origin, producer or service
supplier Rule-29(3)
Where reference to a brand is unavoidable,
the words “or similar or equivalent” should
be used Rule-29(4) (seldom!)
PE may involve experts
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Technical Specifications – Risk Slide No.11/30
Risk Factors & likely consequences:
Narrow definition, commercial specification
few tenders, not most suitable product
Biased specification inadequate responses,
claims of unfair process
Inadequate requirements variety of offers
not meeting needs, difficult to evaluate
Discuss!
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Mitigating Actions: Specifications Slide No.12/30
Define specification in terms of required
outputs – function, performance, terms of
need
Ensure specification consistency with needs
analysis
Observe budget/resources
Implement a control function to review
specification before release
Be familiar with requirements
Get experience!
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Next: Procurement Documents Slide No.13/30
PE completes STD/SRP etc.
with purchase-specific information
Encourage Provide equal
eligible, qualified opportunities
Tenderers/ and
Applicants to clear evaluation
participate criteria
Risk Factors – Mitigation – Discuss!
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Procurement Documents Preparation Slide No.14/30
More on STDs / SRPs will follow
Risk Factors:
Terms and conditions unacceptable
to tenderers
Providing inadequate information
Confusing tenderers by inconsistent
requirements
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Reducing Risk: Documents Slide No.15/30
Action:
Improve implementation of procurement
policies, guidelines and practices
Improve Market knowledge
Seek information (objectively) from
potential tenderers
Provide staff with appropriate training
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Steps in Competitive Process (again!) Slide No.16/30
Identification of Need, Estimated Cost, Availability
Public Procurement Process
Procurement Planning
Tender/Proposal Documents Preparation
Advertisement
Tender/Proposal Preparation and Submission
Tender/Proposal Opening
Tender/Proposal Evaluation/(Negotiation) /Approval
Notification of Award/Signing
Contract Administration and Management
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Next step: Tender Preparation/Submission Slide No.17/30
Tenderers’ activities:
May seek clarification of Procurement
Documents and attend Pre-tender Meeting
(if held)
May withdraw, substitute or modify tender
before deadline
Tender forms completed and signed
Tender security posted
Tender submission right time, right place
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Risk Factors: Tender Prep./Submission Slide No.18/30
Failure by PE of adequately answering
clarification questions/making answers
available to all tenderers
Favouritism by PE (actual or perceived) in
answering clarification questions
Breach by PE (actual or perceived) of
confidentiality
Low response from suppliers, errors, mistakes
Poor value for money due to limited
competition
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Re: Tender Preparation/Submission Slide No.19/30
Your experiences?
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Next Step: Tender Opening (TOC) Slide No.20/30
Tenders shall be opened at the time and place
specified in the Invitation for Tender (IFT) in
presence of the interested Tenderers or their
authorised representatives
Persons not associated with the Tender are not
allowed to attend the opening of Tenders
Tender opening shall not be delayed on the plea
of absence of Tenderers or his or her
representatives, as the presence of Tenderers or
their authorised representatives is optional
Information be read out to all present and
recorded in TOS
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Tender Opening Slide No.21/30
Discussion
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Next step: Tender Evaluation (PE, TEC) Slide No.22/30
Preliminary examination:
compliance, adequacy, authenticity –
incomplete tenders eliminated
PE may seek clarification, not changes in price
or substance
Technical examination, responsiveness
Evaluation against criteria
Financial evaluation & price comparison
Identification of successful tenderer –
Post-qualification
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Risk: Tender Evaluation Slide No.23/30
Failure by TEC to follow effective evaluation
procedures
Breaches of security by PE/TEC
Subjective, not objective evaluation of tenders
Evaluation criteria not clear or identifiable
to tenderers – retendering
Post-qualification negative
Selecting an inappropriate supplier – not able
to execute contract
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Tender Evaluation Slide No.24/30
Discussion
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Last step: Contract Award/Execution Slide No.25/30
PE/Successful-Tenderer activities:
Notification of award (NOA) before expiry
of tender validity date (constitute the contract)
Accept from successful tenderer within 7 wd
Performance security posted (within set deadline)
Signing of contract by both parties (confirmation)
Execution following contract terms – No changes
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Risk: Contract Award/Execution Slide No.26/30
Unwillingness of the supplier/contractor to
accept the contract
Performance security not posted
Delays in delivery as per contract
Delivery of unsatisfactory products/materials
Unauthorized increase by PE in scope of work
(additional costs)
Loss or damage to goods/materials
Fraud
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Contract Award/Execution Slide No.27/30
Discussion
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Cases Slide No.28/30
Two examples:
(1) Hospital X-ray equipment
Too voluminous to come through the
entrance
No shielding against radiation
established
Flooring too weak
No educated manpower
(2) Office supplies
No storage space available
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Cases Slide No.29/30
Trainees may have many examples!
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
Session: M1-2
Risk in Procurement Slide No.30/30
More on Risk Management in
Module Four
CPTU-IMED Three-weeks Training on Procurement of Goods, Works, Services Fineurop Support
