ROLES OF HODS IN PROCUREMENT PROCESS PRESENTED TO

ROLES OF HODS IN PROCUREMENT PROCESS PRESENTED TO KATTI NAIROBI REGION PRINCIPALS AND HODS AT MOMBASA CONTINENTAL RESORT ON 18 TH APRIL 2018. CPA NELSON M. CHEGE COUNTY SCHOOLS AUDITOR MURANG’A

Contents Definition of Procurement Importance of Procurement Objectives of Effective Procurement Management Saturday, November 28, 2020 2

Procurement Definition of Procurement - Acquisition by purchase, rentals or hire purchase, tenancy or any other contractual means of any type of works, assets, services or goods Saturday, November 28, 2020 3

Importance of Procurement of goods, works and services in any institution contributes greatly to the success of the institution, depending on how well it is conducted. Saturday, November 28, 2020 4

Objectives of Good Procurement. Acquisition of items in the most cost effective manner to ensure: 1. Right quantities, 2. The right quality, 3. At right place, 4. From the right source in timely 5. Right delivery period 6. The lowest possible total price Saturday, November 28, 2020 5

Principles of Procurement Professionalism Transparency Accountability Competitiveness Fairness Ethical approach Saturday, November 28, 2020 6

Procurement Methods Depending on the institute’s procurement regulations, practice and rules the following procurement methods may be used: Saturday, November 28, 2020 7

Procurement Methods Open Competitive Bidding Restricted Tendering Direct Procurement Request For Quotation Request For Proposals. Low Value Force Account Design Competition Two Stage Tendering Method Electronic Reverse Auction Framework Agreement Saturday, November 28, 2020 8

Why Alternative Methods The procurement contracting functions should hence be separated. To avoid conflicts of interest. To promote the integrity and fairness of the procedures To increase transparency and accountability in the procedures Saturday, November 28, 2020 9

PROCUREMENT UNITS Tender Opening Committee Inspection And Acceptance Evaluation Committee Disposal Committee Saturday, November 28, 2020 10

TENDER OPENING COMMITTEE Sec 78(1) of the Act provides that the accounting officer shall appoint a tender opening committee specifically for the procurement in accordance with the following requirements ◦ The committee shall have at least three members and ◦ At least one member shall not be directly involved in the evaluation of tenders. FUNCTION ◦ Conduct a preliminary check of the received quotations to ensure that they comply with conditions preset in the quotation request form. ◦ Prepare list of all tender applications received and opened ◦ Prepare List of all qualified applications ◦ Prepare List of all disqualified applications Saturday, November 28, 2020 11

Tender Evaluation committee sec 46 and 47 An accounting officer shall appoint an adhoc evaluation committee established in accordance with the Act and regulations and from within the members of staff, with relevant expertise. Composition • Between 3 -5 members appointed by the accounting officer on rotational basis comprising of user department and two other departments or their representatives. Function • Deal with the technical and financial aspects of procurement as well as the negotiation of the process including evaluation of bids, proposals for prequalification, registration lists, Expression of Interests and any other role assigned to it. Saturday, November 28, 2020 12

Inspection and Acceptance committee sec 48 Composition • Chairperson • Members – At least two others appointed by the principal upon recommendation by PU. Functions • Inspect & where necessary test the goods and services received to ensure compliance with the terms and specifications of the contract. They accept or reject the delivered goods or works on behalf of the institution • Determination of value for money. (Quality, Quantity, Timeliness, Proper documentation/manuals. Saturday, November 28, 2020 13

Disposal committee (sec 163 -166) The principal shall cause the establishment of a disposal committee in writing comprised of five members as follows. Chairman- a member appointed by the principal Two heads of departments Officer in charge of stores Accountant/finance officer Saturday, November 28, 2020 14

Function of disposal committee Disposal of unserviceable asset Disposal of obsolete asset Disposal of obsolescent assets Disposal of surplus stores Verification of all disposal recommendations by the employee in charge of the assets requiring disposal in liaison with the head of procurement function(Procurement Officer) Recommend the best disposal method to the accounting officer Saturday, November 28, 2020 15

TENDERING PROCESS Approved annual budget- only budgeted items can be procured. Preparation of annual procurement plan – The Act and Regulations makes procurement planning mandatory. It is based on the approved annual budget and should be approved by the BOG. Approval of list of potential suppliers by the Evaluation committee. Saturday, November 28, 2020 16

. Invitation of quotations Receiving quotations- completed quotation request forms should be deposited in the tender box. Those received through the post should also be deposited into the box. Opening of tenders. The date of opening tenders is the date of close of request submission. The tender opening committee and representatives of suppliers open the tender box and a preliminary report is prepared. Evaluation of tenders by the evaluation committee. Performs financial and technical evaluation. The committee ranks the suppliers starting with the lowest, second lowest e. t. c Saturday, November 28, 2020 17

. Tender award, Sec 84 (1) provides that the head of procurement function shall provide a signed professional opinion to the accounting officer on the procurement or asset disposal proceedings on receiving the evaluation report from the evaluation committee. The accounting officer shall award the tender. Appointment of suppliers. The principal appoints the suppliers who qualify in writing while they submit acceptance letters. Regret letters are also issued to those who fail to qualify. Sec 87 Saturday, November 28, 2020 18

. Placing orders. This is done using the LPO/LSO or as per contract agreement Inspection and acceptance. - the committee checks the quantity, quality standards, documentation and timeliness of the delivery. The committee may reject or accept the delivery. The committee may invite technical persons for inspection purposes depending on the nature of goods or services being delivered. Saturday, November 28, 2020 19

VARIATION OF TENDER CONTRACTS A supplier may apply for variation of procurement contract terms. This may arise due to change of prevailing market conditions, change of initial plan in case of structural works. Such variations should be occasioned by genuine causes. The variations should be on recommendation by the evaluation committee. Contract prices shall not be varied upwards within twelve months from the date of signing of the contract. And shall only be considered if the following are satisfied; - price variation is based on the prevailing consumer index obtained from Kenya National Bureau of statistics or the monthly inflation rate issued by the Central Bank of Kenya Saturday, November 28, 2020 20

. The quantity variation for goods does not exceed 15% original contract quantity Quantity variation of works does not exceed 20% of original contract quantity The price or quantity variation is to be executed within the period of the contract The cumulative value of all contract variations do not result in an increment of the total contract price by more than 25% of the original contract price If the variation result to an increment of the total contract price by more than 25% such variations shall be tendered separately Saturday, November 28, 2020 21

Activities in a Procurement Cycle 1. Identify 22 Procurement needs 2. Develop 10. Close the Proc. Plans Proc. File 9. Manage the Contract 3. Confirm Budget 4. Select Proc. 8. Award Methods Contract 5. Receive & 7. Negotiate (if needed) Manage Bids 6. Evaluate Bids Saturday, November 28, 2020

General Rules of Contract Management Any person who engages in corrupt /fraudulent practice in the procurement process shall be guilty of an offence and shall be disqualified from entering a contract. No person shall collude or attempt to collude with any other person in the procurement process. Payment owed to suppliers will be prompt otherwise procuring Entities will pay interest on overdue payment based at prevailing commercial bank rates. 23

. A supplier who contravenes provision of the Act and the Regulations may be debarred from participating in public procurement and disposal for a period not less than five (5) years. If the person is an individual, to a fine not exceeding four million shillings or to imprisonment for a term not exceeding ten years or to both; 24

. If the person is a body corporate, to a fine not exceeding ten million shillings. The public officer involved shall suffer disqualification from public office while the private individual shall be debarred. 25

. • A procuring entity shall maintain specimen signatures of all persons authorised to make approvals in the procurement process. • Candidates shall be allowed 14 days to prepare and submit applications. Evaluation shall be within 30 days after opening of tenders. Fee for tender documents should not to Exceed Kshs 1, 000. 26

. • Sec 87(3) When a person submitting the successful tender is notified under subsection (1) (Before the expiry of the period during which tenders must remain valid, the accounting officer of the procuring entity shall notify in writing the person submitting the successful tender that his tender has been accepted) the accounting officer of the procuring entity shall also notify in writing all other persons submitting tenders that their tenders were not successful, disclosing the successful tenderer as appropriate and reasons thereof. Saturday, November 28, 2020 27

Roles of HODS in procurement process Involvement in budget making process Members of procurement units such as; ◦ Tender opening committee ◦ Evaluation committee ◦ Inspection and Acceptance committee ◦ Disposal Committee ◦ Specialized Projects Implementation Committee ØMay be involved in negotiations before award of contract where applicable. ØThey are members of user departments ØInitiate procurement as user departments through raising requisitions/approval of requisition from departmental staff Saturday, November 28, 2020 28

Roles continued. . Approval/proposal of technical requirements(specifications) of a procurement need arising from his/her department Advise /collaborate with the management on alternative procurement requirements incase there is need of change from the initial plan Approval of performance work sheets for provision of service e. g. repair/servicing of computers, machinery etc Inspect/test/ accept delivery of supplies directly or indirectly through the inspection and acceptance committee Saturday, November 28, 2020 29

……………End…………. “ knowledge is of no value unless you put it into practice” Saturday, November 28, 2020 30