procurement assignment

7/28/2019 Procurement Assignment

1/12

CHAPTER ONE: BACKGROUND OF ETHIOPIAN CIVIL

SERVICE UNIVERSITY

The Ethiopian civil service university (ECSU) started operation in 1995 but was formally

established in February, 1996 as an autonomous institution with legal status by the

Council of Minister Regulation No. 3/1996 to support the transformation drive of the

Ethiopian civil service within the context of the county's development policies and

strategies so that it becomes a system that is effective, transparent, accountable learning

and changing. More specifically, the university aims at building the capacity of the civil

service at both federal and regional levels through specialized /professional orientation/

education, training research and consultancy program and services.

Since establishment, the University has contributed immensely in developing the

capacity of the Ethiopian Civil Service University through education and training. The

need for the establishment of the University arose from the acute need for the countryscivil service system with the new form of government structure, namely, the Federal

Government System introduced in 1991. In this historical and political shift from a highly

centralized unitary government system to a decentralized federal system, and given the

countrys existing higher institutions intake capacity, the shortage of trained manpower

in the country in general and in the emerging regions in particular, was acute. As a result,

the duties and responsibilities of self administration by the regional state government and

their various agencies were very difficult to handle. To satisfy this urgent need, the

University began operations with only two fields of studies: Law and Economics.

The University has been able to make tremendous contribution in capacity building

through the provision of short-term courses and specialized undergraduate and

postgraduate programs; rendering research and consultancy services; providing library

documentation services and facilitating conferences, seminars and workshops. The

University employs delivery modalities ranging from resident training and educational

programs to the on-the-job, evening and distance education, including Global

Development Learning Network. The University strives to equip civil servants with

relevant theoretical and practical skills that will empower them to optimally discharge

their responsibilities. This article explains the activities of the different organs of theEthiopian Civil Service University. It explains the background to establishing the

University. the human resources are the most precious assets of the nation has been

shared by the governments and individuals. However the university has four department

unit under administrative support staff, procurement department is one of the most

influential departments because to achieving the over all the university's goal procuring


2/12

of the required materials is the base to perform tasks and accomplish the organizational

mission and vision statement.

Procurement Section Is responsible to:

- Facilitate the purchase of goods and services,

- Prepare documents in relation to purchase including bid and contract documents,

- Facilitate the preparation of item specifications where needed,

- Place an order,

- Facilitate the receiving of goods from suppliers,

- Follow up adherence to procurement proclamation, rules, regulations and directives,

- Communicate the suppliers as per the contractual agreement when problem arises to the

quality of goods received.

CHAPTER TWO: LITERATURE REVIEW

2.1 INTRODUCTION

Public procurement is defined as procurement made by public authority using public

funds on obtaining goods, works and services to fulfill the needs of public authority to

carry output its objectives. It refers to the contracts awarded by a public purchaser to a

supplier, contractors or service provider (PP AM Module, 2012)

Public procurement often constitutes the largest domestic market in Ethiopia because it isa major activity of public sector that generates important flow of finance and makes the

country one of the largest economic actors. In this regard, public procurement is the

major means that the government meet developmental needs such as physical

infrastructure and provides public goods and services to the public (Muktar,2011).

Public procurement is increasingly recognized as a central instrument to ensure efficient

and corruption-free management of public resources. In this context, the role of


3/12

procurement officials has changed dramatically in recent years to cope with the demand

for integrity in public procurement. Countries have devoted efforts to ensure that:

Public procurement procedures are transparent and promote fair and equal treatment;

Public resources linked to public procurement are used in accordance with intended

purposes;

Procurement officials behavior and professionalism are in line with the public purposes

of their organization

Systems are in place to challenge public procurement decisions, ensure accountability

and promote public scrutiny. (ISBN, 2007)

The major principles of public procurement system involve getting the right item in

quality and quantity, at the right time when it is needed to have proper flow of inventory;

from the right supplier and at the right price to support public sector activities.

A properly functioning public procurement system that promotes fair and transparentcompetition for contracts awarded by public sector is essential both to promote market

development and to use public funds effectively and efficiently. Sound procurement

policies and practices can reduce the costs of public expenditure to reduce money waste,

delay, corruption and government purchasing inefficiency.

To promote competition and to increase transparency in public procurement there is a

strong demand to use Electronic procurement (E-P) which has been introduced in

Ethiopia. Because, there must be sound financial management in reducing opportunities

for fraud and corruption, there is a need for qualified professional in Procurement

capacity building and training which is still represent a problem in this area. In Ethiopia,

the government is the most significant buyer of goods, works and services. The value of

the government procurement budget is estimated at about 65% of the total annual budget

(PAP, 2009)

Public procurement in Ethiopia is regulated by the financial proclamation No 57/1996

which constitutes the procurement law, the financial regulation No 17/1997 issued by the

Council of Ministers and the ministry of finance procurement directives and contracts

issued is 1997, 1999, revised in 2005 at the federal level and recently revised in 2009. In

2005 the Ethiopian government has established public procurement agency which isresponsible to oversight policy and monitoring of public procurements.

As per proclamation No 430/2005 procurement law enacted in 2005 is required among

other things, establishment regulatory body development of procurement directives,

preparation of standard bidding documents, guidelines and implementation of capacity

building strategy at all levels as part of the procurement directive and operational manual.


4/12

As per the proclamation no. 649/2009 Procurement law in acted in 2009 is required

among other things. To achieve better efficiency, transparency, fair competition and

impartiality in public procurement and to enable the utilization of the large sum of

public money spent on procurement in a manner that ensures greater economy and

efficiency by addressing problems encountered in the course of implementation of the

proclamation determining the procedures of public procurement of the Ethiopian

federal procedure and establishing the Supervisory Agency during the year in which it

was enforce and the same procedure is applying in the Ethiopian civil service

university.

Public procurement is of considerable economic significant at both the domestic and

international level accounting for a significant proportion of national GDP. At the

domestic level the procurement of goods and services by government agencies provides

needed imputes that enable government to deliver public service and fulfill other tasks.

Procurement system has a significant impact on efficiency of the use of public fund and

more generally public confidence in government and good governance. Moreover, it

has public access to information on government contracts.

Primary concept of public procurement is that through advance planning, scheduling, and

group buying, a large organization can save money and increase the efficiency of the daily

business operation. The level of compliance with these concepts varies widely across all levels

of government, and sometimes even within a government agency. Government purchasing

activity has a huge impact on the local economy. Due to the sheer size and variety of impact,

there are four step incorporated in to most government policies: group buying, just in time

delivery negotiated bulk pricing, and reduced administrative over head Procedure surrounding

the selection of vendors, tendering guideline for high value contracts, and payment terms are

often public document. There are different methods of procurement that are applied by the

university according to the directives, Open advertised bidding is the most competitive

procurement method available. It should be considered the preferred method of procurement

for procurement of goods, works, and non- consulting services designed to attract the widest

possible participation of eligible and qualified contractors and suppliers and the method most

suited to obtaining value for money in the public interest. Open advertised bidding is also themost formal and complex of the methods of procurement discussed in this session. Exceptions

to the use of open advertised bidding should be carefully considered and based only on

compelling circumstances established in procurement law or regulation. Open bidding is the

preferred method of procurement by any procuring entity. In open tendering, any company,

organization or individual that meets the qualifying criteria indicated in the bidding documents

is eligible to participate. Other procedures of procurement are applied if the open bidding


5/12

method is difficult to apply. The open bidding method of procurement is preferred because it

goes in line with the basic procurement rule of non discrimination and transparency. Open

bidding, though it is transparent, requires more time in order to prepare different tender

documents. There are standard bidding documents for national and international procurements

prepared by the public procurement and property administration agency. These standard

bidding documents (SBD) vary depending on the types of purchase. Separate Standard bidding

documents are prepared for goods, services and works. (Principle and practice of public

procurement module)In open bidding the first activity is notifying prospective bidders about

the bid opportunity. The bid is advertised through a process known as invitation to bid. The

invitation to bid contains general information on:

The name and address of the procuring entity, A brief description of the goods, works

or services to be obtained and the desire time of completion,

The place and price for obtaining the bid document, The place and deadline for submission of bids,

The place and time for opening bids.

The invitation to bid for national bid must be published at least once in a news paper

that has circulation throughout the country.

Generally, the bid document must include:

Instruction for the preparation and submission of bids.

Information on the final date for receipt of bids,

The address to which bids must be sent, the date, hour and place of opening.

Bid forms, and bid security to be provided.

The number of copies to be submitted with the original bid.

Specification of requirements, including time limit for delivery or completion.

Evidence to be provided by the bidder to demonstrate its qualification, financial

position, and registration in the suppliers list.

The period during which the bid remains valid.

The criteria and the points given to each criterion for evaluation of bids and award of

the contract.

A reservation to the effect that the procuring entity may reject all bids at any time priorto

The acceptance of the bid; Condition of contract (general and specific). (Principle and

practice of public procurement module2012)

2.2 Procedure of National Open Bidding

For all public contracts, open procedures can always be used. Restricted procedures can

be used when it is necessary to distinguish between the selection phase - dealing only


6/12

with the candidates qualifications - and the award phase - dealing with the offer.

Distinction in the use between open and restricted procedures is provided in public

procurement rules. All Economic Operators who are interested and meet the minimum

technical and financial criteria set out in the contract notice may submit a tender. A

contract notice describing the main characteristics of the contract is prepared and

published in the PAB and on PPA website. The tender documents define in detail the

content of the contract, its terms and conditions, and the award criteria. The typical

formats of the SBD for acquiring goods in national open bidding include the following

The invitation to bid

Instruction to bidders

The bid data sheet

The evaluation and qualification criteria

The bidding forms The eligible countries

The statement of requirements

General condition of contract

Special condition of contract

So, the study will focus in Ethiopian Civil Service University, how the office procures

with regard to fair and transparent procurement procedure to achieve best value for public

money.

However, there are no such a strong and effective public procurement systems in the

office of Ethiopian Civil Service University and public resource are exposed to deferent

losses. This study aims at investigating procedures and policies, transparencies, and

efficiency also attempt to point out the factors that determine the organization following

the procurement manual, on policies and procedure and other procurement directives.

The study answers the fallowing questions.

* Does the civil service university have procurement plan?* How procuring entities measured their accountability and responsibility to

enhance transparency & fairness in procuring public goods and services?

* How public procurement handled properly?


7/12


8/12

CHAPTER THREE: DATA ANALYSIS

While analyzing the prevailing procurement practice applied in Ethiopian Civil Service

University we tried to evaluate every aspects of open bidding method applied starting

from procurement planning up to acquisition of the intended materials. Furthermore,competitive (open) bidding method as it is stated on the directives of article 33(3) and (4),

public body shall use open bidding as the preferred procedure of procurement, ECSU

used as a preferred method and we cant other methods especially restricted method of

procurement applied while conducting our investigation. Therefore, our analysis

considers only the open bidding applied for the acquisition of sanitary materials which is

presented as follows:

3.1Preparation of procurement plan; the preparation of procurement plan bythis organization is supported by action plan which enable them to execute in

due time and necessary to implement their work program accordingly.

Furthermore, the user department prepares their annual procurement plan by

providing technical specification for sanitary materials based on the approved

budget.

Despite the advantages gained through early preparation of procurement planning,

the organization fails to stick or adhere with the calendar set for activities which

hinder the organization to acquire the required material in the right time for the

intended purpose. Moreover, the good practice applied in this organization,

publishing the consolidated procurement plans on the organizations websiteprovides advance information to the outside world of upcoming procurement

activities and advances the key principle of transparency in procurement.

3.2Preparation of standard bidding document; the standard bidding documentprepared by the organizations procurement unit in accordance with the type

and nature of the procurement is well prepared in comply with the procurement

directives which contains:

a. Instruction to bidders; including, general description of the goods, name andaddress of the procuring body, sources of finance, minimum requirement,

address and time for request of clarification, place and time for sample to be

presented, the place of bid box, methods of bid evaluation, bid security,

deadline for bid submission and place, date and hour of bid opening, validity

period of the bid, delivery time, original, number of copies and supporting

document to be presented and place of compliant to be filed.


9/12

b. Technical specification; it is prepared in accordance with the need of endusers in a manner that allows wider competition and it is detail and

comprehensive to provide complete information for the supplier.

c. General and specific contract; the general and specific condition of thecontract were included in the standard bidding document.

d. Criteria for bid evaluation; both qualification and evaluation criteriaincluding technical requirements for samples presented and price.

e. Presentation of samples; indicates that samples have to be submitted prior tothe opening of bids and the candidates are expected to present the specimen in

accordance with the technical specification drawn.

f. Sale of bid document; theprice of the bidding document is 50 br., whichallows wider competition.Generally, the standard bidding document prepared

by the procurement unit was presented for approval by the endorsingcommittee which consists three members.

3.3Invitation to bid: After preparation and approval of procurement plan andstandard bidding document. We analyze the pre-conditions of using national

competitive bidding followed by the organization. Firstly, the organization

ascertains that the goods to be procured can be obtained from local suppliers

and value of procurement is below the threshold established for international

competitive bidding according to the directive. After ensuring the above

condition, the next step is invitation to bid and the organization published the

invitation on Addis Zemen news paper that has nationwide circulation. While

evaluating the content of information disclosed on the advertisement against

the basic principles of procurement, it contains; name and address of the

organization, the criteria to be satisfied by the candidates (includes tax

clearance, renewed business license, VAT registration, TIN no. certificate and

suppliers list registration), the place where the bidding document can be

obtained, the amount of bid security (10,000), the price of bidding document

(50 br), the place and deadline for submission of bids and the place, date and

hour of the bid opening, and a statement that the organization reserves the rightto reject any or all bids. Therefore, the advertisement of invitation to bid

contains all necessary information in accordance with the basic public

procurement practice.

3.4Receipt of Bid document: while receiving the bid document the procurementunit prepare bid receiving attendance sheet for the receipt of bid documents


10/12

from bidders and it contains name, address and signature. Therefore, twelve

bidders were submitted their bid to proceed in the competition.

3.5Bid opening; after receiving the bid documents the next step is bid openingand when we evaluate this process, bids are opened at the time and place stated

in the invitation to bid and participants of the bid opening ceremony were the

bidding committee, five bidders and representatives of the user department and

then the opening process is started after signing on the minute prepared by the

procurement team.

3.6Evaluation; while evaluating competitive suppliers the steps used by thiscommittee includes the preliminary evaluation of minimum requirements,

technical evaluation of the samples and financial evaluation.

a. Preliminary evaluation; before technical and financial evaluation thecommittee evaluates the minimum requirements stated on the invitation to bidas well as in the standard bidding document and these criterias are tax

clearance, VAT registration, TIN no. certificate, suppliers list registration, bid

security and participation permission letter. Based on the above criteria all

bidders those submitted the bid has fulfilled the requirement and qualified to

the technical evaluation.

b. Technical evaluation; while analyzing the technical evaluation it is conductedby the technical evaluation committee which consists the user department

staffs and they evaluate in accordance with the technical specification provided

in the bidding document with respect to the samples presented by the method

of pass/fail evaluation criteria. Throughout the evaluation one bidder is

rejected due to the absence of sample and rest qualified bidders result on

specific and all items were prepared for approval by endorsing committee.

c. Financial evaluation; the financial evaluation is conducted among biddersthose qualified in the technical evaluation, as a result, bidders that offer the

least price for the required items are selected as a successful bidder.

3.7Award notification; finally, after the result is approved by the endorsingcommittee the letter ofaward is written for the successful bidders and also atthe same time the result is communicated to unsuccessful bidders as well. Even

though, the remaining task with regard to this procurement is that signing of

the contract, until we conduct this evaluation the contract is not signed between

the successful bidders and the procuring entity.


11/12

CHAPTER FOUR: CONCLUSION AND RECOMMENDATION

4.1 Conclusion

While analyzing the organizations procurement practice starting from preparation of

procurement plan up to acquisition of materials with regard to competitive bidding is well

developed and performed by this organization. Specifically, early procurement plan wasdeveloped by the procurement unit and the user departments prepare their annual

procurement plan by providing technical specification based on the approved budget.

However, the organization fails to get the required materials in the right time for the

intended purpose due to the failure in adhering with the calendar set. On the other hand,

as far as we see and analyzed the standard bidding document of the organization it is

complete to give relevant information and prepared in accordance with the basic principle

and practice of public procurement. In addition, the organizations open bidding procedure

fulfill necessary preconditions as well as every relevant information were disclosed on

the invitation to bid according to the directives. Furthermore, while analyzing the

organizations open bidding process, it complies with the proclamation starting from bid

opening up to award notification letter. However, the organization fails to sign the

contract with the successful bidders within two months after the award notification letter

is sent.

4.2 Recommendation

Based on the above conclusion drawn we recommend the organization that it should

strengthened the prevailing procurement practice in procuring other goods and service

and the evaluated procurement application is conducted in accordance with the directives.In addition, we suggest that, even though, the selected procurement practice is complied

with the directive in order to get the required goods at the required time they should have

to adhere with the schedule of activities to facilitate on time delivery of the items.

Furthermore, delay in signing the contract with respective suppliers should have to be

improved and there must be measures to be taken in accordance.


12/12

REFERENCE

1. Integrity in public procurement: Good practice from A to Z, ISBN, 2007.2. Public procurement principle and practice module of ECSU, 2012.3. The Federal Democratic Republic of Ethiopia, (2009) The Ethiopian

Federal Government Procurement and Property Administration

Proclamation

4. The Federal Democratic Republic of Ethiopia, (2010) The EthiopianFederal Government Procurement and Property Administration Manual

5. The Federal Democratic Republic of Ethiopia, (2010) The EthiopianFederal Government Procurement and Property Administration Directive

procurement assignment

Documents