Orokom Organization For Relief &
1- Procurement Definition and General Principles
Orokom Organization Procurement Policy is based on the principle of assuring the most cost efficient and rational use of resources for goods or services that will best serve the organization in both the immediate and long-term. The policy shall also ensure that procurements are conducted in a manner to provide open and free competition to the maximum extent practical. Staff should be alert to organizational conflicts of interest as well as noncompetitive practices among vendors that may restrict or eliminate competition or otherwise restrain trade. Awards should be made to the bidder or offer or whose offer is responsive to the solicitation and is most advantageous to the recipient with price, quality and other factors being considered.
Procedures to avoid unnecessary purchases or duplicative items should be in place at all times. No employee or agent should participate in the selection, award of a contract if a real or apparent conflict of interest is involved. A conflict of interest originates when an employee or any member of his/her immediate family, member of Board or associate, has some interest, economical or not in the procurement in a specific business or hiring the service of a particular person or business. The Project should ensure that only contracts with responsible parties are made. While this section is devoted to project purchases of goods or services via Accounts Payable, this principle applies to all project transactions.
Where a particular vendor has been selected as a preferred supplier based on the most cost effective and efficient supplier, in terms of: quality, capacity, timeliness and price competiveness, comparative invoices for exactly the same goods and services will compared on a yearly basis to determine the eligibly of the preferred supplier. Normally, the bidder offering the lowest bid will be selected as the supplier. However, if there are specific reasons why the lowest bid is recommended, this justification needs to be documented on the bid comparison.
2- Procurement Categories
The following table shows the authority levels which determined by the organization’s management team and the procurement actions needed per each category
|Value USD||Type of Solicitation||Authorized by||Purchase Authorization|
|$1≤ Value ≤ $1000||Purchase Request (PR). Direct purchase. Purchase Order (PO). Invoice and support documents.||Finance Manager. Project Manager||Logistic officer|
|$1001 ≤ Value ≤ $5000||Purchase Request (PR). Three quotations. Quotations analysis by logistic department. Purchase Order (PO). Invoice and support documents.||Project Manager. Finance Manager.||Logistic department|
|$5001 ≤ Value ≤ $20,000||Purchase Request (PR). Three quotations. Quotations analyze. Purchase Order (PO). Purchases Committee of three members. Invoice and support documents.||Project Manager. Finance Manager. Country Programs Director.||Purchases Committee|
|$20,001 ≤ Value ≤ $50,000||Purchase Request (PR). Invitation to bid. (Advertisement in official websites and email example NCCI, etc.). Purchase Order (PO). Minimum number of required tenders: 5 Bids Committee: for collecting bids and analyze them. Receiving committee: for receiving goods. Purchases Committee of three members. Invoice and support documents.||Project Manager. Finance Manager. Country Programs Director.||Purchases Committee.|
|$50,001 ≤ Value ≤ $150,000||Purchase Request (PR). Invitation to bid. (Advertisement in official websites and email example NCCI, etc.). Purchase Order (PO). Minimum number of required tenders: 7 Bids Committee: for collecting bids and analyze them. Receiving committee: for receiving goods. Purchases Committee of three members. Invoice and support documents.||Project Manager. Finance Manager. Country Programs Director.||Purchases Committee.|
Note: If there’s one supplier or service provider only for a good or a service especially in remote regions, a clear justification should be written about the reason of dealing with this supplier without competition and more than one time if there’s. It must be noted that there may be few potential vendors in some operational contexts or for some specialist goods or services. In those instances, it is important to document the reasons for accepting number of tenders fewer than the recommended number as mentioned in the above table
3- Procurement Process
3.1 Purchase Requisition (PR)
A Purchase Requisition, specifying the identified good(s) or service(s) requested, must be completed by user officers and submitted to the appropriate programme manager for approval. These will be later submitted to the Accounts department with all appropriate supporting documentation for payment.
3.2 Purchase Order (PO)
The approved Purchase Requisition and quotation from the selected supplier are submitted to the Finance department for the completion of a Purchase Order. The Original Purchase Order is submitted to the vendor to confirm the order, as required.
One copy is kept with the department that made the order. A copy remains with the Accounts Office pending full payment and delivery of the good(s) or service(s). Only after receipt and inspection of the goods is the Purchase Order together with support documentation (invoice, delivery note) submitted to the Accountant for full or final payment.
- Address requests to the program manager to approve it. The basis of approval is to ascertain that the required goods are needed and are within the scope of the project.
- Approve the request by the finance manager who checking the available fund of the current budgets and financial lines
4- Request for quotations and Bids
Request for Quotation (RFQ): Is a simple document sent to known suppliers requesting price and delivery information and used in cases.
4-1 Bids: Hereunder, all bid procedures
4-1-1. Invitation to bid or tender is a formal solicitation document, used especially for procurement of goods with an estimated value of $5,000 or above.
4-1-2. The purchases committee should prepare a shortlist of qualified bidders This shortlist should contain the evaluation criteria and comparison among bidders.
4-1-3 Open Tender shall be advertised and is thus open to all interested tenderers.
Tenders shall be submitted in sealed envelopes.
4-1-5 Bids may be submitted only by hand or mail and shall be kept under lock until bid opening.
4-1-6 Bidding time for any type of solicitation shall be sufficient to allow all bidders to participate. The actual time allowed depends on the complexity of the specifications and the movement of documents as well as the urgency of the requirements.
4-1-7 Bidding period: Depends on the urgency of the requirement, it should normally be not less than five working days. In complex specification cases, it may have to be extended to one month.
4-2 Bid Opening:
- Shall be public for tenderers.
- Bids shall be opened at the time and place mentioned in the prior terms.
- Only bids in sealed envelopes shall be considered
- On arrival, each envelope shall be stamped with arrival date and time and kept under lock.
- Late bids shall not be considered and shall be returned unopened to the bidder. But, nevertheless, it is received after the bid receipt deadline because of an internal problem within Orokom or because of a delay outside the control of the bidder. The bid may be considered at the discretion of the program manager if the integrity of the procurement process has not been compromised.
- A committee of three staff members formed by the director should be present in the bid opening phase. The committee collects and evaluates quotations bids and tenders and decides upon successful suppliers and contractors.
4-3 Bid Evaluation:
The committee should evaluate the submitted bids based on many factors. These factors are; Price and currency.
Quality of good/service.
Accepting payment method appropriate for Orokom.
Warranty terms and conditions and maintenance of product and availability of spare parts.
The lowest evaluated bid that meets technical specifications shall be proposed for award.
The bid evaluation sheet should be filled in, signed by committee and filed.
Written procurement contracts shall be used to formalize every procurement process. The contract should cover the nature of the products or services being procured, the quantity being provided, the contract price, the period, conditions of contract, terms of delivery and payment; full details of supplier (name, address, phone number).
6- Receipt of Goods
A responsible officer shall be appointed by the programme manager in consultation with the Accountant who should be responsible for receiving Goods/orders and verifying delivery against the Purchase Order. All goods received should be recorded in the goods received note. The goods received note together with the purchase order will be passed to the Finance Department for filing or payment.
The Executive Director should authorize all payment at/or in the Head Office while the Branch Programmed Managers will authorize those at the branches.
The Bookkeeper prepares the Payment Voucher and allocates a voucher number (which shall be the cheque number and they shall be filed chronologically) upon verification that the original invoice represents the correct information, the correct addition and conforms to the purchase order and the delivery receipts from the supplier.
Another staff member should check to ensure that details on the delivery note, goods received note, purchase order and invoice all agree before proceeding to prepare payment. To avoid the possibility of duplicating payments all processed invoices will be stamped “Processed” or “PAID”. All payments where practically possible should be by cheque especially those above the local equivalent of US$500 All cheque payments will be accompanied by; Payment Voucher, Receiving reports where applicable, Invoices, Delivery notes, Approved purchase orders and purchase requisitions. Payments for service contracts will only be accompanied by a requisition, invoice and any reliable required information
Once the transaction is complete, the payment voucher together with purchase requisition, invoice, and required number of quotes and copy of cheque are filed together.
For non cheque transactions including receipt of wire transfers, intra account transfers, travel reconciliations, voided cheques and bank charges, the Bookkeeper issues a Journal voucher ,assigns a voucher number and attaches supporting documentation for the transaction.
Similarly all such transactions will have to be approved and authorized by the Accountant.
8- SAFE POLICY
All branches/center should have a lockable cash box or safe for safekeeping of cash. Local equivalent of US$2000 should be kept in the safe overnight.
The organization should ensure that all large cash balances on the premises are adequately/comprehensively insured.