DECLARATION.

I, Fadhili Abel, declare that this report

is my own original task and it has never

been submitted in any other Higher

Learning Institution for academic award.

CANDIDATE NAME

SUPERVISOR

FADHILI ABEL Mr.

KANANIKA A. Y.

SIGNATURE

SIGNATURE

---------------------------

-----------------------

i

DATE

DATE

October 2013

--------------------

TABLE OF CONTENTS

Declaration…………………………………………………………………………. i

Table of contents………………………………………………………………….. . ii

Acknowledgement…………………………………………………………………. iii

List of abbreviation………………………………………………………………... iv

Preface……………………………………………………………………………… v

CHAPTER ONE

Summary of the council profile…………………………………………………… 1

Historical background of the

organization………………………………………... 1

Location and Land area…………………………………………………………...... 1

ii

Administration……………………………………………………………………… 1

Topography and Climate……………………………………………………………. 2

Population…………………………………………………………………………... 2

Socio-Economic status……………………………………………………………… 3

Vision, Mission and Objectives……………………….…………………………. ...

4

Vision of the council………………………………………………………………... 4

Mission statement…………………………………………………………………... 4

Objectives…………………………………………………………………………... 4

Policies and Strategies…………………………………………………………… 5

Council political structure……………………………………………………… 6

The council administration organization

structure……………………………… 7

CHAPTER TWO

Procurement documents and contracts…………………………………………

8

Procurement requisition………………………………………………………… 8

Request for quotation…………………………………………………………… 8

Inspection form of goods and services which are

received…………………… 8

Procurement documentation………………………………………………… 8

Process of evaluation………………………………………………………. 12

Developing evaluation criteria……………………………………………….

13

iii

Rules of fair procurement…………………………………………………… 13

Procedures for procurement…………………………………………………… 15

Invitation to tender…………………………………………………………… 16

Request for proposals………………………………………………………….. 16

Request for expressions of interest………………………………………………

18

Request for qualifications or pre-

qualification………………………………… 18

Simplification of tender documentation…………………………………………

19

Levels of competitive bidding…………………………………………….. 20

National competitive bidding…………………………………………………… 20

International competitive bidding………………………………………………..

20

Process of procurement and tendering…………………………………………

21

Parties to procurement……………………………………………………….. 21

Procurement objectives…………………………………………………………… 22

CHAPTER THREE

Observations, Problems and Suggestions……………………………………..

24

Observations…………………………………………………………………… 24

Problems encountered………………………………………………………… 25

Suggested solutions……………………………………………………………. 26

References………………………………………………………………………………………………………..

28

iv

Field attachment.

ACKNOWLEDGEMENT

I would like to pass my sincere gratitude to several

people who have contributed to the success of my field

attachment at Mbeya City Council.

Firstly is my lovely father Yohana. A. Mwambungu and my

mother Densia Nkwikile for giving me a good health and

strength in whole period of training. I thank also my

tutor’s of CBE who works tireless to train me to be

procurement and supplier officer/head of procurement

management department (HPMD) their work is much

appreciated.

Secondly special thanks should go to MCC administration

to (RHRO) regional human resource officer, Head of

procurement department Mr.Secco S. Nkussa, Mr.Yosia

Kinyunyu Assistant supplier officer, Miss Edina Ndegwako,v

Frank, Ande Mwaipape, Nyoni and other for allowing me to

conduct practical training at the company, also I

appreciate to the staff member of MCC and was happy to

work with you all

Thirdly I would like to thanks my best friends who have

been a great help in fulfillment of acquiring field

report in procurement and supplies management these are

Kimwaga, Adam, Masudi, Nsajigwa Mwakigonja, Sadick

Mwasongela and all (BPS1) members for their assistance in

one way or another.

Lastly I am grateful to all people who helped me in one

way or another in my academic year. Their help is very

much appreciated.

MAY LORD BLESS YOU ALL

LIST OF ABBREVIATION

MCC : Mbeya City Councilvi

PMU : Procurement Management Unit

PPA : Public Procurement Act (2004)

PPRA : Public Procurement Regulatory Authority

HPMU : Head of Procurement Management Unit

LPO : Local Purchase Order

BPS : Bachelor degree in Procurement and

Supplies

SO : Supplies Officer

MPO : Management Procurement Officer

vii

PREFACE

Contained here is my field report conducted at MCC during

my practical training for Eight weeks from 29th July,

2013 to 20th September, 2013.

Therefore it explains in brief the activities of MCC and

how carries out different functions of

procurement/purchasing stores, account department.

I have written this report after being familiar with the

day to day activities of MCC. The chapter and sub-heading

are arranged to help the proper understanding of report

This report is divided into three chapters.

Chapter one: is introduction about MCC historical

background the MCC mission vision, and core value, it

also contain the organization structure of MCC which show

the organization chart of the MCC.

Chapter two: is about procurement/purchasing documents,

procedure and itinerary of eight weeks, followed in

purchasing department.

The last chapter: is concerned with the problem and

challenges faced by MCC it works hard to provide services

to its customer and also conclusion so what I have

observed during my field fulfillment at MCC.

viii

CHAPTER ONESUMMARY OF THE COUNCIL PROFILE

1.0 Introduction to the study

Material Management has a great impact in the

organization and for daily life in the achieving

objectives in the organization for private and public

sectors. The researchers have assessed the effectiveness

of material management in achieving organization

objectives in public sector; these have been carried out

as a case study at Mbeya City Council Procurement

Department.

1.1. HISTORICAL BACKGROUND OF THE ORGANIZATION

The historical background of Mbeya City can be traced

back to 1927. The town developed drastically into large

settlement in 1935. In 1955 the town started to expand

enormously following the colonial Government decision to

shift the Southern Zone Province Headquarters from

Iringa to Mbeya. In 1980 Mbeya Towns was officially

accorded Municipality status. Similarly in the late

2005, Mbeya Municipality was promoted to become a City

Council.

1.2. LOCATION AND LAND AREA

Page1

Mbeya City is within Mbeya District. It is located

between latitudes 8050’ and 8057 south of the equator and

between longitudes 33030’ and 35035’ east of the

Greenwich meridian. It has a total land area of 214 sq

km and boarders Mbeya District Council on all sides.

Mbeya City is the headquarters of Mbeya Region.

1.3. ADMINISTRATION

Administratively Mbeya City Council is divided into two

Divisions namely Sisimba and Iyunga and it has 36 Wards

with 181 Mitaa (hamlets).

DIVISION WARD MITAA REMARKSIyunga 21 115 Urban/Peri-

urban wardsSisimba 15 66 Urban/Peri-

urban wardsTotal 36 181

1.4. TOPOGRAPHY AND CLIMATE

Mbeya City Council is situated at an elevated land along

the slopes of Mount Mbeya ranges at an altitude rising

from 1600 to 2400 meters above sea level. The climate is

influenced by its attitude, it receives mean annual

rainfall of 1200 mm (November-May) accompanied with mean

Page2

temperature ranging between 110 C – 250C. Mbeya City is

generally characterized by moderate climate and

stuffiness rainfall.

1.5. POPULATION

According to the 2002 National Census, Mbeya City

Council had a total population of 266,422 in habitants,

out of which 126,679(48%) are males and 139,743 (52%)

are female

The City population growth rate is 4% per annum compared

to the national average of 2.9 per annum. Population

projection for the year 2011 is estimated to 398,267

people.

1.6. SOCIO-ECONOMIC STATUS

According to 2002 census results main occupation

carried by City residents are:-

Page3

(i) Agricultural and livestock keeping which

employees 33.3% of the population

(ii) 43.4% of the population estimated to engage

them-selves in informal sector and petty

trades/small business.

(iii) 21% are employees, 1.4% as contributing

family workers and 0.9% in rest of categories.

The estimate per capital income is Tshs.

675,047

The council organization system

At Council level, the administration of Mbeya City

Full Council is composed of 51 Councilors out of

which 36 are wards representatives, 12 nominated

members and 3 are members of Parliament(1 of the

constituency and 2 are nominated) of the

legislative body of the Council. The City Director

and heads of departments constitutes the executive

component of the Council.

The full council under the elected Mayor is the

highest decision making organ in the Council. The

Council consists of five standing committees:-

- Finance and Administration

- Economic, Health and Education

- Urban Planning and Environment

- Works and Communication

Page4

- Control of HIV/AIDS

Sections in the Structure are:

o Planning, Statistics, Monitoring and

Evaluation

o Law and Order

o Internal Audit

VISION, MISSION AND OBJECTIVES

Vision of the council

The Vision of the Council is to attain

improved economy of its people that would lead to

sustainable improved standard of living and

eradication of poverty among its residents by 2025.

Mission Statement

The Mission of the Council is to attain

improve standard of living of its people through

utilization of the variable resources and involvement

of all stakeholders in designing, planning and

implementation of their own development activities

guided by principles of good governance so as to

attain sustainable development and as result to raise

the income of every resident in the coming 15 years.

Objectives:

The Objectives of the Council are:-

Page5

A.Services Improved and HIV/AIDS infections reduced.

B.Enhance, sustain and effective implementation of the

National Anti-corruption strategy.

C.Good governance and Administrative services

enhanced.

D.Access and quality of social economic services

improved.

E.Conducive working Environment for efficient and

effective delivery of services created.

F.Infrastructure and other establishment expanded and

improved.

POLICIES AND STRATEGIES

The Council has developed a number of strategies in

order to achieve the policies as well as its mission

as follows:-

1. To carry out participatory planning whereby all

stakeholders and the City resident at large are

involved in preparation of development plans.

Page6

2. To ensure that the City council deliver efficient

and improved services.

3. To create conducive environment for City residents

be able to increase

their income so that to alleviate poverty.

4. To make by-laws, this will ensure that the

development plans and services delivery are

implemented.

5. To ensure good governance within the current

legislative law in order to ensure transparency and

fairness among all stake holders in carry out council

affairs.

6. To enhance revenue collection within the city in

order to ensure the council has enough financial

resources, the areas that will not be able to collect

such revenue, then out sourcing will be done to

private agencies or individuals.

7. To carry out Local Government Reform Program

(LGRP).

8. Ensure that capacity building of City staff through

the long and short courses in order to improve their

skills so as to increase their lever of services

delivery to the City resident.

Page7

The charts below show the approved Council Political

and Administration Structures

COUNCIL POLITICAL STRUCTURE

Page8

FULL COUNCIL

COUNCIL CODE OF CONDUCT COMMITTE

WORKS, FIRE SERVICES AND COMMUNIATION

COMMITTEE

ECONOMIC AFFAIRS HEALTH AND EDUCATION

COMMITTEE

ECONOMIC AFFAIRS HEALTH AND EDUCATION COMMITTEE

WARD DEVELOPMENT COMMITTEES

URBAN PLANNINGAND ENVIRONMENT

COMMITTEE

MITAA LEVEL COMMITTEES

THE COUNCIL ADMINISTRATION

ORGANIZATION STRUCTURE

AGRICULTURELIVESTOCK ANDCOOPERATIVES

AGRICULRUTRE

LIVESTOCK

COOPERATIVE

PLANNING STATISTICS MONITORING &EVALUATION

INTERNAL AUDIT

LAW AND ORDER

URBAN PLANNINGAND

ENVIROMENT

HEALTH ANDSANITATION

WORKS, FIRE SERVICES

ANDCOMMUNICATION

COMMUNICATION

COMMUNITY DEVELOPMENT, GENDER AND

SOCIAL WELFARE

ADMINISTRATION

EXPENDITURE

REVENUE

SUPPLIES

SALARIES AND BANK

RECONCILLI-

LIATION RECONCILIATION

TRADE

URBAN PLANNING

LANDS

SURVEY

VALUATION

NATURAL RESOURCE S

AND ENVIRONMENT

CURATIVE

PREVENTIVE

SANITATION

ROADS

BUILDINGS

MECHANICS

FIRE SERVICES

CURRICULUM DEVELOPMENT

LOGISTICS AND STATISTICS

ADULT EDUCATION

CULTUREAND

SPORTS

GENDER ANDCHILDREN

DEVELOPMENT

PLANNING STATISTICS AND RESEARCH SOCIAL WELFARE

EDUCATION AND CULTURE

FINANCE AND

TRADE

HUMAN RESOURCE

AND TRAINING

HUMAN RESOURCE

ANDADMINISTRATION

THE COUNCIL

CITY DIRECTOR

Page9

CHAPTER TWO.

Procurement Documents and Contracts

There are differences documents which used in procurement

the following are the documents which are used in the

institution.

Procurement Requisition

This are the form number 12/6 which used by the user

department writing all things which are need to use in

their department and send to PMU in order to direct the

procurement officer to buy the goods which are needed

this form will be complete when signed by all people

which their department are present in this form.

Request for Quotation

This is the document which used by PMU writing all needs

which comes from difference department and then

distribute to the difference supplies in order to

determine the price of the goods and service.

Inspection form of goods which are received.

These are the forms which are prepared by the user

Page10

department in order to be auditing by the auditor.

Procurement documentation.

The procurement documentation will depend on the type of

contract that has been selected. In most cases, the

following documentation will be required:

1. Invitation to tender letter

2. Instructions to bidders

3. Bid data sheet

4. Standard forms for technical and financial

proposals

5. Terms of reference

6. Draft contract

7. Form of tender

8. Specification

9. Drawings

10. Bills of quantities and schedule of rates

1. Invitation to tender letter

A brief letter inviting pre-qualified firms or consortia

to submit technical and financial bids for the PPRA

arrangement.

2. Instructions to bidders

This document provides bidders with the general

guidelines and formal rules governing the tender

process. The rules of tender add clarity and

Page11

transparency in order to clarify bidders’ questions

prior to the beginning of the formal tender process. It

is usually preferable to submit the financial and

technical proposals in separate sealed envelopes;

evaluation should be a two-stage process, with only the

bidders that are qualified technically proceeding to the

financial evaluation. This process should be outlined

clearly in the instructions to bidders.

3. Bid data sheet

The bid data sheet provides clarifications on the

general information contained in the instructions to

bidders, including: scheduling, submission deadlines,

evaluation procedures, logistic support, regulations and

so on. Bidders may be required to include in their

technical proposal elements such as:

An understanding of local conditions;

An understanding of the requirements of the

contract;

Information on the equipment and technologies to be

used;

A schedule of activities to reach any performance

targets;

Information on the experience and skills of key

management and technical staff to be assigned; and

Page12

Staffing and staff development plans.

There are several alternative selection criteria that

may be used to evaluate financial proposals:

Lowest tariff or volumetric fee;

Value of investments to be made by the bidder,

given a pre-set tariff;

Fixed fee;

Incentive compensation for the achievement of pre-

defined targets; or

A combination of the above.

4. Standard forms for technical and financial proposals

In order to ensure that bids are both responsive to the

terms of reference (TOR) and easy to compare and

evaluate, the tender documents commonly include a set of

standard forms that all bidders must use in submitting

their proposals. These typically include:

Bid forms and price schedules;

A bid security form;

A form of contract agreement;

Performance security forms; and

A bank guarantee form for advanced payment.

5. Terms of reference (TOR)

The terms of reference may include general background

information on the service area and sector, as well as

the specific scope of work of the private operator. This

Page13

document protects the government at a later stage during

the transaction closing process by supplying much of the

information required by the bidder. It thus prevents

bidders from claiming that they did not have knowledge

of certain circumstances during the bid or negotiation

phases. Much of the work in the closing of a transaction

can be done more efficiently if the information provided

in the terms of reference has been properly researched,

assessed and written. Bidders also appreciate a full

TOR, as it enables them to assess quickly the potential

merits of a project from their home offices.

6. Draft contract

A draft contract may be included in the tender

documents; if so, it will greatly reduce the time

required carrying out negotiations with the preferred

bidder. A draft contract is an extremely detailed legal

document, which covers the following:

It ensures that all of the many legal protections

are met, including representations, warranties,

indemnifications, terms and all applicable laws and

regulations;

It ensures that all proposals address all aspects

of the project that are important to the

government, such as financial structures, social

Page14

guarantees, investment guarantees and so on;

It ensures all investors submit proposals in the

same format to make them clearly comparable for

evaluation purposes; and

It makes the tender process, the proposal

evaluation process and especially the negotiation

process most efficient.

The draft contract is extremely important if

negotiations are to begin with baseline conditions that

are acceptable to the government. If contractors are

allowed to propose their own agreements and conditions

first, it is much more difficult to later negotiate and

change an agreement.

In addition to the above, tender documents for PPRA

arrangements commonly include as annexes:

7. Specification

The specification defines the standard of workmanship

and materials required by the government for completion

of the project. It may include a description of the

works, site conditions, access to the site, site

establishment, supply of materials and so on. The

contractor is obliged to meet these specifications. The

statement of specification must be precise and

unambiguous in interpretation. A specification may set

out how all the work may be done, or just certain

Page15

aspects, leaving the rest to the contractor’s

experience.

8. Drawings

A list of drawings showing the title, number of the

drawing and revision number should be provided with the

invitation to tender letter or with the specifications.

Maps should show the proposed location for works,

possible pipeline routes, crossings and so on.

9. Bills of quantities and schedule of rates

A bill of quantities specifies the quantity of materials

and the labour input that the work will incur. It may be

in just one document or divided into several documents

to suit sections of work. It is normal procedure to

include sections on “Method of Measurement” or “Notes on

Pricing”.

These sections will enable the bidder to define what

exactly is to be included in the individual rates and

prices. Standard documents have been published providing

guidelines on measurement methods, but these may not be

adequate for every possible situation or work item.

Thus, there is always a need for some modifications to

standard methods. Standard methods that have been used,

the edition and any amendments that have been made must

always be specified. These instructions should be

included in the “Notes on Pricing”. It is preferable to

Page16

supply a bill of quantities rather than a schedule of

rates. It is more difficult for the government to

evaluate whether the bidders’ pricing is fair and

reasonable if quantities have not been specified.

Inclusion of a schedule of rates with a tender for a

lump-sum contract is justified where the rates are

purely for evaluating any variations in the work that

may arise.

 

Process of evaluation.

A one-stage proposal evaluation uses two initial screens

Proposals are evaluated for their mandatory

requirements. If any of these requirements have not

been met, the potential partner can be eliminated from

the shortlist.

Proposals that do not adequately and clearly

demonstrate financial or managerial capability or

previous experience can also be eliminated, further

reducing the shortlist.

Once the proposals have been through these two screens, a

shortlist will have been created. The proposals that remain

can then be evaluated based on the criteria set out in the

RFP.

In a two-stage proposal evaluation, all of the submissions

will have been received from participants who have already

Page17

been shortlisted through the RFEI or RFQ process. As such,

all proposals will be evaluated. Members of the project team

may score the projects individually, and then aggregate the

scores, or they may score each project together by

consensus.

As in the case of the one-stage proposal evaluation, a

specific number of the highest ranked submissions will be

shortlisted to receive a Request for Proposals.

As a matter of courtesy to potential partners eliminated in

the RFEI or RFQ process, meetings with unsuccessful

proponents should be held on request to discuss why they

were not shortlisted. This session is important as it

provides access and answers to questions for unsuccessful

applicants, as well as providing them with a better

understanding of the process for the next time the local

government issues a RFEI or RFQ. It will also improve the

quality of submissions received by the local government in

the future, as more participants will have a greater

understanding of the process and its requirements.

Developing evaluation criteria

Evaluation criteria vary depending on the type of project

and end users. They can include the following:

Understanding of the needs of the local government;

Previous experience of the bidder;

Legality of the proposed solution;

Page18

Commitment of the proposed partner to achieving a

solution that will benefit all parties;

Likelihood that the bidder can achieve the proposed

solution;

Management capacity of the bidder;

Financial stability of the bidder;

Municipal priorities and policies; and

Proposed solutions for dealing with labour unions and

local government employees affected by the arrangement.

 

 Rules of fair procurement.

Procurement and tendering should be conducted in a fair,

open and transparent manner. The most important and broadly

accepted principle underlying a modern procurement system is

open competition – unrestricted, universal access to the

procurement market. In addition, the procurement process –

the selection of bidders, tendering procedures and the award

of contracts – should be open to public examination and

review, thus making it a transparent process.

A transparent procurement system ensures that all qualified

suppliers have equal access to all elements of the system,

including:

Methods of procurement;

Legislation;

Evaluation criteria and technical specifications;

Page19

Rights and responsibilities of government as a buyer;

and

Due process.

To promote transparency, the procurement process should be

made open to public scrutiny. The transparency of the

process is further reinforced when contract awards, and the

overall procurement process itself, is subject to the

scrutiny of national parliaments, external audit bodies and

the media.

Procurement should be based on rules guaranteeing fair and

non-discriminatory conditions of competition. An essential

element is procedures by which aggrieved bidders can

challenge procurement decisions and obtain redress if

decisions are made that are inconsistent with the

established rules.

One of the mechanisms used to promote fair procurement is

establishing selection panels to evaluate the proposals. The

evaluation stage is most often closed to the public. Thus,

this stage requires the most effort to ensure that the

process is fair, open and transparent. For this reason, many

governments have established a selection panel to evaluate

the proposals that is separate and independent from the

project team and the government.

There are a number of different ways that a selection panel

may be appointed. In all cases, there should be a close

examination of all members of the independent evaluation

Page20

panel to ensure that no conflict of interest will arise. It

is unacceptable to include in the panel: professionals who

have assisted the government in the preparation of RFQ, RFEI

or RFP documents; individuals who will be making the final

decision; or individuals who will be managing or

administrating the projects.

Once the municipality has chosen a private sector bid, and

the contract has been signed, the promoter should publish

the names of all the organizations that submitted bids along

the name of the winning organization.

Firms that were not successful in their bid may request a

debriefing to learn why they did not win. At this

debriefing, each firm may learn the positive and negative

points of its proposal and may learn the main reason as to

why it did not win.

Confidential information – such as companies' overhead costs

and the like – should not be divulged to competitors or the

public.

Finally, the main terms of the contract must be published

(length, plans for expansions and so on).

Likewise, if the municipality has decided not to engage the

private sector but rather to restructure the public

provider, the main details of the restructuring plan must be

published – such as plans for expansions, benchmarks and

deadlines for quality and coverage improvements, changes in

tariffs and so forth.

Page21

The procurement systems should be protected against abuse,

fraud and corruption. Many mechanisms can help anticipate

and resolve these problems, though there are no “easy

solutions”.

 

Procedures for procurement.

An open and competitive procurement procedure begins with

the promoter’s description of its requirements and an

invitation to suppliers to indicate their interest in the

contract and their professional capacity to fulfill it. The

promoter then identifies potential suppliers and invites

them to submit bids. After the bidding phase, most

procurement systems require a public declaration of the

competitors’ names and their bid prices and, ultimately, of

the successful bidder.

There is a wide variety of procurement procedures available

for use in tendering when it comes to PPRA arrangements.

Many of these procedures have become prescriptive in nature.

Many local governments follow standard procurement

procedures drawn up by the International Federation of

Consulting Engineers (FIDIC).

However, most commonly PPRA contracts are awarded as the

result of some form of competitive bidding procedure.

Designing a competitive bidding process – and getting the

best possible result – is easiest when the product or

service required is a fairly standard one and the technical

Page22

outputs can be defined with reasonable certainty in the

bidding documents. Particular attention, therefore, should

be paid to providing good quality information to potential

bidders and to the detailed design of the bidding process.

A competitive bidding process generally consists of:

1. Public notification of the government’s intention to

seek a private partner for the provision of, for

example, water and sanitation services, including

prequalification or a request for expressions of

interest from private companies;

2. Distribution of bidding documents and draft

contracts to potential bidders;

3. A formal process for screening potential bidders and

finalising a list of qualified bidders; and

4. A formal public process for presenting proposals,

evaluating them, and selecting a winner.

Different procedures for procurement include invitation to

tender; and request for proposals (one- and two-stage

processes).

Invitation to tender

Generally, an invitation to tender is issued when the

promoter knows exactly what it wants and how it wants to

achieve its goals. Most often, the tender is issued and the

lowest bidder is awarded the contract.

Page23

Although this approach reduces the cost involved in

developing a PPRA, it may limit the promoter’s opportunities

to view other, more efficient and/or more cost-effective

options for delivery of the service.

 

Request for proposals

A request for proposals (RFP) is usually used when the

promoter knows what it wants to achieve, but would like

prospective partners to use their experience, technical

capabilities and creativity to identify how the project

objectives can best be met.

One of the main differences between an RFP and an invitation

to tender is that in an RFP the promoter is looking for

value (that is, operating efficiency, cost-saving measures,

innovations and so on), rather than the lowest bid.

The request for proposals can be issued through either:

A one-stage; or

A two-stage process.

The decision between having a single or a two-stage

procedure for requesting proposals will depend on the nature

of the contract, on how precisely the technical requirements

can be defined and whether output results (or performance

indicators) are used for selection of the contractor or

concessionaire. If it is deemed both feasible and desirable

for the contracting authority to formulate performance

indicators or project specifications to the degree of

Page24

precision or finality necessary, the selection may be

structured as a single-stage process. In that case, after

having concluded the pre-selection of bidders, the

contracting authority would proceed directly to issuing a

final request for proposals.

One-stage process

A one-stage RFP may be appropriate for a local government in

the following circumstances:

Parties are known to the local government to have the

capability to be successful partners;

Only a limited number of suppliers have the resources

and capabilities to be a successful partner;

The project must be implemented under a tight

timeframe; and/or

The local government is not able to spend a large

amount of funds on the process.

Two-stage process

The promoter should use the two-step process in the

following situations:

The project is large and complex or of a special

nature;

The required proposal will be time-consuming and

expensive for the proponent to prepare;

Page25

Qualified firms would not take the time and expense of

preparing a response to an RFP if there were too many

other firms submitting;

There is an advantage to initially inviting a large

number of firms and then narrowing the field to those

most qualified; and/or

The RFP process will involve the divulgence of

information that is sensitive or even confidential

(with a limited number of firms receiving the RFP, the

number of people with access to this information can be

limited and monitored).

The two-stage RFP process involves an initial stage that

screens potential partners. Generally, this first stage

involves the issuance of a Request for Expressions of

Interest (RFEI) or a Request for Qualifications (RFQ). This

screening allows the project team and the evaluation

committee a chance to consider a wide range of proponents

initially and then to narrow the field to those most

qualified.

 

Request for Expressions of Interest (RFEI)

The RFEI is intended to provide the promoter with sufficient

information to draft a clear RFP in cases when the local

government has identified its objectives, but may not have

fully defined the project or service to be delivered. The

use of an RFEI can assist in two ways:

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It reduces the time and expense involved in evaluating

a larger number of proposals; and

It improves the quality of proposals.

In this sense, the RFEI is used to gain information to help

in drafting the RFP.

Request for Qualifications (RFQ) or Pre-qualification

A RFQ is used in situations where the promoter and the

project team have a more defined project, but do not know if

there are any private sector partners with the resources,

experience or interest to undertake the project. It is a

step within a contract awarding procedure in which the party

inviting the tenders selects the companies to participate in

competitive bidding for the contract. To this end, potential

participants in the competition are requested to submit

information on their companies.

The RFQ document is more specific than the RFEI document. In

traditional government procurement it consists of the

verification of certain formal requirements, such as

adequate proof of technical capability or prior experience

in the type of PPP, so that all bidders who meet the pre-

selection criteria are admitted automatically to the

tendering phase. Bidders should be required to demonstrate

that they possess the professional and technical

qualifications, financial and human resources, equipment and

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other physical facilities, managerial capacity, reliability

and experience necessary to carry out the project.

Qualification requirements should cover all phases of an

infrastructure project, including financing, management,

engineering, construction, operation and maintenance, where

appropriate.

Based on the pre-qualification results, a shortlist is drawn

up of the companies eligible to compete. The bidders answer

the RFQ with Expressions of Interest.

The RFQ process is used as a "shortlisting" method to pre-

qualify selected potential partners who will then receive

the RFP. It is not designed to gain answers as to how the

project will be completed.

Depending on the pre-qualification requirements set out in

the documents, different groups of companies will be

selected. One recent trend is that pre-qualification

requirements laid down by promoters such as local

governments have started to include not only the price and

quality of the service they wish to procure, but also

requests to address poverty, upgrade welfare and/or create

employment opportunities. Often the bidding companies need

to prove their recent experience with a previous assignment

similar in nature and outcomes.

Thus, the purpose of this stage is to enable the contracting

authority to formulate its requirements in a manner that

enables a final competition to be carried out on the basis

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of a single set of parameters. Put simply, this is an

opportunity to ensure that in the final evaluation, the

contracting authority is able to compare "apples to apples"

rather than "apples to oranges."

Often local small businesses or community-based

organizations are best suited to resolve a particular

service delivery problem. In such cases, it is important not

to leave them out of the bidding process. One of the means

through which this can be achieved is to simplify the tender

documents. Obviously, pre-qualification, drafted without

taking these potential bidders into account, could serve as

an obstacle to the effective and innovative solutions to the

existing problems. Meanwhile, the pre-qualifications can

still be an effective mean pre-define the bidders for the

RFP, when the criteria are correctly specified and weighted

according to their value to the PPP project.

 

Simplification of tender documentation

The system of tender submission should not require too many

forms of supporting information, which could be

unnecessarily complicated for small businesses to complete

satisfactorily. Besides, the administrative burden for

smaller businesses in dealing with tender form requirements

for government bodies is disproportionately greater and more

expensive than for larger companies.

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Thus, the tender submission of documentation should be

rationalized and simplified as far as possible to make it

easier for small contractors to deal with the paperwork

involved. However, this simplification of the documentation

should not influence negatively the essence of the contract

and the contractual obligations.

Levels of competitive bidding

Competitive bidding can take place between local/national

entities, or between interested international companies.

National competitive bidding (NCB) is utilized when:

Domestic production or construction facilities are

available at reasonable cost, are efficient and

adequate in terms of prompt delivery;

The government has specifically requested the adoption

of local competitive bidding;

The local competitive bidding does not preclude

participation by foreign bidders;

The advantages of international competitive bidding are

clearly outweighed by the administrative or financial

burden involved.

NCB may also be the most efficient and economical way of

procuring goods, services or works which, by their nature or

scope, are unlikely to attract foreign competition. In this

case, the promoter does not expect foreign bidders to be

interested because:

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The contract values are small;

Works are scattered geographically or spread over time;

Works are labour-intensive; and/or

The goods or works are available locally at prices

below those of the international market.

Publication of a general procurement notice in international

journals is not necessary for NCB, and advertising may be

limited to the local press or official gazettes.

 

International competitive bidding (ICB)…

…The objective is to provide a wide range of choice in

selecting the best bid from competing suppliers/contractors

and to give to all prospective bidders adequate, fair and

equal opportunity to bid on the goods, services and works

which are to be procured. Whenever procurement is being done

under multilateral development bank loans, certain

requirements are put in place for ICB. In this case, the

government must observe certain guidelines in preparing

bidding and contract documents and must follow certain

procedures in advertising bid invitations and in accepting,

opening and evaluating bids. In addition in such cases,

draft bidding documents, bid evaluation reports and proposed

awards of contract are subject to prior review and approval

by the lender according to its stipulated guidelines.

Process of procurement and tendering.

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Procurement is the process of buying goods, works or

services. For instance, in terms of PPRA, procurement

comprises the process of buying the basic infrastructure

and services. This may, for example, involve the

acquisition of operation and management services for a

basic service such as water supply. Procurement is often

carried out by the process of tendering, rather than

buying products directly from a seller.

A company or organization (the promoter, client or

employer) wishing to obtain goods or services will first

specify its requirements. Subsequently, it will open the

bidding in a process known as tendering. Interested

companies can then submit their proposals to the client

(often a local government) to meet these requirements.

The government offering the tender will then evaluate

the bids to decide which offer best suits its

requirements. The company that has been successful in

the tender process will perform the work by contract.

The underlying objectives of procurement and tendering

are concerned with ensuring competition, which is viewed

as a key factor in achieving the twin objectives of:

Accountability in the spending of public money; and

Transparency in the steps of the decision-making

processes.

 

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Parties to procurement

In relation to the actual contract, there is a need to

focus on who is involved in a contract and what each of

these actors’ various obligations are. The most commonly

used engineering contracts recognize a “triangle of

actors’: promoter; engineer; and contractor.

The promoter/client, otherwise known as the

employer, specifies, authorizes and

pays for the work to be undertaken.

The engineer acts as an agent on behalf of the

employer.

The duties of the Engineer include:

–evaluation of tenders;

– supervision of the work of the contractor;

– confirmation of whether or not the work as been

completed to specification; and

– mediation between the employer and the contractor

in case of dispute.

The contractor (the bidder) successfully bids for a

contract and carries out the work required.

Procurement objectives

A typical case involves an urban government letting a

contract to a private sector company for the

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construction of infrastructure improvements. The

municipality is the promoter; it has planned and

designed the work, and is paying for it to be

implemented. The urban government promoter appoints an

engineer, who is usually in the full-time employment of

the relevant government department. In accordance with

the procedures laid down, a private sector contractor is

then appointed to do the actual construction work.

The engineer has the important role of ensuring that the

interests of the promoter are met, and that the

contractor is duly paid for his/her efforts. The

promoter wants the best value for money and the

contractor wants to secure a good profit; whilst this

dichotomy can involve an enormous range of complex and

contentious issues, satisfying the various interests

often comes down to ensuring that a “triangle of

objectives” are met:

Cost: has the work been completed within the costs

agreed in the contract?

Quality: has the work been carried out in

accordance with what was specified?

Time: has the work been completed satisfactorily

within the time specified?

 

The traditionally accepted objectives of procurement

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procedures and contract documents are to ensure that

works are executed at the minimum cost that is

consistent with the need to achieve a product of

acceptable quality within an acceptable timeframe.

Procurement procedures and contract documents do this by

reducing uncertainty, which in turn is done by:

Clearly defining who is liable to take any risk

that cannot be eliminated from the project; and

Providing information on the work to be carried out

so that all concerned are clear about what has to

be done and what their role is in doing it.

The role of the engineers in urban government is to

ensure that objectives relating to cost, quality and

time are achieved. The objective which is most difficult

to assess, and causes most concern, is the quality of

the finished work. The reality is that neither the

engineers as supervisors nor the government as promoters

are primary stakeholders with a strong motivation for

ensuring that adequate work practices and standards are

maintained.

 

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CHAPTER THREE

3.0 OBSERVATIONS, PROBLEMS AND SUGGESTIONS

3.1 Observations

As far as good cooperation, relationship and respect are

among the catalysts of the achievements in any organization,

I was so happy to experience these just very early. This

made the staff to work as a real team to ensure and achieve

its objectives effectively. Thus I was treated as the part

and parcel of the staff that I was able to participate in

all activities and being able to learn many things under

their supervision and directives to make me as a trainee so

perfect in my studies both theoretically and practically.

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Therefore I learned on how to work with team of the staffs,

how to participate with the others in performing different

development activities pertaining to my field and how to

observe peace and good conducts at work place

In so doing therefore, the main thing I observed is that the

council as the organization has achieved may things towards

its goals such as:

Good records Deepings (all ordering and supplying documents)

helped also on the preservation and safety of the items

against loss development programs of which some of them are

still on progress such as the construction of roads like

Mbalizi road and Sokomatola road respectively

There is the checking and inspection of the item brought in

by suppliers versus the documents (requiring forms) to

protect the value of money by receiving valuable items in

accord to the money spent.

Also by calling up and accepting of the invitations to

tender made by different people whose their tenders are to

be examined and assessed by the tender board before offering

them to supply the items. This helps so much to get valuable

items from good suppliers and this is the stage towards the

combustion of corruption

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3.2 Problems encountered

In fact in each successful measure, there is a problem which

in one way or another reduces the speed of success or make

the objectives unsuccessful altogether. However to solve the

same some measures have to be taken into account.

Despite the achievements of the organization, still the

organization (particularly on the purchasing and supplies

department) has several problems of which I took them as the

challenges towards the achievements of the objectives

mentioned above. These problems act as the barriers towards

the success.

They include the followings;

Poor communication system, that there is no good

organized system of say retrieving some documents and

data from one office to another, that is to say the

system is of the old regime doing away with the

computerized system of data management for example, the

department should have at last the local network system

covering just the department and connecting to the

responsible committee. As the result, this made the

work to be done very slowly wasting more much time for

just a single activity because data and documents are

transferred manually not electronically.

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Lack of enough staffs in the department of procurement

and supplies compared to another departments, this made

law efficiency of work.

Does not know all procedure of payment of supplies.

The LPO does not prepare by PMU.

Poor arrangement of the documents in the office and the

items in the stores, these made the salt to use more

much time finding of either documents of items in need

as the result much time is spent without any reasonable

ground. This reduces the working time hence slow and

low development of the society.

3. 3 Suggested solutions

As afore stated before that, those problems are not taken as

the barriers towards the achievement, rather are taken as

the challenges which call for the improvements of some

working systems and departments so as to get more and better

achievements that before. Thus I suggest that different

measures should take place in several departments to effect

good relationship, coordination/cooperation and

communication which will result into good performance and

efficiency. Therefore, the following should take place to

effect the above that:

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To make different shelves in accord to the document

stored. These should be categorized yearly and/or

monthly, also they should be named according to the

document stored for example, issue voucher shelf from

1st August to 31st August, or according to the

department concerned for example, agriculture receipt

vouchers from 1st January to 31st January 2012. This

will reduce the time consuming to find the documents

while are in need.

There should be made the local network of the

department itself connected to the other department and

committees to affect the computerized system of

retrieving data and documents (data sharing).

This will automatically reserve the employees for other

manual works than transmitting those date or documents

as it no. it will also reduce the wastage of time

unreasonably.

To employ other staffs to make the work so manageable

and hence increase efficiency than before.

This will result into the use of stores at all the time

different from now, where sometimes some stores have to

be stocked due to the lack of staffs.

The LPO must be prepared by PMU and not EPICOR.

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All procedure of payment of goods and services must be

known by PMU but not only accountants.

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REFERENCES

1. Source from the Institution (Mbeya City Council).

2. Baily P and D Fermars, (2005,9thed ), Purchasing

Principles and Management,

Pitman Publishing Ltd, London.

3. BURTON J.A, (1987, 3rd) Effective Ware Housing, Hollen

Street Press Ltd,

London.

4. Dobler W, Burt D. And Lee, L. (1990, 5th), Purchasing

and material

Management, McGraw Hill.

London.

5. Fearon Leaders and et (2006, 13th), Purchasing

Materials, Library of

Congress, USA.

6. Http:// www.Electronics.org.com.

7. Jessop D.Morrison, (1986, 4th) A Storage and Control of

Stock for Commerce

Industry and Public Undertaking,

Pitman Publishing Ltd,

London.

8. Journal e.g. Uganda Procurement Information.

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9. Ksdula, H.J (1983) Warehousing Management Booklet, Dar-

es-Salaam

University Press, Dar-es-Salaam.

10. Public Procurement Regulatory Authority [PPRA]

2004/2005.

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