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RURAL ELECTRIFICATION AUTHORITY
REA OPERATIONAL MANUAL:
PROCUREMENT AND SUPPLY
March 2009
Plot No. 1613
Sheki Sheki Road
Post Net Box 349
Private Bag E891LUSAKA
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TABLE OF CONTENTSPAGE
ABBREVIATION AND TERMS USED iv
1.0 INTRODUCTION 1
PART A- GENERAL
2.0 PROCUREMENT AND SUPPLY MANUAL 2
2.1 Purpose and Use of the Manual 2
2.2 Organization, Intent and Modication of the Manual 3
3.0 ORGANIZATION AND FUNCTIONS OF THE PROCUREMENT AND SUPPLIES UNIT 3
3.1 Introduction 3
3.2 Procurement and Stores Unit 3
3.3 Rea Management Tender Committee 4
3.4 Technical Evaluation Committee 6
4.0 REA STAFF ETHICS AND PROFESSIONAL RESPONSIBILITY 6
PART B OVERVIEW OF THE PROCUREMENT PROCESS
5.0 REGISTRATION OF SUPPLIERS 7
5.1 Introduction 7
5.2 Supplier Registration Process 7
5.3 Evaluation of Supplier Application 8
5.4 Suppliers Recommendation 8
5.5 Supplier Performance Rating 8
5.6 Suspension or Removal from Supplier Data Base 9
5.7 Criteria for Suspension 9
6.0 PROCUREMENT PLANNING 106.1 Introduction 10
6.2 Short Term Planning 10
6.3 Long Term 10
6.4 Annual Plan 10
6.5 Contents of the Procurement Plan 10
7.0 PROCURING 11
7.1 Purchase Requests Specications 11
7.2 Procurement Strategy 11
7.3 Submission of Request to the Procurement Ofcer 12
8.0 PREPARATION AND ISSUANCE OF TENDERS 12
8.1 Introduction 128.2 Preparation of the Tender document 12
8.3 Identication of Potential Recipients of Requests for Bids Methods of Solicitation 12
8.4 Methods of Tendering 13
8.5 Low Value Procurement/Informal Tendering 13
8.6 Formal Methods of Tendering 14
9.0 OPENING, EXAMINATION, EVALUATION AND COMPARISON OF FORMAL TENDER 15
9.1 Opening 15
9.2 Examination 15
9.3 Evaluation 16
9.4 Report on Evaluation 16
9.5 Extension of Validity of Tenders 16
9.6 Clarication or Alteration of Tenders 179.7 Exceptions to Tender Procedures 17
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10.0 ORDERING 18
11.0 RECEIVING OF GOODS AND SERVICES 18
11.1 Returning Materials to Supplier 19
11.2 Control over Good Received 19
11.3 Issues from Stores 19
PART C
12.0 GENERAL PROCUREMENT CYCLE AT REA 20
PART D
13.0 APPENDICES 22
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ABREVIATIONS AND TERMS
GRV Goods Received Voucher
GRN Goods Returned Note
MTC Management Tender Committee
PSU Procurement and Supplies Unit
LPO Local Purchase Order
CEO Chief Executive Ofcer
MAF Manager Administration and Finance
ZESCO ZESCO Ltd
REA Rural Electiricacation Authority
ZPPA Zambia Public Procurement Authority
RFP Request for Proposal
RFQ Request for Quotation
IFB Invitation for Bid
CONTRACT A Contract is a written document, containing the Agreement, and the Terms and
Conditions, between the REA and the Supplier, which serves as proof of theobligation.
DELIVERABLES Goods or Services delivered or to be delivered to the REA pursuant to the Terms and
Conditions of a Contract.
REQUISITIONER REA staff, who is responsible for submitting to the PSU, for their action, an approved
purchase requisisition.
SUPPLIER Provider of Goods, Services and Works to the REA.
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1.0 INTRODUCTION
In November 2003, Parliament passed a new law entitled the Rural Electrication Act Number 20 of 2003.
The law was passed to lend impetus to Governments determination to improve the effectiveness in the
implementation of the rural electrication program. The Rural Electrication Authority established by the Act
is intended to be a special purpose vehicle for promoting the rural electrication agenda as the national utility,
ZESCO Limited, which has hitherto been implementing the program on behalf of Government, is encouraged
to concentrate on commercially viable ventures and projects.
REA has been mandated to carry out several functions as outlined in the ACT. In the course of carrying
out these functions, REA would be required to do procurement that would be acceptable both locally and
internationally.
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Part A. - GENERAL
2.0 PROCUREMENT AND SUPPLY MANUAL
This Procurement and Supply Manual has been developed to assist the REA carry out procurement in
a consistent, efcient and transparent manner. The manual is applicable to all types of procurement
(goods, works and services) and derives its authority from the Zambia Public Procurement Authority
(ZPPA) ACT No. 12 of 2008 of the Laws of Zambia. The tenders for all goods, works and services
shall be invited, examined and evaluated. The Contract shall then be awarded in accordance with the
procedures specied herein.
2.1 PURPOSE AND USE OF MANUAL
The Rural Electrication Authority (REA) needs to procure goods, services and works to support
its activities or projects throughout the country. The Procurement and Supply Unit (PSU) is in
charge of the procurement of goods, services and works.
The Procurement Ofcer is responsible for the procurement activities. However, the REA may
from time to time, depending on the value of services to be procured, request the Zambia
Public Procurement Authority (ZPPA) to perform the procurement on its behalf, as is stipulated
in the ZPPA Act.
(a) The Zambia Public Procurement Authority ACT No. 12 of 2008 of the laws of Zambia,
and the Financial and Accounting regulations of the REA govern the procurement
activities of the REA.
(b) This Procurement and Supply Manual claries the principle of segregation of
responsibilities between requisitioners and the procurement ofce by specifying
several separate and distinct functions within the procurement process. Moreover
cooperation between the requisitioners and the procurement ofce is essential and of
utmost importance to ensure the REA obtains good quality goods, services and works
that meet the specications at competitive prices within the required time frame in
order to further the statutory mandates of the organization.
(c) The Procurement Ofcer is responsible for the purchase of products, services and
works on behalf of the organization for both budgeted funds allocated to the REA, and
projects actions funded by other sources of nancing.
(d) The Requisitioners (e.g. budget holders) are responsible for identifying the needs of
the REA and developing of generic specication to fulll such needs.
(e) This manual is intended to provide guidance on procurement policies and procedures
to all REA ofcers involved in various stages of procurement action conducted by the
REA.
(f) The procedures in this manual are designed to ensure that such ofcers can give
those seeking to conduct business with the REA condence that their submissions are
considered in a fair and transparent manner. It will also assist stakeholders to have
condence that the funds entrusted to the REA will be utilized as intended.
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(g) Given the commercial environment and technological changes over time, this manual
will be updated and rened from time to time.
(h) All REA ofcers will be required to be familiar and comply with the provisions of this
Manual.
2.2 ORGANIZATION, INTENT AND MODIFICATION OF THE MANUAL
(a) This manual brings together policies, procedures and activities dealing with the REA
procurement processes, and consists of four parts namely General Introduction,
Overview of the procurement Process, General Procurement Cycle at REA and
Appendices & Forms.
(b) The main intent of this manual is to allow for efcient REA Procurement actions.
Some procedures contained in this manual may require modication, depending on
the task at hand.
(c) As indicated earlier, this manual will require modications from time to time as
deemed necessary.
General or specic comments and suggestions to this manual for improvements or additional
provisions that may be needed should be addressed to the Chief Executive Ofcer of the REA.
Any specic or general suggestion to modify it would be discussed at appropriate forum and
feed back would be made known to all REA staff.
3.0 ORGANIZATION AND FUNCTIONS OF THE PROCUREMENT AND SUPPLY UNIT
3.1 INTRODUCTION
The REA Procurement Ofce shall ensure efcient, effective and economical administration of
the procurement activities and related support services.
The Chief Executive Ofcer is authorized to establish policy and procurement related procedures
and direct activities of the REAs Procurement and Supply Unit. In additional, the CEO shall:
(a) Provide execution, direction, planning and management of the operations of the
PSU.
(b) Develop and coordinate a responsive and coherent policy for procurement activities.
(c) Provide appropriate reporting information to the overseeing bodies.
(d) Overview and review the preparation of submission to audit observation, reports and
management letters relating to procurement activities.
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3.2 PROCUREMENT AND STORES UNIT (PSU)
The PSU comprises the Procurement Ofcer and any staff reporting to him/her.
The PSU shall:
(a) Plan and Manage Procurement activities in accordance with the requirements of the
REA activities.
(b) Process and expedite requisitions, solicitation documents, submissions, contractual
instruments and invoices.
(c) Prepare and submit written reports on pending activities on procurements for review
and advice.
(d) Negotiate, prepare and administer contracts for goods, services and works.
(e) Liaise with requisitioners in developing technical specication/drawings/BOQs for
goods, services and works to be procured.
(f) Monitor Supplier performance evaluations in conjunction with other related sections of
the REA.
(g) Maintain records of every Contract entered into by the REA.
(h) Arrange and coordinating MTC meetings and drafting of minutes of the same, and
maintaining a permanent record of all minutes/recommendation and cases reviewed
by it.
(i) Responsible for administering and maintaining the Suppliers database.
(j) Conduct bid opening functions as and when needed.
(k) Perform any other duties assigned by the Chief Executive Ofcer from time to time.
3.3 REA MANAGEMENT TENDER COMMITTEE
3.3.1 GENERAL FUNCTION OF THE REA MANAGEMENT TENDER COMMITTEE
The formal responsibility of the REA Management Tender Committee is to ensure
that proposed procurement actions are based on fairness, integrity and transparency,
and that such are impartial and unambiguous. The Management Tender Committee
reviews presentations and provides advice to the Procurement Ofcer on whether the
proposed procurements are in accordance the ZPPA.
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It is the duty of the Management Tender Committee to:
(a) Ensure that general policy laid down by the ZPPA regarding the procurement of
goods, works and services is adhered to.
(b) Standardize goods, equipment and services procured in the interest of efciency,
economy, quality and reliability and ease of maintenance; and
(c) Encourage many eligible registered Suppliers to participate in tenders.
3.3.2 COMPOSITION OF THE REA MANAGEMENT TENDER COMMITTEE (MTC)
TheMTC shall be composed of six voting members from the following ofces:
(a) The Chief Executive as Chairperson
(b) The Senior Manager Planning & Projects
(c) The Manager Administration & Finance
(d) The Manager Public Relations
(e) The Legal Ofcer
(f) Two external members approved by ZPPA
(g) The Procurement Ofcer shall serve as the Secretary to the MTC and shall have no
voting rights.
3.3.3 DUTIES OF THE REA MANAGEMENT TENDER COMMITTEE
(a) The Management Tender Committee will from time to time be convened to review
and provide advice on whether proposed procurement actions of values within the
threshold authorized by the ZPPA are in accordance with the ZPPA regulations.
(b) Two thirds of the members of the committee will form a quorum. The quorum shall
always include the two external members who are not REA staff. Members of the
committees are required to study the committee documents before the meeting.
Therefore, the documents shall be circulated to the members at least 24 hours before
the meeting.
(c) All members of the MTC are obliged to attend all MTC meetings. In their absence, the
proxies delegated in writing shall attend.
(d) If deemed necessary, any requisitioning ofcer initiating the procurement action that
require the MTC review shall attend, in a non-voting capacity during the MTC reviewand consideration of the said procurement action.
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(e) The MTC may invite any other ofcer whose presence is, in its opinion, desirable to
attend and to participate in the deliberations for the purpose of advising the committee
on the suitability of a particular purchase or specic matter. However, such a person
will have no vote.
(f) In case of a perceived of actual conict of interest, the concerned member should
disclose the matter to the committee, and excuse himself or herself from consideration
of that matter. The Chairman of the MTC shall ask members with interests in mattersunder considerations to leave the meeting.
(g) Minutes of the Tender Committee proceedings shall be recorded, maintained in sequential
order, and submitted to the ZPPA within seven (7) days after comrmation.
3.4 TECHNICAL EVALUATION COMMITTEES
The REA shall from time to time constitute Technical Evaluation Committees. Their duties
shall be to give advice to the Procurement Ofcer and the MTC on matters of highly technical
nature.
The Committee may also meet with the requisitioner and the Procurement Ofcer at the
time of formulation of the draft tender document so as to ensure all necessary technical
parameters are adhered to.
4.0 REA STAFF ETHICS AND PROFESSIONAL RESPONSIBILITIES
(a) All staff of REA involved in the procurement processes are expected to exercise loyalty and
discretion in the execution of the duties entrusted to them and to discharge these functions
and regulate conduct in the interest of the public.
(b) Procurement Unit of the REA is obliged to comply with the Financial Regulations and Laws of
the Republic of Zambia as set out by the ZPPA. It is absolutely essential that all procurement
activities are above reproach, with complete impartiality and with no preferential treatment.
(c) REA shall endeavor to deal with Suppliers that adhere to highest ethical standards both during
the bidding process and the execution of the contract.
(d) REA staff shall not allow any Suppliers access to information on a particular acquisition
before such information is available to the business community at large. Staff shall not
intentionally use unnecessarily restrictive or tailored specication or statements that restrict
competition.
(e) The REA procurement process that includes the preparation of specications and scope
of work, tendering or identication of potential Suppliers, evaluation of bids and award of
Contracts to successful bidders, is designed to enable bidders compete for REA business on
a fair basis. Staff associated with the procurement function, therefore, are responsible for
protecting the integrity of the procurement process while maintaining fairness in the REA
treatment of its bidders.
(f) Ofcers involved in the procurement processes are not allowed to accept any gift from
suppliers regardless of the value and whether the supplier is soliciting dealings with REA or
not. Ofcers shall decline gifts, drinks, meals, transportation or any other form of benet. Inthe event that there is any doubt, the matter should be brought to the attention of the CEO.
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Part B OVERVIEW OF THE PROCUREMENT PROCESS
5.0 SELECTION OF SUPPLIERS
5.1 INTRODUCTION
Performance of the REA in terms of execution of projects depends greatly on the quality and
delivery performance of its Suppliers, Contractors and Consultants.
In order to maintain reliable and regular sources of goods, services and works, REA will
assess the database of Suppliers who are registered with the ZPPA, and or National Council
for Construction (NCC) for specic categories of goods, services and works.
Consultants recommended by Cooperating Partners funding specic projects will be contracted
from time to time depending on conditions laid down.
However, the REA may purchase goods, services and works from Suppliers who are not
registered with the ZPPA or NCC depending on the procurement method employed and nature
of goods, services and works sought. This would only happen after REA uses established
criteria to evaluate information provided by prospective Suppliers, and determines compliance
to conditions set forth by the REA and in accordance with the ZPPA guidelines.
A proper and updated data base of registered Suppliers is required to be kept by the PSU
at any one time. This will include information on services provided by each supplier, general
particulars of the Suppliers, telephone and fax numbers, email address, physical address
and any other relevant detail. This would also include details regarding evaluation of supplierperformance.
5.2 SUPPLIER INVITATION PROCESS
The REA shall invite applications from would be Suppliers for its goods, services and works
on an annual basis.
The following are the minimum documents to be provided at the registration stage:
(a) Completed application forms
(b) Copy of certicate of incorporation (privately owned companies)
(c) Latest certied/audited nancial statements
(d) General information about the rm and its products/services
(a) Letters of reference from at least two clients to whom the rm has provided goods,services and works in the recent past.
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(b) Letter of Registration from the ZPPA or NCC.
(c) VAT registration certicate.
5.3 EVALUATION OF SUPPLIER APPLICATIONS
Where a pre-qualication of is considered necessary,the Technical Tender Committee of the
REA, in consultation with the appropriate user department, would evaluate the applicationsreceived.
Evaluation criteria would include:
(a) Relevance to the product/service required by REA.
(b) Financial capacity and stability
(c) Applicant business capacity and experience
(d) Technical competence
The REA shall use established criteria to evaluate information provided by prospective suppliers,
and determine the compliance of the conditions set forth by the ZPPA and the REA.
Registration or refusal shall be granted by the REAs Technical Tender Committee and shall be
communicated to the applicant within twenty one (21) working days from date of opening.
5.4 SUPPLIERS RECOMMENDATIONS
(a) As a general rule, requisitioners and users may recommend suppliers. However while
this can undermine the principle of segregation of responsibility between requisitioning
and procurement ofces it will be the ultimate responsibility of the Procurement Ofcer
to ensure that those suppliers invited to bid are independent of REA, have no links
business or personal with members of staff of REA and that they are the suppliers lest
able to respond to the bid requirements.
(b) A consultant engaged to prepare or review technical specication and/or assist in the
evaluation of bid or proposal concerning a particular requirement, shall not be allowedto recommend any supplier or submit a bid or an offer.
5.5 SUPPLIER PERFORMANCE RATING
REA shall from time to time evaluate Supplier performance in accordance with the following
guidelines:
(a) Fulllment of delivery schedules.
(b) Compliance with contractual terms and conditions.
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(c) Quality of goods or services provided.
(d) Timely response to the REA requests to rectify discrepancies and resolve conicts.
(e) Failure to disclose information which can affect performance of the Suppliers.
(f) Undue delay of the performance under the contract.
5.6 SUSPENSION OR REMOVAL OF SUPPLIER
A member of the REA or its related organizations may report and recommend to
the REA Tender Committee, as appropriate whether to suspend a Supplier for a
specic period of time or indenitely. If the circumstances warrant suspension, the
period of suspension must be clearly dened so as to afford the Supplier with an
opportunity to correct the deciency that lead to the suspension.
5.7 CRITERIA FOR SUSPENSION
The criterion for suspension or removal is as follows:
Based on substantial and documented evidence, that the Supplier has failed to adhere(a)
to terms and conditions of a contract with the REA so serious as to justify suspension
or removal from the database such as:
i. Failure to perform in accordance with the terms and conditions of the
contract.
ii. Lack of response or acknowledgement to three invitations to submit a bid.
iii. The Supplier has been convicted of any criminal activity (e.g. fraud).
iv. Abusive, unethical or unprofessional conduct, including corrupt practices and
submission of false information.
v. Any documented or compelling proof of misconduct which would negatively
tarnish the REA reputation to its Cooperating Partners.
Notication by any reputable institution or other authoritative source that a Supplier(b)
has been charged with committing a criminal offence or fraud.
A criminal conviction or civil judgment issued against a Supplier indicating business(c)
dishonesty or lack of integrity.
However, non performance shall not automatically translate in suspension or removal from the
database. Mitigating factors shall be thoroughly considered by the REA prior to recommending
suspension or removal.
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6.0 PROCUREMENT PLANNING
6.1 INTRODUCTION
Procurement Planning is essential for the effective and timely solicitation of bids or proposals,
award of contract and delivery of goods, services and works required. Requisitioners together
with the Procurement Ofcer are responsible for developing procurement plans yet maintain
their separate roles. Overall responsibility of acquisition of goods, services and works rests
with the procurement ofce.
6.2 SHORT-TERM PLANNING
In order to ensure that REA obtains good quality goods, services and works at competitive
prices the requisitioners shall ensure rational and optimal use of funds throughout the
budget. However last minute requisitions should be discouraged unless in very exceptional
circumstances as this hampers the REAs ability to ensure transparent, open, efcient and
timely procurement process.
6.3 LONG-TERM PLANNING
The requisitioning ofce and the procurement ofce shall from time to time perform long term
planning covering the bulk of the budgetary period. This helps to lay the foundation on the
best procurement terms for the Authority and will also serve to demonstrate the REAs ability
to manage funds in a professional and transparent manner for the benet of the public.
6.4 ANNUAL PLAN
The requisitioning and procurement ofce shall communicate and meet to set up Procurement
Plan for the forthcoming budget year. Such plans, shall be to the extent possible help achieve
economies of scale and other benets to the REA.
Proposed revisions to the Procurement Plan may be done at the beginning of every quarter so
as to ensure continuity of operation without impacting negatively on the budget.
6.5 CONTENTS OF THE PROCUREMENT PLAN:
(a) Item No.
(b) Type of goods, services and works.
(c) Purpose of Procurement
(d) Estimated quantity (number of units) or term (number of months)
(e) Specication and Description
(f) Method of Procurement
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(g) Estimate value in Kwacha
(h) Delivery date or expected quarter when the goods would be required to be
delivered, or services and works required would commence.
(i) Any other relevant information.
7.0 PROCURING
7.1 PURCHASE REQUISITION SPECIFICATIONS
1. The requisitioner must prepare a detailed purchase requisition and specication in time,
bearing in mind all the steps of the procurement processes set forth in this manual, in order
to initiate the process of fullling the said need in due time.
2. The requisitioner is required to make preliminary contact with the Procurement Ofcer for the
forthcoming requisition in order to gain insight into the typical time required to complete the
procurement process.
3. The requisitioner shall allow adequate lead time for the procurement ofce to properly conduct
the procurement process. This process will normally commence upon receipt of a sufciently
funded, completed and authorized purchase requisition including specication, from the
requisitioner and ends with contract award.
4. When planning, the requisitioner should take into account the time required for preparation of
bid documents, expression of interest, submission of bids by Supplier, evaluation of submissions,submission to and review by the MTC or the ZPPA (which ever would be applicable) and the
need for negotiations and drafting of the contract.
5. Requisitioners shall contact Administration and Finance to ensure that sufcient funds are
available for the applicable purchases prior to submitting a purchase requisition to the
procurement ofce.
7.2 PROCUREMENT STRATEGY
1. For large and/or complex procurements to be performed by the REA, the requisitioner together
with the Procurement Ofcer shall establish a procuring strategy setting forth the various
steps in the procurements process and key issues to be resolved at each of these steps.
2. The strategy should address a high level description of needs to be fullled, an estimate of the
time to fulll the process and other issues of higher importance to the process. Procurement
strategy may also include special procurement techniques which bring value for money and
best performance practices from Supplier
3. Once agreed the nal procurement strategy shall be submitted to the CEO by the Procurement
Ofcer.
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7.3 SUBMISSION OF PURCHASE REQUESTIONS TO THE PROCUREMENT OFFICER
The requisitioner shall submit to the Procurement Ofcer an approved Purchase Requisition,
supported by a comprehensive description of goods, services and works to be delivered or
performed, including detailed specication of construction and installations required, and
architectural drawing, if appropriate.
The specication should also specify the reasonable time within which the work or service is to
be performed and the time limit for delivering the goods. The requisitioner is further required,
as a priority, to provide assistance and cooperation in nalizing information for the Bidding
Documents as and when requested by the Procurement Ofcer.
8.0 PREPARATION AND ISSUANCE OF TENDERS
8.1 INTRODUCTION
The Procurement Ofce shall evaluate purchase requests received and should identify any
issues which do not conform to the general requirement of the REA or the ZPPA procurementguidelines. Such issues should be brought to the attention of the requisitioner who must
correct the requisition accordingly.
Typical issues that do not strictly conform to REA or ZPPA requirements are:
1. Requirements designed to limit or do away with competition.
2. Unjustied or persuasive request for exemptions from effective competition.
3. Unrealistic short delivery period.
4. Unrealistically low budget estimates.
8.2 PREPARATION OF TENDER DOCUMENT
The requisitioner in consultation with the Procurement Ofcer and the Legal Counsel shall
prepare the Tender Document or Tender Enquiry.
The document, shall among other things, contain (depending on the purchase) Instructions
to Bidders, Specications, drawings and Bill of Quantities. The Tender Document shall need tobe approved by relevant authorities prior to issuance.
8.3 IDENTIFICATION OF POTENTIAL RECIPIENTS OF REQUESTS FOR BIDS
Duly registered Suppliers who conform to the general conditions as set out by the ZPPA or
Cooperating Partners shall be contacted.
In accordance with this manual, all tenders for capital projects would be invited by advertising.
Potential Suppliers shall be identied, by placing an advertisement or by selective Tendering.
Tendering shall be undertaken in a transparent manner to ensure integrity of the process andthe condence of all involved.
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Limitation of number of invitees may be allowed under the following:
(a) When the list is unduly long for the PSU.
(b) Single source.
(c) Security reasons.
(d) Low value purchases.
(e) Other exceptional circumstances as the situation warrants.
As a general rule, a minimum of three Suppliers should be invited for any particular purchase.
However, jurisdiction should be used with due consideration to costs usually associated with
tendering process. The PSU should always strive to ensure equitable issuance of tenders.
8.4 METHODS OF TENDERING
Basically, there are two methods of tendering. These are Informal Methods of Tendering and
Formal Methods of Tendering.
The method to be employed largely depends on the nature and value of the items or services
to be procured and also on the time frame in which to fulll the need.
Informal Methods are purchases in which the PSU shall obtain quotes from registered suppliers
(via fax, email, or in personal), evaluate them, make a recommendation and submit thequotes for approval to either the CEO or the MTC for approval.
Formal Methods are purchases in which the Requests for quotes are invited by either public or
selective means, and the quotes are received as sealed bids. Opening of these bids shall be
strictly as stated in the bid documents and bidder representative might be required.
8.5 LOW VALUE PROCUREMENT/INFORMAL TENDERING
Low value purchases of less than one million kwacha do not need competitive bidding and the
following procedures shall be followed:
(a) The Procurement Ofcer shall check if there is a current contract for the provision ofrequired item or service. If the contract is in place, the purchase shall be made under
this contract.
(b) If REA has standardized purchases of certain goods, services and works with specicSuppliers, those goods, services and works shall be procured from those Suppliers.
(c) The Procurement ofcer shall invite at least three prospective Suppliers via phone, fax,and email or in person. The request for quotes shall include all requirements (quantity,
delivery times etc.) In order to ensure economy, efciency and fair market prices, the
Procurement Ofcer needs to assess that s/he is getting the best possible value.
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(d) The Procurement Ofcer shall document the assessment by issuing a memo to the casele, stating that s/he has obtained the best possible value.
In the above cases, the Procurement Ofcer shall issue a Local Purchase Order or Contract.
8.6 FORMAL METHOD OF TENDERING
An Invitation to Bids (ITB) shall be used for the procurement of goods, services and works of
standard and rm specication (very clearly dened and continuously used deliverables) of
total estimate in excess of ve hundred million kwacha, and shall be undertaken through open
or public (formal) tenders.
The requisitioner shall prepare a purchase request and submit to the PSU, upon approval by
relevant head of department and conrmation of availability of funds.
(a) The PSO would prepare the draft tender document with the help of the requisitioner and
the Legal Counsel who shall provide technical specication for the required item.
(b) All formal tenders shall be advertised in the Government Gazette and at least one English
language Zambian mass circulation daily newspaper.
(c) The use of selective or restrictive tenders shall be limited to exception cases as provided
for in the ZPPA regulations.
(d) All formal tender undertaken shall be subjected to prior review. This means REA shall
need to obtain a no-objection from the ZPPA to the draft tender document before issuing
to prospective bidders.
(e) A no-objection shall also be obtained from the ZPPA before the evaluation and
recommendation for contract award for purchases above the MTC threshold.
(f) Request for Proposal (RFP) shall be used for procurement of deliverables that cannot
be quantied or qualitatively expressed in sufcient detail to allow use of ITB the time
Solicitation is Issued such as profession services or similar services.
(g) An RFP shall also be used when outsourcing non-core activities and service. An RFP shall
also be used to purchase complex goods using a functional specication when proposals
from invitees are preferred. Specication shall be clear, comprehensive and preferably
performance oriented, in order to ensure fair and equal treatment of prospective
Suppliers.
(h) For RFP, the contract shall be awarded to the qualied proposer whose proposal, all
factors considered, is the most responsive to the requirements set forth in the solicitation
documents.
8.6.1 INSTRUCTIONS TO TENDERERS
The invitation/notice for tenders must state details of the required supplies, services
or works, the name and location of the ofcer from whom the documents are available,
the tender conditions and, in particular the following:
(a) Closing date and time;
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(b) Period of validity of tender;
(c) That no tender will be considered unless it is delivered by the closing time andat the place specied in the tender documents.
(d) Whether there will be a public opening and, if so the appointed time and place;and that is not bound to accept the lowest nor any tender.
8.6.2 ADEQUATE NOTICE
Advertising of public tenders must provide adequate time for the bidders to formulate;
price and return their quotation to the REA.
8.6.3 EXTENSION OF TIME FOR TENDERING
Any formal request for an extension to the tender period must be received by at leasttwo weeks for National Competitive Bidding (NCB) and four weeks for International
Competitive Bidding (ICB), before the tender expiry date, and, if acceptable to the
relevant Tender Committee, extension shall be communicated to all bidders.
8.6.4 RECEIPT OF TENDERS
Tenders received by the Secretary to Tender Committee will be numbered, then
initialed by him/her with the date and time of receipt and deposited in the appropriate
tender box.
Any tender received by the Secretary of Tender Committee through the normal post
or placed in a tender box, or received by any other means after closing date and time
shall be returned, unconsidered and unexamined, to the bidders with the date and
time when it was received.
9.0 OPENING EXAMINATION, EVALUATION AND COMPARISON OF FORMAL TENDERS
9.1 OPENING
Prospective Suppliers who submit Tenders may designate one attendee to be present at the
Tender Opening. Such attendee shall act as observers, and not as active participants in theopening process.
All received Bid Submissions to ITBs shall be recorded, and publicly opened at the time and
place specied in the Solicitation Documents.
All received Submissions to RFPs shall be recorded, and publicly opened for the sole purpose
of registering the details as provided in the Tender Abstract. Price information of proposals for
RFPs shall not be announced at the Tender opening, as the nature of the Tender Document
and Submission does not lend itself to a direct comparison of prices.
9.2 EXAMINATION
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Following the opening it should be ascertained whether material errors in computation have been
made in tenders, whether the tenders are substantially responsive to the tender documents,
whether the required sureties, guarantees or warranties have been provided whether the
documents have been properly signed and whether tenders are otherwise generally in order.
If a tender is not substantially responsive to the tender documents, or contains unacceptable
qualication, it should be rejected, unless it is an alternative tender permitted or requested
under the tender documents. A technical analysis should then be made to evaluate each
responsible tender and to enable tenders to be compared.
9.3 EVALUATION
The specic number and types of evaluation criteria, as well as their relative importance shall
depend on the nature of the requirement and shall be developed by the evaluation committee.
The evaluation criteria shall be determinant, not merely important. They shall be documented
in writing prior to the release of the Tender Document.
In general the relationship between the weight given to the price versus the technical factor
should be determined by various several factors, e.g. the complexity of the requirement, the
level of detail, and objectively to be used for conducting the technical evaluations
The purpose of the source selection process is to identify the Suppliers(s) to whom the
contract(s) is to be awarded, i.e. the process from the receipt of Tender Submission, through
the evaluation of such submission to the decision to award the contract. Suppliers are qualied
and evaluated as to their Responsiveness.
In order to ensure that the procurement process is fair, objective and transparent, the source
selection process shall also give due consideration to a balancing of the following general set
forth.
(a) Best value for money
(b) Fairness, integrity and transparency;
(c) Effective international competition;
(d) The interest of REA
9.4 REPORT ON EVALUATION
A detailed report on the evaluation and comparison of tenders setting out the specic reasons
on which the decision for the award of the contract, or rejection of all tenders, is based should
be prepared by the Chairman of the Management Tender Committee. If a consultant has
been employed to evaluate a tender, an individual assessment and recommendation from the
relevant Chairman must accompany the consultants report.
9.5 EXTENSION OF VALIDITY OF TENDERS
In the event of the assessment of tenders not being within the period of the validity of the
tenders, an extension of time may be requested from the bidders. In these circumstances,
REA should re-negotiate the validity period by exchange of letters or fax. Those who are
willing to extend the period of validity of their tenders should neither be required nor permittedto modify their tenders.
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9.6 CLARIFICATION OR ALTERATION OF TENDERS
Except as otherwise provided in this procedure, no bidders shall be permitted to alter his/her
bid after his/her tender has been delivered to the REA. The REA, however, after the tenders
are opened, may ask any bidders for a clarication of his/her tender but may not ask any
bidders to change the substance or price of his/her tender.
The Tender Committee may reject any tender or part thereof; it need not accept the lowest
tender if it is considered not to be in interest to do so; details of the reasons for not accepting
the lowest tender should be recorded in the minutes.
The award of a contract should be made within the period specied for the validity of tender
to the bidder whose tender has been determined to be most advantageous to the REA and
who meets the appropriate standards of capability and nancial resources.
The award of the contract shall be affected by the issue of a Purchase Order or by a formal letter
or acceptance signed by the authorized ofcers, incorporating the Contract/Tender Reference
and the value of the award.
9.7 EXCEPTION TO TENDER PROCEDURES
For contracts exceeding the Management Tender Committee authorisation limit, any request
for exemption from tender procedures should be made in writing to the Zambia National Tender
Board, accompanied by full details to justify the exemption, and supported by Suppliers
quotations where applicable. The ZPPA subject to the limits may approve purchases without
reference to tender procedures in the following instances:
(a) Where the goods and/or works required are of a specialized or proprietary nature and
there is no compatible alternative, or there is a clearly establish policy of standardization
(i.e. standardization of equipment or spares may require purchases from the originalsupplier in order to be compatible with the existing equipment);
(b) Where the good and/or works required are proprietary in essential after-sales services
cannot be obtained without purchase from one source;
(c) Where tenders have been invited and no offers have been received or it is evident that
tenders are collusive or unreasonable; and
(d) Where urgency or the exigencies of the service prelude tendering. The exigency or the
cause for the urgency must be established and place on record in the application for
approval.
(e) When the proposed procurement contract is the result of co-operation with other in-
progress works.
(f) When offers for identical goods, services and works have been obtained competitively
within a reasonable period and the prices and conditions offered remain competitive;
(g) When the value of the procurement is below the monetary threshold established for
formal methods of solicitation.
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(h)When the proposed procurement contract relates to obtaining services that cannot beobjectively evaluated.
10. 0 ORDERING
This section covers the ordering of goods, services and works, both of capital and revenue nature. The
Purchase Order (PO) is a contract. It is generally used for acquisitions that follow the issuance of a
request for quotation or an invitation to bid, such as for goods standardized items or simple services
The Head of Department must approve a Purchase Requisition before the Purchase Order can be
raised. Purchase Orders must be used for all goods, services and works, with the exception of regular
services such as telephone and electricity charges. Purchase Orders are not required where formal
contracts are being executed and for petty cash purchases.
A Procurement ofcer shall raise a Purchase Order, after approval of the purchase. A Purchase Orders
must contain the prices and/or rates that are agreed upon with the supplier, as well as the quantity and
detailed description of the goods or services ordered, and the delivery schedules. The Procurement
Ofcer may add special instructions to the PO.
The order comes in triplicate copies; the rst copy goes to the Suppliers, the second copy goes to
Accounts and the third copy remains in the Purchase Order book.
Purchase Orders for capital expenditure shall not be issued until the REA has committed funds for
such expenditure, even though such items are included in the budget approved by the Board.
Purchase Orders may not be split to circumvent the authority limits.
Under exceptional circumstances, the Approving Ofcer may delegate a subordinate ofcer to sign the
Purchase Orders on their behalf, provided such Purchase orders are countersigned by the authorized
ofcer immediately on their return.
11.0 RECEIPT OF GOODS, SERVICES AND WORKS
The Stores Ofce is responsible for co-coordinating the receipt,inspection and the certication of
acceptance or rejection of delivered goods, services and works in consultation with the Procurement
Ofce and the requisitioning ofces.
Products and equipment that have been received, inspected and accepted or rejected are so certied
on a Receiving and Inspection report.
No payment shall be effected for projects, products, equipment or services that have been rejected,
provided such rejection takes place prior to the REAs obligation to pay under the terms and conditions
of the Contractual
instrument.
The REA, however, cannot unduly withhold inspection in order to prolong the payment terms. Therefore,
such Inspection shall be performed as soon as possible after the delivery, as dened in the contractual
terms and conditions, since this action commences the payment obligation.
When deliverables are satisfactorily furnished, a receipt and/or Inspection are required to certify
complete delivery or partial delivery of the order or contract.
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For services, the requisitioner or any appointed staff shall inspect to ensure that the services have
been provided satisfactorily.
Goods Received Voucher (GRV) must be completed for all goods received by the person receiving
certifying that the goods received are in agreement with the orders placed.
In the case of services, the requisitioner for the service shall sign the invoice to conrm that the
services ordered have been done to his/her satisfaction.
In the case of works, contract documents shall be authorized by the CEO prior to their issue. The PSU
shall manage the contracts and oversee contracts management by the designated contracts manager.
The PSU shall verify contractor invoices prior to payment. On completion of works the contracts
manager shall issue a completion certicate and a copy shall be retained by the PSU.
11.1 RETURNING GOODS TO SUPPLIER
When it is necessary to return goods to a Supplier, the Procurement Ofcer shall issue a Goods
Return Note.The Goods Return Note shall include:
(a) Reference to the original Purchase Order number;
(b) A description of the item to be returned;
(c) The value of the items as shown in the Purchase Order;
(d) An indication of the reason for the return of the items;
(e) Additional remarks, if required, to explain the reason(s) for the return of the items;
(f) Instruction to Supplier on the action required by the REA, i.e.,replacement of the
returned goods or the issue of an appropriate credit or refund in respect of its value;
(g) And whether the cost is to be borne by the REA or the Supplier.
11.2 CONTROL OVER GOODS RECEIVED
A Goods Received Voucher (GRV) must be completed for all goods received by the Stores Ofcer
certifying that the goods received are in agreement with the orders placed. Goods received in stores
shall be stored properly, in appropriate locations with Bin Cards describing the nature of the items,
last receipt, last price, number of items, Supplier and condition.(Refer to appendix 5).
11.3 ISSUES FROM STORES
All goods issued from stores must be done after producing of a duly signed Stores Requisition Note.
Only quantities sufcient to meet the immediate need or requirements of a user should be issued. The
Stores Ofcer shall ensure that all goods are issued with care to avoid abuse.
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Part C
12. GENERAL PROCUREMENT CYCLE AT REA
The following in the summarized procurement cycle of steps/tasks that shall be executed in performing
the procurement functions:
(a) Each department or section shall ll in a Purchase Requisition Form (Refer to Appendix 1)
clearly specifying its requirements and submit the requisition to the Procurement and Supplies
Unit.
(b) The PSU shall enter the requisitions details on a Procurement Indent Register serially according
to departments or section from the beginning to the end of the nancial year. The PSU will
assign tender numbers to each requisition;
(c) For informal tenders, the PSU shall invite tenders through Tender Enquiry Form and receive
tenders (quotations) from at least (3) prospective Suppliers.
(d) For formal tenders, the PSU in conjunction with the user department shall advertise the tender
in at least one Zambian newspaper of mass circulation or submit to Zambia National Tender
Board depending on the prevailing threshold.
(e) Bids or tender enquiries shall be closed and opened at the exact time and place mentioned in
the invitation to bid or tender enquiry and in public in case of formal tenders. Any interested
individuals are free to attend the tender opening meeting and shall enter details such as;
their names, signature, institutions they represent, the tender number of the tender they are
witnessing and date on the tender opening attendance register.
(f) The Chairman shall proceed to opening the bids while numbering them sequentially according
to the order of opening and read out relevant information e.g. name of a bidder, bid sum
(inclusive or exclusive of VAT), Bid Security amount and its source, delivery period or completion
period and samples. The Chairman shall stamp bid forms and price schedules of each bid using
the Chairmans Bid Opening Date Stamp. The Secretary of the tender opening meeting shall
prepare minutes of the opening for record keeping. The Secretary shall ensure that all pages
of all bids are stamped using the PSU date stamp immediately after opening;
(g) A Tender Evaluation Committee shall be constituted to evaluate the tenders (quotation) received
using Tender Evaluation Form, where applicable and recommend procurement in accordance
with nancial limits. For procurements within the departmental or Chief Executive nanciallimits, the Procurement and Supplies Unit shall recommend approval of purchase to the Head
of Department or the Chief Executive as the case may be;
(h) For procurements above the departmental nancial limits, the Procurement Unit shall prepare
a Tender Committee Paper and attach relevant documents e.g. quotations, for submission to
the Management Tender Committee, for consideration;
(i) The Secretary to the Tender Committee, in consultation with the Chairperson shall arrange for a
Tender Committee Meeting to consider authorizing procurements. The decisions for the Tender
Committee shall within seven days after the meeting be communicated to the applicants.
(j) Immediately upon receipt of the Tender Committees approval the Legal Ofcer in consultation
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with the user departments shall prepare a contract or the PSU can issue Local Purchase
Order(Refer Appendix 2) and have it signed by designated personnel;
(k) Upon signing the Contract, the Supplier/Contractor, where applicable, shall within fourteen
days of signing the contract furnish the REA with a signed performance guarantee.
(l) Once the performance guarantee has been submitted and accepted, the supplier/contractor/
consultant, where applicable, shall submit a bank guarantee for advance payment from a
stated source;
(m) Upon receipt of the goods, the PSU, user department and a hired expert, where necessary,
shall inspect the goods. The PSU shall issue a Goods Received Voucher (Refer Appendix 3).
Donated goods shall also be received and entered accordingly;
(n) Rejected goods will be returned to the supplier as outlined on the Goods Return Note (Refer to
Appendix 4). Returned goods note should be written in red to avoid confusing it with the goods
received note;
(o) Accepted goods shall be entered on the Bin Card (Refer to Appendix 5) and issues shall be
entered progressively from thereon;
(p) The goods shall be issued upon the user submitting correctly signed Stores Requisition Note to
Stores Section (Refer to Appendix 6);
The PSU shall maintain consolidated registers and records for the following:
i. Purchase requisitions;
ii. Purchase orders;
iii. Tender Evaluation Forms;
iv. Management Tender Committee Decisions; and
v. Any other documents which may relate to procurement and supplies function.
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Part D
13.0 APPENDICES
Appendix 1 Purchase Requisition Form
Appendix 2 Local Purchase Order (LPO)
Appendix 3 Goods Received Voucher (GRV)
Appendix 4 Goods Returned Note (GRN)
Appendix 5 Bin Card
Appendix 6 Stores Requisition/Issuing Voucher
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APPENDIX1
RURALELECTR
IFICATIONAUTHORITY
PURCHAS
EREQUISITION
To:P
rocurement
Ofcer
Date
___________________
Ite
m
No.
DescriptionofGoo
ds,ServicesandWorks
Qty
Required
EstimatedValue
PurposeofExpenditure
Raise
dby:
Nam
e:
________________________
_______
Manager-
Adm
in&Finance
______
________________
(BudgetApp
roval)
Sign
ature:____________________________
Appr
ove
dby
_____________________________
(Hea
do
fDepartment)
No.__________
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Appendix 2
RURAL ELECTRIFICATION AUTHORITY
Plot Number. 1613, Sheki Sheki Road, Post Net Box 349, Private Bag E891
Lusaka, Zambia
PURCHASE ORDER ORDER No._________
Messrs____________________________________ Date__________________________
___________________________________________ Your Quotation No.______________
ItemNo. Description Quantity Unit Price Total Amount
Validity: 30 days from date of issue Sub Total
VAT
Grand Total
Procurement Ofcer____________________________ Approved by___________________________
Supplier: ____________________________________
This Order is subject to the following conditions:
All invoices must clearly indicate this order number.1.
Subsequent alterations in prices/specications of goods to be supplied must be communicated and agreed upon in2.
writing with REA.
A delivery Note must accompany the goods supplied.3.
Payment shall be made within 30 days.4.
This order is valid when authorized by all signatories.5.
Distribution of copies: 1. White copy Original: Supplier/Contractor
2. Pink copy Duplicate: Accounts/Payments
3. Blue copy Triplicate: Book copy
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Appendix3
RURALELEC
TRIFICATIONAUTHORITY
GOODS
RECEIVEDVOUCHER
Nam
eo
fSupp
lier_
________________
_______________________
Da
te_________________________
_
____
__________________________________________________
Invo
ice
No.____________________
Purc
hase
Order
No._______________
_______________________
De
livery
Note
No._______
__________________________
Ite
m
No.
Description
Qty
Ordered
Qty
Received
Unitof
Receipt
UnitPrice
Tota
lCost
Good
srece
ive
dby
________________
_______________
Date
________________________________
Veri
edby
______________________
_______________
Date
________________________________
Com
ments
byveri
fyingo
fcer:
________________________________
___________________________
___________________________________________
No._______
___
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Appendix 4
RURAL ELECTRIFICATION AUTHORITY
GOODS RETURNED NOTE
To: ______________________________________ Date__________________________
_________________________________________ GRN No._______________________
ItemNo.
DescriptionQty
ReturnedUnit Price Total Cost
Goods Returned by______________________ Date _______________________
Received by___________________________ Date_______________________
Reason for returning: ____________________________________________________________________
______________________________________________________________________________________
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Appendix5
BIN
CARDNo._________
FIFO
Sto
ckItem__________________
________________________
_____
DATE
RECEIPTS
ISS
UES
BALANCE
SUPPLIER
LPO
QTY
UNIT
PRICE
TOTAL
C
OST
DATE.
Dept..
Stores
Requisition
No
QTY
QTY
SIGNATURE
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Appendix 6
RURAL ELECTRIFICATION AUTHORITY
STORES REQUISITION NOTE
Department/Unit:. Date Required:.
Requested by:
Name:.. Signature
Item
no.
DescriptionUnit of
Issue
Quantity
Requested
Qty Issued
Approved/Not approved Issued by Received by
(Head of Dept/Unit)
Name: Name: Name:..
Signature: Signature: Signature:
Date:.. Date:.. Date:.
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