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Public Disposal Methods
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LEARNING OBJECTIVES
Highlight Legal requirements forDisposal Planning
Highlight the Disposal cycle
Appreciate contents of a Disposal
Plan
Understand key steps in Disposal
Process
Appreciate the methods of Disposal
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Learning outcomes
At the end of this session, participantsshall be able to:-
Define disposal of Public assets
Explain the different methods and
rules of disposal
Outline the stages involved in the
disposal
List the types of documents commonly
used
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Definition of Disposal
The Act defines disposal as the divestiture ofpublic assets, including intellectual and
proprietary rights and goodwill, and any
other rights of a PDE by any means,
including sale, rental, lease, franchise,
auction, or any combination however,
classified other than those regulated by the
Public Enterprise Reform Divestiture(PERD) statute, 1993.
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Disposal Planning
The Accounting officer shall ensure that theassets of a PDE are reviewed on an annual
basis, to identify those which are obsolete
and should be subject to disposal.
Assets to be grouped in contracts or lots.
Board of survey may be used to identify
assets to be disposed off on a periodic
basis.Refer to Regulation. 295
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LEGAL REQUIREMENTS /RESPONSIBILITY FOR
DISPOSAL PLANNING
Sections 34(1) and (2) of the Act specifies keyfunctions of the User Dept some of which are:
To initiate disposal requirements
The Procurement and Disposal Unit should plan allprocurement and disposal activities (Sections 31(f)of the Act) and aggregate all the individual user deptplans into annual and multi- annual consolidatedprocurement and disposal plans
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LEGAL REQUIREMENTS /RESPONSIBILITY FOR
DISPOSAL PLANNING- contd
Section 58 of the Act emphasizes that
Disposal planning must be rationally
planned in such a way as to:Avoid emergency disposal
Aggregate requirements
Avoid splitting of requirements Integrate disposal of all assets in the PDE
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CONTENTS OF A DISPOSAL
PLAN Detailed description of asset to be disposed off
in order of priority
Type/category and lots of assets
The quantities of assets and the unit of issue
Location of assets Year of purchase
Expected/Actual life span of asset
Brief justification for disposal
The estimated value Confirmed source of funding for the disposal
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CONTENTS OF A DISPOSAL
PLAN - continued
Proposed method of disposal for each
or group of asset(s)
Time when each asset will no longer be
required by the user department
Total time the disposal process will take
Required level of approval for each or
group of asset(s)
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Disposal Initiation
User department or PDE shall initiate theprocess for assets under its management.
Initiation may follow recommendation of a
board of survey. Use DPA Form 120
Disposal requirement shall be allocated a
specific reference number.
Refer to Regulation. 296
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Methods of Disposal
Public auctionPublic bidding
Sale to public officers
Direct negotiationsTrade-in
Transfer to another PDE
Conversion or classification of assets into
another formDestruction of assets
Refer to Regulation. 297 to 305
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When selecting method, PDEs to
consider Potential market value of the asset The volume of the asset, whether one-off or
bulk.
The number and location of potentialbidders
The location of the asset
National security and public interest issues
Health and safety issues Legal or human rights issues
Environmental considerations
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Valuations
A PDE to obtain two valuations of an assetprior to commencement of any disposal
proceedings.
If required by law, first valuation to beobtained from a competent authority and a
second independent, market-based
valuation to be obtained from an
appropriate authority or provider.
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Public Auction
Conditions for use of this method
Existence of a large number of potential bidders orassets to be disposed.
A public invitation notice using at least one
publication of wide national circulation. Display on PDEs notice board and PPDAs
website.
Any other appropriate media such as radio.
No formal solicitation document
Bids shall be presented orally and bid to beevaluated on the basis of price.
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Public Auction contd
No minimum bidding period
No negotiations
Contract to be orally awarded to the bidder offering
the highest price as determined by the auctioneer
and shall be announced at the auction.
Successfully bidder shall pay at least 50% of
contract price immediately after award of contract,
balance within 5 working days of award of contract.
Refer Regulation 298 & Regulation 306
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Public Bidding
Conditions for use of this method
High-value or unusual assets
Assets located in remote areas
Where conditions need to be attached tothe sale of the asset
Where post-bid negotiations may berequired.
Public invitation notice. Advertisement for atleast 4 working days.
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Public Bidding contd
Minimum bidding period shall be 10 workingdays.
PDE to request for a written sealed bid.
Evaluation based on price only shall be thepreferred evaluation methodology.
Contract placement shall be by issue of a
contract to a successful bidder.
Refer to Regulation. 299 & 308
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Sale to Public Officers contd
Public officer initiating disposal shall not participateas a bidder.
Bids shall be solicited by the publication of a non-public invitation.
Advertising period shall be at least 4 working daysand bidding period shall be 10 working days.
Written sealed bids
Evaluation based on price only.
PDE to send PPDA copies of all bids received,evaluation report and contract awarded.
Refer to Regulation 300 & Reg.309
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Direct negotiations
Conditions and rules for use of this method
The market is limited and a single buyer is willing
to pay reserved price
National security, public interest, legal,
environmental considerations or human rightsissues are served by selling to a particular
company, group or individual.
A potential buyer is a tenant, occupier or user of an
asset at the time of the decision to dispose.
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Direct negotiations contd
An asset is located on a potential buyers premiseson hire or free-use basis and it is reasonable to
give that person first option to buy the asset at a
market rate.
No minimum bidding period. Bidders to submit written sealed bids
Evaluation based on price only
Evaluation based on price and other factors may
also be used.
Refer to Regulation. 301 & 310
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Trade-in
Conditions and rules for use of this
method
Where the trade-in of surplus assets to
offset the purchase price of new itemsprovides a convenient, economic and
efficient way of upgrading equipment.
The disposal process shall be an integral
part of the procurement process.
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Transfer to another PDE
Conditions and rules for use of thismethod
Where another PDE can make further useof an asset.
Cost to be agreed by the two PDEs.
Transfer may be at no cost, if it isuneconomic to charge for the asset.
A recipient PDE shall issue an authorizedreceipt for the asset to the originating PDE.
Refer to Reg. 303 & 312
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Description of Assets
Solicitation documents or notices, andany other additional information made
available to a prospective bidder shall
specify that the asset is to be sold onan as is, where is basis and shall
disclaim all liability after sale.
No warranty required.Refer to 316
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Inspection of assets
PDE to offer reasonable a reasonableopportunity to potential bidders, to
inspect an asset before the date or
deadline for bidding.Arrangements for the inspection of the
assets shall be included in the
invitation notice or bidding documents,where appropriate.
Refer to Reg. 321
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Negotiations
Under public bidding, negotiations mayrelate to the conditions of sale, where
evaluation is based on factors other than
price, and shall not relate to the price of the
bid.
Under direct negotiations, negotiations may
relate to the conditions of sale, where
evaluation is based on factors other thanprice.
Refer to Reg. 332 & 333
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Reserve price
If best evaluated bid is less than the reserveprice, a contracts committee inconsultation with an accounting officermay-
Obtain a further valuation from anindependent source.
Negotiate under direct negotiation
Arrange for new bids to be submitted.
Use of alternative method
Sell at the reduced price
Refer to Reg. 334
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Record of Disposal Activities
PDE shall maintain a record of itsproceedings and contract
management for a period of seven (7)
years from the date of a decision toterminate a disposal activity or the
date of completion of a disposal
activity, whichever comes first.
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