2. Starting the procurement Project team has to prepare the
Procurement Plan It can be Master Plan It can be Annual plan
3. Master plan for projects running for more than one year
Master plan is usually prepared for the life of the period Annual
plan is formulated on the basis of master Plan
4. Master Plan example Product Specificatio n Estimated cost
Procuremen t type Type of contract Year 1 Transport vehicle Able to
carry 10,000 kg load ,fuel efficient, four wheel, 45,00,000 RFQ
Fixed price/single contract Year 2 Year 3 Year 4 Year 5
5. Content of Master plan Description of Goods: type quantity
and estimated cost Procurement type Type of contract Time schedule
of procurement ( only annual detail optional)
6. Procurement types International competitive bidding National
competitive bidding(above Rs 10 lakh) Quotation(shopping method)
(upto 10 Lakh) Direct purchase(upto 1.5 lakh)
7. Types of Contract Single contract vs Package contract Fixed
cost contract Turnkey contract Time and material contract Cost
reimbursible contract Multi arrear contract
8. Turnkey contract : the contract covers all the activities to
bring the final output of the contract in a running condition
9. Time and material contract Time-and-materials contracts
provide for acquiring supplies or services on the basis of direct
labor hours at a set rate. The rate includes wages, overhead,
general and administrative expenses, cost for materials and profit.
Time and materials contracts are used when it has been impossible
presenting an accurate estimate or where the schedule cannot be
defined.
10. Cost reimbursible contract A cost-reimbursable contract is
a variant of a contract that involves making a payment from the
buyer to the seller in reimbursement for the sellers actual costs
Those categories are direct costs and indirect costs.
11. What is reimbursed to a supplier Direct costs are defined
as the costs that have been incurred only for the purpose of the
project eg cost can be the salaries of the full time staff members,
or equipment purchased exclusively for use in the project. Indirect
costs represent costs refer to costs, such as administrative costs
and general overhead costs. PLUS a fee or profit
12. Multi arrear contract It is extendable contract
13. Master Plan Product Specificatio n Estimated cost
Procuremen t process Type of contract Year 1 Transport vehicle Able
to carry 10,000 kg load ,fuel efficient, four wheel, 45,00,000 RFQ
Fixed price/single contract Year 2 Year 3 Year 4 Year 5
14. What is there in annual plan Details of products and detail
specification (drawings) with justification statements and
timelines Type of contract to be used Contract approval process
Decision criteria Establishing contract deliverables and deadlines
Vendor Management Contract administration and close Performance
metrics for procurement activities
15. Produ ct Type of procurem ent Type of contract Procurem ent
process start Decision Criteria Vendor manageme nt Transpor t
vehicle 45,00, 000 quotation Specific goods and service contract
July 2011 45 Days lead time LC with evaluation(Pa st record of
vendor, delivery date, brand image, technical inspection, delivery
date) Schedule of after sales service and other support Abel to
carry 10,000 kg load, fuel efficient, four wheel,
16. What is contract approval process purpose of this section
is to define the process through which contracts must be approved.
Mention of the procurement team
17. Establishing contract delivery ad dead lines Prepare the
schedule of delivery deadlines
18. Establishing decision criteria The purpose of this section
is to define the criteria used by the contract review board to
decide on selecting the eligible suppliers There are three bid
evaluation approaches Least cost method Least cost with quality
evaluation Best value of money Supplier evaluation and product
evaluation criteria to be fomulated on basis of above
19. Least cost method(selection based on lowest bidder) Without
evaluation of supplier With evaluation and minimum score
requirement for suppler Best value of money There is weightage for
technical evaluation and financial evaluation Different Bid opening
methods
20. Vendor management To Ensure the vendor buyer relationship
-Schedule meeting and review with vendor -Type of after sales
service required
21. Contract administration and close Process of administering
the contract after contract has been signed How to close the
account
22. Performance metrics Compile data on the performance of
various vendors in order to assist with future procurement
activities vendor selection criteria.