Procurement Process WFP Logistics, We Deliver

Lesson Plan: Procurement Process LEARNING OBJECTIVES: By the end of the session, participants will be able to: Describe the process of procuring goods Describe the different sourcing methods and analysis of offers Describe the role of quality control across the supply chain Structure Timing Activities Introduction 5 minutes Explain lesson objectives Exercise: Initial Reflection In groups, identify the process of procurement within their respective organisations. No presentations, as this will be discussed at the end of the session. Procurement process 10 minutes Introduce the overall process; outline the main steps Choosing procurement method 25 minutes Lecture: Defining your needs, determining from that whether to opt for ITB/RFQ/RFP, international / national / local etc Evaluating offers and awarding contract Objective and transparent analysis of offers; giving an example of technical evaluations. Quality control Lecture: planning for quality control across the supply chain Exercise: Reflection Plenary discussion: reflect with respect to discussion at start about the procurement process within each participants’ respective organisations. Lesson End/Plenary EVALUATION / RECAP QUESTIONS: The facilitator should ask the questions below, or similar questions to the class to recap the lesson to ensure participants have understood the lesson content. What are the key elements of a procurement process? How do you determine the best procurement method? What is involved in evaluating offers? Total Lesson Length 90 minutes   This slide is for the facilitators reference only. This slide should be hidden from the workbook and from the class presentation DO NOT PRINT IN WORKBOOK DO NOT DISPLAY IN CLASS

Lesson Objectives By the end of this lesson, you will be able to: 1 Describe the process of procuring goods 2 Describe the different sourcing methods and analysis of offers 3 Describe the role of quality control across the supply chain

Exercise: Your Own Procurement Process Take five minutes to discuss in your groups the procurement process that your organization follows. See if you can identify the main steps and procedures to be followed. At the end of the lesson you will return to this discussion to identify what was the same and what was different from the process and procedures identified here. 5 minute discussion DO NOT PRINT IN WORKBOOK

Procurement Process Identify Needs Determine Specifications Pre-Tender Process Identify Needs Determine Specifications Choose Procurement Method Prepare Solicitation Documents Tender Process Seek, Clarify and Close Offers Evaluate Offers Committee Approval Contract Management Award Contract Negotiate Contract Manage Contract Evaluate Procurement

Review & Award Contract Defining Needs Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment Goods Goods Background for requesting service Objective of service Expected output from the service Activities required for this output Input required Deliverables Timing Technical / Physical characteristics Function Performance Standard Compliance Specifications Specifications Services Services Scope of Work Scope of Work

Sourcing Methods Procurement Existing Stocks Loans Procurement Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment Existing Stocks Loans Procurement Procurement In-kind Donations Prepositioned Stocks Strategic emergency stocks

What are the 3 methods of solicitation? Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment What are the 3 methods of solicitation? Request for Quotation (RFQ) Invitation to Bid (ITB) Request for Proposal (RFP)

International Tendering Why conduct an International Tender? Goods / Services not available locally Moderate or no Competition Access to global Technology

Evaluation Technical Financial How are proposals submitted? Best Value Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment Best Value Maximum value for money while providing quality sufficient to specifications How are proposals submitted? Technical Financial

Technical Evaluation: Example Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment No Criteria Range Points Remarks Transporter 1 (A) Transporter 2 (I) Transporter 3 (N) Transporter 4 (O) 1 Background (max. 20 points) 1.1 Year Established > 10 Yrs 20   10 < 10 Yrs 2 General Capacity (max. 30 points)  2.1 Number of trucks owned Up to 11 Tons Capacity > 10 Trucks < 10 Trucks 05 2.2 Transport Subcontractors usually used: Over 25 Tons Capacity 3 Experience (max. 50 points)  3.1 General (years of experience in providing the transportation services to UN agencies, INGO's and other organisations during emergencies. No of transportation contracts - UN agencies, INGO's) > 05 Yrs 5 < 05 Yrs 3.2 Average Monthly Tonnage of Transportation > 10 Tons < 10 Tons 3.3 Ability to deliver in KPK and FATA Total: 100 50 85 90

Award of Contract Recommendations Committee Review Committee Approval Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment Recommendations Committee Review Committee Approval Authorization Pre Award Meeting Contractual Terms & Conditions

Contract Issue: Purchase Order Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment 1 Specifications / SOW 2 Cost of the goods/services 3 Delivery date & location 4 Conditions to be fulfilled 5 Incoterms 6 Payment & currency 7 Consignee 8 Packing

Receipt of Goods/Service Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment Requester: Technical Specifications Logistician: Supplier selection, sourcing and contracting Technical Verification: Does the product meet the specifications as per bid submitted If not OK If OK Select supplier whose product meets the specification Delivery to Warehouse Delivery Inspection: Documents, quantity, quality If not OK If OK Replacement by the supplier Acceptance and storage in the warehouse

Review & Award Contract Payment Define Needs Source Suppliers Solicit Offers Evaluate Offers Review & Award Contract Issue Contract / PO Receive Goods Process Payment Finance Checklist: Invoice Supply Request Form Quotations / Tender Advertisement Bid Analysis Minutes of meetings – Awards Purchase Order Delivery Note Goods Received Note Approved Budget Waybill Transport Contract Frame Agreement Inspection Report Order Management: Procurement Warehousing Reception Quality Control Stocking Picking/Packing Transport Dispatch Air Operation Fleet/Workshop Generate Documents

Quality Control Across the Supply Chain Management Define & improve processes to ensure quality Quality Assurance Improved processes to prevent defects Quality Control Evaluate quality

Review of Your Procurement Process Consider again the procurement process and procedures that your organization follows. What is the same as that presented here? What is different and why is this the case? 5 minute plenary discussion DO NOT PRINT IN WORKBOOK

Lesson Recap 1 2 3 Questions: What is the process of procuring goods? What are the different sourcing methods and analysis of offers? 3 What is the role of quality control across the supply chain?

Questions WFP Logistics, We Deliver