1. Procurement Plan Er. Satya Narayan Shah
B.Sc. In Mechanical Engineering (India) MS in Manufacturing Engineering & Management (UK)
Cell :
May, 2018

2. Definition
Procurement planning is the process of identifying and consolidating requirements and determining the timeframes for their procurement with the aim of having them as and when they are required.
A good procurement plan will describe the process in the identification and selection of suppliers/contractors/consultants.
Er. Satya Narayan Shah

3. The Terms
Sourcing:
Identification and vetting of suppliers, is a function that occurs prior to procurement.
Put reliable, affordable suppliers in place for the procurement.
tasked with assessing purchasing needs, building sourcing plans, conducting market research, identifying and evaluating suppliers, and selecting the most suitable supplier or suppliers for the need.

4. The Terms Procurement:
the process of selecting vendors, establishing payment terms, strategic vetting, selection, the negotiation of contracts.
Procurement is concerned with acquiring (procuring) all of the goods, services, and works.
Procurement is, essentially, the overarching or umbrella term within which purchasing can be found.
Er. Satya Narayan Shah

5. The Terms
Purchasing:
as the transactional function of procurement with the following activities
Purchase Order Acknowledgement
Advance Shipment Notice
Goods Receipt
Invoice Recording
3 Way Match-matching three documents - the invoice, the purchase order, and the receiving report
Payment to Supplier
Purchasing rely on the judgment of procurement
Purchasing is concerned with budget and cost control.

6. The Typical Procure to Pay Cycle
Steps usually involved:
Identification of Requirement
Authorization of Purchase Request
Final Approval of Purchase Request
Procurement
Identification of Suppliers
Inquiries
Receipt of the Quotation
Negotiation
Selection of the Vendor
Purchase Order Acknowledgement
Advance Shipment Notice
Goods Receipt
Invoice Recording
3 Way Match
Payment to Supplier

7. Planning Process includes three major components:
Information: A collection of facts from which conclusions may be drawn
Deliberation: Discussion of all sides of a question, Careful consideration
Instruction:A message describing how something is to be done

8. Legal Backing
Er. Satya Narayan Shah

9. Procurement Procedure
Formation procuring Unit -PPA -7(3)
Formation Evaluation Committee-PPA -71
Preparation of procurement Plan/strategy PPA -6; PPR- 7,8
Preparation of Estimate (Rs. 100, excluding works)-PPA (5)
Preparation of Bid document
Opening of Bids
Evaluation of bids
Award of the contract
Completion/Termination of the contract

10. Procurement Plan
Master Procurement Plan to be Prepared- PPA (clause 6), PPR (clause 7)
for a period of more than one year or in making a procurement of an amount exceeding one hundred million Rupees annually (Ten Crores).
The master procurement plan to be approved by the secretary of the Public Entity.
To be up dated each fiscal year.

11. Importance of Procurement Planning (1)
It helps to decide what to buy, when and from what sources.
Allows planners to determine if expectations are realistic; particularly the expectations of the requesting entities, which usually expect their requirements met on short notice and over a shorter period than the application of the corresponding procurement method allows.
An opportunity for all stakeholders involved in the processes to discuss about procurement requirements. Stakeholders- the requesting entity, end users, procurement department, technical experts, and even vendors to give relevant inputs on specific requirements.
Er. Satya Narayan Shah

12. Importance of Procurement Planning (2)
It permits the creation of a procurement strategy for procuring each requirement that will be included in the procurement plan. Such strategy includes a market survey and determining the applicable procurement method given the requirement and the circumstances.
Planners can estimate the time required to complete the procurement process and award contract for each requirement. This is valuable information as it serves to confirm if the requirement can be fulfilled within the period expected, or required, by the requesting entity.
Er. Satya Narayan Shah

13. Importance of Procurement Planning (3)
The need for technical expertise to develop technical specifications and/or scope of work for certain requirements can be assessed, especially where in-house technical capacity is not available or is non-existent.
Planners can assess feasibility of combining or dividing procurement requirements into different contract packages.
The Procurement Plan is the product of the procurement planning process. It can be developed for a particular requirement, a specific project, or for a number of requirements for one or many entities in the public or private sectors.

14. Importance of Procurement Planning (4)
From it the procurement schedule is developed, which establishes the timelines for carrying out each step in the procurement process up to contract award and the fulfilment of the requirement.
It allows for the consolidation of similar requirements under one contract or the division of a requirement into several contract packages for economies of scale.
From the number of requirements on the procurement plan, the procuring entity can determine beforehand any need for additional staffing, including external assistance for the purpose of completing all procurement requirements listed on the procurement plan.

15. Importance of Procurement Planning (5)
It allows for the monitoring of the procuring process to determine how actual performance compares with planned activities, and thus to alert the pertinent departments and adjust the procurement plan accordingly.
It enhances the transparency and predictability of the procurement process.
Er. Satya Narayan Shah

16. Factors Affecting Procurement Planning
Market Analysis
strong understanding of the market dynamics, availability etc
Spend Analysis
visibility of spend data-accurately analyse the goods and services that have been historically procured.
analysis will disclose issues concerning spend visibility, contract compliance and control.
Needs Analysis
It is important to identify the ‘need’ and not the ‘want’.

17. NEED ANALYSIS
PPR 5 Ka
मालसामान, निमार्ण कार्य र सेवाको विवरण स्वीकृत गर्नु पर्ने: (१) सावर्जिनक निकायको प्रमुखले कुनै मालसामान, निमार्ण कार्य वा सेवा खरिद गर्नु अघि ऐनको दफा ४ बमोजीमको स्पेसीफिकेशन, योजना, नक्शा, डीजाइन, बिशेष आवशयकता वा अन्य विवरण तयार गर्नु वा गराउनु पर्नेछ । 
Er. Satya Narayan Shah

18. Procurement Plan (need analysis)
The following questions should be answered
what is the procurement aiming to achieve?
Do we really need to purchase, or can the need be met in another way?
Can the quantity or scale of the goods, works or services be reduced whilst achieving the same service delivery?
Can alternative goods or service be used to meet this need?
Can the works, goods, service be specified to have improved sustainability outcomes, including being able to serve a useful purpose after its initial use?
What information is available regarding sustainably-preferable options for this purchasing requirement? Where can more information be obtained about suitable alternatives?
what happens to the product at the end-of-life?
how does this procurement impact upon our (environmental/ social) objectives and policies?

19. Content of Procurement Plan (1)
1. Key project information
objectives and plan to achieve them
an outline of what's being procured and the costs involved
planned approach to meet the Principles of Public Procurement (eg transparent, fair to all, get the right supplier or provider and the best outcome) and the Government Rules of Sourcing
governance arrangements and approvals processes
key stakeholders and your plan for engaging with them
links to agency's procurement strategy.

20. Content of Procurement Plan (2)
2. Sourcing plan
the type of procurement approach (eg open process or direct sourcing)
how suppliers or providers and their proposals will be evaluated and what due diligence will be conducted
a written document detailing your strategy for approaching the supplier or provider community.
Er. Satya Narayan Shah

21. Content of Procurement Plan (3)
3. Exclusions and exceptions
a record of any exclusions or exemptions to the Government Rules of Sourcing, giving specific justification for the approach
evidence of an approved formal exemption from an independent senior manager if your proposed approach proposes a departure from your agency’s own procurement policy.
Er. Satya Narayan Shah

22. Content of Procurement Plan (4)
4. Contract information
a description of the contract that will be used
how the contract will be delivered and its completion date
how the contract will be managed during delivery.
5. Risks and Integrity
the risks associated with the project and how they will be managed.
how the probity process will be managed.
6. Timetable
a realistic step-by-step timetable for the procurement process

23. Procurement Plan
Annual Procurement Plan to be Prepared- PPR (clause 8)-
In the cases where a Public Entity requires to make procurement of an amount exceeding one million Rupees annually.
Annual procurement plan to be attached with the annual program and budget of the next fiscal.
The annual procurement plan to be revised and sent to its superior office, Treasury/ Controller Office and PPMO.

24. Procurement Planning and Budget Linkage: Legal Reference {PPR 8 (5)}
The chief of the Public Entity shall, after receiving the approved program and budget of the current fiscal year, have to revise accordingly the annual procurement plan prepared pursuant to this Rule and approve it and send one copy each of such plan to
its superior office,
Treasury and Controller Office, and
Public Procurement Monitoring Office.

25. Procurement Plan Deliverables
The Procurement Plan should include five key Steps. The Procurement Steps are
Requirement Step
Requisition Step
Solicitation - Selection Step
Contract Administration Step
Contract Closeout Step
Er. Satya Narayan Shah

26. Requirement Step
Conduct market analysis to gain awareness of the products / services that are available for purchase.
Perform a make vs. buy analysis.
Estimate investment costs of the Procurement.
Based on the Procurement Plan, obtain authorization to proceed from appropriate agency/ departments.
Create a Project Procurement Teams (Procurement Unit, Bid evaluation Committee, etc.)

27. Requisition Step
Verify that necessary specifications have been provided.
Prepare solicitation package (e.g. Bill of quantity, IFB, Bid document, RFP etc.)
Review by procurement team and, with final approval of the IFB, RFP by Agency Procurement Officer, send for publication to news papers /e-procurement system.

28. Solicitation - Selection Step
Issue the solicitation document (Bid, RFP).
Answer questions received from vendors in a public forum (Pre-bid meeting based on instructions published in IFB, RFP).
If necessary, prepare for vendor product demonstrations, or oral presentations.
Receive and Evaluate Proposals (by Project Procurement Team)

29. Contract Administration Step
Interpret specifications.
Ensure that quality of the product or service is maintained.
Manage product warranties.
Manage sub-contractors (if required by the contract).
Direct change management;
Resolve contract disputes;
Completion of the project;
Terminate the contract;
Manage contract risk associated with the project

30. Contract Closeout Step
Verify product and services meet acceptance criteria.
Complete fiscal activities:
Approve final payment (notify appropriate accounts payable office),
Update project and activity records,
Close purchase order (notify appropriate procurement office),
Update contract file.
Notify all the stakeholders, if required.
Archive contract files/documents.

31. Procurement Plan Master Procurement Plan
shall contain, the following matters:-
Type, quantity and tentative estimated cost,
Procurement method,
Slice or package for maximizing competition,
Tentative numbers of contracts,
Pre-qualification proceedings (if required),
Tentative time-table of proceedings,
Any other matter as directed by PPMO

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34. Procurement Plan The types of procurement,
Annual Procurement Plan to be Prepared- PPR (clause 8)-
the following matters shall have to be stated
The types of procurement,
Possible package of procurement,
Time table of procurement proceedings,
such as Preparation of specification, cost estimate, bidding documents, notice for invitation, evaluation, Acceptance, contract, commencement, and completion.
Procurement method,
Types of contracts, and
Any other matter as directed by PPMO

35. Procurement Planning Contents
Time table of procurement proceedings should include the following:
Specifications preparation (for the procurement of goods),
Cost estimation of procurement,
Preparation of sealed quotation form, bidding documents or documents relating to proposal for pre-qualification or request for proposal (RFP) for consultancy service,
Publication of a notice for invitation to sealed quotation, pre-qualification proposal, bid or request for the proposal of consultancy services,

36. Procurement Planning Contents
Time table of procurement proceedings should include the following:
Evaluation of sealed quotation, pre-qualification proposal, bid or proposal for consultancy service,
Approval of sealed quotation, pre-qualification proposal, bid or request for proposal for consultancy service,
Endorsement of Contract,
Commencement of the job, and
Accomplishment of the job

37. Procurement Plan Contents
Project Details
Title: Procurement Plan (PP) for Civil Works [Period between September 2010-February 2012]
Project Name & ID: Road Sector Development Project Additional Financing RSDP, AF
Loan/Credit/Grant No.:
Executing Agency: Department of Roads, MOPPW
Implementing Agency: Department of Roads, Babarmahal, Kathmandu

38. Procurement Plan Contents
Activities Details
1. S No
2. Description of Works & Contract ID No.
3. Prior/ Post Review
4. PP Status
5. Cost Estimate (NRs Million)
6. Method of Procurement
7. Proc. procedure: GoN or WB?
8. Bid document to WB
9. WB’s NOL to Bid Doc
10. Bid Invitation
11. Public Opening of Bids
12. BER & Award Recommendation to WB
13. WB’s NOL to Award Recommendation
14. Contract Signing
15. Completion date of the contract
16. Procurement at center/ district
17. Remarks

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40. Consequences of Lack of Procurement Planning
Delays in project implementation
Inappropriate procurements
Use of inappropriate procurement methods and procedures
Increased packaging costs
Er. Satya Narayan Shah

41. Good planning is 80% of the task completed
Poor or no planning manifests in inefficiencies in the procurement function
Failing to plan is planning to fail

42. THANKS
FOR
YOUR ATTENTION