PROCUREMENT: Procurement Methods

Procurement is a broad term that involves acquisition of goods, services or execution of works by buying, leasing, borrowing or using any legal other means.

Procurement methods

Tanzania the public procurement understandings are guided by the Public Procurement Act and its regulations.

In this case, all possible Methods of Procurement are indicated in the PPA- 2011 (goods, works,consultancy and non-consultancy service) Regulation (PFR, 2013) -Section 148 Jo 172 of which all public procuring entities should adhere to.

Despite of having the Acts and Regulations,other organs such as Public Procurement Regulatory Authority (PPRA) Public Procurement Appeal Authority (PPAA), TBS etc. are available in the country in order to ensure all procurement undertakings are legally done.

The following are the procurement methods:

Tendering

In tendering there are national competitive tendering and international competitive tendering:

National Competitive Tendering

A procuring entity shall invite suppliers regardless of their nationality, by means of a tender notice advertised only in the United Republic of Tanzania.

Conditions for use

•  Payment may be made wholly in Tanzanian shillings;
• The snoods are available locally at prices below the international market;
• The estimated cost of the goods is small and does not exceed the threshold for open international tendering prescribed in the Public Procurement Regulation.

International Competitive Tendering

Procuring Entities invites suppliers regardless of their nationality

Condition for Use

• Payment may be made in whole or in part in foreign currency
• If the cost of requirement is huge
• If it is desired to attract tenders from the widest range of suppliers regardless of the estimated value of the goods or works to be procured.
• If the requirements are not domestically available.
• If time is sufficient to undertake the process

Shopping

Shopping is a legal method of procurement indicated in the PPR Section 163.

In this method there are national and international shopping.

It is the method of procurement based on comparing prices quoted by various suppliers (at least three) for the purpose of obtaining competitive price and efficiency in procurement.

Applicability

• Appropriate for on shelf goods which are available off- the-shelf or standard items.
• Appropriate also for items which are so diversified that it will be of no commercial interest for any single supplier to tender for them.
• Must be within the limits stated in the Seventh Schedule of PPR, 2013.
• Legally it must be approved by the tender beard for it to be applied (either national or international shopping can be approved).

In this case the list of suppliers to be contracted shall be submitted to the appropriate tender board for approval before addressing quotations to these suppliers.

Single sourcing

This is the method of procurement where by a procuring entity may engage in a single source procurement i.e. only one supplier is involved in procurement of goods or service. PPR, 257

Legally the circumstances which fever the applicability of this method include;

• When there is an urgent need for the goods or services.
• When goods or services are available only from one particular supplier or service provider or when such supplier has exclusive rights or has capability in respect to such goods or services, at reasonable price.
• When procurement involve national defenses or security purpose if required.
• When there is an on-going project, additional items need to be purchased for the completion of implementation.
• When standardization of equipment is essential for economic or technical reasons and it has been proved by the tender board that, there is no an alternative supplier.
• When critical items are needed to be purchased strategically from a specified supplier.

Direct contracting

It is appropriate for the procurement of works where the procuring entity obtains a single priced. quotation from a single contractor, negotiates and enters into a direct contract. (Single sourcing for works).

This method is applicable when;It is applied when:

• There is an urgent need for the work to be done. PPA S.65 and PPR S.63.
• There is only one contractor by which the procuring entity can reasonably expect to undertake the required work.
• There are advantages to the procuring entity in using a particular contractor who has undertaken or who is undertaking similar work.
• When there is the need for extension of the work.

Minor Value Procurement

PPR S.165 state it,as the procurement of articles of small value. Minor value means an amount of money up to a maximum limit for the procurement- of goods, services or minor works of a minor nature as specified in the seventh schedule of PPR.

This method is applicable when;

• The value does not exceed the limit for minor value prescribed in the 7^th schedule of PPR
• No advantage to a procuring entity is likely to be obtained by seeking further quotation or procurement.
• The price quoted is reasonable.
• The contract for the provision of such goods, service or work may be a Local Purchase Order.

Micro value procurement

A micro procurement may be conducted by a procuring entity that purchases directly from established supermarkets, shops or drug stores or similar establishments if the value of such procurement does not exceed the limit set out in the Seventh Schedule to these Regulations.

This method of a micro-procurement is applicable when the process shall not require a:

• Written solicitation document.
• Public tender opening
• Notice of best evaluated bidder or tenderer
• Signed contract document

Force Account

Force Account is construction by the use of public or semi public agencies or department concerned, where the public or semi-public agency has its own personneland equipment. PPR S.167.

This method is applicable when:

• Required work are small and scattered or in remote location for which qualified construction firms are unlike to tender at reasonable price.
• Works required to be carried out without disrupting ongoing operations.
• Risks of unavoidable work interruptions are better borne by the procuring entity or public authority than by a contractor.
• There are emergencies needing prompt attention.

Turnkey project

A turnkey project is one involving a major specialized works e.g. the construction of an industrial plant or a military base, where the supply of goods and the performance of various works need to be closely integrated.

Under the contract for such works, the design and engineering, supply and installation of equipment and the construction of the complete plant or works will be provided by a single contractor undertone contract, procured using national and international competitive methods of procurement as approved by the appropriate tender board.

Public private partnership

Involving a joint procurement process between the public and private entities.

It may include different forms; PPR 369-380:

Leasing, Joint ventures, Build Operate and Transfer, Build Own Operate.

Procurement by use of agents

This is a procurement method where the procuring entity engages services of an agency to undertake all procurement processes that would otherwise be carried out by the procuring entity, provided that all procurement functions are carried out in conformity with PPA.

Therefore, procurement methods are very important to be used in any procuring entity according to its value of the works, goods or services (consultancy and non-consultancy services), availability of the contractors, suppliers and service providers, time and public procurement regulation requirements.
READ: Reasons and Risks of Outstanding in Most Public Instructions

REFERENCES

Public Procurement Act No. 7 of 2011 and its Regulations Government Printers. Dar es Salaam.

Medhurst, D. (2003). Public Procurement Law.