THE INSTITUTE OF PROCUREMENT AND SUPLY

POSTGRADUATE DIPLOMA IN
PROCUREMENT
AND SUPPLY MANAGEMENT

SUBJECT: THE PUBLIC PROCUREMENT

PGD6

TOPIC 1

SALIENT FEATURES OF TANZANIA PUBLIC

PROCUREMENT ACT NO. 21 OF 2004

1.0 OVERVIEW OF PUBLIC PROCUREMENT ACT NO.

21 OF 2004

1.1

LEARNING OBJECTIVES:
When you have completed this TOPIC you should be able to: Outline the objectives of the PPA and its Regulations
Identify and explain the general guidelines of Public Procurement
Identify Principles governing the Public Procurement.
Identify the contents and parts of the PPA and its regulations

1.2 GENERAL OVERVIEW OF PUBLIC PROCUREMENT ACT

The Public Procurement Act No. 3 of 2001 (Repealed by Act No.21 of 2004)
and the relevant regulations (i.e. the Selection and Employment of
Consultants and the Procurement of Goods and Works)
Govt notices
98/97contain a limited number of laws within the branches of the law.
Firstly, the law of Contract which is expressed by contractual relations to be
entered between two parties, as an individual and a public body; commercial
law by the tendering process; labour law as expressed by employment of
consultants and contractors which belong to the civil law.
Secondly, the public law which includes generally criminal law and
administrative law. Criminal law includes fraud and corruption, which
basically deals with the settlement of disputes.

1.3 OBJECTIVES FOR THE PUBLIC PROCUREMENT ACT AND ITS

REGULATIONS

The Government established the Procurement Act No. 3 of 2001 to guide

government ministries, departments and public bodies including parastatals
organisations in the procurement of goods, works and services with effect from
2nd July, 2001. Act No.21 of 2004 repealed this Act, was made effective after the
Minister responsible approved the regulations per Govt. Notice No 97 for Goods
and Works and Notice No. 98 for Consultancy.

The Procurement Act has the intention of regulating the relations between
natural person(s) and the state, and those against the Government interest.

The Procurement Act provides punishment for damages to those who have
inflicted some harm against the government or for damages against those who
have caused loss to another natural person.

The Procurement Act is intended to regulate, alleviate and eradicate conflicting

interests to business activities between the government and the natural person.
Conclusively it is intended to provide for better approach by putting controls to
the mechanism for the management of procurement in the government.

Further from that the PPA 2004 Section 76 indicates clearly that the measures
provided by the Act shall not preclude the institution of criminal proceedings
pursuant to the Penal Code (Cap. 16) the Prevention of Corruption Act, 1971 or
any other written law against any person discharging functions or excising powers
under this Act or Regulations made under this Act.

1.4 PUBLIC PROCUREMENT ACT AND ITS RELEVANT REGULATIONS

The Public Procurement Act No. 21 of 2004 is an Act of Parliament. The Act and
its Regulations override all other laws in respect of public procurement.
Public Procurement Act Sect 90 as quoted hereunder is relevant for this context: Upon the coming into implementation of this Act all laws, regulations or rules
relating to Procurement shall cease to have any effect, power, function,
authority or duty in relation to any matter connected with the procurement of
goods, services or works.

In the course, in matters of procurement of goods, services or works only this

Act of Parliament applies for any assertion related to the public procurement.
-

The Minister may make regulations and rules for the better carrying out of
the provision of this Act and such Regulations shall include yearly review of
the limits of Authority for each procuring entity and approving entity.
All Regulations and directions made in connection with this Act shall be
published in the Government Gazette.
The Public Procurement (Selection and Employment of Consultants) Act No.
21 of 2004 also came into operation on 11th Feb 2005. However, Sect. 113 of
the Regulations empowers the Minister to make amendments where
applicable. Similarly the Procurement of goods and works Regulations were
also made under Sect. 88 (1-2) of the Public Procurement Act No. 21 of 2004.
Regulations 129 (1-2) have again given power of amendment of the same to
the respective Minister.
4

It should therefore be noted that basically the sense of establishment of the

Procurement Act is to improve and correct the inappropriate and outdated
law/regulations. Reference should be made to the Financial Standing Order
No. 3 which showed the following weaknesses:(a)
(b)
(c)

Non-compliance to the Standing Order.

Poor information on the procurement needs.
Encroachment of the procurement functions by non-professionals
due to shortage of professional staff.

The Public Procurement Act No. 3 of 2001 is indeed implemented vide

Government Notice No. 138 Public Procurement Regulations (Selection and
Employment of Consultants) and Government Notice No. 138. Procurement of
Goods and Works Regulations. These Regulations have now been replaced by
Govt. Notices Nos. 97 for Goods/Works and No 98 for Consultancy

The Procurement Act applies to all procurement undertaken by a procuring

entity except where it is provided otherwise in the Act.
-

In this regard the Procurement Act shall not apply to any Parastatal
organisation except where a Parastatal organisation receives government
subsidiary or subversion and is specified in the Regulations as being
Government Department or Public body, and/or Public Authority for the
purpose of the Act (Section 2(2) of the Act).

Under Section 28 of the Act, there shall be established in every governing body
of a Public Authority a TENDER BOARD.

The Public Procurement Policies are based on the need to make the best
possible use of public funds while conducting all procurement with honesty
and fairness (Regulation 4(1)) for goods and work Government notice 97.

Members of Tender Board who are undertaking or approving procurement must

be guided by the following basic considerations of the Public Procurement
Policy: (a)

The need for economy and efficiency in the use of public funds and
in the implementation of projects including the provision of related
goods and services.

(b)

The best interest of a Public Authority in giving all eligible suppliers

and contractors equal opportunities to compete in providing goods or
executing works and service.

(c)

Encouraging of national manufacturing contracting and service

industries.

(d)

The importance of integrity, accountability,

transparency in the procurement process.

fairness

and

1.5 GENERAL GUIDELINES FOR PUBLIC PROCUREMENT

The following are general guidelines that govern the public procurement:(a) The Public Procurement Act No. 21 of 2004 require that the proceeds of any
public funded procurement be used with due regards to economy and
efficiency. The Government shall make arrangement to ensure that the
proceeds of any public funds are used only for the purpose for which the
funds was granted with due attention to considerations of economy and
efficiency (Refer PPR 4 (2) (a)). For goods and works Government notice. 97.
(b) The Public Procurement Act requires that in most cases a system of open
competitive tendering be used in procurement of any goods and in
contracting for works needed for the public financed projects (Refer PPR (1)).
(c) The responsibility for the execution of the procurement and therefore award
and management of contracts under the public projects rests with the
procurement entity. However, the Tender Boards are required by the Public
Procurement Act to ensure that the proceeds of any public funded
procurement are used only for the purpose for which the funds were
intended.
(d) The Public Procurement Act is generally guided by four basic policy
considerations:- (PPR 4)
(i)

The need for economy and efficiency in the provision of works, goods,
and services.

(ii) The Governments interest in giving all eligible contractors and

suppliers equal opportunity to compete in the supply of goods and
works financed by the government.
(iii) The Governments interest in encouraging the development and
participation of local contractors and suppliers.
(iv) The importance of transparency in the procurement process.

1.6 PRINCIPLES GOVERNING ALL PUBLIC PROCUREMENT

The Public Procurement Act sets out the principle and procedures, which govern
all public procurement without exception. There is no Authority delegated below
the Approving Authority to set aside these procedures.
They are derived from and hence empty to the Public Procurement Act and
Regulations. The principles that govern all public procurement are:(a) The objective of Public Procurement Policy is to ensure that goods, works and
services acquired by any public funds are in line with the following:(i)

Comprehensive technical specifications matched to end use application.

(ii) Well-planned commercial practice, which ensure minimum overall costs of

acquisition, stockholding and distribution.
(iii) Publics strict and rigorous procurement procedures fully comply with all
government guidelines.
(b) It is the policy of the Government to acquire all goods, works and services by
open and competitive tender. A decision note to seek competitive bids for any
reason is reserved to the Tender Board.
(c) In the context of these objectives for effective Procurement the role of the
Procurement Department is to ensure that the (company) procuring entity
procures materials, goods and services using good commercial practice and
taking into account not only, initial costs, but full life cycle costs for the
particular product or services.

(d) Procurement of all stock items require the prior authorization of the
Procurement Department or authorization by an appropriate person(s) directed
by the Department to exercise such authority on the Departments behalf.
(e) All overseas purchases shall require the approval of the Head of Procurement
Department, Chief Accountant and the Approving Authority or Chief Executive
(for parastatals tender).
(f) Procurement of all stock items requires an approval requisition to purchase.
(g) Optimum value for money will be obtained by a combination of comprehensive
specifications in line with industry and international norms, coupled with
effective procurement. The Technical, Commercial and user roles are fully
complementary and independent.
(h) Procurement and repair of assets required the prior approval of works order.
(i) Good Procurement management means the effective operation of an efficient
Procurement and Supply Chain Management from forecasting to procurement,
warehousing and distribution to end-user.
This
demand full
cooperation/coordination from all involved in the process, the Technical
Department for the technical specification, the Regions for accurate forecasting
of its user requirements and the Procurement Department for effective
procurement of the goods/services its stocking and distribution to the user in
the most efficient manner possible.
(j) Contractors and/or suppliers engaged by a public Procuring Entry (PPE) must
abide by the appropriate conditions of contract and in particular must have
Public and Employers liability insurance policies and the existence and verified
prior to commencement or work.
(k) Suppliers of goods, works and services to a public procuring entity must
comply with all Government Regulations requirements.
(l) In addition to ensuring that the PPE gets value for money in all its procurement
these procedures also provide the checks and balances necessary for security
and control purposes and comply with current Government Regulations.
(m) The accountable board or body is responsible for ensuring that all
procurement is full consistent with procedures and policies adopted by Public
Procuring Entity. In discharging that responsibility the accountable board or

body may arrange the allocation of procurement delegation/authorization to a

person or body in such a way as to ensure that an appropriate level of control
and judgment will be brought to bear on procurement decision.

1.7 CONTENTS OF THE PUBLIC PROCUREMENT ACT No.21

2004 FEATURES

OF

The PPA No. 21 of 2004 has the following parts and sections

PART 1:

Preliminary Provisions
Section 1-4: Include short title and commencement,
Applications, Interpretation and International Obligations.

PART II:

Public Procurement Regulatory Authority PPRA

Section 5-27:
Include Establishment, Objectives,
Functions, Investigations Procedures, Powers, Disciplinary
Actions, Recommendations and appointment of Directors.
PART III:

Tender Boards

Section 28 -43: Include Establishment, Powers, Functions of

Tender Boards, Establishment of Procurement Management
Unit (PMUs) Functions of PMUs User Departments,
Evaluation Committees, Third party Procurement.
PART IV:

Public Procurement Principles

Section 44 57: Include duties of Procuring Entities,

Procurement Planning, Qualification of Supplies, Pre- qualification/Post
Qualification, National Preference, Tender securities, Records.
PART V:

Methods of Procurement
Section 58 71: Include selection methods, Invitation to
Tender, Tender documents, Validity of Tenders, Evaluation
Criteria Receipt of Tenders and Opening,
Evaluation/Comparison of Tenders, Approval, Selection of
Consultants/Negotiation and Award.

PART VI:

Prohibitions

Section 72-76: Include Fraud and Corruption, Conducts

influencing Public, Disclosure of Payment, Institution of
Criminal Proceedings.
PART VII: Disputes Settlements
Section 77 -85: Include Establishment of appeals authority,
Functions of PPAA, Right of review, Administrative review,
Judicial review.
PART VIII: Miscellaneous Provisions
Section 86 -91: Include of conduct, Offences, Regulations
and guidelines, Transitional provisions
PROGRESS CHECK:
1. Outline the Objectives of the PPA
2. Identify the Guidelines and
Procurement

10

Principles

governing

the

Public

11

2.0 PRELIMINARY PROVISIONS OF THE PPA

Section 1: Short title
This Act may be cited as the Public Procurement Act, No. 21 of 2004 and came
into operation on 8th February 2005.
Section 2: Application
The PPA apply to all Public Bodies and entities not of Government for Procurement
Financed from Specific Public Finances.
Section 2: Defense and National service Organs shall agree annually with the
PPRA on the categories of items to be included under the restricted list on which
restricted Procurement methods set out in the act or regulations shall apply. (Ref
Sect 2 (a b)
Section 3:

Deals with interpretations of various words including the meaning of

procurement, goods, works, services, Contractor, supplier,
Consultant etc.
Procurement Means buying, purchasing, renting, leasing or
otherwise acquiring any goods, works or services by a procuring
entity spending public funds on behalf of the Ministry, Department
or regional administration of the Government or public body and
includes all functions that pertain to the obtaining of any good,
works or services, including description of requirements, selection
and invitation, preparation and award of contract
Goods means raw materials, products equipment and other
physical objects of every kind and description, whether in solid, liquid
or gaseous form, electricity intangible asset and intellectually
property, as well as services incidental to the supply the
good
themselves. Of the goods provided that the value of the services does
exceed

12

Services means any object of Procurement other than goods or

works, which involve the furnishing of labour, time or effort including
the delivery of reports, drawings or designs, or the hire or use of
vehicles, machinery or equipment for the purposes of providing
transport, or for carrying out wok of any kind with or without the
provision of drivers operator, or technicians.
Works means:
(i)

All Works associated with the construction, reconstruction,

demolition, repair or renovation of a building, structure, road or
airfield.

(ii)

Any other civil works, such as site preparation, excavation

erection, building, installation of equipment or materials,
decoration and finishing.

(iii)

Services which are tendered and contracted on the basis of

performance of a measurable physical output such as drilling,
mapping, satellite photography or seismic investigations,
provided that, contracts which include the provisions of works
and services shall be regarded as works contract if the total
value of the works is greater then the value of the services
covered by the contract.

Consultant means a Company, corporation, organization,

partnership or Individual person engaged in or able to be engaged in
the business of providing services in architecture, economics,
engineering, surveying or any field of professional activity and who is
according to the context a potential party or party to a contract with
the procuring entity
Contractor means a Company, corporation, organization,
partnership or Individual person engaged in civil, electrical or
mechanical engineering or in construction or building work of any
kind including repairs and renovation and is according to the context
a potential party or party to a procurement contract with the
procuring entity.

13

Supplier means a Company, corporation, organization, partnership

or Individual person supplying goods or services, hiring equipment or
providing transport services and who is according to the contract a
potential party or the party to a procurement contract with the
Procurement
Section 4: Conflicts with an obligation of the government arising out of any
agreement with international organs, the requirement of the
international obligation shall prevail.
Also any agreement entered into by the United Republic with an
Inter-Governmental or International financing institutions in which
the United Republic is the beneficiary, the requirement of such treaty
or agreement shall prevail, but in all other respects the procurement
shall be governed by this Act

TRAINEE ACTIVITIES;
1. Read Section 3 of the PPA No. 21 of 2004 and suggest which of the
definitions is more likely to be frequently used by the procurement
specialist in performing his/her duties.
2. Section 2 and section 4 of the PPA No.21 of 2004 are both concerned
with the application of the Act. Discuss

PROGRESS CHECK;
1. All procurement falls under main categories of expenditure namely:
Works, Goods, Consultancy and Non-Consultancy Services. How would
you differentiate the individual category from each other?
2. Differentiate the term Pre-qualification from Post-qualification

3.0 PUBLIC PROCUREMENT REGULATORY AUTHORITY

(PPRA)

14

Section 6:

objectives of the authority:

(a)
(b)

Ensure the application of fair, competitive, transparent, and

Non-discriminatory and value for money, procurement standards and
practices.

(c)

Harmonize the procurement policies systems and practices of the central

governments, Local governments and statutory bodies.

(d)

Set standard for the public procurement systems in the united republic of
Tanzania.

(e)

Monitor compliance of procuring entities.

(f)

In collaboration with relevant professional bodies build procurement capacity

in the United Republic of Tanzania.

Section 7: Functions of PPRA

Functions of PPRA include advisory, monitoring and regulatory. The
functions also include the issues under Sect 89 of the Act;
preparation and issuing of standard tendering documents, procedural
forms and any other attendant documents to procuring levels,
certification requirements, setting training standards, competence and
professional development paths for procurement experts in
consultation with relevant professional bodies and any other
competent authorities. Conducting periodic inspection of the records
and proceedings of the procuring entities to ensure full and correct
application of the act. To discharge its functions under the act the
PPRA shall be entitled to be advised of the award and variation of any
public contract by procuring entity.
Section 8: Authorizes the PPRA to conduct an investigation into the whole
aspect of the procurement proceedings:
Section 14: Gives the PPRA a mandate to report the results of the investigations
to the minister with recommendations on the appropriate action
against any public officer.
Section 16:Powers of the authority

15

This section gives powers to the PPRA to require any information,

documents, records and reports in respect of any aspect of the Public
Procurement Process where a breach, wrong doing,
mismanagement or collusion has been alleged, reported or proven
against any procuring entity or supplier, contractor or consultant. It
shall also act upon complaints by procuring entities, suppliers,
contractors or consultants and any other entity or person in respect of
any party to procurement proceedings in accordance with the
procedure set out under disputes settlement procedures sections of
the Act. Where there are persistent or serious breaches of this Act or
regulations or guidelines made under this Act, the PPRA may
recommend to the competent authority for the suspension of officers
concerned with the procurement process issue, or the replacement of
a procurement management unit, the chairman, or any member of a
tender board, or the disciplinary of the accounting officers or the
temporary transfer of procurement functions to the procurement
agent.
The competent authority must respond within a period specified in
the regulations (section 17(2).

TRAINEE ACTIVITIES;
1. Read part II of the PPA and identify sections that may not be used as
means to enforce compliance to the PPA and its Regulations

PROGRESS CHECK;
1. Identify functions and powers of the PPRA that may be used to enforce
compliance of the Procuring Entity to the PPA requirements.

4.0 TENDER BOARDS

Functions of Tender Boards (Sections 30) includes:
(a) Adjudication of recommendations from the Procurement Management Unit
(PMU) and award of contracts

16

(b) Review all applications for Variations, addenda or amendments to ongoing

contracts.
(c) Approving tendering and contract documents
(d) Approving procurement and disposal by tender procedures
(e) Ensure that best practices in relation to procurement and disposal by
procuring entities
(f) Ensure compliance with the PPA
(g) Liaising directly with the PPRA
No Public body shall advertise, invite, solicit or call for tenders or proposals in
respect of a contract unless authorized by the appropriate tender board (section
31(a). The section further prohibits the award of any contract without prior
approval by the tender board; and that all procurements whose values exceed the
limit set out in the regulations must be reported to the PPRA within 14 days of
commencement of the Procurement process.
Powers of tender boards (section 32(1)
1. In the exercise of their powers under this Act, tender boards may: (a) Call for such information and documents as they may require from any public
body;
(b) Commission any studies relevant to the determination of award of contracts;
(c) Request any professional or technical assistance from any appropriate body or
person in Tanzania or elsewhere, and
(d) Do all such acts and things, as they may consider incidental or conducive to
the attainment of their objects;

(2) Tender boards may:

(a) Require the chairman, accounting officer or chief executive officer of a public
body:
(i) to furnish any information or produce any records or other documents relating
to a contract;

17

(ii) to answer all relevant questions;

(b) Examine such records or other documents and take copies or extracts
therefrom.
Functions of a Procurement Management Unit (Section 35) include:
(a)

Manage all Procurement and disposal by tender activities of the Procuring

entity except adjudication and the award of contract.

(b)

Support the functioning of the tender board.

(c)

Liaise with the PPRA

(d)

Act as a secretariat to the tender board

(e)

Plan the Procurement and disposal by tender activities of the PE

(f)

Implement decisions of the tender board

(g)

Recommend procurement and disposal by tender proceedings

(h) Check and prepare statements of requirements

(i)

Prepare tendering documents

(j)

Prepare tender advertisements

(k)

Prepare contract documents

(l)

Issue approved contract documents

(m) Maintain Procurement and archive disposal records

(n) Maintain a list or register of all contract awarded
(o)

Prepare monthly reports for the tender board

(p)

Coordinate the procurement and disposal activities of all departments of the

PE

(q)

Prepare any other reports.

18

Section 36 provides for the functions of the user department of the PE, which
include providing assistance to the PMU throughout the procurement or disposal
by tender process to the point of contract placement including input with
technical evaluation of tenders received as required by the PMU.
Section 37 provides that an evaluation committee, which shall report to the PMU,
the membership of which shall be recommended by the PMU and approved by the
accounting officer, shall conduct the all evaluations. The members may be
external to the PE where the required skills or experience are not available within
the PE.

TRAINEE ACTIVITIES;
1. Read part III of the PPA and explain the establishment and
scope of services of the PMU, Tender Board, PE, CEO, User
Department and the Evaluation Committee.

PROGRESS CHECK;
1.

Explain the Functions and Powers of:

The Tender Board
The PMU
The User Department

5.0 PRINCIPLES AND METHODS OF PUBLIC PROCUREMENT

Duties of the Procuring entity (PE)

It is the duty of the Procuring Entity (PE) to ensure that procurement is in
accordance with the Act. The accounting officer or CEO shall be held responsible

19

for any failure unless s/he satisfies the PPRA that s/he had delegated her/his
functions in accordance with the law.

Procurement Planning (PP)

A procuring entity shall plan its procurement in a rational manner (Section 45), in
order to:(a) Avoid emergency procurement wherever possible
(b) Aggregate its requirements whenever possible both within and between
procuring entities to obtain value for money and reduce procurement costs.
(c) Make use of framework contract whenever appropriate.
(d) Avoid splitting of procurement to defeat the use of appropriate procurement
methods unless such splitting is to enable wider participation of local bidders.
(e) Integrate its procurement budget with its expenditure programme.

Qualifications of Suppliers (QS)

The PE may engage pre-qualification and post-qualification proceedings as

stipulated under sections 47 and 48 respectively. The Criteria must be set out in
the tendering documents. Section 49 provides for eligibility for the national
preference and for funding by a Tanzanian public body the procurement shall be
reserved exclusively focal persons of firms. Procurement may be made from the
government stores. Procedures are specified in the regulations (sections 50 & 51).
Section 56 specifies a period of not less than 5 years for keeping the procurement
records.

Procurement Methods (PM)

All procurement and disposal shall be conducted in a manner to maximize

competition and achieve economy, efficiency, transparency and value for money
(Section 58).
All procurement and disposal shall be made through competitive tendering
(section 59) except under circumstances listed under section 59 (2). These are:(a)

Where Pre-qualification has been made pursuant to section 47.

20

(b)

Procurement for urgent needs

(c)

Need to achieve certain social objectives by calling for the participation of

local communities.

The methodology is specified in the regulations, and the PE shall include in the
records a statement of the grounds for its decision to justify the restriction.
Invitation procedures, issue of tender documents validity of tenders, contents of
tender documents, evaluation criteria, receipt of tenders and opening (Sections
61-66) are set out in the regulations.
Section 67 specifies the bases for evaluation and comparison of tenders. All
tenders for works shall be evaluated based on monetary terms and completion
period for goods and equipment other factors in addition to price may be
prescribed in the tendering documents.
Any Procedure under which tenders above or bellow a pre-determined assessment
of tender value are automatically disqualified is not acceptable.
Any additions to the value of a procurement contract shall be reviewed and agreed
by the approving and agreed by the approving authority and must be to the
benefit of the government or not disadvantageous to the government (section 69)

Selection of consultants (section 70) provides three methods:

(a) Based on quality only
(b) Based on quality and price consideration
(c) Based on lowest price on comparable technical proposal and services.
Other methods and justifications are set out in the regulations. Section 70 (3)
provides that the PE shall use standard documents issued by the PPRA. Where
the standard forms are not appropriate, the PE may use other forms acceptable to
the PPRA.

Elements of Negotiations (EN)

Section 71(1) provides that, depending on the method of selection of consultant
used, the firm submitting the best proposal shall be invited for negotiations.

21

Subsection (2) specifies that, negotiations shall include discussions of the terms of
reference, the methodology, staffing, procuring entity's inputs and special
conditions of contract and the discussions shall not substantially alter the original
terms of reference or the terms of the contract.
Subsection (3) specifies that, where the negotiation under subsection (2), fail to
result in an acceptable contract, the procuring entity shall terminate the
negotiations and after consultation with the appropriate tender board, invite the
next ranked firm for negotiations.
Subsection (4) further specifies that, after negotiations are successfully completed,
the procuring entity shall within the time set out in the Regulations notify

other firms on the short list that they were un-successful.

TRAINEE ACTIVITIES;
1. Read section 44 of the Act, and explain how other written Laws relate to
this Act?
2. Read relevant section of Part IV of the Act, and explain
a) The reasons for procurement Planning
b) What are the qualification requirements and procedures for prequalification and post-qualifications proceedings?
c) Procedures for National Preference
d) Procedures for entry into force of a contract
e) Requirement for record- keeping and blacklisting of suppliers.
3. Discuss the appropriate actions, which you think may be taken by
respective Tender Boards in respect of failure to comply with
provisions entailed under section 44(6) of the Act.

PROGRESS CHECK;
1. Lack of competition shall not be determined solely on the basis of the
number of tenderers or persons who made proposals when
recommending for the rejection of all tenders. Discuss.

22

2. Explain the circumstances, which may lead to the deviation from

competitive tendering procedures. Identify relevant sections of the Act to
support your answer.
3. What are the differences between procedures for competitive tendering
for Goods and Works, and that of selection of Consultancy as outlined
under Part V of the PPA of 2004.

6.0 PROHIBITIONS, DISPUTE SETTLEMENTS AND

MISCELLANENOUS PROVISIONS

Prohibitions
Section 72 prohibits fraud and corruption and action against the defaulters shall
include institutions of criminal proceedings cap.16 act No. 3 of 1971; the Penal
Code, the Prevention of corruption Act, 1971 as provided under section 76 of the
PPA or any other written law against any person discharging functions or
exercising powers under the PPA or its regulations.
Any conduct influencing public officer is prohibited under sections 73 of the Act.
All payments made by way of commission must be declared in writing and
furnished to the Prevention of Corruption Bureau (PCB) and Tanzania Revenue
Authority (TRA) pursuant to section 74 of the Act.

Dispute Settlements. (section 77 (1))

The aggrieved suppliers, contractors or consultants must register their complaints
within 28 days of awareness of the circumstances giving rise to the complaints.
The review shall not apply to the selection of method of procurement, rejection of
all tenders, national preference and refusal of expression of interest (section 79).
No complaints or dispute shall be entertained after the procurement contract has
entered into force.

23

The PE or approving authority shall deliver a written decision within 30 days after
submission of the complaint in case no mutual agreement and this decision shall
be final unless the aggrieved party institutes the procedures for administrative
review by the PPRA within 14 days of the PES decision (section 80 and 81). The
PPRA shall deliver decision within 30 days. Procedures for review by the PPAA are
stipulated under section (82 -84). If the ruling of the PPAA does not satisfy the
aggrieved party, that party shall have the right to institute judicial review
pursuant to section 85 of the Act.

Miscellaneous Provisions
Offences, which are listed under section 87 of the Act include: (a)

Knowingly giving false or misleading information or evidence in purported

compliance with a summons issued under the Act.

(b)

Without reasonable excuse fails or refuse to give information, or produce any

document, record or reports required by the PPRA or tender board of (section
32)

(c)

Refusal to answer summons pursuant to section 32

(d)

Undue influence on any officer or employee of the PPRA/PE or member of

tender board in the performance of their functions or exercise of their powers
under the act.

(e)

Collusion to commit a fraudulent act or corrupt act pursuant to section 3

(f)

Contravenes or fails to comply with a provision of the act and its regulations.

On conviction a person is liable for a fine not exceeding 500,000 or to

imprisonment for a term not exceeding 3 years or both fine and imprisonment.
Where a PE consistently contravenes the act, its procurement function shall be
transferred to procurement agent appointed by the authority until the PPRA is
satisfied that the causes of contravention have been rectified.
Section 88 and 89 gives authority for the Minister and PPRA to issue regulations
and guidelines for better implementation of the Act respectively.

SCHEDULES

1st Schedule-Composition, appointment and procedures of the Authority.

24

2nd Schedule

-Composition appointment and procedures of the Tender Board.

Composition:
-

Chairman to be appointed by the accounting officer among the heads of

departments or a person of similar standing.

Six members who are heads of departments or persons of similar standing

appointed by the accounting officer.

Procurement Specialist appointed by the accounting officer and who shall be

the head of PMU.

Office tenure is 3 years to maximum of two terms.

3rd Schedule -

Composition appointment and procedures of the PPAA

TRAINEES ACTIVITIES;
1. Read the sections under prohibitions and explains the key
areas of the prohibitions under the PPA 2004.
2. Read relevant sections under Part VI of the PPA and explain
the procedures for settlement of complaints or disputes by PE
and approving Authorities.
3. Read the relevant sections under the miscellaneous provision
of the Act and explain what circumstances may lead to the
recommendation by the Authority to have functions of
procurement of any PE transferred to a third party
Procurement Agency.

PROGRESS CHECK;
1. What are consequences of contradicting the procedures set
out in the PPA of 2004?
2. Explain the composition of:

a) PPRA.
b) PPAA.

25

c) Public Tender Board.

26

SALIENT FEATURES OF PUBLIC PROCUREMENT

REGULATIONS FOR GOODS, WORKS, NON
CONSULTANCY AND DISPOSAL OF PUBLIC ASSETS BY
TENDER ( GOVT NOTICE NO. 97)

1.0 PRELIMINARY AND GENERAL PROVISIONS

Application of the Public Procurement Regulations (PPR)

The Public procurement Regulations applies to all procurement of goods, works
and related services and non- consultants services undertaken by a Public
authority procuring entity and to the specified parastatals organizations except
where it is provided otherwise by the act.

Interpretation of various terminologies.

Procuring entity means Ministry government
parastatals organisations, a regional or local authority.

department,

agency,

Public body or public authority means any ministry, department or

agency or government; any body corporate or statutory body or authority
established for the Purposes of the government; any registered company in which
the government has shares; any local government authority, any parastatals
organization
(Regulations 3).
Procurement means buying, purchasing, renting, leasing or otherwise
acquiring any goods, works or services by a procuring entity spending public
funds on behalf of the Ministry, Department or regional administration of the
Government or public body and includes all functions that pertain to the
obtaining of any good, works or services, including description of requirements,
selection and invitation, preparation and award of contract

27

Goods means raw materials, products equipment and other physical objects of
every kind and description, whether in solid, liquid or gaseous form, electricity
intangible asset and intellectually property, as well as services incidental to the
supply
the good themselves.
Of the goods provided that the value of the
services does not exceed the value of goods themselves.

Works means:
(iv)

All Works associated with the construction, reconstruction,

demolition, repair or renovation of a building, structure, road or
airfield.

(v)

Any other civil works, such as site preparation, excavation

erection, building, installation of equipment or materials,
decoration and finishing.

(vi)

Services which are tendered and contracted on the basis of

performance of a measurable physical output such as drilling,
mapping, satellite photography or seismic investigations,
provided that, contracts which include the provisions of works
and services shall be regarded as works contract if the total
value of the works is greater then the value of the services
covered by the contract.

Contractor means a Company, corporation, organization, partnership or

Individual person engaged in civil, electrical or mechanical engineering or in

construction or building work of any kind including repairs and renovation and is
according to the context a potential party or party to a procurement contract with
the procuring entity.

Supplier means a Company, corporation, organization, partnership or

Individual person supplying goods or services, hiring equipment or providing

transport services and who is according to the contract a potential party or the
party to a procurement contract with the Procurement

Competitive tendering or tendering means the method of procurement

whereby suppliers, contractors or consultants are invited by the procuring

28

entity to compete with each other in submitting priced tenders for goods,
works or services;

Goods means raw materials, products, equipment and other physical objects
of every kind and description, whether in solid, liquid or gaseous form, electricity,
intangible asset and intellectual property, as well as services incidental to the
supply of the goods provided that the value of the services does not exceed the
value of the goods themselves;
Lowest evaluated cost means the price offered by a supplier, contractor, or
consultant that is found to be the lowest after consideration of all relevant factors
and the calculation of
Minor Value means an amount of money up to a maximum limit for
the procurement of goods, works and services of a minor nature, to be determined
each year by the Minister;

Procurement Expert or Specialist means a person who is engaged in a

profession, occupation or calling in which recourse to procurement is directly or
indirectly involved and has such knowledge and experience of the practice of
procurement;

"Procurement Management Unit" means a division or department in each

procuring entity responsible for the execution of the rocurement functions;

Procurement proceedings means the proceedings to be followed by a

procuring entity or any approving authority when engaging in rocurement;

"Procurement process" means the successive stages in the procurement

cycle, including planning, choice of procedures, measures to solicit offers from
tenderers, examination and evaluation of those offers, award of contract and
contract management;
Public body or public authority means (i) Any ministry, department or agency of government;
(ii) Any body corporate or statutory body or authority established for the purposes
of the Government; Cap 212,

29

(iii) Any company registered under the Companies Ordinance being a company in
which the Government or an agency of Government is in the position to
influence the policy of the company;
(iv) Any local government authority;
(v) Any parastatals organization.

General Provisions

Regulation 4 provides that the Public Procurement policies are based on the need
to make the best possible use of Public funds, whilst conducting all procurement
with honesty and fairness.
The basic considerations of the public procurement policy are:
(a)

The need for economy and efficiency in the use of public funds.

(b)

Equal opportunities to eligible suppliers and contractors.

(c)

Encouragement
industries.

(d)

Importance of integrity, accountability fairness and transparency in the

procurement process.

of

national

manufacturing,

contracting

and

service

Regulation 7 Provides that Procurement of Goods, works and related Services

through international and national competitive tendering shall be considered
before other methods of tendering is used as long as the selection is done with due
regard for Transparency, Economy and efficiency in the implementation of the
project.
Regulation 8 of this Act stipulates that all public officers concerned with
procurement and members of Tender Boards must be scrupulously honest in all
their dealings with suppliers, contractors, and members of the public and with the
Public Authority itself. This means the PEs and members of Tender Boards must
conduct procurement proceedings with complete probity and in such a manner
that public authority is respected and trusted as a client or a customer whilst
maintaining good reputation with contractors and suppliers.
Regulation 9 of the Act stipulates the need for Equality of participation for all
eligible suppliers and contractors. This means that all PEs and approving
authorities shall take the necessary measures to ensure the widest possible
participation by suppliers or contractors on equal term in invitations for tender for
Goods and Works contracts, as appropriate measures to: 30

a)
b)
c)
d)

Ensure publication of invitations to tender in the Government Gazette, Local

newspapers of wide circulation and any other appropriate information media.
Eliminate discriminatory practices or technical specifications, which might
stand in the way of widespread participation on equal terms.
Ensure that all the selection criteria are specified in the tender documents,
and
Ensure that the tender selected conforms to the requirement of the tender
documents and meets the selection criteria stated therein.

Regulation 10 stipulates the need for eligibility where in accordance to regulation

26 participation in the invitations to tender and in the award of contract shall be
open on equal terms to:a) Natural persons, companies or firms or public or semi-public agencies of
Tanzania and foreign countries.
b) Co-operative societies and other legal persons governed by public or private
law.
c) Joint ventures or groupings of companies or firms.
Regulation 11 of the Act provides the need for Transparency and fairness where a
procuring entity and tender boards are required to maintain adequate written
records of all procurement proceedings in which they are involved, including any
procurement conducted other than by competitive tendering. Such records shall
show which suppliers or contractors responded to advertisements or were
approached to tender, who was chosen and the reasons.
Under Regulation 13, in dealing with donor funded procurement entity shall
uphold provisions of Section 4(1) of the Act, and shall not seek clearance of tender
documents or award recommendation from an external government, agency or
institution that extended a loan, credit or grant before obtaining internal clearance
of the same from an appropriate approving authority or tender board. In case that
the clearance or approval of the appropriate internal approving authority conflict
with the external clearance or approval of an external approving authority arising
out of the loan or credit or grant agreement, the clearance or approval of the
external approving authority shall prevail, but in all other respects, the internal
clearance or approval shall prevail
In qualifying Suppliers or contractors, qualifications Criteria are stipulated under
Regulation 14 as follows:
(a)

That the firm possess the necessary professional and technical qualifications,
professional and technical competence, financial resources, equipment and

31

other physical facilities, managerial capability, reliability, experience and

reputation, and the personnel to perform the contract.
(b)

That they have legal capacity to enter into the procurement contract.

(c)

That they are not insolvent, in receivership, bankrupt or being wound up,
their officers are not being administered by a court or a judicial officer, their
business activities have not been suspended, and they are not the subject of
legal proceedings for any of the foregoing.

(d)

That they have fulfilled their obligations to pay taxes and social security
contributions in Tanzania where required.

(e)

That they have not been convicted of any criminal offences related to their
profession or have not been otherwise disqualified pursuant to administrative
suspension or disbarment proceedings.

Regulation 14 (4) restricts a procurement entity to impose criterion, requirement

or procedure with respect to qualifications of suppliers or contractors other than
those provided for Regulation 14. Pre-qualification proceedings are stipulated
under Regulation 15.
Each procuring entity and each approving authority shall maintain a record of
procurement proceedings and such record shall be kept for a period of not less
than five (5) years from date of completion of the contract. Regulation 19
Stipulates relevant information that shall be included and maintained in the
procurement proceedings containing, at a minimum, the following information.
a)
b)
c)
d)
e)

A brief description of the Goods, or works to be procured, or of the

procurement need for which the procuring entity offers
The names and address of suppliers or contractors that submitted tenders,
offers, or quotations, and the name and address of the supplier or contractor.
The information relative to the qualifications, or lack thereof, of suppliers or
contractors that submitted tenders, offers or quotations.
A summary of the evaluation and comparison of tenders, offers or quotations,
including the application of any margin of preference.
A summary of any request for clarification of the pre-qualification or
solicitation document, the responses thereto, as well as summary of any
modification of those documents.

The annulment of a tender may take place in the following cases (Regulation 20(2)

32

(a)

If no responsive tender

(b)

If no tender satisfies the award criteria

(c)

If economic/ technical data of the Project have changed

(d)

Under exceptional circumstances the performance of the contract is

impossible

(e)

If every tender received exceeds the budgetary resources available

(f)

Under serious irregularities

(g)

If no competition

Regulation 21 specified rules for public notice of procurement contract awards,

Regulation 22 specifies rules concerning description of goods or works. The
regulation stipulates that any specifications, plans, drawings, designs and
requirements or descriptions of goods or construction shall be based on the
relevant objective, technical and quality characteristics of the goods or
construction to be procured. There shall be no requirement of or reference to a
particular trade mark, name, patent, design, type, specific origin or producer
unless there is no other sufficiently precise or intelligible way of describing the
characteristics of goods or works and the words or equivalent and included
-

Price adjustment Regulation 23 (1-4)

Language Regulation 24(1-2)
National preference Regulation 25 & 26
Tender sample Regulation 28
Specification for Vehicles, machinery etc,
Regulation 30 (1-3)

TRAINEE ACTIVITIES
1. Read

Regulations (23-29) from Part II of the

Regulation and identify their impotency in
procurement proceedings

33

PROGRESS CHECK
1. How Public Procurement Policies as laid down under
Regulation 4 of the Act can be achieved.
2. Outline the Objectives of PPR for goods and Works.
3. Define the following: Competitive tendering
Lowest evaluated Cost Tender.
Minor Value
Procurement expert or specialist
Procurement
Procurement proceedings

34

2.0 PROCUREMENT ORGANISATION AND

LIMITS OF AUTHORITY.

Approval of Procurement

Any procurement by PE must be authorized by the accounting

officer
and
enclosed by a tender board. A tender board must approve all tender documents
before tenders are invited (Regulation. 40-41).

Accounting officers and delegated power

Regulation 32 of this Act stipulates that an accounting officer or procuring entity
is responsible for all procurement of Goods and works undertaken by his/her
department or region and shall be accountable for the use made of the funds
voted by parliament to that ministry or department and for that justification for
the requirement that are procured.

Tender Boards.

Regulation 41 of the Act stipulates that, tenders may only be issued with the
approval of the appropriate tender board, which may examine the draft tender

document before approving the issue of the tender . Also the tender board may
make a decision of the tender board without a meeting by circular resolution by
circulation of the relevant papers among members of the tender board.

Emergency procurement.
Emergency procurement is allowed under Regulation 42 with due regard to
circumstances of urgency and without regard to the limits of the approving
authority.
The approving officer must promptly present the unauthorized
procurement to the paymaster general, treasury for retrospective approval. Lack
of foresight in not procuring at the right time authority is held personally liable to
the extra costs implications.
Under this chapter regulation 43-45 provides the details on the alteration and
amendments of a procurement contract, Conditions for additions to contract value
and validity of procurement authorization given by a tender board.

35

TRAINEE ACTIVITIES.
1. Read Part III of the Regulation and identify the powers of the
Accounting officer in comparison to that of the Tender Board.
PROGRESS CHECK.
1. Emergency procurement is generally prohibited but it is only allowed under
Regulation 32.Discuss

3.0 PROCUREMENT PLANNING AND FINANCIAL CONTROLS

3.1. LEARNING OBJECTIVES

When you have completed this chapter you should be able: Develop an appropriate strategy of procurement planning.
To aggregate or separate requirements in accordance with the strategy
chosen.
To identify options for packaging for goods and works.

Planning
Regulation 46 stipulated the procedures for procurement planning; Planning for
implementation shall involve preparation of a project work plan describing the
various project tasks and activities, including how the tasks will be accomplished
and managed and identify the resources necessary to carry out the various project
activities.
Procurement planning shall begin at the design stage during the identification /
preparation stages of the project cycle.
The procuring entity shall take a strategy decision whether the most economic and
efficient procurement can best be achieved by separating contracts for each
component.

36

A procuring entity must forecast its requirements for goods and works as
accurately as is practicable, with particular reference to works already
programmed in the public authoritys annual work plan and included in the
annual estimates.
The forecasts shall include an estimate of the optimum time to the nearest month
for receipt of each consignment of goods or completion of required works.
The estimate shall be shown in the tender evaluation report and priorities for
procurement may be determined in accordance with available funds.
A procuring entity shall then draw up procurement plans for those requirements
for which sufficient funds are available in the current vote, sub-head or, if
payment will be due in a subsequent financial year, have been budget for that
year.
In compiling such plans, a procuring entity shall establish the appropriate method
of procurement, as set out in Part VI of these Regulations, to be employed for each
requirement.
The timescale for each procurement shall then be calculated on the basis of the
standard processing times at Fourth Schedule to these Regulations, allowing any
necessary margin for delays in transmission of documents or clarification of
tenders.
From this timescale, the start dated and critical points in the
procurement process shall be set out in the procurement plans.
Except for institutions, which have fully fledged engineering service departments
or such other similar professional service department, and those, that are in
position to use the services of such professional departments, all procuring
entities shall engage the services of consultants to prepare tender documents,
evaluate and make recommendations to tender boards.

Approval to proceed with procurement

Before the preparation of tendering documents, shall be established genuine
intention to proceed with the procurement.
Approval of the accounting officer or chief executive officer must be held either by
inclusion of that procurement in procurement programme or plan or by request as
an individual item of procurement.

Aggregating requirements.

37

In order to maximize economy and efficiency in its procurement, a procuring

entity may group goods or works of a broadly similar or related nature into a
single tender or number of tenders of a size and type that will be likely to attract
he most suppliers or contractors, provided that this is practicable and will not
cause unreasonable delay in the procurement.
Requirement that are to be debited to different vote sub-heads shall only be
combined into one tender if all costs of the procurement can be easily identified
and separately debited.
Such as to maximize participation in such tenders, suppliers or contractors need
not be required to tender for all the goods or works so grouped but may be
permitted to submit tender in respect of each item or a combination of items of
goods, or individual contracts or a combination of contracts for works
Such tenders shall be received and opened by the same deadline and evaluated
simultaneously so as to determine the tender or combination of tenders that offers
the lowest evaluated cost.

Prohibition of splinting tenders and contracts.

A procuring entity shall not divide its procurement into separate contracts for the
purpose of a voiding international or national tendering.
Any procuring entity proved to have divided its procurement for the purpose of
provisions of regulation 49(2) the head of that procuring entity and such other
officer shall be held personally responsible in accordance with Section 76 of the
Act.
Notwithstanding provisions of sub-regulation (1) and (2), a procuring entity shall
be allowed, with prior approval of the authority, to split contracts to enable
participation of local firms or person.
Procuring entities should plan their requirements in such a manner that the same
goods or works are not procured more than once in every six months within the
limits given to the accounting officer/ chief executive officer or tender boars.
Items or consumables, which require constant use, shall be procured on specified
length of period on annual basis.
It is not permitted to subdivide the
requirements to bring the total value within the lowest limits of authorization.

Packaging of procurement.

38

In considering how a project may be carried out, account shall be taken of the
advantage, for economic and technical reasons, of dividing the project into
homogeneous lots or packages, which are as large as possible.
Where a project has been divided into packages, the size of the package should be
appropriate to foster maximum competition to obtain the most economic contract.
If similar items of equipment are to be procured for several subcomponents in a
project or for several projects, it may be convenient to combine them all into one
procurement package in
Where a project has been divided into lots or packages, the instructions to tenders
shall state: The number of lots or packages;
The nature, location and size of each lot; and
Where appropriate; the minimum and maximum number of lots
or packages for which a tender may tender.
The procedure for submitting a tender for package tenders shall be as follows:
a) Tender may submit a tender for each lot or package;
b) Unless the instructions to tenders provide otherwise, a tendered may include in
his tender the overall rebate he would grant in the event of amalgamation of
some or all of the lots or packages for which he has submitted individual
tenders;
c) Unless the instructions to tenders state that lots or packages apportioned on
the same tender shall form a single contract each lot shall form a separate
contract:
d) Where lots or packages are to be appointed to different tenders, the invitation
to tender document or the instructions to tenders may provide that the tender
for a particular lot or packages shall ensure the coordination of the execution
of all the lots or packages.

Types of works contracts Regulation 56

Procurement from government stores Regulation 57

Procurement of vehicles, heavy plant and spare part regulation 58

39

Maintenance and repair of vehicles, plant and equipment to be made in case

the price offered is above the market prices or lack of technical know-how or
resource constraint then must be made in the approved garages or by
competitive quotations from private garages (regulation 59)

Procurement of computers and software (Regulation 60).

TRAINEE ACTIVITIES
1. Read Part V under regulations (46-50) of the Act and discuss
their importance to the procuring entity.
PROGRESS CHECK
1. How Procurement Planning can be used to achieve
Economy and Efficiency as stipulated under the
Public Procurement Policies?
4.O METHODS OF PROCUREMENT AND
THEIR CONDITIONS FOR USE

40

Selection of a method of procurement

Regulation 63 of the Act stipulates that, except otherwise provided by this

regulation a procuring entity engaging in procurement of goods or work or build,
operate and transfer (BOT) or build, own, operate and transfer (BOOT) and
turnkey projects shall do so by means of competitive tender proceedings.
In any case where tendering would not be the most economic and efficient method
of procurement and the nature and estimated value of the goods or works permit,
a procuring entity may select an appropriate alternative method of procurement as
provided for in Regulation 68-73.
International Competitive Bidding (ICB)
Regulation 65 of the Act stipulates that procurement of goods, works and related
services shall be made through international competitive tendering and a
procuring entity shall invite suppliers/ contractors regardless of their nationality,
by means of a tender notice that shall be advertised nationally and internationally.
Also students should understand that this method of procurement shall be used
in all cases where:a) Payment may be made in whole or in part in foreign currency.
b) The estimated cost of the goods or works exceeds the threshold for such
tenders shown in 3rd schedule to these Regulations.
c) It is desired to attract tenders from the widest range of supplier the suppliers
or contractors, regardless of the estimated value of the goods or works to be
procured.
National competitive Bidding (NCB)
Regulation 66 of the Act stipulates that, a procuring entity shall invite suppliers/
contractors regardless of their nationality by means of a tender notice advertised
only in the United Republic of Tanzania in this case to submit priced tenders for
goods or works.
The following conditions should be taken into consideration when selecting this
method of procurement: a) Payment may be made wholly in T/Shillings
b) Goods/Works are available locally at prices below international market.
c) The estimated cost of the goods or works is small and does not exceed the
thresholds for open International tendering
d) Works are scattered geographically or spread over time.
e) Works are labour intensive

41

f) The advantages of ICB are clearly outweighed by the admistrative or financial

burden are involved, and
g) Where foreign firms have participated domestic or national preference shall
apply in the evaluation of tenders.
Regulation 67 of the Act insist that, a procuring entity may restrict the issue of
tender document to a limited number of suppliers or contractors when:a) Pre-qualification have been conducted
b) The works or goods required are of specialized nature or can be obtained from a
limited number of specialized contractors or reputable sources.
c) The estimated contract values are within the limit for restricted tendering
shown at the 3rd schedule to these regulations.
d) There is an agent need for the goods or works and that the would be
insufficient time for PE to engage in open NCB or ICB provided that the
circumstances giving rise to the agency could not have been foreseen by the PE
and have not been caused by dilatory conduct on its part.
International and National Shopping
Regulation 68 of the Act stipulates that, shopping is procurement method based
on comparing price quotations obtained from several suppliers, usually at least
three to ensure competitive prices, and is an appropriate method for procuring
readily available off-the shelf goods or standard specification commodities that are
in small value.
A minimum period of 30 days for International shopping and 7 days for local
shopping shall be allowed for the preparation of the tenders and quotations and
may be submitted by Telex or facsimile as stipulated under Regulation 68(6) of the
Act
Under this Regulation as specified in Regulation 68(7) minimum information to be
included in a quotation form are as follows:
a) The full name and address of the PE.
b) A full description of the goods or works to be procured. e.g. Required technical
or quality characteristics, specifications, designs, plans and drawings.
c) Quantity of any goods to be supplied, time and place of delivery and any
requirement of such goods.
d) The period for validity of quotations is 90 days.
Single Source procurement for goods

42

Subject to approval by the tender board a procuring entity may engage in a single
source procurement or direct contracting in accordance with Regulation 70 as
stipulated under Regulation 69 of this Act under the following circumstances: a) The goods are available only from a particular supplier or particular supplier
exclusive rights in respect of the goods and no reasonable alternative or
substitute exist.
b) There is an agent need for the goods and must be provided that the
circumstance giving rise to the urgency where neither foreseeable by the PE nor
the result of dilatory conduct on its part
c) Where NCB or ICB is carried out and PE determined that additional supplies of
the same type as those purchased under existing contract are required.
d) Where the PE seeks to enter into a contract with a supplier for the purpose of
research, experiment, study or development.
e) Procurement National Defense or National Security.
f) Where critical items need to be purchased from a specified supplier to ensure
that the contractor shall guarantee the output of a process plant responsible
for the process design.
g) Where standardization of equipment is essential for economic and technical
reason and it has been proved to the tender boards satisfaction that
compatibility of the existing equipment with another make of equipment cannot
be established and that there is no advantage in having an alternative supplier.
h) Where an on-going project, additional items need to be purchased for the
completion of implementation.
Direct contracting for works
A procuring entity may obtain a priced quotation from a single contractor and
negotiate and enter into a direct contract when:a) There is an agent need for the works such that there would be insufficient time
for a PE to engage in tendering or any other method of procurement provided
that the circumstances giving rise to the agency could not have been foreseen
by the PE and have not been caused by dilatory conduct on its part.
b) There is only one particular contractor, which a PE can reasonably expect to
undertake the required works.
c) There are advantages to a PE in using a particular contractor who has
undertaken or is undertaking similar work or who may have already been
mobilized with plant, equipment and staff in the vicinity.
d) Civil works are already satisfactorily under construction are to extended and
the prices on the extended contract are reasonable and competitive and there is
no advantage to further tendering.
e) The estimated value of the works does no exceed the limit specified in 3 rd
schedule to these regulations.
43

Minor value procurement

Goods, works and services of minor value as may be determined by the
Minister in the Regulations may be procured directly by a procuring entity
without seeking competition in accordance with provision in the
Regulations.
This is stipulated under regulation 71 where a contract may be on Local
Purchasing Order (LPO).

Community participation in procurement

Regulation 75 of the Act stipulate the need for community participation in
procurement for the interest of project sustainability or to achieve certain specific
social objectives of the project, increase the utilization of local know- how and
materials as well as employing labour intensive and appropriate technologies.

Procurement of Commodities
Regulation 76 of this Act provides the details on procurement of Commodities
such as grain, animal feed, cooking oil, fuel, fertilizer and metals, the market price
of which fluctuate depending upon the demand

44

and supply at any particular time, may involve multiple awards for partial
quantities to assure security and multiple purchases over a period of time to take
advantage of favorable market conditions and to keep inventories low. In any
procurement of such commodities a PE may: a) Draw up a list pre-qualified suppliers and issue periodic invitations for the
supply of commodities to quote price linked to the market price at that time of
or prior to, the shipment of such commodity and tender validities shall be as
short as possible.
b) Specify single currency in which a commodity is priced in the market to be
used in for tendering and payment,

Procurement agents

(A procuring entity may procure the services of a procurement agent to undertake any or
all of those procurement functions which would otherwise carried out by the entity
provided that all such procurement functions are carried out in conformity with the Act
and in accordance with these Regulations. This is stipulated under Regulation 77 of the
Act where a PE shall:-

a) Be responsible for instructing any procurement agent

b) Only authorize a procurement agent to act on its behalf and ensure that any
procurement is reviewed and authorized by the appropriate approving
authority before any contract is placed.
c) Ensure strictly follow-up of all the procurement procedures outlined in these
regulations.

Inspection agents
Regulation 78 stipulates the need for inspection agent to undertake preshipment inspection and certification of imports.
But where exemption by the Minister has no been granted, any inspection agents
fees are not to be included in the price tendered or considered in the evaluation of
a tender.
TRAINEE ACTIVITIES

1. Read Part V of the Regulation and assess the shortfalls of

each procurement method if any.
PROGRESS CHECK

1. Explain why ICB is said to be a Default method of

Procurement in any procurement proceedings?

2. ICB is suitable only in certain condition. Discuss this

statement and justify your discussion by citing relevant
regulations

5.0 TENDERING PROCEEDINGS

Invitation to tender and Advertising

Procedures for competitive tendering for goods and works are stipulated under
Regulation 79 and invitation to tender and advertising procedures are stipulated
under Regulation 80. Where:(i) A procuring entity wishing to commence competitive tendering proceedings shall
prepare a tender notice inviting suppliers or contractors to submit priced offers for
the supply of the required goods or works.
(ii) The approved tender notice shall be advertised by the procuring entity at least twice
in one or more newspaper of national circulation and in case of international
tendering, a similar notice may be published in appropriate foreign publication or
trade journals.
(iii)
Any tender notice shall be published in sufficient time, to enable the
prospective tenderers to obtain tender documents, prepare and submit their
responses before the deadline for receipt of tenders.
(iv)The time specified for the opening of the tenders submitted shall be the same as the
deadline for receipt of tenders or immediately thereafter, and shall be repeated,
together with the place for tender opening in the invitation to tender.

Contents of invitation to tender

Particular attention is drawn to Regulation 81 and Regulation 83, which stipulate
contents of invitation to tender, and those of solicitation documents respectively.

Tender Period
Time allowed for preparation of tenders shall depend on the magnitude and
complexity of the procurement sought, tender boards would require the following
minimum times as stipulated under Regulation 84
-

NCB = 30 days

ICB= 45 days

Restricted (National) 21 days

Restricted (International) - 30 days

National shopping 7 days

International shopping 14 days

Where large works are involved are specified on the Third

Schedule GN 97

Clarifications and modifications of solicitation documents.

Regulation 85 provides that bidders are allowed to seek clarifications 14 days

before submission date and for the procuring entity to make modifications and
issue addendum at any time prior to submission date.

Submission of tenders.
Regulation 86 provides that the procuring entity shall indicate the specific
date and time for bid submissions and opening.

place,

Note That:

The time for the tender opening shall be the same as time for deadline for
the receipt of tenders
Period of effectiveness of tender, modification and withdrawal of tenders

The procuring entity shall require tenderers to make their tenders and tender securities
valid for periods specified in the tendering documents and such periods shall be sufficient
to enable the procuring entity to complete the comparison and evaluation of the tenders
and for the appropriate tender board to review the recommendations and give its approval
for the contract to be awarded while the tenders are still valid.

Tender validity period shall be a maximum of 120 days and modification or

withdrawal the tender prior to the deadline for the submission of tenders should
be done if its stipulated in the tender document (Regulation 87)

Tender securities.

If the procuring entity requires suppliers, contractors or consultants who are submitting
tenders to provide any form of tender security or any form of guarantee or bond against
satisfactory performance of the contract, such requirement shall apply equally to all
suppliers, contractors (regulation 88)

Receipt of tenders and tender opening

Receipt of tenders and tenders opening as stipulated under Regulation 89 all
tenders submitted before the deadline time and date for submission shall be
opened in public, in the presence of tenderers, or their representative and other
partner. (Regulation 89 (7))
Tender received after the time stipulated as well as those not opened and not read
out at the tender opening, shall not be considered, and shall be returned un
opened (Regulation 89 (11)).

Examination, evaluation and comparison of tenders.

Examination, Evaluation and Comparison of tenders procedures are set out in

Regulation 90. The committee shall have 3-5 members.
Any evaluation procedure under which tenders above or below a pre-determined
tender value are automatically disqualified shall not be accepted Regulation 90
(14).
Methods of evaluation and evaluation criteria (Regulation 90 (18) ) Regulation 90
(18) (b) (ii) specifies that the evaluation criteria shall, to extend practicable, be
objective and quantifiable, and shall be given a relative weight in the evaluation
procedure or be expressed in monetary terms.

Evaluation with margin for preference.

Evaluation with margin of preference for goods (Regulation 91 & 92)

Evaluation with margin of preference for works (Regulation 93)

Negotiations with suppliers or contractors (Regulation 95)

Approval of award ( Regulation 96)
Acceptance of tender and entry into force of procurement contract
(Regulation 97)
Tendering procedures for selected sub-contractors or suppliers for
provisional and prime cost sums in works contracts (Regulation 98).

TRAINEE ACTIVITIES
1. Read Part VI of the regulation and identify main steps in
tender proceedings.
2. Read Part VI of the Regulation and identify how
encouragement of the national can be exercised and when it
should be applied?

PROGRESS CHECK
1. How does efficient tender proceedings enhance Economy and
Efficiency as required by the Act.
2. What is a tender security and when can it be issued during
the tendering process?

6.0 PROHIBITION AND MISCELLANEOUS

PROVISIONS

Prohibition
Regulation 100 stipulates that procuring entities and approving authorities as well
as consultants under public financed contracts shall proceed in a transparent and
accountable manner during the selection and execution of such contracts as
required by Section V of the Act
Regulation 101 of the Act prohibits improper inducement of procuring entities,
approving authorities and tenderers in soliciting contracts either direct or
indirectly.
Regulation102 & 103 concerns conflict of interest. Members of the procuring
entities, tender boards and approving authorities shall declare their personal
interest which can influence decisions in any procuring contracts.

Miscellaneous Provisions
Liquidated damages Regulation 119 & 120 concerns pre-estimated rates of 0.10.2% of undelivered values of goods or materials and 0.1-0.15% of the contract
value for delayed works, up to a sum equivalent to the amount of the performance
guarantee.
Regulation 121 refers to continuous monitoring and evaluation of performance of
the contract by the procuring entity.
Goods delivered shall be inspected sampled and tested by the receiving entity and
procedures for inspection of goods shall be carried out by PE through inspecting
and counting the goods in order to ascertain whether they are correct and
complete in accordance with the agreement and the accounting officer shall
appoint a works inspection committee which shall inspect, supervise and see to it
that the work(s) is progressing in accordance with the approved programme of
works and order variations to the contracted work(s), if considered expedient in

accordance with the contract conditions, drawings and specifications as stipulated

under Regulations (126-127)

Schedules
1st Schedule Authorized limits for accounting officers and heads of departments
2nd Schedule methods of selection and limit of application.
-

ICB - No limit
NCB - goods 800m, -works 3000m

Restricted tendering
Goods 400 m
Works 800 m
Competitive quotations
Goods 80 m
Works 200 m
Single source
Goods No limit but must be justified
Works 800 m
3rd Schedule

Standard Procurement Processing time.

4th Schedule

National and Exclusive Preference.

TRAINEES ACTIVITIES
1. Read Part VII of the regulation under prohibitions and
explain the key areas of the prohibitions under the PPR of
2005
2. Read the relevant regulations under the miscellaneous
provision of the Act and explain what circumstances may
lead to the omission of regulation 126-127.

PROGRESS CHECK
1. With reference to the prohibitions listed in the PPR explain
how transparency and accountability during the selection
and execution of contract can be achieved.

SALIENT FEATURES OF PUBLIC PROCUREMENT (SELECTION

AND EMPLOYMENT OF CONSULTANTS) REGULATIONS
GOVT.NOTICE NO. 98

GENERAL OVERVIEW
COMPETITIVE SELECTION OF CONSULTANTS
A procuring entity wishing to commence competitive selection proceedings shall prepare
inviting consultants to submit expressions of interest for providing the services required,
and such a notice shall be submitted in good time before the planned issue of the request
for proposal to the Secretary of the tender board.
(i)

The notice for invitation of consultants shall be published in the Gazette and it shall
contain:
(a) The name and address of the procuring entity;
(b) A brief description of the services to be procured; and
(c) The deadline and place of the submission of the expressions of interests.

(ii)

The notice shall be published in a language customarily used in international trade

in a newspaper of wide national or international circulation.

(iii) The selection process shall include the following steps:(a)

(b)
(c)
(d)
(e)
(f)
(g)

Preparation of cost estimates and the budget;

Advertising of expressions of interests;
Preparation of the short list of consultants;
Preparation and issuance of the request for proposals;
Receipt of proposals;
Evaluation of technical proposals in particular consideration of quality;
Evaluation of financial proposals;

(h) Final evaluation of quality and cost; and

(i) Negotiations and award of the contract to the selected consultant firm.

SELECTION OF CONSULTANTS
A procuring entity when selecting consultants may use the following principal selection
methods:(a) Selection based on technical quality by evaluation of the firms competence, the staff
seconded to the assignment and the technical value or quality of the proposal, or
(b) Selection based on the technical quality with price consideration, or
(c) Selection based on the lowest price after establishing compatibility of technical
proposals and the service to be provided.

1.0 PRELIMINARY PROVISIONS:

-

Application Regulation 2.
Interpretation Regulation. 3

Consultancy Service means a service of an intellectual or advisory nature,

provided by a practitioner who is skilled and qualified in a particular field or
profession and includes, but not limited to engineering design or supervision
architecture, quantity surveying, accountancy, auditing, financial services,
procurement services, training and capacity building services, management
services, policy studies, and advice and assistance with institutional reforms.
Non- consultancy services means a service of a skilled or non-skilled nature,
which is not a consultancy service and includes but not limited to cleaning,
security, maintenance, and repair services.
Services means any object of procurement other than goods or works,
which involve the furnishing of labour, time or effort including the
delivery of reports, drawings or designs, or the hire or use of
vehicles, machinery or equipment for the purposes of providing
transport, or for carrying out work of any kind, with or without
the provision of drivers, operators or technicians;

2.0 GENERAL PROVISION

Eligibility of consultants (Regulation 11)


Consultants are permitted to compete for consultancy job without regard to
nationality except in case where a Procuring entity decides otherwise;

Foreign consultants shall be eligible if: (a): They are are registered or if elected are capable of being registered by the
relevant professional registration board; and
(b):They have entered into a voluntary joint venture or association with a local
consultant or if selected are capable of forming or entering into voluntary
joint venture or association with a local consultant.

A consultant from a foreign country may be excluded if:(a)

(b)
(c)

As a matter of law or official regulations, Tanzania prohibits commercial

relations with that country or
By compliance with a decision of the united Nation Security Council,
Tanzania prohibits any payments to persons or entities in that country.
It is proved beyond reasonable doubt that the consultant does not satisfy the
relevant regulations governing the provision of those services in Tanzania.

Natural persons companies or firm shall not be eligible for the

award of contracts where:-

(a)
(b)

They are bankrupt

Payments to them have been suspended in accordance with the judgment of a
court.
(c) Legal proceedings have been instituted against them involving an order
suspending payments and which may result in a declaration of bankruptcy.
(d) They have been found guilty of any offence with respect to their professional
conduct.
(e): They are guilty of serious misrepresentation with regard to information
required for participation in invitation to submit proposals.
(f): They are in breach of contract on another contract with a local government
authority.
(g): They have been declared ineligible due to corrupt or fraudulent practices .
Conflict of interest (Regulation 13)
Consultants are required to provide professional objective and impartial advice
and at all times to hold the clients interests paramount without any future
consideration for work and strictly avoid conflicts with other assignments or their
own corporate interests.

Record of selection proceedings (Regulation 20)

When procuring services a PE shall maintain a record of the selection proceeding
containing the following information:(a) A brief description of the service to be procured
(b) A record of the procedures used in the short listing of consultants,
(c) The names and addresses of consultants that were short listed and were
requested to submit proposals,
(d) The names and addresses of consultants that had submitted proposals
(e) Information relative to the qualifications of consultants that submitted
proposals
(f) The price, or the basis for determining the price and summary of the other
principal terms and condition of each proposal
(g) A summary of the evaluation and comparison of proposals.
(h) If all proposals were rejected pursuant to Regulations 14, a statement and
reasons for doing so should be given
(i) a statement must be made if selection was made other than through
competitive selection
Rejection of all Proposals (Regulation 21)
The rejection of a selection may take place in the following cases:

(a)
(b)

If no proposal is responsive to the request for proposals

(c)
(d)

if the economic and technical data of project have been altered

(e)

If no proposal satisfies the criteria for the a ward of the contract

If every proposal received exceeds the financial resources earmarked for the
contract
If there has been no competition.

Public notice of contract awards (Regulation 22).

A procuring entity shall within 28 days publish notice of procurement contract
awards in newspapers of wide circulation after obtaining all relevant approvals

Information for consultants through GPN (Regulation 24)

A procuring entity shall publish a General Procuring Notice in a newspaper of

wide circulation within Tanzania at least one month prior to any publication or
notification of a request for the recruitment of consultants.
-The General Procuring Notice shall describe and define the nature of the
consultancy services sought and the process to be followed for acquiring such
services and restrictions attached
The notice shall state details of the name, postal and telegraphic address, and
facsimile and telephone numbers of the procuring entity.

Planning (Regulation 25)

A procuring entity shall forecast its requirements for services as accurately as
possible with reference to service already in the annual work plan and included in
the annual estimates.
The forecast shall include an estimate of the nearest month of performance and
completion of services.
The cost of such requirements shall be estimated and compared with the likely
availability of voted or donor funds so that priority for procurement may be
determined in accordance with available funds.

Approval to proceed with procurement (Regulation 26)

Before the preparation of the request for proposals there must be a genuine
intention to proceed with the procurement.
Approval of the accounting officer must be obtained either by inclusion of the
procurement in a procurement programme or by request as an individual item of
procurement

Aggregating requirements (Regulation. 27)

Where several services that are to be procured require co-ordination or collective
responsibility of the service providers, a procuring entity shall group these
services and seek to employ a single consultant for the performance of those
services.

Prohibition of splitting contract (Regulation 28)

A procuring entity shall not divide its procurement into separate contracts:
(a) For the purposes of avoiding a more competitive method of selection, or
(b) So that the procurement may be authorized by a lower level of authority than
would be appropriate for the total requirements.

TRAINEE ACTIVITIES;
3.

4.

Read Section 3 of the PPA No. 23 of 2004 and suggest which of the
definitions is more likely to be frequently used by the procurement
specialist in performing his/her duties.
Section 2 and section 4 of the PPA No.23 of 2004 are both concerned
with the application of the Act. Discuss

PROGRESS CHECK;
3.

4.

All procurement falls under main categories of expenditure namely:

Works, Goods, Consultancy and Non-Consultancy Services. How would
you differentiate the individual category from each other.
Differentiate the term Pre-qualification from Post-qualification

3.0 METHODS FOR SELECTION

International competitive selection (Regulation 32)
This method of selection shall be used in all cases where:a) Payment may be made in all or in part in foreign currency
b) The estimated cost exceeds the threshold for such tenders shown in the 2 nd
schedule to these regulation
c) It is desired to attract expression of interest from the widest range of
consultants regardless of the estimated value of the services to be procured
National competitive selection (Regulation 33)

In using this method of procurement a procuring entity shall invite consultants

regardless of their nationality, and such method of selection may be used in case
where:a) Payment may be made wholly in Tanzania Shillings
b) The services can be obtained locally at price below the international market
c) The estimated cost of the service is small and does not exceed threshold for
International competitive selection.

Restricted selection (Regulation 38)

A procuring entity may restrict the issue of RFP to a limited number of specified
consultants when:a)
There is an urgent need for the services.
b)
Pre-qualification have been carried out
c)
Service required are within the competence of a limited number of
specialized consultants

Single source selection (Regulation 35)

A procuring entity may engage in single procurement directly with a supplier, contractor
or consultant for goods, works or services in accordance with the conditions prescribed in
the Regulations and shall include in the record a statement of the grounds for its decision
to justify the restriction to a single source.

PROGRESS CHECK:
3. Outline the Objectives of Selecting different consultants
4. Identify the Guidelines and Principles governing the Selecion and
Employment of Consultancy

4.0 SELECTION PROCEDURES AND CONDITIONS FOR

APPLICATION
A procuring entity when selecting consultants may use the following principal selection
methods:(d)
Selection based on technical quality by evaluation of the firms competence, the
staff seconded to the assignment and the technical value or quality of the proposal, or
(e)

Selection based on the technical quality with price consideration, or

(f)
Selection based on the lowest price after establishing compatibility of technical
proposals and the service to be provided.

There are four basic selection procedures (Regulation 36)

(a)
(b)
(c)
(d)

Based
Based
Based
Based

on
on
on
on

technical Quality
technical quality with price consideration
compatibility of technical proposal and least cost consideration
quality and fixed budget

Procedures for selection based on technical quality Regulation 37, stipulates that
the firm which has submitted the best technically acceptable proposal shall be the
first to be invited for negotiation with its financial proposal opened first. If
negotiation fails the second ranked firm is invited for negotiations.
Conditions for application are outlined under Regulation 38 selection based on
combined technical quality and price consideration (Regulation 38.).
Two envelopes are submitted for technical and financial proposals respectively.
Technical proposals and evaluated first and those passing the minimum technical
score shall have their financial proposals opened in Public.
Technical proposal weights are combined with financial proposal weights and the
highest ranked firm is invited for negotiation first.
Selection based on compatibility
consideration (Regulation 39).

of

technical

proposals

and

least

cost

The firms, which submitted the technical proposals with weights not less than
80%, shall have their financial proposal opened and the firm with the lowest offer
shall be invited for negations.
Selection under fixed budget (Regulation 40) is the procedure under which the
RFP shall indicate the available budget and request the consultants to submit
technical and financial proposals within the budget; The firm with highest rank in
technical proposal whose budget is within the limit shall be invited for
negotiations.
Selection based on consultants qualification (Regulation 41) is for very small
assignments for which the need for preparing and evaluating proposals is not
justified. Very small means minor value contracts. TOR is prepared and them
EOI whereby a shortlist is established and a firm with most appropriate
qualifications and references are selected. The firm small then be asked to submit
a combined technical and financial proposal and then be invited to negotiate the
contract.

TRAINEE ACTIVITIES;

Read Section 3 of the PPA No. 21 of 2004 and suggest which of

the definitions is more likely to be frequently used by the
procurement specialist in performing his/her duties.
Section 2 and section 4 of the PPA No.23 of 2004 are both
concerned with the application of the Act. Discuss

PROGRESS CHECK;

All procurement falls under main categories of expenditure

namely: Works, Goods, Consultancy and Non-Consultancy Services.
How would you differentiate the individual category from each
other.
Differentiate the term Pre-qualification from Post-qualification

5.0 BASIC PRINCIPLES FOR SELECTION:

Regulation 42 provides that proposals shall be invited from five to ten qualified
and experienced consultants:
Principal stages are as per Regulation 42 (2)
(a)

Preparation of TOR

(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)

Preparation of cost estimate and budget

Advertisement
Prepare short list
Determine selection process
Prepare and issue Request For Proposals
Invite proposals
Receive proposals
Evaluate technical proposals
Evaluate finance proposals
Final evaluation (combined technical & financial)
Negotiation and contract award
Signing of contract.

Terms of References (TOR) (Regulation. 43) shall provide:

(a)

Precise statement of the objectives and goals sought

(b)

Clear description of the nature and scope of the services required and their
context as well as the time interval in which they shall be provided.

(c)

Description of duties and responsibilities of the consultant

(d)
(e)

Description of duties and responsibilities of the procuring entity.

Information of counterpart staff and roles

(f)

Information on training if required

(g)

Summary of data & facilities to be provided by the PE.

PEs contributions (Regulation 44)

Cost estimates and budget (Regulation 48)
principal cost categories are: (a) Consultants staff in puts in Person months
(b) Other professional and support staff
(c) Direct costs such as travel, per-diems transport etc.
(d) Cost of physical inputs and materials such as equipment, vehicles, office
supplies
(e) Miscellaneous
(f) Other special services if any.

Advertisement (Regulation 49) must be made for EOIs and copy sent to PPRA for
values exceeding TSh 100m, and giving a minimum of 14 days to respond to the
EOI.
Preparation of short list (Regulation 50 requires that at least 3 firms must be from
Tanzania.
RFP regulation 52 must be in the standard document prepared by the PPRA.
Information to consultants (Regulation 54)
Receipt of proposals must be within 30-90 days (Regulation 56).
Evaluation of proposals shall be two stage; for the quality and then the cost
(Regulation.57)
Evaluation of technical proposal shall use merit point system (Regulation
58)
Evaluation committee shall comprise 5 or more specialists. Regulation 58
(2)
Relative merit points for individual criteria out of 100.
(a)
5%-15% for general experience, reputation and experience in previous
similar assignments
(b)
20% - 40% for under standing of the TOR, methodology and overall quality
of proposal
(c)
30% - 60% for qualification of key personnel
(d)
5% - 15 % for local firms participation
(e)
5% - 10% for local participation by national export
(f)
5% - 10% for knowledge of the country
Regulation (8) specifies the ratings of individual key staff to be based on the
following:
a) General qualification:
- General education & training
- Length of experience
- Positions held
- Time with the consulting firm
- Experience in developing countries etc.
b) Adequacy for the assignment
- education
- training and experience in the specific sector, field, subject, etc relevant
to the particular assignment.
c) Experience in regional countries knowledge of local
administration system & culture.

language

Regulation 58 stipulates that a proposal shall be rejected at this stage if it does

not respond to important aspects of TOR or if it fails to achieve minimum score
specified in the RFP. The evaluation report shall describe relative strengths and
weakness of the proposals with individual mark sheets.
-

Notification of results of technical evaluation (Regulation 59)

- Date of opening of financial proposals to be no sooner than two weeks after
notification date (Regulation 60)
- Evaluation financial proposal ( Regulation 62)
- Combined quality and cost evaluation (Regulation 63)
- Contract negotiations (Regulation 66) shall include discussions on:
(a) TOR
(b) Comments made by consultant on the scope of services
(c) Methodology
(d) Staffing and training
(e) PES inputs
(f) Special conditions of contract
(g) Consultants proposed work programme
Award by contract ( Regulation 67)
Role of tender board ( Regulation 68)

PROGRESS CHECK;
What are the basic considerations when preparing TOR?

6.0SELECTION OF PARTICULAR TYPES OF

CONSULTANTS
Selection
Selection
Selection
Selection

of
of
of
of

Public bodies agencies, as consultants (Regulation 70)

UN- (regulations 71)
NGOs (Regulations 72)
Procurement Agents (Regulation 73)

TRAINEE ACTIVITIES;
For more reference Read Part VI of GN 98 of 2005(Selection and
Employment of Consultant Regulation0.

7.0 SELECTION OF INDIVIDUAL CONSULTANTS

Regulation 77 stipulates that individual consultants shall be employed, on
assignments for which
(a)
(b)
(c)

Teams of personnel are not required

No additional outside Professional support is required
The experience and qualifications of the individuals are the paramount
requirement.

Regulation 78 specifies types of services recommended for individual consultants

as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)

Preparation of TOR
Opening and evaluation of tenders for works, goods and proposals.
Preparation of the brief where architectural services are to be procured
Revision and updating of feasibility studies
Preliminary or Project engineering design
Technical assistance for planning
Training
Assistance with project implementation
Preparation of project completion report
All other necessary assistance decided by the PE.

Selection Process of individual consultants ( Regulation 79)

(a)
Prepare TOR and contract
(b)
Advertisement

(c)
(d)
(e)
(f)
(g)

Prepare cost estimates

Prepare short list
Evaluate qualifications and experience
Negotiations
Signing contract

Regulation 79 (2) stipulated that for short-term assignments of a few weeks to one
or two months, the PE may after approval by the tender board recruit a qualified
individual consultant directly on the basis of information available.
Criteria for evaluation:
(a) General qualification and suitability 45%
(b) Experience in specific assignment 40%
(c) Language 10%
(d) Knowledge of the country 5%

TRAINEE ACTIVITIES;

For more reference Read Part VI of GN 98 of 2005(Selection and

Employment of Consultant Regulation0.

8.0 TYPES OF CONTRACT AND THEIR

CONDITIONS FOR USE
-

Regulation 80 lump sum contract

Regulation 81 Time based contracts
Regulation 82 Retainer and/or contingency fee
contract
Regulation 83 Percentage contract
Regulation
84
indefinite
delivery
(price
agreement)

TRAINEE ACTIVITIES;

For more reference Read Part VIII of GN 98 of 2005(Selection

and Employment of Consultant Regulation0.

9.0 DELEGATION OF PROCUREMENT

AUTHORITY
Regulation 86: Delegation and contract acting out procurement and disposal by
Tender functions.
Regulation 87: Delegation of the accounting Offer or chief
Executive
Officer
own functions.
Regulation 88: Delegation of the functions of Tender Board or Procurement
Management Unit.
Regulation 89: Contracting out to another Procuring entity.
Regulation 90: Contract out to Procurement Agent
Regulation 91: Disagreement between the Accounting Officer or Chief Executive
Officer and the Tender Board
Regulation 92: Disagreements between the Tender Board and the Procurement
Management Unit.
Regulation 93: Disagreement between the Procurement Management Unit and the
User Department.
PROGRESS CHECK;
What are the powers and functions which shall not be delegated by
AO/CEO?

10.0 IMPORTANT PROVISIONS IN THE IMPLEMENTATION OF

CONTRACT
.
- Regulation 94 modification of contracts
- Regulations 95 Emergency procurement
PROGRESS CHECK;
Why is it important to seek for approval to respective authority for
additional contract?

11.0 PROHIBITIONS

Disclosure of pecuniary interest (Regulation 100-102)

Tempering with submitted proposals Reg.103
PROGRESS CHECK;
Why is it important to observe ethical behavior in procurement?

12.0 REVIEW OF PROCUREMENT REVISIONS AND

DISPUTES SETTLEMENT
12.1. LEARNING OBJECTIVES

When you complete this chapter you should be able to: Identify different disputes settlement methods
Determine time limit of reviewing procurement decicions
Regulation
Regulation
Regulation
Regulation
Regulation
Regulation
Authority

104:
105:
106:
107:
108:
109:

Review of Procurement decision

Time limit on review
Submission of applications for review
Administrative Review by Accounting Officer
Administrative Review by the Authority
Review by the Public Procurement Appeals

PROGRESS CHECK;
Examine time limits for reviewing procurement decisions and appeal
13.0 MISCELANEOUS PROVISIONS
o Regulations111) Role of consultant
o Regulation (112) Action by the Tender Board
o Amendment of the regulations
Schedules 1-7
Limits of methods
ICS
NCS
Limited selection
Single source -

No limit
800 m
500m
300m

PROGRESS CHECK;
Study all the schedules and time limits of authorities for schedule 1-7

TOPIC-2

STRATEGIC PROCUREMENT PLANNING

Learning objectives
1.0 INTRODUCTION

Efficient and adequate provision of goods, works and services is essential to

activities of any organization. However, the procurement proceeding is expensive,
and to procure effectively and efficiently it must be planned and closely controlled.
Financial resources are scarce and it is quiet important that funds are not
depleted trough inefficient management and control mechanism or the inefficient
use of procurement resources available.
Development of an effective procurement plan is therefore very important. The
plans have to be designed to ensure that the expenditure of funds is properly
controlled to minimise waste. It is recommended that wherever possible
procurement schedules are produced to maximise the utilisation of procurement
funds, and that appropriate procurement methods be adopted to ensure that all
procurement ethics are maintained to high standard of reliability, and that the
procurement costs are kept to a minimum.
Alternative Definitions of Strategy
Strategy is defined as: a course of action, including the specification of resources
required, to achieve a specific objective.
1.1

A wider view emphasises the development of resources in the context of

competition from rival organisations, and stresses that a strategy must
embody a future plan of action.

1.2

Hofer and Schendel emphasise the impact of the environment: strategy is

the mediating force or match between the organisation and the
environment.
Andrews emphasises the links between plans, decisions and actions: the
corporate strategy is the pattern of decisions in a company that
determines and reveals its objectives, purpose or goals, and produces the
principal policies and plans for achieving those goals.

1.3

1.4 Mintzbergs five Ps strategy is:

a
a
a
a
a

plan
ploy
pattern (of consistent behaviour)
position
perspective.

The Different Levels of Strategy

Corporate strategy is not confined to any one area. It embraces all functions
within an organisation and covers a long time period.
There are three levels of strategy:
Corporate strategy
Business strategy
Functional strategy
Corporate strategy is concerned with the scope of the organisations
activities, its environment, its resources, and its stakeholders.
Business strategy is concerned with how each business attempts to achieve
its mission within its chosen area of activity.
Functional strategy relates to the separate organisational functions
(marketing, production, etc) and how they support the corporate and
business strategies.

SETTING PROCUREMENT OBJECTIVES

Should they be set at an ambitious level or realistic level?
Should they be long-term or concentrate on short-term profits?
One problem is that objectives may be used as post-rationalisations rather
than being genuinely set in advance.

Purposes of Procurement objectives

Targets/benchmark for evaluating tenders/quotations and for plans

Participation of managers is good for motivation the achievement of the
corporate goals.
Yardsticks for comparing with actual outcomes of contract performance
Harmonisation of the Procurement goals

The Planning Period

Factors to take into account when deciding how far ahead to plan objectives
The organisations time horizon
Strategic lead time
Resource stability
Estimated life of production or service facilities
Estimated life of products/services
Reliability of forecasts

CORPORATE PROCUREMENT PLANNING

Procurement planning is a systematic approach to clarifying procurement

objectives, making strategic decisions and checking progress towards the
objectives.
Strategic Procurement planning is the formulation, evaluation and selection
of strategies for the purpose of preparing a long-term plan of action to attain
the Procurement objectives.

Important features of Procurement corporate planning

Definition and clarification of the objectives of the organisations

Procurement as a whole
Systematic process, not a haphazard approach
Provides for the monitoring of Procurement plans to check progress

PROCUREMENT STRATEGY AND PLANNING

Procurement planning stands at the heart of our purchasing operation: without it

all of our efforts would be opportunistic and we almost certainly would overlook
important opportunities to contribute to our organizations profits and/or
objectives.

The Procurement Plan

To prepare a procurement plan you need to:

Identify needs and how to satisfy them
Plan within framework of the Governments regulations
Identify barriers and eliminate them early
DEVELOPMENT AND MANAGEMENT OF PROCUREMENT PLANS
Since most of materials can be forecasted, Procurement Specialists can
develop annual procurement plan for their key materials when it is practical
to do so. Included in this plan is the use of a variety of volume buying and
longer-term contracting techniques. Thus, Progressive Procurement
Management Units are Proactive; that is they make things happen. In this
case, they prepare a flexible game plan before specific resources needs
arise.
The Annual Operating Plan

A forecast of the scope and magnitude of key operating activities is the

starting point for development of the plan,

e.g. in the Public organisation this is the forecast work breakdown

structure, which usually consists of activities to implement to achieve the
objectives with an annual budget that is further, divided into quarterly and
monthly estimates by target type. The service level forecast is then
translated into an aggregate plan of action and Master Schedule, taking into
account works, goods and services to be procured in the year under review

BUYING PLAN OBJECTIVES

Purchasing and supply management objectives are developed for use at three
levels:
managerial activities,
functional operations and
detailed buying plan development
In developing a buying plan, objectives and target modes of operation should
be established within each of the broader functional objectives of the department.
Fundamentals of developing an effective buying plan are:
To develop effective suppliers.
To buy competitively.
To optimise material availability.
To buy quality effectively.
To coordinate effectively with users.

BUYING STRATEGY

From a department perspective, the purchasing and supply management team

must develop an overall strategy for handling its buying responsibilities in the
aggregate.
This strategy includes three elements:
Term contract buying this is suitable for materials that represent 60 to 80
percent of the firms annual purchasing expenditures.
Minimizing small orders small orders account for a disproportionately high
percentage of the purchase orders placed. Techniques such as, systems
contracting and blanket orders should be used to effectively reduce both
purchasing and clerical efforts and improve price and service and performance.
Managing the in-between materials these are materials that are purchased in
response to requisitions from inventory and operating departments. This is done
for many B and C materials that do not posses a stable enough demand to
warrant the use of contract buying, and the market is too unstable to warrant for
contract buying.
SOURCES OF AUTHORITY AND PROCEDURE
Purchasing department in non-profit making organizations generally operate
under authority granted to them by boards of directors or trustees that are
provided in by laws and policies. Whereas in government they operate under
authority granted by constitutional provisions, status and ordinances. Purchasing
by Governmental Organizations tends to be more regulated by legal requirements
and more open to public scrutiny

ROLES OF THE PROCUREMENT ENTITY

The roles, which distinguish the procurement entity in public sector from that of
industrial organisation, include those of:
A supplier of wide variety of goods and services to many departments and
agencies, which in turn, use those items to produce public service and
support internal operations
A decision maker, which must strike the balance between quality, total cost,
timeliness, control, accountability and politics.
A staff adviser, which assists management and line departments in
developing budgets, planning projects.
An implementer of socio-economic policy in the frontline of economic
development for local, small and the disadvantaged business.

THE PURCHASING CYCLE IN PUBLIC PROCUREMENT

This begins with the determination that a product or service is needed.

For goods, the cycle ends when the organization has consumed or disposed
of the item.
For services, it ends when the final payment has been made.
Planning and scheduling, supplier selection and contract management are
the three principal phases in cycle.

PURCHASING REQUISITIONING

Requisitioning for goods and services has been a major source of inefficiency and
delay due to lack of understanding between the purchasing department and the
operating departments of their respective needs. There may be hundreds of
requisitions dispersed throughout a large Organization that may cause difficultly
in processing the requisitions by the buying department. Additionally, most
requisitioners are technical people such as doctors, engineers, field experts, etc.
Who have very low tolerance for the competitive procurement process

THE

ANNUAL PROCUREMENT PLAN

After the preliminary annual work plan and budget has been developed for the
coming year, procurement plans are then developed for the same period. A
precise procurement plan should be structured for each major material or
category of materials.
There are three major steps in developing a precise procurement plan:

1. CARRYIING OUT PROCUREMENT SITUATION ANALYSIS

2. DEVELOPING STRATEGY OF PROCUREMENT
PLANNING
3. PREPARING DETAILED PROCUREMENT PLAN AND
SCHEDULES
PROCUREMENT SITUATION ANALYSIS
There are three steps in carrying out procurement situation analysis
Demand analysis
Market analysis
Supplier analysis

Demand analysis

As a general rule, the 80-20 phenomenon holds for most organizations, and for
obvious reasons, it is particularly important that plan for top 20% or 50% of the
materials be developed using careful detailed analyses. The 80% of the materials
that account for approximately 20% of the firms expenditures are grouped by
general classifications and a plan is made for each group of similar items.

Identify various works contracts under each component/department. In case

of public works the interpretations in the Public Procurement Regulations
should be applied.
Identify various consultancy services and non-consultants services in
accordance with the Public Procurement Regulations where necessary.

Market analysis

Since the buyers major initial concerns are availability and price, the
anticipated supply and demand factors, along with their expected stability,
must be reviewed

Supplier analysis

A general review of other potential suppliers, contractors and service providers

in additional to current suppliers are done to determine whether any
particularly attractive possibilities should subsequently be investigated more
closely

STRATEGY OF PROCUREMENT PLANNING

Option for packaging and Methods of Procurement in
public procurement
General strategy:
From the Procurement Regulations, obtain guidance from the sections of
Methods
of Procurement and Thresholds applicable for each category
of procurement
From procurement Regulations, obtain guidance from the Aggregate Totals
applicable for each category of procurement
Depend upon relevant regulations for choice of different methods of
procurement (for consultants, and for Goods and works)
Cost of individual procurement proposals is an important factor in the options,
ad
chosen strategy, for procurement
Nature of product to be procured an important factor
General approach is to develop the most economic and efficient procurement
strategy, including an estimation, in each case, whether this can be achieved
by:
(i)
separating contracts fro each component,
(ii) awarding a single responsibility contract for groups of contracts (or items), or
(iii) awarding a turnkey contract for the entire
project.

PACKAGING OPTIONS.
For Goods and Works
Sub-categorize requirements according to similarities of items to procure;
size of each package should be appropriate to obtain maximum possible
competition from qualified bidders
Group requirements to get larger size of contract to facilitate international
competitive bidding (ICB) and to get economies of scale
Create Lots within a single procurement proposal
(a) To reduce the number of procurement proposals, and
(b) To facilitate procurement of grouped items as a Lot

Create Lots that include items of similar nature likely to be supplied by

dealers (or manufacturers) specializing in such items
If large quantities of a single commodity are being procured, then packaging
should take into consideration market practices for that item, transportation
costs, ship unloading capabilities, storage capacities, inventory carrying
costs.
Decide, for each individual case, if it is better to include supply of
materials and supply of equipment within the scope of a Works Contract
Package separately the Good and Works required to be delivered and erected
at different dates during the project implementation period.

PACKAGING OPTIONS.
For Consultancy services

Sub-categorize according to nature of work

Do not make the scope of work too large or too small. Guide: Nature and
Size of average Consultancy firm active in the relevant field
For Consultants (where firms are to be hired), as far as possible, define
scope of work such that payments are made for measurable outputs rather
than a periodic payment (example: avoid monthly payments without relation
to outputs achieved). However, in the case of time-based contracts, this may
be more difficult to achieve, but at least a part of the payments could be
linked to measurable outputs to be delivered.
For Consultants (where individuals are to be hired), the normal payment
method could be periodic payments, but a part of the payment could also be
linked to specific outputs to be delivered.

OPTIONS
ON
METHODS
For Goods and Works

OF

PROCUREMENT

ICB the preferred option to consider first in each case

To facilitate development of local firms, ICB preferred to NCB or LIB (Restricted
Tendering) Because NCB and LIB procurement are not eligible for domestic
preference to local firms
For Smaller Works, preferable to go for lump-sum contracts (rather than Bill of
Quantity based ones), wherever feasible.

OPTIONS ON METHODS AND

SELECTION OF CONSULTANTS

PROCEDURES

FOR

For Consultancy, Short-list based on Expression of Interest advertisement

published in the Development Business and National newspapers is the
preferred option under the Quality and Cost Based Selection (QCBS)
Other selection procedures include Quality only, Consultants Qualifications
(CQ), Fixed cost and least cost for comparable services.
Individual Consultants preferred where institutional support not needed for the
assignment and number of consultants is small
Decide whether to go for Lump-sum contracts or Time-based ones - depends
upon nature of assignment. Primary criteria are the level of uncertainty
involved in the estimation of the requirements of inputs to complete the task.
Another factor is the need to provide the consultant with flexibility to complete
the task effectively even if it means that the original estimate of the time
required has to be changed for this purpose.
Depend upon Public Procurement Regulations as necessary

STEPS IN PREPARING DETAILED PROCUREMENT PLAN AND SCHEDULES

There are four steps in preparing annual procurement plan and schedules:
STEP 1. Group the requirements under the relevant procurement categories of
expenditure.
List of goods, works and services
STEP 2. Prepare List of Goods, works and Services (LOGWS). These should be in
the Procurement cost tables (Expenditure Schedule) by Category. The cost tables
are extracted from the Plan of Action (PoA) and the budget.
This is a summary of the total costs under each category of procurement. It gives
the totals of all procurement packages of the organization.
Lots and Package
The Lots may exist under certain procurement packages.
E.g. Construction works package may have lots such as:

Lot 1: Rehabilitation of office block

Lot 2: Construction of conference hall
Lot 3: construction of drainage system
Consultancy services for works may have:
Lot 1: Consultancy for rehabilitation works
Lot 2: Consultancy for construction work (office block)
Lot 3: Consultancy for design and supervision
Equipment Package may have:
Lot 1: Staff bus
Lot 2: Office equipment
Lot 3: Conference equipment
Training package may have:
Lot 1: IT training
Lot 2: Training for market research
Lot 3: Capacity building in procurement and contract management
Materials and Stationery Package may have:
Lot 1: Stationery
Lot 2: Cleaning materials
Lot 3: Office supplies
Lot 4: Staff uniforms
Operating costs
To be procured continuously without lots. The plan indicate expenditure per
quarter.
STEP NO. 3: Prepare Procurement Schedule
After the determination of procurement arrangements and preparation of the
LOGWS with appropriate packages and lots, the next step would be to prepare the
procurement schedules with target dates for each main task. To this end, the
Procurement Officer should bear in mind the lead time required for each
procurement cycle. This should be taken into consideration when preparing the
annual
procurementschedules.
STEP NO. 4: Prepare Detailed Procurement Implementation Plan (PIP
This is normally prepared in the form of a bar chart showing the list of
goods
and
services,
the
cost
estimate,
the
wks/months.
The PIP may further be divided into sub-tasks and detailed activities to
show specific responsibilities
MODE OF PROCUREMENT

This should be decided in accordance with the Public Procurement regulations in

case of public fund expenditure or procurement regulations of the respective firm.
However, the following basic principles should be taken into consideration
The amount of expenditure per contract
The need for agency
The need for economy
Efficiency and transparency requirement
Competition and sources of supply
Any other constraints of procurement.
TOPIC3: TECHNICAL SPECIFICATIONS AND TERMS OF REFERENCE

This topic covers:

1. Preparation of Technical Specifications and schedule of requirements for

goods
2. Preparation of Technical Specifications and BOQ for Works
3. Preparation of Technical Specifications and activity schedules for nonconsultants services
4. Preparation of Terms of Reference and activity schedule for Consultant
services

Learning Objectives:

When you have completed this topic you should be able to:

Define technical specifications and their main objectives.

Identify and apply the different considerations in the preparation of

technical specifications for goods, works and Non consultancy services.

Define contents of terms of reference and their main objectives.

3.1 PREPARATION OF TECHNICAL

SPECIFICATIONS AND SCHEDULE OF
REQUIREMENTS:
Definition of Technical Specifications

Specification is simply the definitive description of what is wanted. The object of

internal specifications is to ensure that the purchasing department knows just
what to buy; the object of external specifications is to ensure that the supplier
knows just what to supply. Specifications for external use need to be drawn even
more carefully and precisely than the specification for internal use, because inside
an organization there may exist established customs for interpreting drawings and
instructions and there will exists channels of communication which makes it
relatively simple (in case of doubt) to ask for clarification from those responsible for
issuing the specification. But an external supplier who deals with many different
customers tend to learn heavily on what is actually down in writing. Every
purchase order must communicate the requirement to the seller.
The purpose of the Technical Specifications is to define the technical
characteristics of the Goods and Related Services required by the Purchaser. The
Technical Specification, as part of the Schedule of Supply, constitutes a Contract
document and are, therefore, a part of the Contract. The Purchaser must prepare
the Technical Specification and include them as a part of the Bidding Documents,
as applicable to each Contract.

o Is the means that play important role in the search for the quality
and the right value
o Assist in resolving design conflicts between departments and
therefore this is the heart of resulting purchase order or contract.
o Is the method of describing requirements
o It is important to have written description of quality of goods and
their impact.

Objectives:

The main objectives of describing materials to be procured are:

Communicate to the buyer what to buy.

Communicate to prospective suppliers what is required.
Serve as the heart of the resulting procurement contract.
Establish the standards against which ingredients, lists and
quality checks are made.

In preparing the Technical Specification, the Purchaser should take into

account the following:

Well-prepared Technical Specification will facilitate the examination, evaluation,

and comparison of the bids by the Purchaser, as the Technical Specification
constitute the benchmarks against which the Purchaser will verify the technical
responsiveness of bids and subsequently evaluate the bids.

The Technical Specifications should require that all goods and materials to
be incorporated in the goods be new, unused, and of the most recent or
current models, and that they incorporate all recent improvements in design
and materials, unless provided for otherwise in the contract. Cautions in
Purchasing Used Equipment .It is difficult to determine the true condition of
a used machine and to estimate the type and length of service it will
provide. For this reason it is wise to have one buyer specialized in used
equipment. Moreover, it is virtually essential to enlist the cooperation of an
experienced production or maintenance specialist in appraising used
equipment. It is always sound practice to check the reputation of a used
equipment supplier and to shop around, inspecting several machines before
making a purchase. Whenever possible, a machine should be observed
under power through a complete operating cycle. Finally, a prospective
buyer should determine the age of a machine. If not available in the seller's
records, the age of a machine can be traced through the manufacturer
simply by serial number identification. The combined knowledge of age and
usage history is a key guide in predicting the future performance of a used
machine.
The Technical Specification should make use of best practices. Samples of
specifications from successful similar procurements in the same country or
sector may provide a sound basis for drafting the Technical Specification.
The use of metric units should be encouraged.

THE GENERAL RULE:

Standardizing
technical
specifications
under
General
Technical
Specifications may be advantageous, depending on the complexity of the
goods and the repetitiveness of the type of procurement. Technical
Specifications should be broad enough to avoid restrictions on
workmanship, materials, and equipment commonly involved in
manufacturing similar kinds of goods, even if these may not necessarily
apply to a particular procurement. Particular technical requirements for a
particular procurement would be in each case specified through deletions or
addenda to the Technical Specifications.

The specification of standards for equipment, materials, and workmanship

shall not be restrictive. Recognized international standards should be
specified as much as possible. Reference to brand names, catalogue
numbers, or other details that limit any materials or items to a specific
manufacturer should be avoided as far as possible. Where unavoidable,
such item description should always be followed by the words "or
substantially equivalent." When other particular standards or codes of
practice are referred to in the TS, whether from the Buyer's or from other
eligible countries, a statement should follow other authoritative standards
that ensure at least a substantially equal quality, then the standards
mentioned in the Technical Specification will also be acceptable.
Reference to brand names and catalogue numbers should be avoided as far
as possible; where unavoidable the words "or at least equivalent" shall
always follow such references.
Technical Specifications shall be fully descriptive of the requirements in
respect of, but not limited to, the following:

Standards of materials and workmanship required for the production

and manufacturing of the Goods.
Detailed tests required (type and number).
Other additional work and/or Related Services required achieving full
delivery completion.
Detailed activities to be performed by the Supplier, and participation of
the Purchaser thereon.
List of detailed functional guarantees covered by the Warranty and the
specification of the liquidated damages to be applied in the event that
such guarantees are not met.

The TS shall specify all essential technical and performance characteristics

and requirements, including guaranteed or acceptable maximum or minimum
values, as appropriate. Whenever necessary, the Purchaser shall include an
additional ad-hoc bidding form (to be an Attachment to the Bid Submission
Sheet), where the Bidder shall provide detailed information on such technical
performance characteristics in respect to the corresponding acceptable or
guaranteed values.
When the Purchaser requests that the Bidder provides in its bid a part or all
of the Technical Specifications, technical schedules, or other technical
information, the Purchaser shall specify in detail the nature and extent of

the required information and the manner in which it has to be presented by

the Bidder in its bid.
The heart of the procurement is formed by purchase description. A
purchase order or contract will be performed to the satisfaction of the
buying organization only when the purchase description is selected or
written, specifying the quality requirements properly. It is the only form of
communication where the need for greater clarity and precision is
expressed.
In order to purchase the right quality the three considerations should be in
mind.
The first consideration should be to decide and state clearly what exactly it
is required; what are the right goods, in the sense of those considered most
suitable for intended application. We must first get the specification which
the supplier has to comply with.
The second consideration must therefore be to ensure that the chosen
supplier is informed of specification and has the capability to comply with it.
Third and finally is to check the reliability of the goods and suppliers output, sort
goods from bad and initiate remedial. In this we are interested with the goods,
which will have trouble free performance during the expected life cycle of them.

What do we mean by the term quality?

There is a root sense (from the Latin qualis, of what kind) in which the
word refers to the kind of thing we want. Things of different kinds differ in
many ways, some quality characteristics are: chemical analysis, physical
dimensions, tensile strength, hardness, surface finish, colour, conductivity,
elasticity and many more.

Trainee Activity:

Discuss different considerations involved in the preparation of Technical

Specifications for goods.

SPECIFICATIONS AND STANDARDS

Definition of Standard:

Any specification intended for repeated use becomes a standard. The word
standard refer to anything we use as a measure; we speak for instance of a
standard of length, a standard of living, a standard of value. A builder who builds
every house to a different specification has not standardized his main product; but
he may well have standardized some part of it, for instance the kitchen. If he
supplies a standard kitchen in each house, this is to say that the kitchen in each
house is built to the same specification. The word also implies the notion of
measuring or comparison; if one of the kitchens does not comply with the
specification, we would say it is not up to standard. The organized process of
formulating standards and getting everyone concerned to adopt them is called
standardization.
DESIGN ANALYSIS
When designing technical specification the application of Design analysis is
important.
Value analysis and value engineering are jointly used.
Value
engineering application, focuses on new specifications developed at the engineering
design stage. On the other hand, in most analysis applications, management
attempts to coordinate the talent of personnel in engineering, operations and
purchasing in conducting a meticulocis investigation, which usually leads to
improvement of existing rather than new specifications.
Design analysis entails a methodical step-by-step study of all phases of the design
of a given item in relation to the function it performs. The philosophy underlying
this approach is not concerned with appraisal of any given part per se. Rather, the
appraisal focuses on the function, which the part, or the larger assembly
containing the part, performs. This approach is designed to lead the analyst away
from a traditional perspective which views a part as having certain accepted
characteristics and configurations. Instead, it encourages the analyst to adopt a
broader point of view and to consider whether the part performs the required
function both as effectively and as efficiently as possible. Both quality and cost are
objects of the analysis.
One technique many firms use in analyzing component parts of a subassembly is
to dismantle, or explode the unit and then mount each part adjacent to its
mating part on a pegboard or a table. The idea is to demonstrate visually the
functional relationships of the various parts. Each component can thus be studied
as it relates to the performance of the complete unit, rather than as an isolated
element. Analysis of each component in this fashion attempts to answer four
specific questions:
1. Can any part be eliminated without impairing the operation of the complete
unit?
2. Can the design of the part be simplified to reduce its basic cost?

3. Can the design of the part be changed to permit the use of simplified and less
costly production methods?
4. Can less expensive but equally satisfactory materials be used in the part?
When viewed in this manner - from the standpoint of composite operation and
cost-possibilities for making component design simplifications are frequently more
apparent than is possible under the original design conditions. This in no way
reflects unfavorably on the work done by the design engineer. The discovery of
such potential improvements is simply the product of an analysis with a
substantially broader orientation than that possessed by the original designer. An
organized value analysis study usually utilizes a number of individuals with
different types of background, experience, and skill impossible to combine in the
person of a single designer. Resulting design changes often permit the substitution
of standardized production operations for more expensive operations required
special setup work. In some cases, considering the volume of parts to be produced,
an entirely different material or production process turns out to be more efficient
than the one originally specified.

VALUE ANALYSIS APPROACHES:

The specific manner in which a value analyst approaches the problem of design
analysis is a highly creative matter, which differs from one analyst to another. Each
possesses unique analytical abilities and develops unique pattern of thought. Some
companies, however, require analyst to follow several general approaches, which are
designed to stimulate and organize their efforts. Those commonly used are (1) the
value analysis checklist, (2) the functional cost approach, (3) the use of brainstorming,
and (4) the use of suppliers.

TRAINEE ACTIVITY:

Discuss main issues involved in specifications and standards for goods

and works.

CHAPTER 3
TITLE: HOW BALANCED SPECIFICATIONS ARE
DEVELOPED
LEARNING UNIT 1: PREPARATION OF TECHNICAL
SPECIFICATIONS AND SCHEDULES OF REQUIREMENTS FOR
GOODS
3.l

General Outline

3.1.1

Learning Objectives:
When you have completed this chapter you should be able to:

Discuss importance of preparing balanced specifications for goods.

Define and apply all the approaches for preparation of balanced technical
specifications.

3.1.2

Chapter Three Contents:

3.1.3

General Outline.
Introduction.
Approaches to Develop Balanced Specifications.
Trainee Activity.
Progress Check.

Tools and Aids you will Need:

3.1.4

Conducive learning environment.

Guidance where necessary from a facilitator/trainer.

Other Related Reference Materials:

Learning from Case Studies by G. Easton (Prentice/Hall), IPS.

DEVELOPING BALANCED SPECIFICATIONS

INTRODUCTION:
Specifications are the most detailed method of describing requirements. Various
types of design specifications are the detailed descriptions of materials, parts and
components to be used in making a product. They are the description, which tells
the seller exactly what the buyer wants to purchase, they define the technical
characteristics of the goods and related services needed for a particular application
by purchaser.
Too often design engineers and production engineers resolve between themselves all
four of the major considerations of specifications preparation without consulting
purchasing or other concerned departments.
This is regrettable because
professional engineers seldom have the commercial experience and market
information required to resolve the procurement considerations of specifications.
In their attempts to do so, they frequently develop stringent specifications that do
not provide sufficient latitude to allow effective competition.
When specification conflicts arise, final authority for the decision should rest with
the department having responsibility for the products performance. This is
usually the design-engineering department. However this is not justifiable reason
for engineering unnecessary to subordinate the design considerations of
manufacturing, procurement, quality and marketing. From a company viewpoint,
the right specifications are those that blend the requirements of all departments.
Only such specifications can satisfy the goals of top management i.e., increased
sales, decreased costs, and the added corporate security, which comes with an
increasingly strong competitive position.

APPROACHES
SPECIFICATIONS:

TO

DEVELOP

BALANCED

To develop specifications that properly balance product quality characteristics and

product cost, management must coordinate the firms technical and business
skills. Four approaches can be used.

(a) Early Purchasing Involvement

More and more progressive firms involve purchasing and potential

suppliers during the early stages of new product development. Such
early involvement optimizes the development of specifications since
the technical and commercial issues are addressed at as point where
there is maximum objectivity and flexibility. Prospective suppliers are
provided rough function fit specifications.
As the items
configuration takes form, more definitive specifications evolve.
Progressive firms find that this approach is an element in their quest
for quality at realistic costs.

(b)

The Formal Committee Approach

This approach recognizes that a good specification is a compromise of

basic objectives. A specifications review committee is established,
with representation (as appropriate) from design engineering,
production engineering, purchasing, marketing, operations, quality
and standards. When a new product design is proposed, all members
of committee receive copies of all drawings, bill of materials and
specifications. No design becomes final until it is approved by this
committee.

(c)

The Informal Approach

(d)

The Purchasing Coordinator Approach

This method emphasis the concept of buyer responsibility to

challenge materials requests. At the same time top management
urges designers to request advice from buyers and work with them on
all items that may involve commercial consideration. Emphasis at all
times is placed on person-to-person communication and cooperation
between individual buyers and designers.

One or more positions are created in the purchasing department for

individuals frequently called materials engineers, to serve in liaison
capacity with the design department. Typically the materials engineer
spends most of his/her time in the engineering department reviewing
design work as it comes of the drawing boards. The materials
engineers searches for potential purchasing problems in an attempt to
forestall them before they become serious.

TRAINEE ACTIVITY:

Discuss importance of preparing balanced specifications for goods.

CHAPTER 4
TITLE:
LEARNING UNIT 1: PREPARATION OF TECHNICAL
SPECIFICATIONS AND SCHEDULES OF REQUIREMENTS FOR
GOODS
4.l

General Outline

4.1.1

Learning Objectives:
When you have completed this chapter you should be able to:

4.1.2

Prepare specifications.

Develop requirements for a specification.

Chapter Four Content:

4.1.3

General Outline.
Needs in writing Specifications
Examples of Writing Specifications.
Trainee Activity.
Progress Check.

Tools and Aids you will need:

4.1.4

Conducive learning environment.

Guidance where necessary from a facilitator/trainer.

Other Related Reference Materials:

Learning from Case Studies by G. Easton (Prentice/Hall), IPS.

4.2

INTRODUCTION

WRITING SPECIFICATIONS
After a design of a product is determined, the next step is to translate the
individual part and material specifications into written form. The need for
clarity and precision of expression is important in all business
communication emanating from purchase contracts.
Optimal performance in all departments is contingent on good
specifications. To meet the needs of all departments, a specification must
satisfy the following requirements:
(i)

Design and marketing requirements for functional characteristics,

chemical properties, dimensions appearance, etc.

(ii)

Manufacturing requirements for workability of materials.

(iii)

Inspections requirements to test materials for compliance with the

specifications.

(iv)

Stores needs to receive, store, and issue the materials economically.

(v)

Production controls and purchasing ability to substitute materials

when such materials become necessary.

(vi)

Production controls
economically.

(vii)

Purchasing ability to procure material without difficulty and with

adequate competition from reliable sources of supply.

requirement

to

schedule

the

material

(viii) The total firms requirement to use commercial and industrial

standard materials whenever possible and to establish company
standards in all other cases where non-standard material is used
repetitively.
(ix)

The total firms requirements of suitable quality at the lowest overall

cost.

EXAMPLE OF WRITING SPECIFICATIONS

(a) Design and marketing requirements (for functional characteristics,
chemical properties, dimensions, appearance etc.) Example of Tomato
Paste (Hot Break): Tomato Paste shall be the product resulting from
concentration of the liquid obtained from clean, sound, well-ripened
tomatoes of red varieties. Free from skin, seed particles, black specks,
foreign material, added salt or colouring and harmful contaminants.

(b) Manufacturing requirements for the workability of materials.

The Tomato paste must be processed using 0.60 finishing screens.
(c) Inspection requirements to test materials for compliance with the
specification:
General requirements
Organoleptic requirements
Analytical requirements
Microbiological requirements
Manufacturing and packaging requirements
(d) Stores needs to receive, store and issue:
Cans -in accordance with can specification attached
Filled weights-1 kg gross for Net
Cases-in accordance with case specification attached
(e) Production controls and purchasings ability to substitute materials
when such material becomes necessary
Free from scorched, bitter, green tomato flavours or
objectionable flavours or

objectionable odours of any kind.

(f) Production controls requirement to schedule the material

economically,
i.e. statement of ordering cans and cases which will conform to the
production schedule.
(g) Purchasing ability to procure material without difficulty and with
adequate competition from reliable sources of supply.
The descriptions here are clean and mercies as explained above.
(h) The total firms requirement to use commercial and industrial
standards and materials whenever possible and to establish
company standard in all other cases where nonstandard material is
used.
Colour: Gardner colour difference at 12% total solids by
reflactometer: L25 1, 25 +, b + less than a.
Flavour and Aroma-Free from scorched, bitter, green tomato flavours
or objectionable flavours or objectionable odours of any kind.
Since this production will repeat to be produced then using the same
specifications becomes the measure of the company and so become standard.
This will enable the firm to produce the batch of the same quality and hence
reduced costs of production.

Table 1: COMMODITY SPECIFICATION FOR TOMATO PASTE

STANDARD COMMODITY SPECIFICATION
TITLE: TOMATO PASTE (HOT BREAK)
COMMODITY CODE: 0114
DETAILS
1. GENERAL REQUIREMENTS

No.0114
Date Issued: 15.08.02
Replaces
---------

Tomato Paste shall be the product resulting from concentration of the liquid
obtained from clean, sound, well ripened tomatoes of red varieties. Free from
skin, seed particles, black specks, foreign material, added salt or colouring
and harmful contaminants.

2. ORGANOLEPTIC REQUIREMENTS
a. Flavour and Aroma
Free from scorched, bitter, green tomato flavours or
objectionable flavours or objectionable odours of any kind.
b. Colour
Gardner Colour difference meter targets at 12 % total solids by
refractometer: L25 1, a 25 +, b + less than a.

3. ANALYTICAL REQUIREMENTS (on sample(s) as designated by an

approved
random sampling method).
a. Consistency
Consistency below 10.0 cms measured by Bostwick
consistometer at 12 % total solids by refractometer 250 C for
10 secs.
b. Copper (as Cu)
Not more than 50 p.p.m. calculated on dry residue.
c. Lead (as Pb)
Not more than 5 p.p.m. on the concentrate.
4. MICROBIOLOGICAL REQUIREMENTS
a. Mould Count
Not exceeding 50% positive fields as determined by the Howard
Mould
Count Method
b. Insects fragments
Free from insect eggs, hair or fragments.
5. MANUFACTURING AND PACKAGING REQUIREMENTS
a. Screen Size
The tomato paste shall be processed using 0.60 m.m. finishing
screens.
b. Cans
In accordance with can specification attached.
c. Filled weights
1 kg gross for Net
d. Cases
In accordance with case specification attached.

Example of Technical Specification for a 4WD VEHICLE

Model Engine 4100CC six cylinder inline Transmission 5 speed manual
right hand drive, Tyre 23/85/R16, seating capacity 6 persons Fuel Tank
Capacity 90LTS, Wheel Base 2800 mm, Engine Power 120kw/4000NM/rpm.
Stealing: Integral power sterling.
In depended Suspension, Coil springs and telescopic shock absorbers,
Torsion bar type stabilizer, Electric winch, 210mm Road clearance Roof
Rack, Disc Wheel 6.5, Spare Wheel Carrier with Cover, Stealing Column tilt,

double fuel filter, Rear differential Lock, power door lock/power windows
Anti-Theft immobiliser Security system, Electrical winch.

TRAINEE ACTIVITY
With example describe the process of writing specifications .

PROCUREMENT IMPORTANCE OF SPECIFICATION

One of the basic requirements of good specification is to satisfy the procurement
consideration of markets, materials availability, and price. The specification must
also be clear enough for both buyer and seller to be absolutely certain they are
considering the same thing. Clarity in written expression is not always easy to
achieve. A certain TV company recently lost 65,000,000/= on a closed circuit
television installation because its written specification mislead the supplier into
believing that a more expensive installation than the buyer really wanted was
specified.
In addition to achieving clarity, care must be exercised to ensure that specifications
are not written around a specific product; so as to limit competition.

There are sometime where specifications given land to a sole supplier

because of specifying the design like asking for a particular truck with an
engine of 10 cylinders which is being produced by one manufacturer. This
completely restricts the competition. Had the buyer specified what was
wanted in terms of performance characteristics, such as speed and
acceleration, competition would have been plentiful. Specification writing
should also be economical for example in producing 1000 drive pulleys for
use in vacuum sweeper motors, the first decision would be to determine
whether the pulley would be manufactured satisfactorily by a casting
process. Although this method dictates the use of looser tolerances, in large
volume its unit cost is considerable lower than that of a second alternative,

machining the pulleys from bar stock. The second decision would be to
select an industrial standard for the part, regardless of the method of
manufacture used. This decision leads directly to a consideration of
standardization.

PRINCIPAL TYPES OF DETAILED SPECIFICATION

-

Commercial Standards
Design specification (generally accompanied by engineering drawing)
Material and method-of-manufacture specification

5.3.1 Commercial Standard:

Due to recurring needs of the same material have led industry and
government to develop commercial standards for these materials; A
commercial standard is nothing more than a complete description of
the item standardized.
The descriptions include the quality of materials and workmanship
that should be used in manufacturing the item, along with
dimension, chemical composition and so on. It includes a method for
testing both materials and workmanship. Commercial standards are
a cornerstone of the mass production system; therefore they are
important to efficient purchasing and standard of living.
All nuts, bolts, pipes, and electrical items that are made to standard
specification can be expected to fit all standard applications regardless that
manufactured the item. Materials ordered by standardized specifications
leave no doubt on the part of either the buyer or the seller as to what is
required. Standard specification has been prepared for many goods in
commercial trade. Copies of standard specification can be obtained from a
number of government trade associations and testing association sources.
The easiest way to get a particular specification is to ask a manufacturer to
provide a copy of the standard specification of the material or produce that
it recommends for the buyers intended need. Commercial standard items
should be used whenever possible.
They contribute greatly to the
simplification of design purchasing procedures, inventory management and
cost reduction. Purchasing by commercial standards in somewhat similar
to purchasing by brand name, in both methods the descriptions of what is
wanted can be set forth accurately and easily. Commercial standards are

also applicable to raw materials fabricated materials, individual parts and

components and subassemblies.
5.3.2 Design Specification
This is normally used for items, which are not covered, by standard
specifications or brands.
It broadens buyers field of competition by
preparing their own specifications. By so doing you allow the competition
for the manufacturers who are capable of making the item described in
buyers specifications knows as Potential Suppliers.
Describing requirements with chemical or electronic specifications or with
physical specifications and accompanying engineering drawings entails some
risks. For example, if a buyer details for a paint manufacturer the exact
chemical specifications of the paint desired, the buyer assumes a complete
responsibility for the paints performance. Should the paint fade in the first
months, it is the buyers responsibility.
The costs of inspection to assure compliance can also be high, since the very
nature of materials purchased under this method of description requires
special inspection. Engineering drawings are the most accurate method of
describing what is wanted where precise shapes, dimensions and spatial
relationships are required.

5.3.3 Material and Method-of Manufacture Specifications:

In this method prospective suppliers are instructed precisely as to specific
materials to be used and how they are to be processed. The buyer assumes
full responsibility for product performance. Further the buyer should have
the latest knowledge concerning materials, techniques and manufacturing
for the item being purchased and the buyer see no reason to pay another
company for this knowledge.
The armed services and the department of energy use this method
extensively. A modified version of these specifications is used by industry.
Large buyers of paint, for example, frequently request manufacturers of
standard paint to add or delete certain chemicals when producing paint for
them. Large steel buyers make the same type of request when purchasing
special steels. Chemical and drug buyers for reasons of health and safety
sometimes approach full use of materials and method-of-manufacture
techniques in describing quality.
These specifications are used most
appropriately in those situations where technically sophisticated buyers in
large companies deal with small suppliers having limited research and
development staffs.

Specifications of this type are expensive to prepare, inspection generally is

very expensive.

OTHER PROCUREMENT DESCRIPTIONS

Performance Specification:
In theory this is the perfect method of describing a requirement. Instead of
describing the item in terms of its design characteristics, performance
specifications describe in words and quantitatively where possible what the items
is required to do. The potential suppliers are told only the performance that is
required. Though the performance is specified in detail suppliers are not told how
the product should be manufactured or what materials should be used in its
manufacture.
A performance specification for wire may require it to withstand a given
temperature, have a designated resistance to abrasion, and have as given
conductivity capability. No mention is made in the specifications of materials to be
used or how the wire is to be manufactured or insulated to give it the required
characteristics. Manufacturers are free to make these choices as they see fit.
Industries use performance specifications extensively to buy expensive complicated
machines and machine tools. To reduce and control the expense associated with
this approach to describing requirements, descriptions should be written as
explicitly as possible. Also the product being purchased should be sectionalized
into the greatest practical number of district components with potential sellers
required to quote on each component.

This method has two main advantages:

(i)
(ii)

Ease of preparing specifications, and

Assurance of obtaining the precise performance desire.

For complex products, it is by far the easiest type of specification to write. It

assures performance and, if is competent, it assures inclusion of all applicable new
developments. Potential problems with performance specifications includes in
appropriate use, poor supplier selection and pricing.
Because performance
specifications can be easy to prepare, indifferent buyers sometimes apply them in
appropriately. Such buyers use performance specifications to avoid preparing more
suitable descriptions that may lead to less costly purchases.

When using performance specifications, buyers must solicit competition

among a number of capable sellers. Capable suppliers ensure quality,
competition ensure reasonable prices.
Function and Fit Specification:
These are the variation for performance specifications and are used in early
supplier involvement programs.
With this approach the design team
describes the function to be performed and the way the item is to fit into the
larger system (e.g automobile, computer, etc) together with several design
objectives (cost, weight, reliability). This method (ESI) is now becoming very
popular, and with careful pre-qualification of suppliers, there are no
significant disadvantages with this approach.
Brand and Trade Names
Branding or differentiating a product is generally done to develop a
recognized reputation and thus gain repeat sales, protect the product
against substitutes, maintain price stability and simply sales promotion.
Brand name products are the simplest to describe on a purchase order.
They save purchasing time and reduce purchasing expenses.
It is often said that when a buyer purchases by brand name he/she
eliminates competition by limiting the purchase to a single source of supply.
If a buyer had to limit the purchases to a single brand from a single source,
this would represent a major of purchasing by brand names. However, in
fact, there are very few situations in which only one brand is acceptable for
a given purpose! A profitable market for any item in competitive enterprise
economy attracts other manufacturers to make the item. Competition is
therefore available by brands just as it is by other types of quality
descriptions. In addition the same branded Product may be available from
different wholesalers or jobbers who are willing to compete on price and
service to get a buyers order.
Specifying brand X or equivalent, but what does or equivalent mean usually
attains competition among brands?
For small quantities, brand buying is excellent.

Samples
When samples are used, the buyer does not have to look for an equal brand,
pick a standard specification, or describe the performance wanted. Samples

specification is normally called the Lazy persons method of describing

requirements. This method should be used only if other methods of
description are not feasible, e.g. in colour, texture, printing, and grading.
Samples are neither the cheapest nor the most satisfactory method of purchase.
Usually the money spent on inspection costs substantially exceeds the money
saved in description costs. It is usually difficult to determine inspection that the
item delivered is, in fact, the same as the simple. Quality of materials and quality
of workmanship are generally exceedingly difficult to determine from routine
inspection.

Market grades
Grading is a method of determining the quality of commodities. A grade is
determining by comparing a specific commodity with standards previously
agreed on, e.g. on wheat, hides, cotton, etc. In buying graded commodities,
buyer often use personal inspection as part of their buying techniques. This
is done in the same way one selects a shoe in a shop.
Qualified Products
This method is applied when it is necessary to determine in advance of
purchase whether a product can meet specifications. For example:
(a)
when it takes too long to conduct the normal post purchase
inspection and test to ensure quality compliance.
(b)
When special tests are involved, and
(c)
When purchase involves safety equipment, life survival equipment,
research equipment, etc.

Combination of methods
A combination of more than one method may be used when a single method of
description cannot adequately describe an item, e.g. something like space vehicle.
Performance specifications could describe overall characteristics of the vehicle, i.e.
its ability to withstand certain temperatures; physical specification describes the
vehicles configuration, commercial standards or brand names used to describe
selected pieces of electrical hardware for its support systems.

TRAINEE ACTIVITY

Explain the advantages of performance specification.

STANDARDISATION AND VARIETY REDUCTION

The use of standards permits a firm to purchase fewer terms, in larger
quantities and at lower prices. Thus fewer items are processed and stocked.
This lowers purchasing, receiving, inspection and payment costs. The use of
standardized approved items drastically reduces the number of defects in
incoming materials and increases the quality which enters in production
line due to the fact that the specifications sets for the past purchases are
now repeatedly used as standard for the incoming goods. By using proper
specified standards the organization reduces the rate of deterioration and
defects items, as the items purchased should have life span period, which is
within the specifications and will be turned according to the stock turnover,
hence reduces costs. Consequently, the purchase of standardized materials
saves money four ways: lower prices, lower processing costs, lower inventory
caring costs and few quality problems.
THE USE OF NATIONAL AND INTERNATIONAL STANDARDS
There were basically two kinds of material standards: which were:

(1)
(2)

Industry or National Standards, and

Company Standard.

But with the increase use of International Standard now we have three kinds of
materials standards.

If the designer or user cannot adopt a national standard for his/her purpose
the second choice is to use a company standard. But if the required part is
truly a non-repetitive special then use of standard is impossible. The
increase of international trade and by eliminating technical trade barriers
the need for international standards is fundamental.
The standards specifications, which are the specification for the items that
have been standardized, can be obtained from the organizations that have
developed them, such as Tanzania Bureau of Standards and many of
commercial trade associations, and testing associations. Some of the
standards used are adopted from international organizational standards like
BS ie, British Standards, American Bureau of Standards which share the
common standards like bolts and nuts sizes, electrical equipments and
spare parts. In 1979 the International Standard Code Multilateral Trade
Agreements was signed which involved thirty signatory nations including
United States, The European Economic Community, The Nordic countries,
Canada, New Zealand and Japan who current use the code.
The mechanism used to create international standards was relatively easy.
However, actually getting International Standards adopted will be a long and
difficult task. Consider just a few of existing difficulties. Many countries
includes United States are in the early stages of implementing metric
standards. Although metric standards are use din both Europe and Japan,
product dimension have not been standardized so parts from these
countries are not yet interchangeable.
Standardizing electric power
characteristics in a very difficult problem; for example voltage requirements
for electrical equipment vary significantly between the United States and
Europe. In short countries around the world currently have widely different
standards for virtually everything from safety to ecology.
Nevertheless, simply because there is no quick or easy way to get
international standards adopted does not mean that progress will not be
made.
The economic states associated with the development of
international standards are so high in terms of increased international trade
and prosperity that progress, albeit slow, is inevitable. Because private
organizations, national and regional governments and other international
organizations are all involved in the adoption process, political infighting is
inescapable. This of itself precludes fast action.

VALUE ANALYSIS AND VALUE ENGINEERING

Lawrence D. Miles of the General Electric purchasing organization originally
developed value analysis. The terms value analysis and value engineering
are often used synonymously. However the key difference is in the timing of
activity. Value engineering takes place during product design phase while
value analysis is usually associated with improvements after the product or
service has been created. Design for manufacturability is a relatively recent
approach that is in reality a variation of value engineering. The goal of both
value analysis and value engineering is to attain the best product value to
accomplish the required function at the least possible cost. Value is
increased when cost is reduced without reducing performance or
performance is increased without increasing cost. Value analysis provides a
process for evaluating the organizations cost reduction ideas, coordinating
the affected parts of the organization, selling proposed improvements to
management, implementing ideas and documenting the cost reduction.
The value analysis function may be formal or informal in an organization. A
firm could have a dedicated staff whose primary function is value analysis
and engineering. Generally firms use an ad-hoc approach, creating a value
analysis team when it is deemed appropriate. The value analysis team
should be cross functional with representatives from the areas involved,
such as purchasing engineering, materials, quality, production, customers,
and suppliers. Even if a formal team is not established, purchasing has an
ongoing responsibility to analyze the function and value of the items and
services it is responsible for acquiring.

The value analysis process insist of six steps; identification, appraisal, solution
generation, solution evaluation, implementation planning and execution, and the
project follow-up.

Identification:

The identification step determines the functions of the item, the customers
requirements, the costs, the value of function and the service and
maintenance issues that are present. The value analysis team must identify
the facts that are known about the items under analysis, the assumptions
that are being made, and the information that is not known.

Appraisal:

The purpose of appraisal step is to investigate and prioritized the

information created in the identification stage. The value analysis team first

prioritizes the identified functions into primary and secondary functions by

analyzing their relative importance to total performance.

Solution Generation:

This is where creativity enters the process. The objective is to identify

alternative ways to do the job by determining what can be modified,
simplified, combined or eliminated in terms of functions, features, or
processes.

Solution Evaluation:
Once a set of potential solutions is generated, the next stage in the process
is to evaluate the feasibility, appropriateness and cost of each potential
solution. The team must evaluate if each solution is technically feasible and
evaluate the suitability of a particular solution.
Implementation Planning and Execution:
Once a preferred solution is identified the team needs to develop a plan for
making the required changes in the product and/or process.

Project Follow-up:

Probable the most important stage of the process is to verify that the project
objectives were achieved. Has the items cost been reduced? Does the
consumer perceive an increase or maintenance of value?

TRAINEE ACTIVITY
Discuss the use of National and International Standards.

Explain importance of Standardization and Variety Reduction.

Distinguish between Value Analysis and Value Engineering.

THE TOOLS OF QUALITY MANAGEMENT

DEFINITION OF QUALITY

There is several different view of quality depending on ones perspective. It is

important to understand the significance of these different concepts. Basically
quality can be defined in three ways:

In absolute terms
Relative to perceived need
As conformance with stated requirements

In Absolute Terms
Quality is the function of excellence, intrinsic value, or grade as
determined before by society generally. Hence most people consider
gold to be a high quality precious metal. In a more utilitarian sense

prime beef is generally considered to be among the highest-quality

meat in the meet market.
Relative to Perceive need
In business and industrial activities, generally quality is first defined in
terms of relationship to a need or function. In this case the important
thing is not the absolute quality of an item, but the suitability of the
item in satisfying the particular need at hand. Thus design engineers;
users, and buyers attempt to develop a material specification in which
the quality characteristics of the specified material match closely with
the quality characteristics needed to satisfactorily fulfill the functional
requirements of the job. Consequently in the development of product
or material specifications, quality is defined relative to the need.
As Conformance with Stated Requirements
A buyers responsibility, and a suppliers job, is to deliver material whose
quality conforms satisfactorily to specification requirement. Once the
specifications have been finalized, the specific requirements have been
set for those who subsequently work with the specifications. For
these people, especially purchasing personnel and suppliers, quality
is defined very simply conformance with the stated requirements.

MATERIAL SPECIFICATION
A sound material specification represents a blend of four different considerations:

1.
2.
3.
4.

Design requirements
Production factors
Commercial purchasing considerations, and
Frequently marketing factors.

When dealing with commercial considerations, purchasing personnel should make

the following investigations with respect to quality.

Study the quality requirements

Ensure that quality requirements are completely and unambiguously
stated in the specification.
Investigate their reasonableness, relative to cost
Ensure that specification is written in a manner that permits
competition among potential suppliers.
Determination whether the desired quality can be built into the
material by existing suppliers.
Ensure the feasibility of the inspections and tests required to assure
quality.

For some materials and components, such investigations are relatively

simple. For other they are extremely complex, involving high technical
considerations.
Example some firms includes reliability or quality
engineers on the purchasing staff to assists in analysis of the more complex
problems.

QUALITY MANAGEMENT CONCEPTS

All buyers should have at least a little understanding of quality systems, process
capability analysis and statistical process control concepts. As pointed out
earlier, a progressive firm views its quality system as two parts of a single
integrated system. The buyer is the middle person in this operation. He or she
first must be able to cooperate with in-house quality people intelligently in
designing and making operating decisions about the firms quality systems. Next
because the buyer is the key communication link with suppliers, he or she must be
able to deal with them effectively on a wide variety of quality issues.

PROCESS CAPABILITY ANALYSIS

Figure 1: The output distribution of a process that is in control.

Prediction

Time

Size
Fig. 2 and 3:
process

An illustrative comparison of quality requirements with

Capability.

(Process frequency distribution curves for shafts are shown)

Natural range of process

quality capability

Buyers acceptance
range of quality
Natural range of process
quality capability

0.996

0.995

1.004
1.005

Fig. 2

Buyers acceptable
range of capability

0.997
0.996

1.003
1.004

Fig. 3

No operations activity can produce identical results time after time. This is true
even for machine-based production processes. Every process possesses some
natural variability due to such things as machine part tolerances or clearances,
bearing wear, lubrication, variations in operator technique, and so on. These are
common causes, which produce random variations in the output. Overtime, this
natural variability in the output of a process will produce a distribution of outputs
around the mean quality level. In many cases this distribution approximates the
normal bell-shaped curve. The difference between the two extremes of the curve,
the high and low values are defined as the natural tolerance range of the process.
As long as the process is properly adjusted and is not affected by any outside nonrandom forces as long as the process is in control the distribution it produces
is predictable (shown in Fig. 1).
If a buyers desired range of quality for a given purchased part is compatible with
the natural tolerance range of a potential suppliers production process, the
supplier should have a little difficult in providing the buyer with parts that meet
specifications. On the other hand, when the buyers required quality range is
narrower than the natural capability range of the process, the supplier is bound to
produce some unacceptable parts.
Alert buyers recognize the direct economic relationship between their specified
quality requirements and the produces ability to perform consistently at the
specified level. In the case of a non-standard item, the capable buyer before
selecting a supplier, must determine:

1. Whether the potential supplier in-fact knows what the natural capability
range for its production process is;
2. If so, whether the buyers desired range of quality is compatible with the
suppliers natural capability range; and
3. If so, how the supplier plans to monitor the process to ensure that it
stays in control so that it will consistently produce satisfactory output.
The following examples should clarify this concept.
In figure 2(a) assume that a buyer want to purchase 100,000 metal shafts 1
inch in diameter, with a tolerance of + 0.005 inch. Assume further that the
supplier has studied his process, stabilized it, and knows its natural
capability for this type of job to be 1 inch + 0.004. Examining Figure 2, the
buyer sees that as long as the suppliers process operates normally and
remains centered on 1:0 inch, every piece produced will fall within his/her
acceptable range of quality. In this example, then if the supplier is able to
keep the process in control, this situation appears to represent a sound
purchase for the buyer from a quality point view
Assume now that the buyer wants to purchase 100,000 shafts 1 inch in
diameter, with a tolerance of + 0.003 inch. Examination of Figure 3 reveal
that, dealing with the same supplier, under normal operating conditions,
the production process cannot entirely satisfy the buyers requirement.
Some shafts will be produced with diameters less than 0.997 inch and some
with diameters larger than 1.003 inches. It is important for the buyer to
understand this type of situation. Unusable shafts, whether re-worked or
scrapped, must be paid for. In the long run it will be the buyer who pays.
Assuming that the buyers requirements cannot be compromised, he or she
is faced with two alternatives:
Negotiate with the supplier to determine whether the natural range of
process capability can be narrowed economically to a point nearer the
buyers requirements.
Seek another supplier whose process can meet the requirements more
economically.

Process Capability Index

Another way of expressing a processs capability relative to a buyers specific design

requirements is by means of a process capability index (Cp). This index is defined
as

Cp = buyers absolute design tolerance

natural capability range of the process
Note: In practice, the natural capability range of the process frequently is
estimated by taking the mean output quality + 3 std deviations of the output
values.
A Cp value of 1 indicates that the capability range of the process matches
exactly the quality range required by the buyer. From practical point of
view, this is a very marginal fit for the buyer. A value of more than 1 reveals
excess process quality capability, while a value of less than 1 indicates
insufficient process capability.
Consider the examples in Fig. 2
Cp (a) = 1.005 0.995 =
1.004 0.996

0.01 = 1.25
0.008

Cp (b) = 1.003 0.997 = 0.006 = 0.75

1.004 0.996
0.008
In case (a) the Cp = 1.25, indicating that the quality capability of the
process, if it stays centered, exceeds the buyers requirement. In case (b),
the Cp = 0.75. Showing clearly that the process is not capable of satisfying
the buyers quality requirement. In the vernacular, the case (a) the process
is capable for case (b) the process is incapable.

PREPARATION OF SCHEDULE OF REQUIREMENTS

What is schedule of requirements?
It is defined as the schedule, which provides brief description of goods or
services, unit of measure, quantity required and the delivery schedule in
weeks or months.

Example
S/N DESCRIPTION (S)

UNIT

QTY

DELIVERY PERIOD
FROM CONTRACT
SIGNATURE

The schedule of requirements shall be included in the bidding documents by the

purchaser, and shall cover, at a minimum, a description of the goods and services
to be supplied and the delivery schedule
OBJECTIVES
The objective of the schedule of requirements is to provide sufficient information
to enable bidders to prepare their bids efficiently and accurately, in particular, the
price schedule, for which a form is provided.
In addition, the schedule of requirements, together with the price schedule,
should serve as a basis in the event of quantity variation at the time of award of
contract.
The date or period for delivery should be carefully specified, taking into account:
(i)

The implications of delivery terms stipulated in the instructions to

bidders, pursuant to the Incoterms rules (i.e EXW, or CIF, CIP, FOB, FCA
terms- that delivery take place when goods are delivered ( to the carriers),

(ii)

The date prescribed herein inform which the purchasers delivery

obligations start (i.e notice of award, contract signature, opening or
confirmation of the L/C.

The delivery schedule expressed as weeks/ months stipulates hereafter a delivery

date, which is the date of delivery:(i)

At EXW premises

(ii)
(iii)

To the carrier at the port of shipment when the contract is

placed on FOB or CIF terms
To the first carrier when the contract is placed on FCA or CIP
terms

In order to determine the correct date of delivery hereafter specified, the purchaser
has taken into account the additional time that will be needed for international or
national transit to the Project site or to another commonplace.
CLASS ACTIVITY
Prepare a schedule of requirements for a photocopying papers need by your company for annual
use.

Reference Materials:

Learning from Case Studies by G. Easton (Prentice/Hall), IPS.

PPA and its Regulations
Purchasing principles-Peter Baily
Purchasing and Material management-Text and Cases- Dobler

3.2 TECHNICAL SPECIFICATIONS FOR WORKS

Writing Specification for Works
After the design of the required construction, the next step is to translate the
individual part and material specifications into written form. The need for clarity
and precision of expression is important in all business communication
emanating from purchase contract.
Optimal performance in all departments responsible for the design is contingent
on good specifications. To meet the needs required, specifications must satisfy the
following requirement:
i)

Design and marketing requirements of the construction expected,

functional characteristics of materials to be used their chemical
properties, dimensions in the drawings and appearance of the
construction.

ii)

Manufacturing requirement for workability of construction materials.

iii)

Inspection requirements to test materials and performance of the

construction quality for compliance with the specifications.

iv)

Stores needs to receive, store and issue the construction materials

v)

Construction controls and purchasing ability to substitute materials

when such materials become necessary.

vi)

Construction controls requirement to schedule the construction

economically.

vii)

Purchasing ability to procure construction materials without difficult

and with adequate competition from reliable sources of supply.

viii)

The total project requirement to use commercial and industrial

standard materials whenever possible and to establish company
standards in all other cases where the construction will be required.

Example of specification for works

Constructions of water tank stand at Institute of Procurement and Supply
CHANIKA.
The required stand should be of concrete base and blocks in + (cross) shape.
150mm Thick round concrete base with the ratio of 1:3:6 and diameter of 1.5
meter. The cross walls of 225mm of 18 courses of blocks will be constructed by
mortar ratio 1:3 cement, sand, the same as the ratio used for blocks.
On top a slab of 100mm with concrete ratio of 1:3:6 reinforced with 10mm round mild
steel rod with spacing of 150mm square binded.

Plastering of 25mm will be used with the mortar ratio of 1:3 cement sand.
Tairolean (putching) of mixture of cement, lime and sand will be applied for
finishing.
Example 1
Top concrete
slab

100mm

Block
walls

225mm
3000mm
Block
walls
Bottom
round
concrete
base

150mm

1500mm

CONSIDERATIONS WHEN PREPARING SPECIFICATIONS FOR WORKS

In preparing the Technical Specification for works the purchaser should take into
account the following.
1.

A well-prepared Technical Specification will facilitate the evaluation,

examination and comparison of the bids by the purchaser or Client, as the
Technical Specifications constitutes the benchmark against which the
purchaser will verify the technical responsiveness of bids and subsequently
evaluate the bids.

2.

The Technical Specifications should require that all construction materials

to be incorporated in construction be new, unused and of the most recent or
current models, and that they incorporate all recent improvements in design
and materials, unless provided for otherwise in the contract.

3.

The Technical Specification should make use of the best practices. Samples
of specification from successful similar procurements in the same country
or sector may provide a sound basis for drafting the TS.

4.

The Government encourages the use of metric units.

5.

Standardizing
technical
specifications
under
General
Technical
Specifications may be advantageous, depending on the complexity of the
construction and the repetitiveness of the type of procurement. Technical
Specifications should be broad enough to avoid restrictions on
workmanship, materials, and equipment commonly involved in
manufacturing similar kinds materials even if these may not necessarily
apply to a particular procurement. Particular technical requirements for a
particular procurement would be in each case specified through deletions or
addenda to the Technical Specification.

6.

The specification of standards for equipment, materials and workmanship

shall not be restrictive. Recognized international standards should be
specified as much as possible. Reference to brand names, catalogue
numbers or other details that limit any materials to a specific manufacturer
should be avoided as far as possible. Where unavoidable, such material
description should always be followed by the words or substantially
equivalent. When other particular standards or codes of practice are
referred to in the Technical Specification, whether from the purchasers or
from other eligible countries, a statement should follow other authoritative

standards that ensure at least a substantially equal quality, then the

standard mentioned in Technical Specification will also be accepted.
7.

Reference to brand names and catalogue numbers should be avoided as far

as possible; where unavoidable the work or at least equivalent shall always
follow such references.
The Technical Specifications shall specify all essential technical and performance
characteristics and requirements, including guaranteed or acceptable maximum or
minimum values, as appropriate. Whenever necessary, the purchaser shall include
an additional ad-hoc bidding form (to be an Attachment to Bid Submission Sheet),
where the bidder shall provide detailed information on such technical performance
characteristics in respect to the corresponding acceptable or guaranteed values.

When the purchaser requests that the bidder provides in its bid a part of all
the technical specifications technical schedules or other technical
information, the purchaser shall specify in detail the nature and extent of
the required information and the manner in which it has to be presented by
the Bidder in its Bid.

DRAWINGS
This is the major part of specification in the procurement of works. The
purpose of drawings it to specify locations, dimension, materials to be used,
stages of construction, details of hidden parts, and other characteristics of
work or construction.
The purchaser should prepared appropriate drawings as needed this is
normally prepared by Architects and later bill of quantities which are
prepared by Quantity Surveyors. This is done through procurement of
consultancy services.
The purchaser includes the drawings in the Bidding documents. Such
drawing which are part of schedule of supply are contract documents and
therefore shall be part of contract. Similarly the purchaser may request the
contractor to provide drawings either with its bid or for approval during
contract execution.

PREPARATION OF BILLS OF QUANTITIES (BOQS)

DEFINITION:

Bills of Quantities are the statements, which state the quantities of materials and
labour for the various sections of works. They state the general condition of
works, workmanship required and quantity of materials.
3.1.1 Function of Bills of Quantities
1.
Helps bidders to quote in a uniform manner
2.

Used when correcting errors during tender evaluation

3.

Assists and act as the base for valuation during work progress or
construction (interim valuation)

4.

Means of valuing variations issued by client during work progress.

5.

Used as basis for cost analysis.

6.

Provides unit of measure for individual items under the works

contracts

PROCEDURES FOR PREPARATION OF BOQS

Taking off
In this step the process of determining the quantities of labour and materials
required for each part of a building or a Civil Works. Measures and calculations
shall be based an Architectural drawings.
1.

Decide on unit of measure and dimensions i.e. linear (Running meters), Area
(M2) (volume) (M3) and weights (kg), Pcs, etc.

2.

Preparing activities required using the WBS

3.

Preparing abstracts, checking and grouping similar tasks in single elements

THE CONTENTS OF BILL OF QUANTITIES (BOQS)

The Bill of Quantities normally prepared by Engineers contains two parts. One
part consists of General Materials Preliminary (items), which normally consists of
items, which are priced, in lump sum. The second part contains elements, which
are priced according to the units given.
Examples of Preliminary items are:
Tools, Plants and Scaffolding:
The contractor is required to estimate for items necessary for the execution of the
works according to the requirements meaning of the Drawings. This includes
provision of all necessary cranes, wrist, and concrete mixers and other plant
including ladders, tools, modules, staging access gangways etc.
Site Accommodation
(i)

The contractor shall provide and maintain any necessary temporary

office accommodation required by himself and his subcontractors
suitably equipped with desks, chairs, drawing boards and electric
lighting where possible.

(ii)

The contractor shall provide and maintain for his workers latrine
facilities, washing and drinking water, first aid equipment, first aid
equipment and shelter equipped with tables, benches and cooking
facilities all to the reasonable satisfaction of Project Manager and the
Health Authorities.

(iii)

The contractor shall provide and maintain any temporary storage shed
or building which in his opinion are necessary for execution of the
works.

(iv)

The contractor shall provide a temporary office of approved design for

the sole use of the Project Manager.

Telephone:

Allow for the installation, paying bills and later removal of the telephone for the
sole use of the Project Manager at site if the service is available.
Water for Works
The contractor shall allow for all necessary clean fresh water for the works,
including that required by subcontractors and for any temporary plumbing meter
and storage facilities and pay all the changes in connection therewith and clear
away on completion and make good all works disturbed.
Lighting and Power for the Works
The contractor shall allow for providing and maintaining a temporary electricity
supply for the works including that required by subcontractors and for any meters
and fittings to give artificial lighting and power necessary for the execution of the
works and pay all charges in connection therewith and clean away on completion
and make good all works disturbed.
Watching and lighting
The contractor shall allow for providing and maintaining any barrier, loading,
watching and lighting which must comply with the bylaw or requirements of the
local Authority and Police Regulation and the contractor must give all requisite
notices to these authorities and provide everything necessary to protect the
general public, workmen, plant, materials and the whole of the works from injury
or damage.
Signboard
The contractor shall provide and exact a signboard on the site showing the little of
the contract, the name and address of Employer, Project financier, Project
Manager, Nominated subcontractors and such information as may be required by
the Project Manager.
Protection
The contractor is required to protect the works in all sections until practical
completion.
Removing rubbish and cleaning
The contractor shall remove all rubbish and superfluous materials from the site of
the works with all reasonable speed from time to time and at completion.
Disturbance or Nuisance
The contractor shall allow for taking all necessary precaution in the cause of
execution of the works as to avoid causing disturbance or nuisance to the

occupants of the existing building and those adjacent to the works and complying
with the Project Managers instructions in this respect.
Trespass, Damage and care of works
The contractor shall prevent any trespass on the adjoining property, and he shall
take reasonable precautions during the progress of the contract to prevent any
damage to the adjoining property or public or private read ways and to prevent
materials, plant; rubbish, debris etc.
The contractor will be reasonable for protection of adjoining buildings, boundary
walls, fences, services either overhead or underground and for the making good of
or paying for all damage there to should such be caused in the course of building
or civil operations.
The contractor shall be required to take all reasonable care during alternations as
not to damage the existing structure.
The collection of the above priced items are added and taken as the total
Preliminary Items which be carried to General Summary.
Part two of Bill of Quantities after the Preliminary items which are quoted in lump
sum is that part which is normally divided into Elements and are Quoted
according to the provided units.
The costing is done according to Work
Breakdown Structure (WBS). Starting from the first activity to the required last
finishing activity.

The elements, which form part of similar materials, are collected in one Bill of the
PACKAGE EXAMPLE: BILL NO. ------------------------- ACCOMODATION UNIT

ITEM DESCRIPTION
ELEMENT NO.1
substructure
Element No. 2
Frame
Element No. 4
Walling
Element No.5 Doors
Element no.6

UNIT

QUANTIT
Y

RATE

AMOUNT
(TSHS

windows
Element no. 7
Roofing
Element no. 8
Finishing
Element no.9
Decorations
Element no.10
Fitting & fixtures
Element no. 11
Plumbing and
Engineering
Installation
Element No. 12
Drainage
TOTAL ACCOMODATION
GENERAL SUMMARY

UNIT

CARRIED

TO

PREPARATION OF BOQs
Normally the Bill of Quantities shall be read in conjunction with the Instruction to
Bidders, General Conditions of Contracts, Technical specification and Drawing.
A rate or price shall be entered against each item in the priced Bill of Quantities.
The cost of items against which contractor has failed to be fill, shall be deemed to
be covered by other rates or prices entered in the bill of Quantities.
The detailed drawings, which are used for preparation of Bill of Quantities, are
normally attached with BOQ for the proper quotation.
In the preparation of BOQ the description of the site location is necessary. The
Bidder is advised to visit the site and acquaint himself with the nature and terrain
of the sites.
The reason of visiting the sites is to make the contractor to satisfy himself as to:
The nature of the sites
The amount of bush, rubbish or debris to be cleared away before
commencement of work
The nature and size of any adjoining buildings and property
Sources of electricity water etc.

After the description of site the BOQ has also to describe the works to be done
whether it is Building works or Civil Works. It is also to describe whether there is
an external works like construction of rainwater harvesting system, which may
include supply and installation of rainwater roof gutters and pipes for building
works and Excavation and construction of Catch Water drainage and Mitter for
Civil Works.

BUYERS CONTRIBUTION TO THE PREPARATION OF BOQS

In the formation of specification, the buyer must make sure that the prepared
specifications by user (by this case Engineers and Quantity Surveyors) are
challenged so as to assure the inclusion of commercial aspects, which are
seldomly included by Engineers.
The buyer should provide information on alternative of materials required in the
BOQ, Availability of these materials in the market and if they are not available, the
required quality in the BOQ compared to buying which fit for the required
purpose. In the normal course of designing, most of Engineers tend to over
specify materials in the construction to maximize Quality. But as buying
economically and efficiently as per PPA, Buyers must challenge these
specifications to make sure that the conformation of them fit for the required
purpose and fulfill the required objectives.
It is also through this Bill of Quantities Buyers establish the market prices and
prepare cost estimates for the procurement of the particular works.

Example of Bill of Quantity (BOQ)

Bill No.-------------- Construction of

VIP Latrine
ITE
M

DESCRIPTION
ELEMENT No. 1: SUBSTRUCTURE (All Provisional)
EXCAVATION AND EARTHWORK

Excavate foundation trench commencing at formation

QTY

UNIT

RATE

AMOUNT
(TSHS)

level and not exceeding 1.50 metres deep

CM

1,000.00 4,000.00

1.50 metres deep.

33

CM

1,000.00 33,000.00

Ditto over 1.50 but not exceeding 3.00 metres deep

33

CM

2,000.00 66,000.00

Ditto over 3.00 but not exceeding 4.50 metres deep

CM

5,000.00 5,000.00

Extra over any kind of excavation for breaking up rock

and
7

CM

2,000.00 14,000.00

18

CM

600.00 10,800.00

SM

2,000.00 10,000.00

53

CM

1,500.00 79,500.00

Excavate pit commencing at stripped level not

exceeding

the like

Earth backfilling well rammed and consolidated

around
foundations and the like

Selected excavated material filling, well rammed and

consolidated to make up levels under floor, 100mm
thick
Load up surplus excavated material and remove from
site
Disposal of water

Allow for keeping excavations free from water (except

spring or running water) by pumping, baling or by
other
means necessary.

ITEM

Planking and strutting

Allow for the provision and subsequent removal of

planking
and strutting to uphold and maintain all faces of
excavations.
Hardcore

200mm Bed levelled and blinded to receive concrete

ITEM

bed
(measured separately).

21

SM

3,500.00 73,500.00

bed

SM

3,500.00 7,000.00

200mm Bed to make up levels

SM

3,500.00 3,500.00

Labour, hand packing to form vertical faces

LM

1,000.00 2,000.00

200mm Bed laid to slope and blinded to receive

concrete

To collection

308,300.00

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

Soil sterilisation
A

Aldrin 0.50% solution applied at a rate of 7 litres per

square metre to hardcore beds.

SM

600.00 3,000.00

22

LM

500.00 11,000.00

CM

80,000.00 80,000.00

22

SM

264,000.0
12,000.00 0

SM

12,000.00 24,000.00

LM

4,000.00 4,000.00

LM

4,000.00 4,000.00

17

SM

204,000.0
12,000.00 0

Ditto at a rate of 8 litres per linear metre per 300mm

depth
per 235mm width to backfilling to one side of wall
foundations.
CONCRETE WORK
Plain concrete grade "20"

Foundations including steps and the like

150mm Bed

150mm Ramp

Extra over 150mm bed for forming thicknessing

200mm wide x 250mm (average) deep

Extra over steps and the like for thicknessing size

200mm
x 250mm (average) deep
Reinforced concrete grade "20" including
vibrating around reinforcements

150mm Suspended slab

Extra over 150mm slab for forming 300mm long x

200mm
wide x 150mm high foot rest

NO

4,800.00 19,200.00

NO

2,000.00 4,000.00

17

SM

3,500.00 59,500.00

13

SM

2,500.00 32,500.00

24

LM

600.00 14,400.00

Form opening size 250mm long x 200mm wide in

150mm
reinforced concrete slab including formwork to edges
and
cutting fabric reinforcement
Reinforcement

Fabric reinforcement to BS 4483:1969,ref. 252

weighing
3.95kg per square metre in slab
Sawn formwork to

Horizontal soffits of suspended slab, left in

Vertical edge of bed over 75 but not exceeding 150mm

high

To collection

723,600.0
0

ITE
DESCRIPTION
A

QTY

UNIT

RATE

AMOUNT
(TSHS)

Vertical edge of slab over 75 but not exceeding 150mm

high

17

LM

600.00 10,200.00

Vertical risers of steps over 75 but not exceeding

150mm high

LM

600.00 1,200.00

Vertical sides of steps, ramp and the like

SM

2,500.00 2,500.00

54

SM

No

1,000.00 2,000.00

to concrete blockwall

12

SM

1,500.00 18,000.00

Prepare and apply two coats of black bituminous paint

on rendered or concrete surfaces, externally

12

SM

1,000.00 12,000.00

WALLING
Solid concrete blocks to BS 2028 type "A" bedded
and jointed in cement mortar (1:3)

230mm Wall

______________
Build end of 100mm PVC pipe through 230mm
blockwall and make good sorrounds

12,000.00 648,000.00

Finishes
F

12mm Cement and sand (1:3) external rendering

To collection

693,900.00

COLLECTION

Page No. 8/11/8/1

308,300.00

Page No. 8/11/8/2

723,600.00

Page No. 8/11/8/3

693,900.00

TOTAL, SUBSTRUCTURE CARRIED TO SUMMARY

OF BILL No. 8/11/8

1,725,800.
00

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

ELEMENT No. 4: WALLING

CONCRETE WORK
Reinforced concrete grade "20" including vibrating
around reinforcements

Horizontal isolated beam

CM

90,000.00 90,000.00

119

Kg

600.00 71,400.00

28

Kg

600.00 16,800.00

10

SM

2,500.00 25,000.00

62

SM

10,000.00 620,000.00

10

LM

2,000.00 20,000.00

Reinforcement
Mild steel bar round bar reinforcement to BS
4449:1969

16mm Bar

8mm Bar
Sawn formwork to

Sides and soffits of horizontal isolated beams

Blockwork
Solid concrete blocks to BS 2028 type "A"
bedded and jointed in cement mortar (1:3)

150mm Wall

Raking cutting

Precast concrete grade "20" louvre blocks bedded

and jointed in cement mortar (1:4)

150mm Wall built fair and flush

SM

10,000.00 50,000.00

TOTAL, WALLING CARRIED TO SUMMARY OF BILL

No. 8/11/8

893,200.00

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

ELEMENT No. 5: DOORS

Joinery
Prime quality mninga or other equal and
approved hardwood
Batten door

45mm Ledged and braced batten door size 780 x

2040mm
comprising of 25 x 135mm ledges and bracing and
20 x 130mm vertical boarding

NO

70,000.00 140,000.00

Ditto size 680 x 2040mm ditto

NO

60,000.00 120,000.00

40 x 135mm Frame fixed to hardwood grounds

(measured separately)

20

LM

3,750.00 75,000.00

15 x 55mm Door stopper

19

LM

600.00 11,400.00

Frames and finishing

Sawn hardwood third grade

15 x 100mm rough grounds, plugged

20

LM

1,000.00 20,000.00

Ironmongery
Supply and fixed the following ironmongery as
manufactured by "UNION" or other equal and
approved fixed to hardwood with matching screws

100mm Aluminium butt hinges

PRS

3,500.00 21,000.00

100mm Brass barrel bolts

NO

1,000.00 4,000.00

TOTAL, DOORS CARRIED TO SUMMARY OF BILL

No. 8/11/8

391,400.00

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

ELEMENT No. 7: ROOFING

Roof covering
22 Gauge industrial trough aluminium sheeting,
lapped 300mm at joints fixed to softwood purlins
A

Roof covering sloping not exceeding 45 degrees

from horizontal

24

SM

14,000.00 336,000.00

No

2,000.00 4,000.00

Hole through roof covering for large pipes and make

good
with cement sand mortar (1:3)
Roof structure
Sawn softwood pressure impregnated with
preservative

50 x 150mm Wall plate

10

LM

1,800.00 8,000.00

50 x 150mm Rafters

20

LM

1,800.00

36,0
00.00

900.00

20,7
00.00

4,000.00

32,0
00.00

50 x 75mm Purlins

23

LM

Vent pipe
Unplasticised PVC pipes and fittings to BS 4514

G
H

100mm Pipe fixed to blockwall with straps, plugged

and screwed

Bend
Copper wire balloon set on top of 100mm pipe and
covered with mosquito gauze

LM

NO

2,000.00

4,000.
00

NO

2,000.00

4,0

00.00
TOTAL, ROOFING CARRIED TO SUMMARY OF BILL
No. 8/11/8

454,700.00

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

ELEMENT No. 10: FINISHINGS

In-situ finishing
Cement and sand (1:4) screed flooring
incorporating an approved hardener trowelled
hard and smooth

40mm Floors and paving

12

SM

4,000.00 48,000.00

40mm Floors and paving to fails and cross falls

SM

4,000.00 32,000.00

40mm Treads 300mm wide

LM

1,300.00 2,600.00

18mm Riser 150mm wide with rounded nosing and

coved junction with treads

LM

600.00 2,400.00

Dishing around drain holes, pit latrines holes and the

like

NO

3,000.00 12,000.00

Working around vent pipes and the like

NO

2,000.00 4,000.00

64

SM

1,800.00 115,200.00

28

SM

1,800.00 50,400.00

Internal plastering in two coats, steel trowelled to a

smooth finish

15mm To walls
External cement and sand (1:4) rendering with
approved plasticizer in two coats, steel trowelled
to a smooth finish

15mm To walls
External Tyrolean render in three coats

22mm To walls

39

SM

2,200.00 85,800.00

TOTAL, FINISHINGS CARRIED TO SUMMARY OF

BILL No. 8/11/8

352,400.00

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

ELEMENT No. 11: DECORATIONS Internal work

Prepare and apply one thinned coat and two full
coats of emulsion paint

Plastered walls

Fairfaced louvered blockwall

41

SM

1,000.00 41,000.00

SM

1,000.00 5,000.00

23

SM

1,200.00 7,600.00

20

LM

240.00 4,800.00

SM

1,200.00 7,200.00

40

LM

240.00 9,600.00

28

SM

1,000.00 28,000.00

Prepare apply one undercoat and two finishing

coats of gloss paint on

Plastered walls
Prepare and prime only wood surfaces before fixing

Frames and the like over 100 but not exceeding

200mm girth
Prepare, prime and apply one undercoat and two
finishing coats of gloss paint on wood surfaces

General surfaces

Frames and the like over 100 but not exceeding

200mm
girth
External work
Prepare and apply one thinned coat and two full
coats of emulsion paint

Rendered walls

Fairfaced louvered block wall

SM

1,000.00 5,000.00

LM

120.00 960.00

Prepare and apply two coats of black gloss paint on

I

PVC large pipe

TOTAL DECORATIONS CARRIED TO SUMMARY OF
BILL No. 8/11/8

129,160.0
0

ITE
DESCRIPTION

QTY

UNIT

RATE

AMOUNT
(TSHS)

BILL No. 8/11/8: VIP LATRINE

SUMMARY

Element No. 1: Substructure Page No. 8/11/8/3

1,725,800.0
0

Element No. 4: Walling Page No. 8/11/8/4

893,200.00

Element No. 5: Doors Page No. 8/11/8/5

391,400.00

Element No. 7: Roofing Page No. 8/11/8/6

454,700.00

Element No. 10: Finishing Page No. 8/11/8/7

352,400.00

Element No. 11: Decorations Page No. 8/11/8/8

129,160.00

TOTAL, VIP LATRINE CARRIED TO GENERAL

SUMMARY OF PACKAGE 11

3,946,660.0

CASE STUDY
A Special Procurement Audit conducted by a consultant for the Chanika
consulting agency revealed that the cost for constructing a conference hall was
higher than the budget by TShs. 7.0m. The auditors observed that the higher
costs were due to unnecessary steel reinforcement, which were used in the
construction of floors. The Specifications for the floor work indicated that
1000kgs of round bars were used to reinforce the floors. When asked, the
engineer said that this was because he wanted a floor, which could not deteriorate
easily.
Furthermore, the bricks used were made of concrete to support a heavy roof made
of 4x 6 timber traces placed 20cm apart.
The Engineer justified the
specifications by saying that the conference hall shall be used by students whom
he thought are normally shouting and he would not like to disturb passers-by.

TASK
Explain how Procurement Specialist could assist in the preparation of BOQ to help
reduce the costs.

TERMS OF REFERENCE (TOR)

INTRODUCTION
What is consulting Services?

It is a service of intellectual and Advisory nature performed for a fee by

qualified practitioners, to help the clients or firms to achieve their goals and
objectives. In other words it is the business of managing change and hence
consultants are skilled knowledgeable agents of change.

The purpose of every consulting assignment is to make something in the

clients organization happen that will improve its performance and
change for the better. In order to carry out the assignments the clients
or procuring entity has to produce and issue to the Consultants with the
terms of reference (TOR)

Definition of Terms of Reference

Terms of reference are the statements issued by the procurement entity giving the
definition of the objectives, goals, scope of the services, including, where applicable the
means to be used.
TORs are prepared to serve as the basis on which proposals shall be sought and contracts
negotiated. Hence great emphasis should/must be placed on its careful preparation,
clarity and consciousness. It is a of the law, under the Public Procurement Act No. 21 of
2004
The procuring entity is a fully responsible body for preparing the terms of reference so
that scope of the services described in the TOR is compatible with the available budget.

Preparation of Terms of Reference (TOR)

In any Consultancy assignments at local or international levels requires that terms
of reference (TOR) be prepared to serve as the basis on which proposals for
procurement of goods, works and services shall be sought, contracts negotiated.
The life of the TOR extends through all phases of the prospective consultancy
assignment. Hence great emphasis must be placed on its careful preparation,
clarity, conciseness and completeness as per Public Procurement Act No. 21 of
2004.
(i)

TORs are normally used by procurement entity for three purposes:-

(a) For reaching agreement among the responsible agencies within the
country or sector concerned, and between the executing agency and
the prospective financing agency, on the objectives and scope of the
proposed assignments
(b) To inform prospective consultants of the objectives and detailed
intended scope of work when they are invited to submit proposals (The
TOR is normally enclosed with the Request for proposals or in special
circumstances at the stage of the Expression of Interests) and
(c) To define the Consultancy services in the contract to be negotiated
after selection
(ii) Normally the TOR shall include and provide:
(a) A precise definition or statement of the assignment, objectives and goal
set
(b) A clear description of the nature and detailed scope of services required
as well as the context
(c) Qualification and experience of the consultants and counterparts staff

(d) Training of the required services (the time interval in which they shall
be provided)
(e) Location or place of the assignments to be carried out
(f) Specific description of the outputs, duties responsibilities of the
consultants
(g) Specific description of the inputs, duties and responsibilities to be
provided or undertaken by the client or procurement entity
(h) Background information of the problem areas, available data, reference
to all previous studies related to the assignment. This should provided
by the procurement
(i) Information on any counterpart staff and its role
(j) Information on training and the transfer of technology where necessary
(k) Summary of facilities and services which the procurement entity will
provide to the consultants
(l) Fees to be paid and the relevant payment modality
(m) The reporting requirements either
i. Draft report to be presented
ii. Final report
(n) Furthermore the TOR should

Be as detailed and as accurate as possible

Provide a relatively neutral list of duties to be performed
Be prepared with great care, in view of its significance
Be prepared by experts who are suitably qualified and well
experienced in the particular discipline and are familiar with the
project area.

Scope of Service
The scope of service for consultants work is to be defined in a detailed engineering
designs following successful feasibility study since on the one hand the basic
characteristics of the project and the related problem areas are known and on the other,
the technical specifications and other important criteria may be determined on the basis
of study.
Projects for which there are no or insufficient pre-investment studies shall be given
particular attention regarding technical design parameters.

For very large projects or where the nature of the work requires major inputs from
diverse disciplines, it may be deemed necessary to retain more than one consultant. In
such cases, the terms of reference will include specific provision for coordination of
various consultants work.

For the preparation of final detailed designs and tender documents, the
procurement entity requires the consultant to be made solely responsible for the
accuracy and the suitability of its work. The terms of reference will provide,
therefore, that while the buyer shall supervise and review the consultants work,
no modifications shall be made in the final documents prepared by the consultant
without his consent. As appropriate the consultant may be appointed to act as
adviser to the buyer on all technical problems related to the project, with
authority to make final decisions within such limits as may be prescribed by the
buyer.
For works supervision and inspection services, the definition of the consultants
tasks is in general fairly simple. There may be instances; however, where the
buyer may consider that an additional consultant is necessary because of the
complexity of the project or the highly specialized nature of the inputs from
diverse disciplines.
In such case, the terms of reference will provide for coordination of the work and specify
the responsibilities of the different consultants.

At the stage of detailed engineering designs, detailed designs and supervision of

construction, it is important that the responsibilities of the consultants be clearly
understood by the buyer and all other interested parties.

Counterpart Staff
The Government insists that, during the acquisition of consultancy services,
qualified counterpart employed by the procuring entity or its executing
agency be involved in the assignment. Ideally, in some types of assignments
such as feasibility studies, would be desirable to assign to each key experts
of the consultants team and the counterpart from the executing agency, if
possible temporarily released from his function.
In view of the staffing constraints of the executing agencies the members of
counterparts shall be determined on a individual basis depending on the
importance of the assignment and the requirement of the executing agency
or procuring entity.
The role of counterpart varies from assignment to assignment and includes
the following responsibilities and elements:
a) Through a day-to-day contact with a consultants experts, benefit from
a transfer of skills and thus receive on the job training.

b) Liase between the organs of the procuring entity and the consultants
and assist the latter with data collection providing it will all available
information, documentation and studies of assignment.
Prior to any decision regarding the level, qualifications, number and
responsibilities of each counterpart, discussions shall be held during the
negotiation to determine:
a) The number and responsibilities of the counterpart staff cooperating
with the consulting team.
b) The extent to which counterpart staffs are released from their normal
duties.
c) The extent to which counterpart can fit into the consultants proposed
work schedule.
d) The arrangement made to cover field and travel expenses of the
counterpart staff.
e) The arrangements for Training replacements of unsuitable counterpart
staff.

1.6.2

Training
The strengthening of national capability `of agencies or agent in the
procuring entities through a transfer of knowledge and skills to local
professionals, is of key concerned to the government.
It is based on programmes which falls within the frame work or assignment
whose principle objective may not necessarily be training and transfer of
technology, but which meet requirements related to the principal project or
its sector and the programmes may provide an opportunity for strengthening
the capacity of the counterpart staff involved in the assignments to that of
the national staff participating in a joint venture between foreign
consultants.
For the successful implementation of this programme, the procuring entity
must be convinced of its necessity, and consequently, sele1ct the necessary
qualified professionals to participate in it, and release these professionals
for the duration of the programme. The consultant shall accept the training
function and its inclusions an obligation which is separate and distinct from
the other services and propose corresponding costs and an implementation
time frame.
The objective of the programme shall be define and included in the TOR sent to
the consultants invited to submit proposals; it will be defined during the
negotiations both with regard to trainers, trainees, the skills to be transferred

both with regard to trainers, trainees, the skills to be transferred and the timeframe.

1.6.3

Cost Estimates for Key Staff

The cost estimate shall be made on the basis of the cost of consulting assignment
on the assessment of the resources needed to carry out the assignment: staff time,
logistical support, and physical inputs (for example vehicle, laboratory
equipment).

The cost estimate and budget for key staffs shall be based on the Terms of
Reference. The budget shall be as detailed and as accurate as possible.
Although assignments often vary in importance, type, duration and complexity, the
buyer shall be able to prepare a detailed estimate by breaking down each
assignment into activities to be undertaken in time, in a given order and
subsequently determine the duration and cost of each.

An estimate of the level of key staff inputs (in staff month) require of the
consultants, and indication of minimum expense, academic achievement
and so forth, expected of key staff of the total budget, if a given figure
cannot be exceeded.
Therefore the principal cost categories and characteristics on which the cost
estimate based are the following:

(a)

The consultants staff, profile, qualifications, time spent at

headquarters and in the field, whose cost in (person/months for
person/weeks, person/day) is based on the fixed rate of the cost of
one person/month.

(b)

National professional and support staff, whose cost is in general,

estimated on the basis of local salaries.

(c)

Direct costs such as travel, transport, per diem.

(d)

The cost of physical inputs and materials such as equipment,

vehicles, office supplies.

(e)

Other expenditure (offices, communications, services, etc)

(f)

An amount shall always be allocated, over and above the basic costs,
to cover physical and price contingencies.

Some items of the cost estimate in foreign exchange or in local currency may be
reimbursable and, as such, shall be clearly identified. These could be cost
covering, travel, and vehicles equipment purchased especially for the assignment,
some surveys and special investigations.

Any taxes and customs duties component of the cost estimate shall also be
identified and appropriately handled by the buyer.
Trainee Activities

Explain the purposes for the preparation of TOR.

Discuss Scope of Service of Consultants Work.

STEPS FOR THE PREPARATION OF THE TOR

Writing the Background

This contains the problem statement, the mission and efforts being made by
the procuring entity in solving this problem. The problem statement, the
mission statement and causes and effects of the core problem should give
the historical background of the key issues with which the consultancy
services is being sought. The general scope of services should also be
shown here.

Writing the Objectives

This section deals with the definition of the assignment goals and objectives.
The objective should be clear and straightforward. Ambiguous statements
should be avoided as far as possible. Here are just a few of the objectives of
the project, to illustrate.

(a) Objectives:
(a) To present a program that will enable a learner to put together a
plan, schedule, and control system by the end of the class.
(a) To develop a course that is highly practical, rather than theoretical.
(No date is needed for this objective.)
(a) To have the course reviewed by at least two experienced project
managers by December 30,1995.
(b) A list of deliverables would include the following:

i.

A workbook to be used in the class

ii.

Overhead transparencies to illustrate significant points covered in

the class

iii.

Handouts to be used in testing a learner's understanding of the material,

and for use in class exercises

iv.

Structured exercises to illustrate development of a Work Breakdown

Structure, developing a CPM schedule (no resource allocation
involved), and how to interpret a progress report using variance or
earned-value measures.

The nature and scope of the services to be provided:

The third step is to write down a clear description of nature and scope of
services is required and their context. State the items that are excluded in
the scope.

Sample Project Plan

To illustrate the principles presented in this part of module, a sample
project plan will be developed. I have tried to choose a project that a person
from any discipline can follow. That is a tall order in itself, but I have found
that the one described fits the requirements fairly well a project to develop a
training program for new project managers. A general description of the
project follows. The example plan will include most of the core elements
from the list of contents recommended for a project plan.

General Description Of the Project

This training program will be offered by Lewis Consulting & Training on
both a public and in-company basis. That is, public programs will be offered
that can be attended by anyone, and the class will also be offered to
companies that have enough trainees to make their own class, usually in
the range of 10 to 30 participants.
The class will include a participant workbook, some overhead
transparencies, and a number of exercises that will help participants
develop their competence in applying the skills being taught. Following are
the components of the plan, together with commentary on various elements.

The Project Plan

The first step is to develop a problem statement. Here is the one written for
this project:
Problem Statement: New project managers usually have no formal training
in the tools and techniques of project management. They do not know how
to plan, schedule, and control a project and therefore try to manage by the
"seat of the pants."
Based on this problem statement, an overall statement of the goal of the project
can be written. Following is the goal of the training program project:

Project Goal: To develop a training program for new project managers that
will teach how to develop a project plan, a schedule with resources allocated
realistically, and a control system. The program should be completed by
November 30,2002.
It is a good idea at this point to list the assumptions that will govern the project
plan and have those agreed upon before going further. Some of the assumptions
that might govern this project include:

The class is targeted at people who have little or no training in

project management; that is, it is not an advanced class.
Resources applied to the project will be available full-time for the
duration of the project.
A market exists for the training program as defined.
Next, a statement of the scope of the project might be written, to
define the boundaries of the job.

Project Scope: The training program will include the essential tools of
project management, including how to plan, how to schedule using either
CPM or PERT methods, how to allocate resources in scheduling, and how to
do variance or earned-value analysis. It will not include training in
supervisory skills, as these are already available in another course. The
course is also not aimed at experienced project managers, and so no
advanced concepts will be presented.
A mission statement for this project follows:

Our mission is to develop a

training program in the tools and
techniques of project
management for project managers

who have little or no training in

the discipline. This is to be
achieved by benchmarking best
practice throughout the world
and incorporating those methods
into the course.
Although the mission statement provides a general approach to doing the
project, it is helpful to spell this out more explicitly:

The workbook will be prepared by

the instructor, using word
processing combined with clip art
and conventional illustrations.
Desktop publishing will be used
wherever possible. The cameraready art will be provided to a
printer for preparation of
workbooks. Overhead
transparencies that support the
text will be prepared as required.
The workbook will contain ample
space for participants to take
notes in class.
Here are just a few of the objectives of the project, to illustrate.

Time interval in which the services shall be provided:

This step involves the breaking down of the major activities to be carried out
by the consultant showing the expected duration of each activity. Under
this section it is important to indicate the key staff

Duties and Responsibilities of the Consultant:

Write down a comprehensive job specification required for the consultant to

carry out and jot down a list of duties. This, section also entails the
responsibilities and accountabilities of the consultant.

Duties and Responsibilities of the Procuring Entity:

This section defines the duties and responsibilities of the procuring entity
that needs no attention of the consultant. It contains clear statements
regarding financial liabilities of each party.

Key qualification required for the consultant and the key staff:

Under this section, the procuring entity should state the required skills and
knowledge to accomplish the above duties; the experience and minimum
level of education as well, as areas

The role of counterpart Staff:

This section is important as it deals with the possibility of transfer of skills

and knowledge to the clients staff. The relationship between the consultant
and the counterpart staff should be clearly shown. The section entails the
separation of authority lines as well as the disciplinary actions that might
be taken when things go wrong and the methods for replacing the
counterpart staff.

Information on Training and Transfer of Knowledge:

This entails writing down the training requirements and the asking the
consultant on the skills transfer methodology requirement.

Reporting Requirements:

There should be a section indicating the requirements of report writing

formats and stages. This should be related to the time intervals of the
assignment. The number of reports depends on the complexity of the
assignment and the duration.
Trainee Activities

Discuss steps for the Preparation of TOR.

MANAGING THE CONSULTANCY PROGRAMME

Authority

The program manager has the delegated authority from general management to
direct all program activities. He or she represents the company in contacts with the
customer and all internal and external negotiations. Project personnel have the
typical dual- reporting relationship: to functional management for technical
performance and to the program manager for contractual performance in
accordance with specifications, schedules, and budgets. The program manager
approves all project personnel assignments and influences their salary and
promotional status via formal performance reports to their functional managers.
Travel and customer contact activities must be coordinated and approved by the
program manager.
Any conflict with functional management or company policy shall be resolved by
the general manager or his or her staff.

Responsibility
The program manager's responsibilities are to the general manager for
overall program direction according to established business objectives and
contractual requirements regarding technical specifications, schedules, and
budgets.
More specifically, the program manager is responsible for

Establishing and maintaining the program plan,

Establishing the program organization,
Managing and controlling the program, and
Communicating the program status.

1. Establishing and maintaining the program plan. Prior to authorizing the

work, the program manager develops the program plan in concert with all
key members of the program team. This includes master schedules,
budgets, performance specifications, statements of work, work breakdown
structures, task and work authorizations. All of these documents must be
negotiated and agreed upon with both the customer and the performing
organizations before they become management tools for controlling the
program. The program manager is further responsible for updating and
maintaining the plan during the life cycle of the program, including the
issuance of work authorizations and budgets for each work package in
accordance with the master plan.

2. Establishing the program organization. In accordance with company policy,

the program manager establishes the necessary program organization by
defining the type of each functional group needed, including their charters,
specific roles, and authority relationships.
3. Managing the program. The program manager is responsible for the
effective management and control of the program according to established
customer requirements and business objectives. He or she directs the
coordination and integration of the various disciplines for all program
phases through the functional organizations and subcontractors. He or she
monitors and controls the work in progress according to the program plan,
Potential deficiencies regarding the quality of work, specifications, cost, or
schedule must be assessed immediately. It is the responsibility of the
program manager to rectify any performance deficiencies.
4. Communicating the program status. The program manager is responsible
for building and maintaining the necessary communication channels among
project team members to the customer community and to the firm's
management. The type and extent of management tools employed for
facilitating communications must be carefully chosen by the program
manager. They include status meetings, design reviews, periodic program
reviews, schedules, budgets, data banks, progress reports, and team
coloration.
Coloration of the project manager. This constitutes an obvious source of
power in the project environment. While this gives project managers the
right to exercise that power, the significance of authority under the projectfunctional interface cannot be understated. While project managers may
have the final, unilateral right to order affairs in the project, it would be
foolhardy for them to substitute their views without fully considering the
"crystallization of thinking" of the other stakeholders in their project. Project
managers rarely hope to gain and build alliances in their environments by
arbitrarily overruling the team members who contribute to a project. They
may not have the control for such arbitrary action. Even if they did, they
should be most judicious in using authority in such a manner so that the
culture in which the project team is operating is not adversely affected.
Authority operates in the context of responsibility and accountability. These
concepts are presented in the following material.
What Is Responsibility? Responsibility, a corollary of authority, is a state, quality,
or fact of being responsible. A responsible person is one who is legally and ethically
answerable for the care or welfare of people and organizations. A person who is

responsible is expected to act without specific guidance or being told to do so by a

superior authority. To be responsible is to be able to make rational decisions on
one's own, to be trusted to make such decisions, and to be held liable for one's
decisions. Archibald, a noted author in the field of project management, notes the
following concerning the project manger's responsibility:

If the project manager's responsibilities are divided among several persons (such as one man for engineering, another for scheduling, a third
for cost, a fourth for contract administration, etc.) such division is the
most common cause of projects not achieving their objectives. Unless
one person integrates the efforts of the project engineer, the project
contract administrator, and so on, it is not possible to evaluate the
project effectively to identify current or future problems and initiate
corrective action in time to assure that the project objectives will be
met.
The project manager cannot actually perform all the planning,
controlling and evaluation activities needed, any more than he can
perform all the technical specialty activities required. Project
management support services must be provided to him, and he must
direct and control these support activities. The hazard is that the
support activities may exist, but in the absence of an assigned project
manager, they are not properly used.
Some companies are very explicit about their project manager's
responsibilities. For example, within the Fluor Corporation, a major
engineering/construction company, project managers have "...total
responsibility for the execution of the project from its earliest stages right
through to completion.

What is Accountability?
Accountability is the state of assuming liability for something of value,
whether through a contract or because of one's position of responsibility. A
professional is held accountable for excellence in the quality of the service
rendered to the organization. Project managers have dual accountability:
They are held answerable for their own performances and for the
performance of people who comprise the project team. One of the basic
characteristics of managers is that they are held accountable for the
effectiveness and efficiency of the people who report to them.
Authority, responsibility, and accountability can rest with a single person or with a
group of people. An example of pluralism in this sense is found in the use of a
plural executive at the top-management level of organizations such as a

management councilor the board of directors. The plural executive serves as an

integrator of top-management decision-making and implementation. The increasing
complexity and size of many large organizations have created managerial
responsibilities beyond the capabilities of one individual. The plural executive that
has been created by organizations usually acts in an advisory capacity to the chief
executive by providing stewardship for the strategic management of the company.
The specific authority of such plural executives depends on the character
establishing such a body. Authority, responsibility, and accountability within the
matrix context are the cohesive forces which hold-the organization together and
make possible the attainment of the organization's cost schedule and technical
performance objectives. Figure 10.2 is one way of portraying these forces. The
existence of cost, schedule, and technical performance objectives in this figure
means that the degree of completeness of authority, responsibility, and
accountability at each level in the model can influence any of or all the parameters.

Summary
In this chapter we addressed the de jure and de facto elements of authority. A
project manager can never be granted all the authority

Board

Role definition:
authority
responsibility
accountability

of
Directors
---------------CEO and
staff
------------------------Manager of
projects
--------------------------------Project
managers
----------------------------------------Functional
managers
--------------------------------------------------Work package
managers
------------------------------------------------------------

Cost objective

Schedule objective

Project
management
organizational
design

Project
professionals

Technical performance objective

Figure 4 Project management organizational designs.

Necessary to discharge his or her project management responsibilities. That
manager must develop de facto sources and uses of authority through the

development of knowledge, skills, expertise, personality, interpersonal skills, ability

to build and maintain alliances, and so forth.

Projects can fail because of authority, responsibility, and account- ability

ambiguities. Documentation of the project manager's and other key
managers' authority in the project is a must. Criteria for the delineation of
the legal authority of such managers were provided in the text of this
chapter.
The last measure of authority is the individual's ability to influence all the
people who have some interest in the project and, in so doing, to deliver the
project on time, within budget, satisfying both the project objectives as well
as the strategic objectives of the project owner.
The linear responsibility charting process described in Chap. 9 is an
excellent tool to use in getting down to the specifics of authority in project
management. Once an LRC is completed, the project team will have a better
understanding of their individual and collective authority, responsibility,
and accountability.

Trainee Activities

What is the
accountability?

difference

between

authority,

responsibility,

and

What role does power play in project management? List and discuss
some power sources.