ADDITIONAL INFO

MODULE NAME: PUBLIC PROCUREMENT OPERATIONS

UNIT NAME: PLANNING FOR PROCUREMENT
DEVELOPING PROCUREMENT PLANS
Advance procurement planning is necessary so that appropriate procurement
strategies can be developed to achieve the larger goals of procurement. These
procurement strategies cannot be built in ad-hoc and emergency procurements.
Procurement plans facilitate a structured and considered approach to the
management of procurement activities. Procurement plans must be undertaken at
both the organisational level and for vital category individual procurement projects or
aggregated vital categories of expenditure. Procurement plans should have interface
with budgetary allocations. Procurement plans should include the following activities:
(i)

Deciding the agency for procurement

(ii)

The scope or quantity of the subject matter of procurement, if

determined;

(iii) In the interest of efficiency, economy and timely completion of supply

(but not to limit competition among bidders) decide appropriate
packages of the requirement
(iv) Limitation on participation of bidders as per the Governments Purchase
Policy regarding preference to certain sections of Industry, if any
(v)

The method of procurement to be followed suitability for

e-Procurement or Reverse Auction; Framework Contracting;

(vi) Need for pre-qualification, if any;

(vii) Deciding on the mode of procurement
(viii) Review of the procurement plan at pre-defined intervals

ORGANISATIONAL PROCUREMENT PLANS

Every procurement agency must prepare an Organisational procurement plan
sufficiently before start of the budgetary year. Organisational procurement plans set
out:
(i)

Procurement objectives

(ii)

Finalisation of annual requirements

(iii) Identification of common use items for collaborative purchasing

Page

References

(iv) The procurement profile of the procurement agency including specific

vital category procurements
(v)

Procurement systems, processes and practices, including management

and resources available for the procurement operations

(vi) Procurement strategies that will achieve the stated procurement

objectives (Skills development of officers in procurement chain and
improvement of capability and maturity of procurement organisation)
(vii) Deciding how the procurement can fulfil the social or development
objectives of Procurement Policy
(viii) Procurement measures, targets, and annual comparisons against
targets

INDIVIDUAL VITAL CATEGORY PROCUREMENT PLANS

In a similar manner, procurement agencies should also develop individual
procurement plans for vital category of procurements and for common-use-items,
since these have significant impact on the goals of Public Procurement.
FINALISATION OF ANNUAL REQUIREMENTS:
The first step in procurement planning is the finalisation of the annual requirements.
Annual requirement is finalised at the beginning of the year considering the following
parameters:
(i) Performance target of the organisation
(ii) Demand forecasting based on historical data, estimation of requirement
based on new projects and current stock and order levels
(iii) Consolidation of requirements raised by all user departments
REVIEW OF THE PROCUREMENT PLAN:
A mid-year review of the annual procurement plan should be undertaken. In this
review, the quantities procured should be compared to the actual consumption during
the period. Procurement department should send the consumption data for the last six
months to the user departments asking them to re-look at the proposed requirement
for the next six months. This modified demand is then sent back to the purchase
department. Necessary adjustments in contract execution may be made based on
modified requirements plan furnished by user departments. Advancing and
postponement of delivery period if called for may be negotiated with the vendors,
Page

ADDITIONAL INFO
without levy of Liquidated Damages. If review so indicates, quantity option clause
may also be exercised.
DECIDING ON MODE OF PROCUREMENT:
After finalisation of procurement plan, the mode of procurement for goods/services
should be decided. Any one of the modes of procurement may be used depending on
the nature and expected value of procurement of the item and/ or type of requirement.

Page