ASSOCIATION OF SOCIAL ENTREPRENEURS IN VIHIGA

PROCUREMENT MANUAL

INTRODUCTION

This Manual establishes rules and procedures relating to the management of the procurement process for goods and services at the Association of Social Entrepreneurs in Vihiga; hereinafter referred to as “the organization”. Compliance with this Manual is mandatory for all members of the organization. When implementation of an action approved by the Secretariat (hereinafter: the contracting Authority) requires procurement, the contract must be awarded following this Procurement Manual. Before starting any procurement of goods and services, of whatever value, the request for it must be passed directly to the Chief Executive Officer (C.E.O), who will ensure with the Finance and Administrative Officer that they are passed in accordance with all applicable procurement and financial control requirements. No commitment to purchase any goods or services may be made without prior signature of the Head of Secretariat or a delegate.

OBJECTIVES 

General Objective:

To establish an institutional regulatory framework for the procurement of goods and services required by the organization, geared towards complying with the principles of:

• Transparency
• Prudent use of resources
• Objectivity in selection processes
• Competitiveness
• Sustainability
• Accountability
  
  

Specific Objectives

• To expedite the procurement of goods and services, by means of an efficient and safe procedure that contributes in a timely manner to the fulfilment of activities in the organization’s Annual plan and the effective execution of projects
• To achieve greater efficiency in the use of financial resources, the organization allocates to the procurement of goods and services.
• To provide goods and services required to facilitate the execution of activities in a timely and pertinent manner, and in compliance with mandates issued by the members.
• To contribute to sustainable development by means of the institutional provisions and procedures for the procurement of goods and services

GENERAL PROVISIONS

The present Manual will adhere to the following general provisions:

1. Institutional procurement of goods and services at the organization must be conducted in keeping with the provisions of the manual and in accordance with basic procurement rules and principles;

• Ensuring sufficient transparency and fair competition
• Ensuring equal treatment and non-discrimination
• Avoiding conflict of interests.

1. During procurement and award of the contract, and afterwards the contract implementation stage, the Secretariat is referred to as the Contracting Authority. 
2. Procurement of goods and services must be conducted by competitive methods and foster financial prudence, quality and rational spending.
3. Procurement of goods and services will be subject to the existence of budgetary resources that have been duly approved for that purpose, as well as the availability of financial resources. 
4. The organization has a no-tolerance policy towards fraud, any act of fraud will be denounced and investigated as applicable. The Anti-fraud policy applies without exception to all the organization’s activities and operations in response to any irregularity or suspected irregularity involving staff, suppliers, consultants, contractors and/or any party that has an employment or contractual relationship with the organization.
5. All staff must comply with the guidelines detailed in this Manual, otherwise the Secretariat will have legitimate authority to apply disciplinary measures established in the organization’s rules, pursuant to the provisions of staff rules and Code of Ethics and the organization’s Anti- fraud policy.
6. Management of the procurement of goods and services is the exclusive responsibility of the Procurement Committee. Therefore, no staff member may delegate the procurement of goods and services to another staff member or compromise internal or external resources, unless required to do so as part of their position.
7. The Procurement Committee may prepare proposals for guides to the procuring of goods and services that facilitate their operations and the projects they execute to provide the staff with a complementary and more detailed tool. However, they cannot be contrary to this Manual.

PROCUREMENT PROCEDURES

Procurement Categories and Methods

Procurement of goods and services may be categorized as:

• Direct procurement ( Single Bidding)
• Procurement by comparing at least three written quotations (Competitive Bidding)
• Procurement by means of an institutional bidding process (Open Bidding)

 Initiation of Procurement

Only those goods or services identical to or similar to those listed in the approved budget shall be procured. Request can be made by any of the Secretariat staff, pre-approved by Finance and Administrative Officer and approved by the Head of Secretariat. For that purpose the Purchase request Form shall be used. Depending on the threshold the appropriate procedure will be applied.

Procurement Thresholds

The basic means of awarding contracts is competitive tendering. The purpose is twofold:

• To ensure that operations comply with the awarding principles, and 
• To obtain the quality of services, or supplies wanted, at the best possible price

Once the funds are available in the budget and activity is approved, the contracting authority can proceed with tendering and contracting following these standard procedures. All basic principles must be complied with, regardless of which procedure is used.

Methodology 

The first criterion in choosing a supplier shall be the lowest bid. However, if a supplier does not provide the required level of service or an adequate guarantee, then other criteria shall also be considered. The organization shall specify in the purchase file the reasons the lowest bid was not chosen.

• For purchases under Ksh15000, a price survey by telephone of two suppliers will be sufficient for determining the supplier.
• For purchases above Ksh100,000 a quotation/invoice shall be obtained from three local suppliers.
• Purchases from a sole source shall be explained in the purchase file.
• For purchases over ksh100,000 an open bidding process will be undertaken.

The purchase file shall contain all the documents pertaining to each transaction, i.e. the purchase requisition, quotations, contact information of suppliers purchase contracts or orders, invoices, delivery slips and any other pertinent documents.

Open Procedure

A procedure is called open when the potential and eligible bidders may submit a tender. The contract is given maximum publicity through the public invitation at the organization’s website and if applicable, any other electronic media.

Under the open procedure, any natural or legal person wishing to participate receives upon request, the tender dossier in accordance with the procedures laid down in the public invitation. When the tenders received are examined, the contract is awarded by conducting evaluation and award procedures.

No negotiation is allowed.

*Steps 

The Chief Executive Officer signs Decision on starting procurement, stating funds available, procedure to be followed ( Open Procedure), selection and award criteria, time limits for procedure. The bidders shall have at least 10 working days after publication to submit the offers, and 45 days after tender submission date their offers may be valid. That is period when evaluation of tenders must be done and Contract award Decision finalized. The Evaluation committee is also appointed. After these Decisions, public invitation to tender may be launched.

If candidates have questions regarding tender documentation it should be answered prior to submission date. All questions and answers shall be published on the organization website. 

Tender opening session takes place after submission deadline. Tenders (offers) are open only when all members of the Evaluation Committee are present. Each offer should be checked whether it satisfies all requirements, and that information should be part of the Evaluation report. The Evaluation Committee concludes the Evaluation report, which shall contain proposed candidate to whom the contract will be offered. The report is sent to the Chief Executive Officer for approval. After approval, the selected candidate is offered the contract for signature. If they accept the proposed contract, the implementation can start after contract commencement date. If they do not accept it, the contract can be offered to the second best successful candidate.

Competitive Procedure

Under competitive procedure, the Contracting Authority invites at least three candidates of its choice. At the end of the procedure, out of the technically compliant offers, the one that offers the best value for money or one that  is the cheapest is selected ( depends which award criterion is set to be used). The Contracting Authority receives only one offer that is administratively and technically valid, the contract may be awarded provided that the award criteria are met.

*Steps 

Procurement procedure starts with a Purchase Request Form. The C.E.O, the Finance officer and Administrative Officer approve the procurement, confirming the availability of funds. If the procurement value is below Ksh100,000 then the evaluation committee is to be established.

Persons responsible for procurement communication sends Request for Offer and relevant documentation/ information to at least three addresses of potential candidates. 

The bidders should be given a minimum of three days to submit offers. After submission deadline, each offer should be checked whether it satisfies all requirements. Person(s) responsible for procurement communication completes the purchase file by attaching all offers to the Purchase Requisition Form and performing the evaluation/ comparison of all offers.

 In case of purchases of below ksh100000, the Evaluation Committee report shall be prepared and sent to the C.E.O for approval. After approval, the offer of the selected candidate is accepted. In case the selected candidate withdraws from the process for any reason, the second best candidate can be offered the opportunity.

Direct Purchase or negotiated procedure – Direct purchase based on single bid is provided for in case the sum allotted for a contract is equal or less than ksh 15,000. However, artificially splitting related activities into smaller sized contracts to prevent requirement for tendering is strictly prohibited.

In case the candidate is technically competent to undertake the contract as asked to and is able to abide by the financial limitations of the budget, a direct contract may be signed with the provider. 

The C.E.O approves the Purchase.

Purchases to be paid against invoice and does not have to rely on contract. It is not obligatory for this procedure to set up the Evaluation Committee. 

This procedure allows procurement of goods and services without bidding procedure; a simple invoice, order of purchase or any other document that serves as a proof of purchase shall be accepted as such.

A justification stating and explaining the reason for a direct purchase procedure needs to be written, approved and be included in the financial expense report.

*Steps 

The Finance and Administrative Officer checks whether budget of an action is available. 

A purchase request form is sent to the Chief Executive Officer.

In cases where the Secretariat has prior knowledge/ experience of numerous goods/service providers, it is appropriate to pre-qualify bidders.  Such list can be placed at the disposal of the Secretariat staff in some form of internal list of vendors that will be used as an initiation for such procurement. Pre-qualification criteria vary and can be set on a yearly basis with an ongoing call for potential new bidders.

Decision on Procurement

The Chief Executive Officer signs decision on procurement, stating justification for this procedure and value of the Contract.  He/she signs the award decision stating value and the Contractor.

Grounds for exclusion from participation in open procurement

Candidates shall be excluded from taking part in an open procurement procedure if:

• They are bankrupt or being wound up, are having their affairs administered by the courts.
• They are persons having powers of representation, decision making or control over them have been convicted of an offence concerning their professional conduct by judgment of a competent authority.
• They have not fulfilled obligations relating to the payment of government taxes
• They or persons having powers of representation, decision making or control over them have been the subject of a final judgment which is related to fraud, corruption, involvement in a criminal organization, money laundering or any other illegal activity.

 Bidders are obliged to sign statement that they are not in any of these situations.

Exclusion from the award of contracts and rejection of tenders

Contracts may not be awarded to candidates or bidders which, during the procurement procedure;

• Are subject to a conflict of interest.
• Are guilty of misrepresentation in supplying the information required by the organization’s Secretariat. 
• By sole discretion right of the Evaluation Committee or Chief Executive Officer, if determined possible, negative regard associated with political or legal risk.

Reasons for rejection of tenders

All bids/tenders of the candidate shall be rejected if the candidate:

• Participates in more than one independent and/or as a member of a group application for the same tender/bid or
• Is on the list of entities deemed to be supporting terrorism or participating in money laundering,
• Is found to be conflicted with the organization, or the organization’s donors and partners.
• The bid/tender submitted after the expiration of the deadline for submitting bids/tenders shall be rejected as overdue and returned to the candidate unopened.

Requirements not mentioned in the tender documentation cannot be reason for the rejection of any candidate

Selection and Award criteria – The Contracting Authority (the Secretariat) must draw up clear and non-discriminatory selection criteria for the purpose of assessing that the candidate has sufficient financial, economic, professional and technical capacity to implement the tasks of the contract. The chosen criteria must not go beyond the scope of the Contract. The criteria should be tailored for each procurement. The contract award criteria should be based on:

1. Lowest price (of the tender satisfying selection criteria and is technically compliant)
2. The best-value-for-money (the most economically advantageous tender)

An award criteria is applied after the tender is evaluated, which is done by the Evaluation Committee. The Committee should state in their evaluation Report, the basis of their selection of the candidate using the previously set selection and award criteria.

The Chief Executive Officer approves the Evaluation report and signs contract award decision. After the Contract Award Decision, the bidder is then notified.

Evaluation Committee

The Evaluation Committee is established to ensure consistent and correct application of procurement practices.  The Committee members are responsible for monitoring and verifying procurement actions and ensuring that approved procurement procedures have been applied properly. The Committee shall be composed of three or four members but the head of Secretariat shall not be a member of the Committee.  They will render decisions unanimously by:

• Ensuring compliance with Procurement Policy
• Approve notices, tender documents, terms of service agreements and all other material
• Ensuring documents related to the procurement process corresponds with the bidders
• Considers the proposals submitted by bidders
• Evaluates as per criteria
• Prepares Evaluation Report
• Reports to the Head of Secretariat regularly to give progress reports on the procurement process
• Proposes a contract award decision to the Head of Secretariat.

The Chief Executive Officer shall be obliged to approve the Evaluation Report unless he/she finds that the procurement procedure was not respected. The decision on the rejection of the proposal for contract award must be delivered to the Evaluation Committee in written containing all the information on reasons for rejection and corrective measures/ steps to be undertaken.

Procurement Documentation and Filing

Documents shall be put in appropriate files and kept in a cabinet at the organization’s office. The procurement officer shall be responsible for safe custody of the documents.  The documents include:

• Purchase Requisition Forms
• Advance Request Forms
• Stores ledger
• Tenders Register
• Local Purchase Order
• Local Service Order

Conflict of Interest

A conflict of interest arises in situations in which the organization’s staff or the candidates or bidders have directly or indirectly had an economic, financial or any other personal interest that might be perceived as an element that compromises their impartiality or independence in the context of the award procedure.

Potential conflict of interest shall be resolved by self-exemption or exemption upon request of an interested party from the work of the Evaluation Committee and any decision-making in the procedure. 

Confidentiality

All applicant/tenderer information and tender documents received are to be treated as confidential. The confidentiality and anonymity of tenderers must be maintained throughout the tender process. All members of the Evaluation committee as well as the Head of the Secretariat shall sign the Confidentiality Declaration. 

Disclosing proposed solutions or information /data subject to intellectual property protection and copyrights from the contents of the tender/bid or negotiations dialogue without the consent of the candidate/bidder shall be prohibited.

Transparency

The Secretariat shall promote fair and equitable treatment for potential and suppliers by providing an adequate and timely degree of transparency in each phase of public procurement cycle, while taking into account the legitimate needs for protection of trade secrets and other privacy concerns as well as the need to avoid information that can be used by interested suppliers to distort competition in the procurement process. Additionally, suppliers should be required to provide appropriate transparency in subcontracting relationships

FIXED ASSETS POLICY FOR THE ORGANIZATION

Purpose

To carry out its activities, the organization needs material resources. The quality of these resources is dependent upon how they are used. Material resources are in large part durable goods, which need to be well-managed to be maintained in good condition. These goods include stationary, tables, chairs, shelves, computers and related accessories. The Fixed Assets Policy will aim for:

• precise identification of goods that are part of the asset base;
• sensible use of goods;
• periodic taking of physical inventory;
• effective maintenance of goods;
• replenishment of goods when required.

Procedures

At the organization, the management of material resources is the responsibility of the Finance staff. The procedures involved in managing these resources are:

• receiving and recording goods;
• using goods properly;
• maintaining goods;
• taking inventory of goods;
• disposing of goods.

Material resources are managed by means of records or files.

Asset inventory

The purpose of the inventory is the physical monitoring of the items belonging to a project. The inventory makes it possible to detect differences between information about goods in the records and the actual state of goods.

Inventory is usually done once a year and is the responsibility of the finance division.

Procedures

The inventory procedure is composed of the following steps:

1. Creation of record cards on which is found: 
   • type of item description of item
   • identification code
   • service user or name of manager
   • assigned location
   • previous placement of item
   • notes on condition of item
   • record updates
   • minutes of physical inventory
2. Final removal of an item
3. Replacement of an item
4. List of annual needs

Removal of items

The inventory procedure described above permits the identification of dilapidated or defective goods whose presence in office presents more inconveniences than advantages, for various reasons:

• steep rise in operating or maintenance expenses;
• excessive cost of repair;
• any other objective reason.

The Chief Executive Officer should give the authorization to take out of service, transfer or dispose of any items, and that should be noted in the book of assets.

Annexes

• Conflict of Interest statement

Each member of the Evaluation Committee (and Chief Executive Officer) must submit a signed declaration using this format. Statement is to be signed for all procurement procedures, and is a part of tender dossier.
The organization’s Secretariat has a zero tolerance on fraud and other proscribed practices and is committed to preventing, identifying and addressing all such acts and practices against the organization, as well as third parties involved in the organization’s activities. The organization expects its suppliers and service providers to adhere to the rules of Ethical Conduct.

Herby I declare that I am not in any of the following situations potentially falling into the conflict of interest in a given procurement procedure, namely:
There are no family, emotional, political or nation-wise affinities towards the potential bidders in the procurement procedure;
I have no economic or other shared interest in respect of the outcome of the procurement procedure;
I have not shared any information that may grant an advantage to bidder or influence the outcome of the procurement procedure in any way.
I have not been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organization, money laundering or any other illegal activity.
Conflict of interest shall occur especially in the cases of:

1. Ownership, control or management relations between the organization’s staff members and bidders (share and stock owners, managing functions, board members etc.);
2. Economic, family or personal involvement with politically exposed persons;
   -family relations between the organization staff members and bidders such as their first of kin; marital partners, and their first of kin; household members.

………………………………………….

• Confidentiality Declaration

Each member of the Evaluation Committee (and Head of Secretariat) must submit a signed declaration using this format. Declaration is to be signed for all procurement procedures, and is a part of tender dossier
I, ________________________________, the ___________________
Name and Surname                                   position in the organization for the _____________ (procurement/tender number or description)
I declare that I shall maintain the strictest confidentiality in respect of all information acquired as a result of my involvement in the evaluation process. 

I undertake neither to disclose such information to any unauthorized person who does not already have right of access to such information, nor to discuss it with any person in any public place or where others could overhear it.

I furthermore undertake to use this information only in the context, and for the purposes of, the evaluation of this specific evaluation process. I understand that any unauthorized disclosure by me will result in the termination of my role as a member of this Evaluation Committee and may also render me liable to legal action.
I undertake to maintain this duty of confidentiality after the conclusion of my term as a member of this Evaluation Committee.

…………………………….
Name
Position in the organization.

3. 
   Statement of exclusion

As part of their tender, each legal entity must submit a signed declaration using this format.
We have examined and accept in full the content of the dossier for invitation to tender No ………………………………. We hereby accept its provisions in their entirety, without reservation or restriction.
This tender is valid for a period of ……… days from the final date for submission of tenders.
We are not in any of the situations excluding us from participating in procurement procedure, namely;

we are not bankrupt or being wound up, or having our affairs administered by the courts, or are in any analogous situation arising from a similar procedure provided for in national legislation or regulations;

we have not been convicted of an offence concerning our professional conduct by a judgment of a competent authority; we have fulfilled obligations relating to the payment of social security contributions and the payment of taxes we have not been the subject of a judgment which has the force of res judicata for fraud, corruption, involvement in a criminal organization, money laundering or any other illegal activity.  If required, we can provide the proof usual under the law of the country in which we are established that we do not fall into these exclusion situations.

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