PROCUREMENT

PROCEDURES AND
RULES
Presented By:
Engr. Emmanuel Sardar,
Manager Procurement PMU MEPCO
ORGANIZATION CHART
PROCUREMENT SECTION PMU
Manager
Procurement PMU

Head
PA Clerk

Dy. Manager-I Dy. Manager -II

Asstt. Asstt.
Manager Manager

LDC SDC
PROCUREMENT: DEFINITION
 Procurement is the act of obtaining or buying goods,

works and services in order for an organization to

operate.

 It is the process of finding, agreeing terms and

acquiring goods, services or works from an external
source, often via a tendering or
competitive bidding process. 
PROCUREMENT PROCESS
 Public Procurement process comprises Three key Phases:

Contract
Procurement Procureme
Managemen
Planning nt Process
t

 Regulatory rules on public procurement generally focus on the

second stage where legal rules and other regulatory
measures are important tools of policy.
PROCUREMENT PLANNING:
ANNUAL PROCUREMENT
PLAN
 What to procure?
 How much to procure?
 How to procure?
 When to procure?

 Steps involved in preparation of Annual Procurement Plan:-

Annu Cons
olida Pre Appr
al oval
Dem tion par &
of
and
Dem
atio Uplo
of ading
Mate
and n of at
& Ten
rial MEPC
Budg
et der O/PP
(GSO RA
&GS
Requ s/L Webs
irem
C) ent OTs ite
ANNUAL DEMAND OF
MATERIAL
 Procurement planning starts with the receipt of annual
demand of Material by GSO and GSC formations against
Operation & Maintenance jobs as well as STG Projects.
 Annual procurement Plan is prepared by consolidating the
material requirements of GSO & GSC and approved from
competent authority.
 Annual Procurement plan elaborates the Type & Quantity of
material along with the time of its requirement during the
financial year along with the Budget involved.
PREPARATION OF TENDER
PACKAGES
 Grouping of material requirements in such away as to
ensure economy and efficiency in processing and the
delivery of the specific works, goods and services at
the specified time for the Project.
 Grouping on the basis of type of Contract:-
 Basis of Payment i.e. Re-Measurement, Lump Sum etc.
 Financing by government (PSDP), Donor Agency, Public Private Partnership
(PPP) or Private investment.

 Grouping on the basis of Type of Goods & Capabilities

of Bidders and Suppliers.
METHODS OF
PROCUREMENT
 Principle Method of Procurement:-
 Open Competitive Bidding:-
 National Competitive Bidding (NCB)
 International Competitive Bidding (ICB )

 Alternate Methods of Procurement:-

 Petty Purchases
 Request for Quotations (RFQ)
 Direct Contracting
 Negotiated Tendering
 MEPCO ANNUAL PROCUREMENT PLAN FOR F.Y 2017-18
Tender No. PMU-65 PMU-66 PMU-108 PMU-109
40MVA Power
Description of Material Circuit Breakers Crane T&P Items
Transformer

Procurement
ICB NCB NCB NCB
Method
Est. Cost (Mln) 1,163 106 9 10
Approval to float tenders 10.09.2017 10.09.2017 10.09.2017 10.09.2017
Date of Advertise 05.10.2017 02.10.2017 09.10.2017 10.10.2017
Opening Date 07.11.2017 20.10.2017 01.11.2017 03.11.2017
Completion of B.E.R. 07.12.2017 20.11.2017 01.12.2017 03.12.2017

Approval to award contract 12.12.2017 05.12.2017 17.12.2017 18.12.2017

Issuance of LOI 01.01.2018 15.12.2017 27.12.2017 28.12.2017

Issuance of P.O. 16.01.2018 30.12.2017 11.01.2018 12.01.2018

Final Delivery Date 29.06.2018 13.05.2018 25.05.2018 26.05.2018

Total Tentative Procurement Cost for 2017-18 = PKR 2942 Million

APPROVAL
 The Annual Procurement Plan, after its finalization is

submitted to competent authority for its approval.

 After approval the Annual Procurement Plan is

uploaded on MEPCO & PPRA websites.
PUBLIC PROCUREMENT
REGULATORY AUTHORITY
(PPRA) PAKISTAN
 PPRA is responsible of prescribing regulations and procedures for

public procurements by Federal Government owned public sector

organizations with a view to improve governance, management,
transparency, accountability and quality of public procurement of
goods, works and services.

 It is also endowed with the responsibility of monitoring procurement

by public sector agencies/organizations and has been delegated

necessary powers under the PPRA Ordinance 2002. 
PROCUREMENT CYCLE:
Pre- Preparation
Advertiseme
Qualification of Bidding
nt IFB
of Bidders Document

Award of
Bid
Contract Bid Opening
Evaluation
(LOI)
PRE-QUALIFICATION OF
BIDDERS
 To ensure that only technically and financially
capable firms having adequate managerial
capability are invited to submit bids. (PPRA Rule 15)
 Following factors must be considered :-
 Relevant experience and past performance.
 Capabilities with respect to personnel, equipment, and plant.
 Financial position.
 Appropriate managerial capability; and
 Any other factor that a procuring agency may deem
relevant, not inconsistent with these rules.
PREPARATION OF BIDDING
DOCUMENTS
 Bidding documents provide a common base for potential bidders
to submit their bids for a particular procurement.
 Precisely drafted bidding document has key role in subsequent
success and smooth running of the project.
 The documents should clearly define the scope of works, goods or
services, the rights and obligations of the Employer/Purchaser and
Contractor /Supplier, and the conditions to be met, in order for a
bid to be declared, valid and responsive.
 The evaluation criteria for selection of bidder should be clear, fair
and non discriminatory.
 Forforeign funded projects, bidding documents of funding
agencies are used.
BIDDING DOCUMENTS
 Generally Bidding documents contain two major components:
 Commercial
 Invitation for Bid (IFB)
 Instructions to Bidders
 The Bid Data Sheet
 Evaluation and Qualification Criteria
 The General Conditions of Contract
 Special Conditions of Contract:
 Schedule of Supply
 Bidding Forms

 Technical
 Technical Drawings, Standards & Specification
 Type Tests
SPECIFICATIONS
 Specifications shall allow the widest possible competition and
shall not favor any single contractor or supplier nor put others
at a disadvantage.
 Specifications are generic and shall not include references to
brand names, model numbers, catalogue numbers or similar
classifications.
 However if the procuring agency is convinced that the use of
or a reference to a brand name or a catalogue number is
essential to complete an otherwise incomplete specification,
such use or reference are qualified with the words “or
equivalent”.
ADVERTISING (IFB)
 An important part of procurement is advertising the proposed procurement of
goods, works or services.
 The purpose is to ensure transparency and provide prospective bidders with a
level play ground to all.
 Based on the thresholds defined by the PPRA Rules 2004 the following are
adhered to by all procurements made for WAPDA:

 Sufficient time be provided to bidders for obtaining prequalification or bidding

documents and prepare and submit their response.
 Minimum response time for receipt of bids is15 days for national competitive bidding
and 30 days for international competitive bidding (PPRA Rule13)
 All adds are to be uploaded at MEPCO/PPRA website
 Adds are published in at least two national dailies, one in English and the other in Urdu
having wide circulation.
MINIMUM INFORMATION IN
ADVERTISEMENT
 Name of procuring agency.
 Tender number (for identification)
 Procurement Title (indicating type and quantity).
 Contact person and address (for seeking bidding documents).
 Last date for obtaining bidding documents and its price (if any).
 Closing time and date as well as place for receiving bids.
 Time and Place of public opening of bids
 Amount of bid security (%age of bid price).
 Time period for performance of contract.
BID SUBMISSION & OPENING
 The bids are submitted in a sealed packages in such
manner that the contents are fully enclosed and cannot
be known until duly opened.
 Bid security not exceeding five per cent of the bid price
is submitted along with the bid.
 The date for opening of bids and the last date for the
submission of bids are the same.
 The bids are opened at least thirty minutes after the
deadline for submission of bids.
 All bids are opened publicly in the presence of the
bidders or their representatives who may choose to be
present, at the time and place announced prior to the
BID EVALUATION
 Bids are evaluated in accordance with the evaluation
criteria set forth in the prescribed bidding documents.
No evaluation criteria can be used for evaluation of bids
that had not been specified in the bidding documents.
 For the purposes of comparison of bids quoted in
different currencies, the price shall be converted into a
single currency specified in the bidding documents.
 A bid once opened in accordance with the prescribed
procedure is subject to only those rules, regulations and
policies that are in force at the time of issue of notice
for invitation of bids.
REJECTION OF BIDS & RE-
BIDDING
The procuring agency may reject all bids or proposals at any


time prior to the acceptance of a bid or proposal.

 The procuring agency shall upon request communicate to

any supplier or contractor who submitted a bid or proposal,

the grounds for its rejection of all bids or proposals, but is
not required to justify those grounds.

 Notice of the rejection of all bids or proposals shall be given

promptly to all suppliers or contractors that submitted bids

or proposals.
AWARD OF CONTRACT
 Notification of award of contract (Letter of Intent) is issued to the

lowest evaluated responsive bidder after approval of the

competent authority and receipt of No. Objection Letter (NOL) in
case of foreign funding agency.

 Notification shall include any Memorandum of Understanding

(MOU) as a result of clarifications.

 If the successful bidder fails to return the signed contract or

provide the required Performance Security, the bid security shall

be forfeited and may be proceeded to offer the bid to 2nd lowest
PERFORMANCE SECURITY
 Performance guarantee ensures that the contractor shall fulfill his obligations

under the contract.

 The amount of the security should generally not exceed 10% of the contract

price in the form of a Bank Guarantee issued by a scheduled Bank in Pakistan.

 The contract should define clearly the kind of defaults that would lead to the

encashment of the performance security. Where there is no default, the

 Performance security must be discharged after completion of the contract and

expiration of the Defects Liability / Notification / Warranty period.

ISSUANCE OF PURCHASE
ORDER
 After acceptance of Notification of Contract Award (LOI) and

submission of Performance Guarantee by the Bidder, the

Purchaser places a Purchase order which is a binding document
upon the upon the Bidder till the successful execution of the
contract and warranty period.

 The purchase order mentions all the necessary tasks to be

completed by the supplier of goods during the course of execution
of the contract.
 It is a legally enforceable contract, if there is an offer and
acceptance by both parties, for a consideration
CONTRACT MANAGEMENT
 Most critical function for timely execution of the
contract.
 Monitoring of all activities to ensure to timely
completion of the contract.
 Communication with the supplier.
 Resolution of the disputes.
 Maintenance of record/ files.
DELIVERY PERIOD
 Delivery period is mentioned in the Purchase order which is
agreed by the supplier.
 Procuring agency can extend the delivery period by making
amendment in the contact on genuine grounds upon request of
the supplier.
 Extension can not be allowed as a matter of routine and be
allowed in exceptional cases.
 No extension will be granted if the contract was awarded on
higher rates by giving consideration to earlier dates of delivery.
 If delay is alleged to be beyond the control of the
Contractor/Supplier and it is claimed that circumstances fall under
the FORCE MAJEURE
FAILURE & TERMINATION
Incase the supplier fails to supply the goods within
stipulated delivery period, the purchaser can take
following actions against the supplier.
 Levy of Liquidated damages
 Purchase from elsewhere
 Cancel the contract
 Blacklist the supplier
 Forfeit performance Guarantee
 Ban imposed to participate in future Tendering
INSPECTION & REJECTION
 To ensure the quality the goods are subjected to sample and
routine tests .
 Inspection of material is carried out at manufacturer’s works
by the authorized representatives of the NTDC / MEPCO.
 A notice of 15-days for locally manufactured and two
months for material being procured out of Pakistan.
 In case the goods fail to withstand any test, the cost of
repeating such test and the cost of witnessing such test by
the inspectors shall be borne by the supplier.
 After successful tests the inspectors issue Inspection
certificate.
DELIVERY
 Goods are delivered at the designated
Sites/Stores, following actions are taken at time
of delivery:-
 Unloading and checking the shipment
 Unpacking and inspecting the material
 Verify that the quantity delivered
 Handling discrepancies
 Preparing Goods Receipt Note (GRN)
 Issue of Goods
WARRANTY PERIOD
 All supplied goods are under warranty i.e. the supplier is
responsible for all losses and to substitute the
unacceptable goods with the acceptable goods incase of
any discrepancies are found within warranty period.
 Warranty period shall be within 18 months from the date
of installation/commissioning or 24 months from the date
of delivery of last consignment whichever is earlier.
 10% Performance Guarantee is returned to the supplier
after Satisfactory performance of goods in the field till
the completion of warranty period.
THANKS,
ANY
QUESTIONS?
Prepared by
Haris Siddiqui,
Assistant Manager (Proc) PMU, MEPCO