- Charity Ali

Procurement Plan

As an organizations (NGO) whether international, national or local you will be involve in one or two procurement activities and having  procurement plan is very important to an organization.

Procurement plan It is a very strategic document that outlines how an organization will acquire goods, services, or works to fulfill its operational needs or execute its projects effectively.

A procurement plan is a critical tool for organizations to streamline their procurement activities, optimize resource allocation, and achieve value for money in acquiring goods and services to support their operations and projects.

Procurement plan consist of the following:

  1. Purpose: The procurement plan serves as a roadmap for the procurement process, detailing the steps and procedures required to acquire goods and services in a timely and cost-effective manner.
  2. Scope: It defines the goods, services, or works that need to be procured, including specifications, quantities, quality standards, and delivery timelines.
  3. Budgeting: The plan identifies the budget allocated for procurement activities, ensuring that funds are allocated appropriately to meet organizational needs while adhering to financial constraints.
  4. Procurement Methods: It outlines the procurement methods to be used, such as competitive bidding, request for proposals (RFPs), request for quotations (RFQs), or direct negotiations with suppliers or contractors.
  5. Timeline: The plan establishes a timeline for each stage of the procurement process, including preparation of bidding documents, bid evaluation, contract negotiation, and delivery of goods or services.
  6. Roles and Responsibilities: It defines the roles and responsibilities of individuals involved in the procurement process, including procurement officers, project managers, finance personnel, and other stakeholders.
  7. Risk Management: The plan identifies potential risks and challenges associated with procurement activities and outlines strategies to mitigate these risks, ensuring that procurement objectives are achieved effectively.
  8. Compliance: It ensures compliance with relevant laws, regulations, and organizational policies governing procurement practices, promoting transparency, fairness, and accountability in the procurement process.

 Procurement Process

The procurement plan is developed based on an approved existing activity plan and is closely linked to the organization’s budget. It provides detailed guidelines on what needs to be procured.

Requesting Process of a Procurement

The requester initiates the procurement process by raising a Purchase Request form. The form is filled out by the requester and then reviewed by the budget holder to ensure alignment with the approved budget. Financial authorization is obtained from the organization’s Executive Director (ED) and subsequently forwarded to the finance department for payment processing.

Once the purchase request is approved, it is forwarded to the procurement focal person within the organization. It’s important to note that purchase requests can be initiated by any member of the organization in need of items or services.

The procurement focal person assesses the procurement threshold level of the organization to determine the appropriate procurement method. This includes deciding whether the procurement should be through local tender or national tender, based on the organization’s procurement policy.

After collecting quotes from suppliers, a bids analysis is conducted by a committee consisting of 3 to 5 members. The analysis considers various criteria beyond price alone, ensuring that the selected bidder aligns with quality standards.

The procurement committee prepares a report detailing the analysis of the quotes. At this stage, all committee members sign a conflict of interest form to ensure transparency and accountability.

Following the committee’s analysis, the procurement focal person reviews the preferred vendor and internally raises a contract. Once the contract is signed and finalized, a purchase order is issued to the vendor, specifying the required goods or services, pricing, quantity, delivery date, and payment terms.

Upon receipt of the goods, along with the invoice/receipt and Goods Received Note (GRN) or Service Received Note (SRN) for services, the requester is called upon by the procurement focal person to verify that the items received match the initial request. Additionally, a sanction check is conducted on the vendor to ensure compliance with organizational policies.

Before making payment, the finance department verifies the Purchase Request, Purchase Order, Goods Received Notes, sanction check form, invoice/receipt, and terms of reference. Once verified, payment is processed, and documentation is retained for financial records.

For consultant services, a service contract is issued, outlining the terms of the agreement.

Organizations can ensures transparency, efficiency, and compliance throughout the procurement process by following these steps systematically.

Procurement Requesting Process for Activity

In every organization, any program personnel or staff member can initiate a request for an activity they intend to conduct, whether at the community or state level.

Once a staff member submits a request, it undergoes a comprehensive review process. The request must be duly signed and approved, accompanied by an Activity Concept Note. This note outlines the details of the proposed activity, including its purpose, location, date, time, estimated number of participants, and the necessary supplies or equipment required. The budget for the activity is also thoroughly approved during this stage.

Following the approval of the activity request, the finance department reviews any advance requests made by the staff for their per diem. The per diem rate varies based on the organization’s financial policy. It’s essential to clearly outline all operational procedures, including financial policies, to ensure compliance and provide necessary guidance to the finance personnel. For instance, the policy should specify the mileage rate for organization cars and the process for obtaining approval for internal travel requests.

Once all necessary approvals are obtained, the finance department disburses the requested advance amount to the individual staff member. After the completion of the activity, the staff member is expected to retire the advance by completing an Advance Liquidation form. Additionally, they must fill out the organization’s Per Diem and Transport forms to provide details of expenses incurred during the activity.

If the activity involves purchases, the same staff member who requested the activity raises a Purchase Request. This request includes details of participant accommodation, meals, transport, per diem, and any other necessary training items. Additionally, a service agreement for the consultant, if required, is prepared.

Procurement Advance Retirement

The retirement typically includes:

  1. Activity concept note.
  2. Budget.
  3. Advance request.
  4. Advance Liquidation form.
  5. Participant attendance.
  6. Payment sheet dually sign by every attendee.
  7. Service agreement (If a consultant was involve).
  8. Receipt /invoice.
  9. Goods received note for the items purchased.
  10. Sanction on the vendor.
  11. Activity report /Trip report.