Module 5:

Methods of Procurement
[24 July 2018]
Main learning objectives
By the end of this session, you will be able to:

• understand the requirements in Part VI of the Act and Part III of the Regulations
• make suitable selection of the method for each procurement
• understand how framework agreements can be used in public procurement and
their advantages and disadvantages

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Topics
Use of competitive bidding and alternative procurement methods (ref. Part VI of
Act and Part III of Regulations)

• Competitive bidding
• Framework contracting within competitive bidding
• Restricted bidding
• Direct procurement (including Emergency procurement)
• Request for quotations
Selection of procurement method (S. 30 – 31)
Competitive bidding is preferred method of procurement

• Domestic competitive bidding where only Zimbabwean suppliers MAY be

invited to bid
• International competitive bidding
• All eligible and qualified bidders may submit bids and their bids are assessed
according to the same criteria

Alternative methods require written justification in record of proceedings

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Two-stage tendering (S. 31 (2) and R. 11)
A means by which market consultations may be carried out

May be used where

• It is not feasible for the PE to formulate detailed specifications and where it
seeks tenders, proposals or offers on various means of meeting its needs in
order to obtain the most satisfactory solution

• Where the character of the goods or works are subject to rapid technological
advances or where the PE seeks to enter into a contract for research,
experiment, study or development

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 Stage One Stage Two
• Where call for proposals are • Where bidders, whose
released without tender proposals have not been
price rejected, are invited to
submit final tenders with
• Consultations /MEETINGS prices on a single set of
AFTER THIS BUT BEFORE specifications
Stage 2??
Framework agreements (S. 30 (3) & R. 9)
Framework agreements (FA) are a form of competitive bidding

• Competitive bidding procedures up to award of contract apply

• Should be included in procurement plan

PRAZ shall issue guidelines for concluding FA and conditions to be set out in them

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Purpose of framework agreements

FA seek to combine procurements that would otherwise be carried out on a one-

off basis through Requests for Quotations or other low-value procurement
methods to bring them up to the value threshold where tendering would be
worthwhile and effective.

What are some of the advantages/disadvantages of framework agreements?

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Framework agreements (S. 30 (3) & R. 9)
Regulations provide for FA to be concluded between a PE and one or more
contractors

• If single contractor contract term shall not exceed one year

• If more than one contractor term shall not exceed 3 year

• PRAZ may authorise extension of these term limits

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Framework agreements (S. 30 (3) & R. 9)
Contracts based on a FA may be awarded either:

• By applying the terms laid down in the framework agreement without

reopening competition
OR
• Where not all the terms are laid down in the FA, by inviting further bids on
the basis of the same or more precisely formulated terms or other terms
referred to in the FA

Contracts based on FA shall not substantially alter the terms and conditions in the
agreement
Framework agreements and framework contracts

FA are written instruments of understanding, negotiated between a PE and a

supplier, which contain

• Terms and conditions applying to future orders between the parties during its
term
• A description, as specific as practicable, for the services and/or supplies to be
provided
• Arrangements to price and to issue future delivery or task orders.

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Framework agreements and framework contracts
FA lack the essential element of a contract, a legally binding commitment on both
parties to perform the contract on the contract terms

Where the agreement places an obligation, in writing, on the PE to purchase a

minimum quantity of goods, works or services from the contracted provider, the FA
becomes a contract in its own right and should be referred to as a framework
contract (FC).

What are the advantages of framework agreements over single

supplier framework contracts
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What kind of items might be suitable for framework contracts?
Can you think of examples?

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Common-user items
• Stationery and office supplies
• Standard office furniture
• Cleaning materials
• Electrical fittings
Other items in continuous demand but where
quantity of demand varies at different times
• Pharmaceuticals
• Medical consumables
Contracts for regular services
• Road and building maintenance
• Cleaning
• Security
• Catering
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Methodology
Assess requirements for commonly-used items by
different units within the organization over a time-frame
of one-year or longer

Conduct competitive tendering procedures for the

supply of each item or a group of items

Enter into agreements with the 2-3 best evaluated

bidders for supply of these items to end-users on an
as-and-when-required basis
End-users may obtain their supplies from any of the
parties to the agreement according to the terms of the
agreement
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Features of framework contracts
Framework contract is an indefinite quantity contract based on:
• Estimate of requirements
• Ceilings
• Minimal contractual commitment

Some contracts may contain indexing mechanism to adjust prices

• Based on relevant public information
• e.g. for fuel contract use wholesale price of litre of petrol

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International use of FA/FC

Indefinite quantity contracts with single provider and multi-award framework

contracts are widely used internationally as means of procurement for all regular
requirements

Advocated by World Bank for contracts up to 3 years

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Restricted bidding method (S.32 of Act and R. 13)
• May be used when considering
• Time, cost and value
• Urgency
• For procurements below prescribed threshold

• May be based on a standing list of qualified bidders

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Direct procurement method (S. 33 and R 14)
Direct procurement may be used
• Where no responsive bids in response to a competitive bidding procedure

• One supplier has exclusive rights (e.g. patent, copyright) and no reasonable
alternative or substitute exists

• Extreme urgency

• Additional supplies needed and change of supplier would cause problems of

inter-changeability or incompatibility with existing equipment or discontinuity of
services

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Direct procurement method (S. 33 and R 14)

• Additional services or new services that repeat similar services

• Acquisitions made under exceptionally advantageous conditions from unusual

disposals

• Procurement of immoveable property

• Procurement of proprietary spare parts

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Procedures under direct procurement (R.14)

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• PE prepares description of procurement / special requirements

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• Bidder/s to be drawn from registered supplier list

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• PE gives bidder a time limit to prepare and submit bid

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• Ensure compliance with specifications and terms

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• Price negotiation

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Emergency procurement
• Emergency may provide justification for use of direct procurement or other
methods that take less time than competitive bidding

• Emergency should be genuine and not capable of being anticipated and

planned for
• E.g. natural disaster giving rise to immediate need for medical supplies

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Experience sharing

What kind of emergencies have arisen that gave rise to emergency procurement?

Could better value for money have been obtained if more time had been
available?

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Request for quotations (RFQ) method (S. 34 and R.
8(2))

• PE solicits at least 3 competitive quotations from reputable suppliers

• Used for procurements below prescribed threshold

• USD 20,000 for construction works
• USD 10,000 for goods
• USD 5,000 for non-consulting services

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RFQ procedure (R. 15)

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• Quotations solicited through notice board advertisement, email or website

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• RFQ shall contain clear statement of procurement requirement

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• Bidders given at least 3 days to prepare and submit bids

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• Sealed quotations deposited unopened in tender box
• At deadline, PMU take quotations from tender box, open stamp and sign
5 them

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• Purchase order sent to successful bidder
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