Capital Goods Procurment Manual

CAPITAL GOODS PROCUREMENT POLICY
April 2020
FINFINNE
Oromia Capital Goods Finance Business Share Company (OCGFBSCO) 2019
TABLE OF CONTENT
Title page
PREAMBLE ......................................................................................................................................................... 1
PART I.................................................................................................................................................................. 2
1. INTRODUCTION ....................................................................................................................................... 2
1.1 SHORT TITLE ................................................................................................................................................2
1.2 DEFINITIONS ................................................................................................................................................2
1.3 SCOPE OF THE MANUAL ............................................................................................................................5
1.4 OBJECTIVE OF THE MANUAL ...................................................................................................................5
1.5 BASIC PRINCIPLES AND PROCUREMENT RULES .................................................................................5
1.5.1 Basic Principles .....................................................................................................................................5
1.5.2 BASIC PROCUREMENT RULES ..........................................................................................................6
1.6 CODE OF ETHICS .........................................................................................................................................7
PART II ................................................................................................................................................................ 8
2. DUTIES AND RESPONSIBILITIES OF PROCUREMENT PERFORMERS, ........................................ 8
2.1 THE BOARD OF DIRECTORS......................................................................................................................8
2.2 THE DUTIES AND RESPONSIBILITIES OF EXECUTIVE MANAGING DIRECTOR .....................................................8
2.3 DUTIES AND RESPONSIBILITIES OF A PROCUREMENT UNIT ..............................................................................9
2.4 CAPITAL GOODS PROCUREMENT ENDORSING COMMITTEE ............................................................................10
PART III............................................................................................................................................................. 14
3. PROCUREMENT PLAN .......................................................................................................................... 14
3.1 PREPARATION OF PROCUREMENT PLAN ....................................................................................... 14
3.2 IDENTIFICATION AND PACKAGING OF PROCUREMENTS .......................................................... 15
3.3 SELECTION OF PROCUREMENT METHOD...................................................................................... 15
3.4 DECIDING /SETTING TIME TABLE FOR CAPITAL GOODS PROCUREMENT ........................... 16
3.5 CONTENT OF A PROCUREMENT PLAN ............................................................................................ 16
3.6 APPROVAL AND AMENDMENT OF PROCUREMENT PLAN .......................................................... 17
3.7 PUBLICATION OF ANNUAL PROCUREMENT PLAN ..................... ERROR! BOOKMARK NOT DEFINED.
PART IV ............................................................................................................................................................. 18
4. PROCUREMENT METHODS AND THEIR APPLICATION ............................................................... 18
5 PROCEDURE OF NATIONAL COMPETITIVE BIDDING .................................................................. 18
5.4 PRE-REQUISITE ...............................................................................................................................................19
5.5 INVITATION TO BID .........................................................................................................................................19
5.6 BIDDING DOCUMENT .....................................................................................................................................20
5.7 INSTRUCTION TO BIDDERS ..............................................................................................................................21
5.8 TECHNICAL SPECIFICATION OF CAPITAL GOODS ............................................................................................23
5.9 BID FORM AND PRICE SCHEDULE ...................................................................................................................24
5.10 GENERAL AND SPECIAL CONDITIONS OF CONTRACT .................................................................................24
5.11 SETTING OF CRITERIA FOR BID EVALUATION .............................................................................................25
5.12 SETTING OF BID FLOATING PERIODS ..........................................................................................................26
5.13 SALE OF BIDDING DOCUMENTS .................................................................................................................27
5.14 PRESENTATIONS OF SAMPLES ....................................................................................................................27

5.15 CLASSIFICATION OR MODIFICATION OF BIDDING DOCUMENTS ..................................................................29
5.16 LANGUAGE OF BIDS ..................................................................................................................................30
5.17 BID PRICE AND PRICE ADJUSTMENT ..........................................................................................................30
5.18 VALIDITY PERIOD OF BID DOCUMENTS ......................................................................................................30
5.19 BID SECURITY ...........................................................................................................................................31
5.20 RECEIPT OF BID DOCUMENT.......................................................................................................................33
5.21 BID OPENING:- ..........................................................................................................................................33
5.22 EVALUATING AND COMPARING BIDS. ........................................................................................................36
5.23 PREFERENCE..............................................................................................................................................40
5.24 CANCELATION OF BID AND DISQUALIFICATION OF BIDDERS .....................................................................41
5.25 DISCUSSION WITH BIDDERS .......................................................................................................................42
5.27 ANNOUNCING THE SUCCESSFUL BIDDER ....................................................................................................44
5.28 PERFORMANCE SECURITY .........................................................................................................................45
5.29 ADVANCE PAYMENT ..................................................................................................................................45
5.30 SIGNING OF CONTRACT .............................................................................................................................47
6 PROCEDURE OF INTERNATIONAL PROCUREMENT..................................................................... 48
7. OTHER INTERNATIONAL PROCUREMENT PROCEDURES .......................................................... 50
8. PROCUREMENT BY MEANS OF TWO STAGE BIDDING ................................................................ 50
9. PRE-QUALIFICATION BID ................................................................................................................... 51
10. PROCUREMENT BY RESTRICTED BIDDING .................................................................................... 53
11 PROCUREMENT BY REQUEST FOR QUOTATIONS ........................................................................ 55
12 SINGLE SOURCE PROCUREMENT ..................................................................................................... 57
PART V .............................................................................................................................................................. 59
CONTRACT ADMINISTRATION ................................................................................................................... 59
13 IMPLEMENTING PROCUREMENT CONTRACTS ............................................................................ 59
14 FOLLOW UP OF PERFORMANCE OF CONTRACTS .............................................................................................59
15 COMPLETION OF A CONTRACT .......................................................................................................................60
PART VI ............................................................................................................................................................. 62
MISCELLANEOUS PROVISIONS .................................................................................................................. 62
16. RECORDS OF CAPITALS GOODS PROCUREMENT ........................................................................ 62
17. REGISTRATION OF SUPPLIERS .......................................................................................................... 62
18. RESERVED RIGHT OF THE COMPANY ............................................................................................. 62
19. DUTY TO COOPERATE ......................................................................................................................... 62
20. BLACK LISTING SUPPLIERS ............................................................................................................... 62
21. LEGALITY OF BIDDERS ....................................................................................................................... 62
PART VII ............................................................................................................................................................... 63
ETHICS IN CAPITAL GOODS PROCUREMENT ......................................................................................................... 63
22. PROFESSIONAL ETHICS EXPECTED OF PERSONS ENGAGED IN CAPITAL GOODS
PROCUREMENT. ............................................................................................................................................. 63
23. ETHICS EXPECTED FROM CANDIDATES ......................................................................................... 66
PART VIII .......................................................................................................................................................... 67

PROCEDURE OF REVIEW OF COMPLAINTS PRESENTED TO THE COMPANY ................................. 67
24. THE RIGHT OF COMPLAINT OF A CANDIDATE OR A BIDDER ................................................... 67
25. MATTERS IN RESPECT OF WHICH COMPLAINT MAY NOT BE LODGED ................................. 67
26. PROCEDURE FOR REVIEW OF COMPLAINTS PRESENTED TO THE HEAD OF A COMPANY 67
23. FORCE MAJEURE ......................................................................................................................................... 71
24. REVIEW BY COURT............................................................................................................................... 71
PART IX ............................................................................................................................................................. 72
REPEALED DIRECTIVES AND EFFECTIVE DATE .................................................................................... 72
28 REPEALED POLICY ............................................................................................................................... 72
29 APPROVAL AND AMENDMENT .......................................................................................................... 72
30 EFFECTIVE DATE .................................................................................................................................. 72
RESPONSIBILITIES OF THE CHAIR PERSON COMMITTEE .......................................................................73
RESPONSIBILITIES OF THE SECRETARY OF THE PROCUREMENT COMMITTEE .................................73
Preamble
Whereas Oromia Capital Goods Financing Business S.C hereafter refer to as OCGFB S.C.
Whereas existing Capital Goods Leasing Operational Manual was approved in 2014 G.C that
have been used for long years;
Whereas, there is a need to set up, promote and develop strong and viable capital goods finance
Business in Ethiopia so as to contribute for economic growth;
WHEREAS, to achieve better transparency, efficiency, fairness and impartiality in capital goods
procurement and to enable the utilization of the limited budget spent on Capital Goods
procurement in a manner that ensures greater economy and efficiency by addressing problems
encountered in the course of implementation of the Capital Goods Procumbent Manual
determining the procedures of Capital Goods procurement of the Oromia Capital Goods
Financing Business S.C during the years in which it was enforce;
WHEREAS, to ensure that Capital Goods in which a significant amount of the company budget
is invested, utilized in such a manner as to enable the company device maximum benefit
therefrom and modernize the administration thereof, it is necessary to introduce an integrated
capital goods administration;
Procurement Manual Page 1

PART I
1. INTRODUCTION
AS it is clear “Procurement Manual” provides the essential information for procurement of

Capital Goods that the company mainly procures for its core Business activities, works and
services. The manual is intended to guide the procurement officials and committees who are
directly involved in the procurement activities. It also intends to help in understanding the
procurement processes and to achieve uniformity in company’s procurement processes at all
level.
The manual will serve as a road map for the procurement activity and will be carried out within
the context of government policies and procedures. In doing so, it will play a great role in
ensuring organizational and operational efficiency as well as avoiding ambiguity in discharging
one's responsibilities.
The manual, also, enables the company to maintain reliable policies and procedures in
procurement at all levels. It has a clear focus on the objectives to scale up and support ongoing
efforts of the company to improve quality of purchase of Capital Goods for MSMEs and enhance
existing capacity of the company to become dynamic, demand-driven, quality conscious,
efficient and forward looking, responsive to rapid economic and technological developments
occurring at local and international levels.
In general this procurement manual, therefore, provides the essential information and brief step-
by-step procedures for procurement of the Capital Goods stated above in line with the objectives
of company’s growth and in consideration of MSMEs and stakeholders’ needs and expectations.
1.1 SHORT TITLE
This policy may be cited as “Oromia Capital Goods Finance Share Company
Procurement policy/manual”.
1.2 DEFINITIONS
In this procurement manual unless the context requires otherwise:
a) “Agency” means Public Procurement Agency

b) “Bid” means a tender, or an offer, in response to an invitation, by a person,

consultant, firm, company or an organization expressing his or its willingness to
undertake a specified task at a price;
c) “Bidder” means a person who submits a bid;
d) “Bidding Documents” means a document prepared by the company as a basis for
preparation for a bids;
e) “Board of Directors” shall mean the governing body of the company
f) “Capital Goods” Means any equipment or machine that may be used to produce
products or to provide services and includes accessories;;
g) “Company” shall mean Oromia Capital Goods Finance Business Share Company;
h) “Competitive Bidding” a procedure leading to the award of contract whereby all the
interested persons, firms, companies or organizations may bid for the contract;
i) “Contract” means an agreement enforceable by law;
j) “Fixed Asset” means goods whose value is 1000 birr and above and can serve more
than a year.
k) “Lowest Price” means:-
i. A bid most closely conforming to evaluation criteria and other
conditions specified in the bidding document; and
ii. Having lowest evaluated cost;
l) “MSMEs” means micro, small and medium enterprises
i. “Micro Enterprise” means a business Enterprise that established in the form of
PLC or share company or sole proprietorship or partnership that can employ up to
5 individuals including the enterprise owner and the family with a capital up to
birr 50,000 for service sectors and up to birr 100,000 for industry sectors. The
capital amount does not include the value of an enterprises’ building if any.
ii. “Small Enterprise” shall mean a business Enterprise in the form of PLC, or
Share Company or sole proprietorship or partnership that can employ 6-30
individuals including the enterprise owner and the family with a capital from
50,001-500,000 for service sector and birr 100,001-1,500,000 for industry sector.
The capital amount does not include the value of an enterprises’ building if any.

iii. “Growing-Medium Enterprise” means those enterprises that are graduated from
Small Enterprises and fulfill the criteria given to set the status and level of Growing-
Medium Enterprises
m) “Procurement” means obtaining Capital Goods that shall be requested by MSMEs
through purchasing, hiring or obtaining by any other contractual means;
n) “Proclamation” means the Ethiopian Federal Government Procurement and
Property Administration Proclamation No. 649/2009.
o) “Procurement Committee” means a team composed of staffs from different
directorates of the company and responsible for handling all company’s procurements
including Capital Goods for MSMEs, fixed assets, consumable materials and services
that shall be requested by different work units of the company;.
p) “Procurement Officer” means an individual in Capital Goods Procurement and
Property Administration Directorate who shall handle procurement activity of the
Company independently.
q) “Repeat Orders” means procurement of the same Capital Goods from the same
source without competition at the lowest original price of the last tender;
r) “Supplier” means a person, firm or an organization who undertakes to supply
Capital Goods.
s) “Technical Specification” means the Quality and Standard requirement that could
provide a correct and complete descriptions of the Capital Goods, to be procured by
the company which is used for the purpose of procuring quality goods as per the
demand of the requesting party and for the purpose of creating conditions of fair and
open competition among all candidates
t) ‘Total price’ means the value that quoted by the supplier as its sales price for the
item to be procured which the company is expected to pay for the specific
procurement
u) “Value for Money” means best return for each Birr spent in terms of quality,
timeliness, reliability, after sales service, upgradeability, price, source, and the
combination of whole-life cost and quality to meet the company’s objectives.

1.3 SCOPE OF THE MANUAL

The policies and procedures in this procurement manual shall be applicable to all procurements
of Capital Goods that shall be requested by MSMEs.
1.4 OBJECTIVE OF THE MANUAL

This procurement manual shall have the following objectives:
a) Purchase of Capital Goods of a good quality with a competitive price from reliable
supply sources,
b) Ensure the timely delivery of Capital Goods
c) Ensure company’s interest; eliminate wastage of resources and corruption,
d) Maintain effective communication between the company and its suppliers to secure a
high level of service and favorable terms of payment to the company,
e) Helps to develop planned purchasing system in the company,
f) Enhance MSMEs and customer’s satisfaction,
g) Empower staffs in decision making.
h) Helps to follow each step in implementing procurement
1.5 BASIC PRINCIPLES AND PROCUREMENT RULES

1.5.1 Basic Principles
The Procurement of Capital Goods and it accessories by the company to lessees shall be
based on the following basic principles
a) Timely provision of requested items & services;
b) Effective utilization of budget;
c) Maximize value for money from procurement (i.e. ensuring economy, efficiency
and effectiveness);
d) Fair and non-discriminatory treatment of suppliers; to give all qualified bidders an
equal opportunity to compete for the tender;
e) Transparency; to ensure that the procurement process is transparent, fair and
discretion free,
f) Accountability for decisions made and measures taken with regard to company
procurement;
g) Domestic preference; where in the evaluation of bids for procurement of items
and services or works equal percentage points are resulted for local and

international bidders offering similar price and quality. However, preference

shall be given to local manufacturers and suppliers
1.5.2 BASIC PROCUREMENT RULES
a. Keeping Records
The company shall maintain records and documents regarding its Procurement for a
period of ten years from the date of concluding capital goods procurement proceeding
which will contain:
i) Description of the items of capital goods to be procured,
ii) Invitation to bid,
iii) Names and addresses of suppliers who submitted bids, proposals or quotations,
names and addresses of the winner,
iv) Evaluation criteria applied, summary of evaluation and comparison of bids,
proposals and quotations received,
v) Information on any decision to suspend or cancel proceedings after having been
initiated and,
vi) The reasons to use that particular procurement procedure other than open bidding.
The record concerning any proceeding shall on request, and once the proceedings have
resulted in a contract or have otherwise been terminated, are made available to candidates
who participated in the proceedings. However except when ordered to do so by a
competent court and subject to the conditions or such an order, the company shall not
disclose:
i) Information if disclosure would be contrary to law, would impede law
enforcement, would not be in the public interest, would prejudice legitimate
commercial interest of the parties or would inhibit fair competition,
ii) Information relating to the examination and evaluation of bid proposals or
quotations and the actual content of bids, proposals or quotations should be kept
confidentially.

b. Non-Discrimination
Without prejudice to Article 5.2 of this Manual, suppliers shall not be excluded from
participation in the procurement on the basis of nationality, race or any other criteria not
having to do with their qualifications.
c. Form of Communication
i. Communications between suppliers and the company shall be in writing.
Communications in any other form shall be referred to and confirmed in writing.
ii. Subject to necessary safeguards with regard to authenticity and confidentially, and
when technical conditions so permit, the company may determine which Electronic
communication to be used in addition to or instead of writing.
1.6 CODE OF ETHICS

1.6.1 Authorized persons and employees of the company engaged in evaluation, approval of
purchasing in any form of procurement shall not use their authority or position for
personal gain of any type, specially:
a) Openly declare to the manager his/her authorized representative, or to the bid
committee any personal interests that may impose or be seen to impose upon
their behavior:
b) Shall not accept any gift or gratitude or hospitality,
c) Keep in secrecy, sensitive information treated as confidential.
1.6.2 All authorized body and personnel of the company involved in the procurement process
shall adhere to laws, ethical principles stated in the company’s code of conduct and to
this manual,
1.6.3 Qualified suppliers shall be given equal opportunity to compete for any purchase of
Capital Goods, Fixed Assets, Consumable Materials, Works or services,
1.6.4 All purchase decision shall be based on the objective assessment of quality, fair goods/
services price and technical qualifications.

PART II
2. Duties and Responsibilities of Procurement Performers,
Company’s procurement management will be the responsibilities of different levels authorized
body in the company. Accordingly, the following are authorities with respect to approval or
evaluation of procurement of Capital Goods as provided in this manual.
a) Board of Directors
b) The Executive Managing Director or his authorized representative
c) Capital Goods Procurement and Property Administration Directorate Team.
d) Procurement Committees at Head office including the BoDs, and Procurement
Committee at Branch offices
e) Branch Managers,
2.1 THE BOARD OF DIRECTORS

2.1.1 It is the mandate of BODs to indorse /approve/ procurement above Birr 5,000,000.00
2.1.2 The board is responsible for the overall procurement policies of the company and its
implementation.
2.1.3 Board of Directors shall approve:
a. The annual plan and budget allocated for the procurement of Capital
Goods, Fixed Assets, consumable Materials, Works or services.
b. The standard bid document of the company (as required).
2.1.4 The Board of Directors shall follow and ensure the implementation of this policy
/manual.
2.2 The Duties and responsibilities of Executive Managing Director
2.2.1 The Executive Managing Director shall have the following responsibilities:
a) Executive Managing Director authorized to approve the capital goods whose
value birr 3,000,001.00 up to 5,000,000.00
b) Ensures that this manual is properly implemented;
c) Ensures that the company achieves value for money in its procurement of
Capital Goods,
d) Review and approves or rejects any proposal recommended by the
Procurement Committee within his/her approval authority limit;

e) Appoints member of the procurement committee;

f) Delegates his powers to his subordinates in writing;
2.3 Duties and Responsibilities of a Procurement Unit

Apart from duties and responsibilities given by the operational lease policy, a procurement
unit shall have the following additional specific duties and responsibilities:-
a) Identify the procurement need and prepare the procurement plan of the company in
accordance with article 3/1 of this policy; which can be purchased through
consolidated procurement with needs of lessees
b) Make sure that except as provided in article 51 sub articles 1 g and h of the
Proclamation, OCGFBSCo procurement is made from suppliers who are registered
by the Agency and have Bank- Account.
c) Prepare and submit to the Procurement Endorsing Committee, bidding documents in
collaboration with the procurement initiator (lessees).
d) Make corrections to the bidding documents in conformity with the recommendation
of the Procurement Endorsing Committee,
e) Establish and maintain suppliers data base and regularly update the data base
f) Establish and Maintain Capital Goods Catalogs that mostly demanded by MSMEs
and new models and regularly update the catalog database
g) Compiles procurement demands of MSMEs, internal requests and prepares
procurement plan;
h) Ensure whether all demands from MSMEs generated requests are presented with
clear specifications
i) Advertises bid opportunities on the newspaper (media) or company’s web site, as the
case may require;
j) Sells bid documents, responds to the questions that may raise in connection with sold
bid documents,
k) Prepares sufficient bid boxes for submission of bids regularly,
l) Ensures that all the bidding documents are signed and stamped,
m) Ensures that minute is prepared for bid opening,
n) Receives bid security and keeps under proper custody,

o) In collaboration with the requesting MSMEs select candidates for procurement to be

made
p) Communicates award decisions,
q) Ensures that the implementation of the awarded contract is in accordance with the
terms and conditions stated in the bid documents and or any amendments,
r) Deliver purchase order and ensures that Capital Goods are supplied or provided as
per the terms and conditions stipulated in the contract agreement,
s) Facilitate the delivering of purchased Capital Goods to the working premises of
MSMEs or store and receive all necessary documentation for payment.
t) Ensures the commissioning of the Capital Goods procured at the working premises
of MSMEs based on the procurement agreement made with suppliers
u) Follow the implementation of post procurement services of Capital Goods or any
items procured based on the procurement agreement made with suppliers
v) Handles procurement issues to be processed by the Directorates’ team,
w) Enforces payments by providing necessary documents to Finance and HRMD
Directorates,
x) Prepares and submits performance reports on the type, quantity and mode of
purchase to the Executive Managing Director,
y) Open bids, invite the procurement initiator and internal audit to attend the bid
opening ceremony, if possible
2.4 Capital Goods Procurement Endorsing Committee

Apart from duties and responsibilities given by the operational lease policy, a procurement
unit shall have the following additional specific duties and responsibilities:-
2.4.1 A Procurement Endorsing Committee will be established by the company to execute

all capital goods procurements for a minimum values above birr 50,000.00 that shall
be procured either-or in Proforma, open bid, restriction bid, procurement by request
for proposal, direct procurement and request for quotations single stage bidding in
accordance with the relevant Laws and this policy/manual.
2.4.2 Ensure that the annual procurement plan prepared by the procurement unit of a
company takes into account the following points:-

a) That the identified procurement needs of the company are in harmony with
its work program.
b) That there is no other better alternative to procurement to satisfy each
need,
c) That the procurement plan is prepared in such a way as to enable bulk
purchase
d) That other special requirements arising from the nature of the company are
addressed
2.4.3 Ascertain that the bidding document prepared by the procurement unit satisfies the
following requirements:-
a) That it is inconformity with the standard bidding document prepared by the
Agency for each type of procurement.
b) That the technical specification complies with the conditions stipulated in the
Proclamation & this policy.
c) That the evaluation criteria are non-discriminatory, transparent and
achievable.
d) That it contains all the necessary forms and conditions which the proclamation
and this directive require to be stated depending on the type of the
procurement, and other matters of fundamental importance.
2.4.4 Consider and approve Bid evaluation reports of procurements the value of which
exceeds the threshold specified in article 11/2 of this policy for each type of
procurement, by ascertaining that the following conditions are satisfied:-
a) That the evaluation was conducted in accordance with the bidding document,
b) That the evaluation was carried out in compliance with the provisions of the
proclamation and this policy,
c) That the detailed evaluation leading to the recommendation given in the
evaluation report and the overall process of capital goods procurement would
result in ensuring value for money for the company.
2.4.5 Implement the provision of article 5/26 of this policy.
2.4.6 Any decision given by the committee on evaluation report submitted to it should be
reasonable.

2.4.7 Advise the head of the company on ways of ensuring compliance with the
Proclamation, this policy and other legal documents regulating the conduct of capital
goods procurement.
2.4.8 Submit to the CEO of the company reports on procurements made, problems
encountered and solutions suggested.
2.4.9 Give clarification concerning its decisions made on any procurement proceedings
within its Jurisdiction when required to do so by the company, the BoDs’ and other
appropriate body.
2.4.10 Members of the Procurement Endorsing committee at Head office shall be appointed
by the Executive Managing Director which may constitute the following:
i) A management member to be elected by the EMD ….Chair Person
ii) Three staff members from each directorate assigned by EMD ……Member
iii) One of the technical officer …………………………Member& secretary
2.4.11 Roles and responsibilities of a chairperson & a secretary of a Procurement Endorsing
Committee and the meeting procedure of such committee are provided in annex 2 of
this policy
2.4.12 All Members of the Procurement Committee shall:
i) be renowned for their eternal behavior,
ii) have never been subject to disciplinary actions,
iii) Have knowledge about international bids too
iv) Have knowledge and experience required and to carry out procurement and
particularly the knowledge about Capital Goods.
2.4.13 Decisions in the Procurement Endorsing committee shall be taken by majority vote
with the chairman having the casting vote in the event of a tie,
2.4.14 Dissenting (nonconforming) opinion of a member shall be recorded in the minutes
2.4.15 The Procurement Endorsing Committee at the head office and shall be changed
whenever required.
2.4.16 Endorse the procurement of capital that its single value is above birr 50,000.00 and
all different items procurements that are bought in bulk or in different purchase
method when total value of the items are greater than 50,000.00 as well .

2.4.17 Select the appropriate procurement methods from the options that are approved and
stated here in this manual in consultation with the procurement requesting MSMEs
or and concerned internal work unit (Procurement unit);
2.4.18 Procurement Endorsing Committee shall evaluate the bids in accordance with this
policy and propose selection for decisions of the Executive Managing Director or to
his authorized representative
2.4.19 The Procurement Endorsing Committee might also use technical experts to evaluate
the technical aspects of any bid. These experts can be any of the following:-
a. From within the committee itself,
b. Experts from the company who have direct knowledge of the Capital
Goods,
c. From other specialized government institution
d. A consultant or a private company specializing in these aspects.
2.4.20 All authorities, any member of the Procurement Endorsing committee or Ad-hoc
committee member responsible for opening, evaluation or approval of bids or any purchase
request shall be jointly and severally liable for any damages caused so that by negligence;
intentional act or act of omission arising from their official responsibility.

PART III
3. Procurement Plan
3.1Preparation of procurement plan
3.1.1 The company shall be required to prepare a procurement plan supported by action plan
enabling them to execute in due time, the procurement necessary to implement their
work program.
3.1.2 The procurement plan shall be prepared in such a way as to enable the attainment of
the following objectives:-
a. To ensure compliance with principles of capital goods procurement stated in article
6.6 of the operational policy of the company.
b. To achieve the work program of the company.
c. To ensure economy and efficiency in the operation of the company by discouraging
piecemeal purchase.
d. Exercise prudence and make the necessary preparation to forestall problems that
might be encountered in the execution of procurement.
e. Make necessary preparations by realizing that risks may encounter in procurement
processes in the future.
f. Avoid routine purchases to make the company’s operation timely and cost efficient,
thus, preferably and if possible arrange for bulk procurement
g. Maintain best quality of capital goods with a reasonable price
3.1.3 The annual procurement of Capital Goods shall be conducted based on the demands
and requests of MSMEs which could not be known in advance, the company shall set
budget and prepare procurement plan of Capital Goods by identifying sectors that to be
financed during the budget year with consistency of operational plan. The identification
of the sectors shall be made by assessing the available market and demands of the
Capital Goods.
3.1.4 The company shall set budget for Capital goods to be purchased within the budget year,

3.2Identification and packaging of procurements

3.2.1 the company identifying its procurement needs, have to take the following point into
consideration:-
a) That the need can be raised by MSME’s met by a product or service available in
the market
b) That the need cannot be met by using unused resource or property available in the
company.
c) That the need does not involve items which shall be of no use to the company and
cause to incur unnecessary cost.
d) That the identification of procurement needs makes provisions for additional need
that might arise in the future, especially in regard to the procurement of goods of
long term contract.
e) That the procurement need is in line with standard items which are widely
available in the market unless the need requires otherwise.
f) That the procurement need is environmentally friendly.
3.2.2 In determining its annual procurement needs arising from its various departments, the
company has to adhere to the following procedures:-
a) require end users in the company to submit their annual procurement needs,
b) Identify the need submitted by end users by type of procurement, quantity, quality
and source.
c) Identify capital goods to which the company gives priority and special attention.
d) ascertain that there are adequate suppliers for the needs
e) Determine the cost estimate for each type of capital goods procurement by
reference to survey conducted by the company or price information obtained from
other sources.
3.3 Selection of procurement Method

3.3.1 In the preparation of procurement plan, the company has to select and indicate the
appropriate procurement methods to be used in respect of each type of procurement,
from among the methods prescribed in this manual and operational lease policy.

3.3.2 In preparing its procurement plan, a company has to insure that the plan is inclusive
of all of its identified procurement needs and the appropriate procurement method is
selected for each procurement
3.4 Deciding /Setting time table for Capital Goods procurement

3.4.1 A company has to fix the time table for the main activities to be performed in the
procurement process, using the formats developed by the directorate to facilitate the
preparation of procurement plan. In doing so, the company has to take into
consideration the following and other matters which are relevant to the type of
procurement.
a) That the time fixed for the execution of that procurement is in harmony with
the work schedule of the company,
b) That the schedule takes into consideration when the supply is widely available
in the market.
c) That the schedule is in keeping with the minimum floating period of bids
prescribed in Annex 3 of this policy and allows as far as possible, additional
time for bidders to prepare bid documents in order to create conducive
environment for wide competition.
d) The company has to ensure that adequate time is given for preparation,
evaluation and approval of bid documents in respect of complex and large
procurements.
3.4.2 Without prejudice to sub article 3.4.1 of this article, care should be taken in the
fixing of procurement schedule not to allow longer time in respect of each type of
procurement than what is necessary for carrying out the main activities of
procurement.
3.5Content of a procurement plan

3.5.1 The company has to prepare procurement plan in accordance with the provision of
part 3 of this policy and using the procurement plan preparation format developed by
the company and attached as annex 1 to this policy. The procurement plan the
company shall contain:-
i. Preparing procurement category and description

ii. Procedures to be followed in performing procurement and

procurement size
iii. The time of implementation of major activities of completing the
procurement
iv. The budget required and appropriate contract type for procurement
v. The condition and scope of major participants in the procurement
process
3.5.2 In order to make the procurement process transparent, the company shall attach
major data sources and relevant information that are used as input for procurement
plan preparation
3.6Approval and amendment of procurement plan

3.6.1 Procurement directorate has to submit the annual procurement plan they have
prepared for approval after consultation with the Procurement Endorsing Committee
of the company.
3.6.2 The executive managing director or the one who officially represent the managing
director shall approve the procurement plan of the company as well as all request
that to be made by MSME’s.
3.6.3 If amendment is needed on the previously prepared request the procurement officer
of the concerned body will justify the reason of amendment.
3.6.4 A company shall not split procurements nor deviate from the annual procurement
plan once it is approved by the Executive managing Director of the company and a
copy of it is sent to the BoD
3.6.5 Notwithstanding the provision of sub article 3.6.4 of this article, a company may at
any time modify its procurement plan where necessary.
3.6.6 A procurement plan modified in accordance with sub article 3.6.5 of this article shall
be sent to all departments and the BOD for which the initial procurement plan was
sent

PART IV
4. Procurement methods and their application
4.1 Approved methods of procurement
4.1.1 Unless otherwise provided in this manual, the company shall use open bidding as the
preferred procedure of procurement for the items that its value fall above the per
forma ranges.
4.1.2 Depending on the nature of supply and essentiality of the Capital Goods to be
purchased and as the circumstances may justify, the company shall use the following
procurement methods:-
a) Open bidding:
b) Restricted bidding:
c) Single source /Direct Procurement
d) Request for quotations , and
e) Two-stage biddings:
4.1.3 The company may use preferred procurement methods other than open bidding if and
only if it is justified in accordance with the terms and conditions stipulated in this
Manual and operational policy of the company.
5 Procedure of National Competitive Bidding

5.1.1 Depending on the value, complexity, type of quality, and availability of the Capital
Goods of services to be purchased, the company shall announce through public media
for international or local bid invitation to all potential suppliers.
5.1.2 Where Capital Goods or services to be purchased at local market are of satisfactory
quality standard and competitive in terms of price, local bid shall be given preference
to international bid,
5.1.3 The company can purchase capital goods by open bidding when a single price of
Capital Goods above Birr 5,000,000.00 When applying national competitive bidding,
the company shall use the standard bidding documents prepared by the Agency and
follow the steps listed hereunder article 5.4 and 5.5 of this policy.

5.2 Pre-requisite
Company has to ascertain that the following conditions are satisfied when using national
competitive bidding:-
5.2.1 Ascertain that the required objects of procurement can only be procured from local
suppliers and the value of the procurement is below the threshold established for
international competitive bidding in article 6/2 of this policy, or
5.2.2 The required object of procurement is available only locally not withstanding that the
cost of the procurement exceeds the threshold established in article 6/2 of this policy.
5.3 Invitation to bid

5.3.1 The invitation to bid has to be published at least once in a newspaper that has
nationwide circulation to ensure participation of as many bidders as possible.
5.3.2 Without prejudice to article 5.5/1 above, OCGFBSCo may advertise bids at any time,
as many times and by any means of its choice other than those stated in article 35/2 of
the Proclamation
5.3.3 The publication of an invitation to bid shall contain at least the following
information:-
a. The name and address of the company publicizing the invitation to bid
b. The type and to the extent possible the quantity and place of delivery of the
capital goods and the site of the capital goods to be delivered,
c. The criteria to be satisfied by the candidates, who can participate in the bid,
d. The Bid document for Capital Goods in particular shall also contain
information about place of handing over, commissioning (erecting) testing
production, post sales service, maintenance and other related issues of the
Capital Goods
e. Means and conditions for obtaining the bid document and the place where the
documents may be obtained,
f. The amount of the bidding security
g. Place and time, for opening the bids and an announcement that bidders or their
Legal Representative are allowed to attend the opening of the bid,
h. The price of the bid document and the means of payment

i. The place and deadline of submission of bids, and the place, date and hour of
the bid opening
j. If bidders are required to submit sample the place where samples are to be
delivered and if appropriate the time when and the place where the samples
will be openly shown, as well as, an indication that samples are to be returned
to unsuccessful bidders or not,
k. Reserved right of the company to increase or decrease quantity of the items to
be purchased by 25% without altering the price offered by the bidder in the
original bid,
l. A statement that the bidders shall not alter or amend, that they shall not with
draw their bid after the bid opening,
m. Criterion for evaluation and points to be given for each criterion and award of
the contract,
n. Reserved right of the company to reject all or part of the bids at any time prior
to the notification of award, bids
o. Other matters that the company deems necessary for bidders to know.
5.3.4 The invitation to bid shall be prepared in the language in which the bid proceeding is
to be conducted as provided in article 5/16 of this policy.
5.4 Bidding Document

5.4.1 OCGFBSCo has to use the standard bidding document prepared by the Agency and
make sure that the bidding document prepared by company incorporates the contents
listed in this policy.
5.4.2 The company to reproduce the part of the standard bidding documents dealing with
the instruction to bidders and the general conditions of contracts in the bidding
documents and prepare without making any change there to, while making any
adjustment to the other parts of the standard bidding documents that consider
appropriate to the type and nature of the procurement,
5.4.3 The task of drawing up bidding documents is principally that of the procurement unit
or team, a bidding document prepared in respect of procurement subject to the
approval of the Procurement Endorsing Committee has to be approved by the
committee before being put to use.

5.4.4 Prior to the bid announcement, the company shall prepare its bid documents
specifying clearly. The bid document consists of
a) Instruction to bidders,
b) Bid form, and where applicable a standard form for bid security or performance
bond,
c) Form of contract,
d) General or special conditions of contract,
e) Specification of the Capital Goods or services to be procured,
f) List of consumable goods or bill of quantities (where applicable),
g) Number of copies to be submitted with the original bid,
h) Purchase price of the bid document,
i) Response, delivery or completion time,
j) Evidence to be provided by bidders to demonstrate their qualification, financial
capacity and registration in suppliers’ list,
k) Any other detail not incorporated in the above.
5.5 Instruction to bidders

5.5.1 The company has to make sure that bidders get the instruction to bidders which is an
integral part of the standard bidding document, and the bid data sheet which is an
extension of the instruction to bidders, as parts of the standard bidding document.
5.5.2 The company has to ascertain that the instruction to bidders it prepares contains the
following:-
a. A general description of capital goods
b. The content of bid documents to be submitted by candidates, the language in
which bid documents have to be submitted, the type and number of necessary
documents and complementary forms described in the bidding documents.
c. An indication of the address and time for submitting requests of clarification
on the bidding document and a statement that such request has to be made in
writing
d. An indication that the bidder has to sign on Anti-bribery pledge form; a
statement of undertaking to observe Ethiopian Law against Fraud and
Corruption and other forms that ought to be completed and signed by him/her

e. A statement indicating that bidders attempting to influence the bid shall be

disqualified from the bid, prohibited from participating in any future public
procurement and the bid security deposited by them shall be forfeited, or not,
f. If bidders are required to submit samples, the place where the samples are to
be delivered and if appropriate, the time when and the place where the
samples will be openly shown, as well as an indication that samples are to be
returned to the unsuccessful bidders
g. The place where the bid box is available and a statement indicating that bids
submitted after the bid is closed shall not be accepted,
h. A statement indicating the methodology of evaluating bids, the criteria for the
evaluation and the weight each criterion shall have as well as the conditions
for submitting further proposals to select the successful bidder and the criteria
for evaluating such proposals where two or more bidders get equal evaluation
results.
i. Whether it is possible to make price adjustment in the course of the
performance of the contract and the condition in which such price adjustment
is made, if it is allowed,
j. An indication of the mode and amount of bid and performance securities
required and the validity period of same.
k. The deadline for submission of bids and the place date and hour of the bid
opening
l. The validity period of the bid as well as the place and time of delivery.
m. A statement indicating the manner of application of preference to local
products and companies granted by the Proclamation.
n. An indication whether the bids are to be submitted in a single or double
envelopes, the manner in which the envelopes are sealed, the requirements
that the original and copies of the bid documents shall be uniform, the number
of copies, that all documents have to be signed by authorized persons and the
seal of the organization shall be affixed there to, the manner in which
supporting documents (current tax clearance certificate, renewed business
license and other documents) that the company requires should be submitted.

o. If advance payment is to be made in accordance with article 5/29 of this

policy, the amount of such payment and the mode of the corresponding
guarantee required as a prerequisite for such advance payment
p. An indication that if bidders are aggrieved by the decision rendered during
the procurement process, they have the right of complaint in accordance with
chapter fourteen of the Proclamation and article 24 and 26 of this policy, and
the place where such complaint may be filed
q. An indication that the company has the right to decrease or increase the
quantity of the Capital Goods by up to 20% (twenty percent) when awarding
the contract without changing the unit price offered by the bidder.
5.5.3 No change shall be allowed to the content of the instruction to bidders of the standard
bidding document. Any modification to be made to the instruction to bidders shall be
indicated only in the bid data sheet
5.6 Technical Specification of Capital Goods
5.6.1 The company shall be required to draw up detailed technical specification Capital
Goods procurements in accordance with the lessees preference
5.6.2 A technical specification of capital goods shall be prepared in accordance with the
need of lessees and in such a manner that it allows wider competition on the basis of
performance, function, technical or design characteristics depending on the type of
the procurement.
5.6.3 The technical specification shall be used to verify the conformity of the supply with
the stated technical requirement.
5.6.4 The technical specification of capital goods shall be drawn up by the procurement
unit which has identified the need or by the staff of the company who have adequate
knowledge of the procurement in question. The company may seek the advice and
assistance of experts outside the company or hire consultants.
5.6.5 A specification shall not prescribe a particular capital goods provider. However,
where it is difficult to draw up a specification giving an accurate description of the
requirement, where the procurement is for spare parts for a particular item of
proprietary plant or equipment, or where there is known to be only one manufacturer

or provider of the capital goods in question, the name of the manufacturer and the
term “Or Similar” may be incorporated in the specification.
5.6.6 The technical specification should be prepared in such a manner that it incorporates
use values needed to satisfy the current and future demand of the company and lessee
in question and should avoid the inclusion of non-value adding features.
5.6.7 When preparing technical specification, the company may incorporate standards set
by Ethiopian Quality and Standard Authority or by other similar institutes depending
on the type of procurement and as appropriate
5.6.8 Technical specification shall form part of the bidding document and shall be
sufficiently detailed and comprehensive to provide a complete and exact basis for the
formulation of bids by those suppliers wishing to participate in the bid.
5.7 Bid form and Price Schedule

5.7.1 The company shall incorporate in the bidding document they prepare the bid form
depending on the type and nature of capital goods of the procurement, the bid form
and the price schedule prepared by them to be filled by bidders, and other forms the
incorporation of which in the standard bidding document is deemed to be necessary.
5.7.2 The price schedule to be prepared by company in accordance with (5.6.1) of this
article, shall be such that prompts bidders to clearly indicate price, tax and other
issues related to price and facilitates transparent and efficient bid evaluation.
5.7.3 The bid form prepared by the company shall be such that enables the candidates to
present clear proposal, understand the bid procedure, warns against acts of disruption
of the bid process and informs candidates that they take full responsibility for the bid
proposal they put-up.
5.8 General and Special Conditions of Contract

5.8.1 The company has to make sure that bidders get copies of the general and special
conditions of contract as parts of the standard bidding document.
5.8.2 No change shall be made to the content of the general conditions of contract of the
standard bidding document. The special conditions of contract may however be
modified depending on the type and nature of the procurement with reference to the
provisions of the general conditions of contract.

5.8.3 Without prejudice to article 5.7.1 and 5.7.2 above, the special conditions of contract
drawn up by the company shall contain the following, notwithstanding that it may
vary from one type of procurement to another.
a. A clear indication of the duties and responsibilities of the company and the
bidder as a prospective supplier, and legally sustainable and attainable
obligations of the company.
b. provisions for the important terms of the contract such as time of delivery,
packing, responsibility for transportation, price adjustment, payment, delivery
and inspection, security and others as the case may be.
5.9 Setting of criteria for bid evaluation

5.9.1 The company has to indicate clearly the bid evaluation criteria in the evaluation and
qualification criteria section of the standard bidding document.
5.9.2 Selection of a successful bidder shall be carried out in either of the following two
methods, notwithstanding that the bid evaluation criteria varies from one type of
procurement to another:-
a. setting the minimum technical requirement and selecting the bidder with the
lowest evaluated bid from among the bidders meeting such minimum
technical requirements, or
b. Indicating clearly in the bidding document the criteria to be applied to
determine the functional or economic value of the procurement and the
relative weight to be ascribed to each criterion and selecting the bidder with
the highest cumulative result by conducting evaluation based on these criteria.
5.9.3 The criteria selected for conducting evaluation as described in article 5.8.2 (b) above
shall be objective and that can, as far as possible, be expressed in monetary terms in
respect of achieving maximum value for money and shall take the following
conditions into consideration:-
a. A Where the object to be procured is standard supply, whether a value can be
sought in respect of that object which is useful to the company/ lessee and
which can make a difference among the bidders and facilitates the selection of
the successful bidder.

b. Whether a value offered by a bidder in addition to the minimum requirement

would bring extra benefit to the company/lessee, and whether the extra
benefit, if any, is significant,
c. That there is no standard for the capital goods to be procured and whether
similar capital goods are available which can respond to the specification in
different levels in terms of creating extra benefit to the company/lessee.
d. In respect of capital goods of long term service, whether the company/lessee
has to incur different costs of operation, maintenance and disposal on account
of variation in the source of the supply.
5.9.4 After identifying the successful bidder by evaluating the bid documents against the
criteria set forth in this article 5.8 of this policy, It shall indicate in advance in the
bidding document the criteria the company applies to conduct post qualification
evaluation to establish the current qualification of the successful bidder where it feels
that it has to be ascertained.
5.9.5 The relevance of the evaluation criteria to be selected in accordance with sub article
5.8.3 of this policy to the determination of the benefit of the capitals goods to be
procured must be ascertained and the criteria have to be given relative weight in terms
of the level of their contribution to the determination of the benefit of the
procurement
5.10 Setting of bid floating periods

5.10.1 In the preparation of a bidding document, a company has to set the deadline for bid
submission taking into consideration the following points:-
a. The time it takes for bidders to obtain the bidding document, to prepare
responsive bids, to gather information, to analyze the information, to establish
joint venture as necessary, to obtain certificate of manufacturer’s authorization
including the power of attorney to sign and to fulfill other pre-conditions to
participate in the bid.
b. In case of international competitive bidding, the time necessary for the
submission of bid document to the designated place.
5.10.2 Without prejudice to article 5.9.1 above of this policy, the floating period shouldn’t
be less than the minimum date stated in Annex 3 of this policy

5.11 Sale of Bidding Documents

5.11.1 The company shall fix the selling price of bidding documents for all kinds of bids
taking into consideration the following points further to article 38 of the
Proclamation:-.
a. The price of the bidding document prepared by the company shall not be such
that impedes wide competition.
b. In fixing the price of any bidding document, the company shall not seek profit
or gain but aim only at recovery of cost incurred in the preparation of the
bidding document.
c. The company may allow candidates to obtain bidding documents free of
charge, or at a price less than the cost incurred in the preparation of such
document under the following circumstances:-
i) Where it is thought that there will be no adequate number of bidders
forthcoming for a bid, or
ii) Where the cost incurred to prepare the bidding document is so minimal
that the company considers recovering the cost from bidders to be
unnecessary.
iii) Where the company considers that the cost estimate of the bidding
document is so high that recovering the full cost from bidders
discourages competition by restraining candidates from participating
in the bid.
iv) In case of re-advertised bid, where the company considers it to be
unfair to require candidates who bought the bidding document to
participate in the former bid to pay again for the bidding document.
5.11.2 The bidding document shall be available to candidates desiring to participate in the
bid on working days during the floating period of the bid in the manner stated in the
advertisement.
5.12 Presentations of Samples

5.12.1 Where it is not possible to draw up technical specification, or where the better
execution of the procurement requires the presentation of samples representing the

required objects of procurement in addition to technical specification, the company

may produce or require candidates to produce samples.
5.12.2 Where the company produces samples of the desired capital goods of the procurement
for candidates to take a look at:-
a) The samples produced by the company shall not be restricted to capital goods
produced by a specific producer or under a specific trade name. The samples
presented must, as far as possible, involve acceptable specimen, and bidders
should be informed that goods of comparable quality may also be supplied.
b) It is necessary to make sure that samples are displayed at a convenient place
clearly visible to the candidates, and to the extent appropriate, a professional
has to be assigned to give description of the samples presented.
c) Where the company has to provide technical specification a part from
presentation of samples to demonstrate to candidates the required object of
procurement, the technical specification so provided shall, as far as possible, be
adequately descriptive of the specimen presented and in conformity with the
technical characteristics of such specimen.
5.12.3 Where candidates are required to produce samples in accordance with the technical
specification drawn up by the company:-
a) Candidates shall be given adequate information about the samples they are
required to produce as well as the time and manner of presenting such samples.
b) While samples have to be submitted prior to opening of bids, a company may
allow additional time in respect of sample sent by a candidate at the right time
but the receipt of which was delayed in the process of transportation for
reasons beyond the control of the candidate, as long as in the opinion of the
company, allowing extra time doesn’t harm the procurement process.
5.12.4 Candidates may supply evidence of their sample where they cannot supply the sample
item itself and the company accepts the reason for a candidate’s inability to do so.
This evidence may include photographs or a piece of sample item. This option may
however be exercised if it is ascertained that it doesn’t make a difference in selecting
the best evaluating bidder and doesn’t have discriminatory effect.

5.12.5 The company has the duty to handle and examine carefully, samples supplied by
candidates; however Bidders shall not be paid compensation for samples lost or
destroyed in the examination process because of their nature. Samples that are not lost
or destroyed shall be returned to unsuccessful bidders. If samples are not claimed by
unsuccessful bidders within 6 months, they shall be forfeited to the company.
5.12.6 Unless the company decides otherwise, a sample supplied by the successful bidder
shall stay with the company until the completion of the procurement process to be
used for checking conformity during delivery.
5.12.7 The sample test or evaluation shall be confidential
5.13 Classification or Modification of bidding documents

5.13.1 As provided in article 39 of the Proclamation, a company has to entertain requests
from candidates on clarification or modification to a bidding document prepared by it.
5.13.2 Notwithstanding the provision of article 5.12.1 above, the company shall not be
obliged to respond to a request for clarification or modification submitted:
a. Later than 10 days prior to the deadline for submission of bids, in respect of
national competitive bidding for complex procurements of capital goods the
minimum floating period of which is 30 days as stated in this policy..
b. Later than 21 days prior to the deadline for submission of bids in respect of
international competitive bidding.
c. Later than 5 days prior to the deadline for non-complex capital goods
procurements the minimum floating period of which is 15 days.
5.13.3 . A reply given by the company to a request for clarification by a candidate shall be in
writing and sent to all candidates at the same time without reference to the identity of
the candidate initiating the request.
5.13.4 Where a company finds it necessary to introduce modification to a bidding
document initially issued by it on the basis of request for clarification by a candidate,
the company may modify such bidding document. Any alteration to the content of the
bidding document shall at the same time be communicated in the form of an
amendment to all candidates who purchased the bidding document.
5.13.5 A company has to extend the closing date for submission of bids where it modifies a
bidding document as per article 5.12.4 above, if it is assumed that the time remaining

before the closing date is not sufficient for bidders to prepare adjusted bid documents
on the basis of such modification.
5.13.6 Where a company deems it to be appropriate, it may convene a meeting of bidders
who purchased a bidding document for clarification and discussion on the bidding
document or modification thereto, and such discussion shall be minuted.
5.13.7 Copies of the minute shall be delivered to the candidates who purchased the bidding
document to enable them prepare their bid documents by incorporating the content of
the modification.
5.14 Language of Bids

5.14.1 The language in which bid advertisement and a bidding document are prepared, and
the language in which bids are conducted as provided in article 27 of the
Proclamation shall be:-
a) Amharic for national open bidding in which only local bidders participate.
However, if the company considers that using English language is more
convenient to the procurement process in terms of facilitating competition, it may
authorize the use of English language in the preparation of bid advertisements,
bidding documents and in bid proceedings.
5.15 Bid price and price Adjustment

5.15.1 A company has to ensure that prices quoted by a bidder are not based on prices of the
other bidders and such prices remain firm and do not vary during the validity period
of the bid and throughout the performance of the contract.
5.16 Validity period of bid documents

5.16.1 The company shall carefully decide the validity period of the bid and indicate same in
the bidding document. While the validity period of bid document or bid price varies
depending on the type of the procurement, the company shall take the following
matters into consideration in fixing the period.
a) The complexity of the capital goods procurement in question and the estimated
time required for the bid proceeding.
b) The estimated number of candidates participating in the bid.
c) The experience of the company in evaluating bids of similar nature

d) The price volatility of the procurement

5.16.2 The validity period of bid price, to be fixed in accordance with article 5.15.1 above,
shall take into account the time necessary for the company to evaluate the bid, to
obtain the approval of the Procurement Endorsing Committee, to consider complaints
and to sign contract with the successful bidder.
5.16.3 The validity period of bid shall not extend beyond 60 days from the day of bid
opening, unless the company believes that a bid document requires longer preparation
period in light of the point of considerations stated in article 5.15.2 above,
5.16.4 The company has to complete bid proceedings within the validity period of bid
documents and sign contracts with successful bidders however, where the company
realizes that for reasons beyond its control the price validity period expires before the
completion of the bid proceeding, it shall request bidders to extend the validity period
of their bid price.
5.16.5 The extension of bid validity a company has to require of bidders in accordance with
article 5.15.4 above shall only be for such time as is necessary to complete the
remaining part of the bid proceeding. However, bidders who are not willing to extend
their price validity period for whatever reason shall be disqualified from the bid
without having forfeited their bid security.
5.16.6 Bidders agreeing to the company’s request for extension of their price validity period
have to express in writing their agreement to such request and for how long they are
willing to extend the period. Similarly, they have to amend the validity period of their
bid security on the basis of the extension of the price validity period they have agreed
to, or alternatively, furnish new bid security to cover the extended period.
5.16.7 A bidder not agreeing to extend the validity period of his/its bid security shall be
treated as a bidder refusing the company’s request for extension of price validity
period, and as such, shall be disqualified from the bid.
5.17 Bid Security

5.17.1 The company has to fix and clearly indicate in the bidding document, the amount and
mode of bid security to be required of bidders in respect of each capital goods
procurement when executing procurement by means of open, restricted or two stage
bidding.

5.17.2 The amount of bid security the company may require shall be in the range of 0.5% to
2% of the total estimated capital goods price, which the company has to fix and
indicate in the invitation to bid and the bidding document. However, the bid security
to be fixed by the company shall not exceed 500,000.00 (five hundred thousand) birr.
5.17.3 when fixing the amount of bid security as provided in article 5.16.2 above, the
company shall take the following points into account:-
a) The volatility of the price of the required capital goods of procurement.
b) the availability of adequate number of candidates to participate in the bid,
c) That the bid security required of candidates doesn’t discourage them from
participating in the bid.
d) that the bid security urges the successful bidder to sign the contract
e) That the bid security is sufficient to compensate the damage the company may
sustain as a result of the successful bidder refusing to sign the contract.
5.17.4 The bid security may at the bidder’s option be in the form of cash, cheque certified
by a reputable bank, bank guarantee or letter of credit.
5.17.5 Notwithstanding the provision of article 5.16.4 above, local suppliers engaged in
supplied capital good may provide bid security in the form of conditional insurance
bond.
5.17.6 The validity period of bid security provided by bidders should extend for at least 28
days after the expiration of bid price validity.
5.17.7 The bid security furnished by foreign bidders from a bank outside of Ethiopia has to
be unconditional and certified or counter guaranteed by local banks.
5.17.8 The commission or omission of the following acts by any bidder may result in the
forfeiture of bid security to the company:-
a) Withdrawing from a bid after the dead line for submission of bids stated in
the bidding document or before the expiration of the price validity period
indicated in the bid document.
b) Refusing to sign the contract or to furnish the performance security after
award.

5.18 Receipt of bid document

5.18.1 The bids shall be submitted in a sealed package or packages in such manner that the
contents are fully enclosed and cannot be known until duly opened,
5.18.2 The company (OCGFBSCO) shall specify the manner and method of submission and
receipt of bids in an unambiguous and clear manner in the bidding document
5.18.3 The company has to make available a bid box for collection of bid document
from bidders. The bid box shall be placed at the location stated in the bidding
document and remain open throughout the bid floating period.
5.18.4 The bid box shall be kept securely and the key of the box shall be in the
possession of the head of the procurement unit until the day of the bid opening.
5.18.5 As far as possible, all bid documents shall be placed inside the bid box;
however, where the bid box cannot accommodate bid documents, the company
shall assign an employee to collect bid documents from bidders as of the day of
publication of the invitation to bid.
5.18.6 The company shall issue receipt for bid documents it receives from bidders as
per article 5.17.5 above in acknowledgement of receipt, the employer in charge
of the procurement in question shall be responsible for the security of the bid
documents received accordingly.
5.18.7 Bid documents received after the dead line for submission of bids shall be
returned to the bidders concerned without the envelopes containing the bid
documents being opened.
5.19 Bid Opening:-

5.19.1 Bids shall be opened in public at the time and place stated in the invitation to
bid or in the document amending such invitation to bid.
The bid:-
a) Shall be opened in the presence of the bidders or their authorized representatives
who may choose to be present, at the time and place announced prior to the bidding.
However, the opening of the bid shall not be affected by the absence of the
bidders on their own will.

b) To the extent that it doesn’t interfere with the bid opening process and there is
enough space, any representative of mass-media or any other interested observer
may attend the bid opening ceremony
c) As far as possible, a representative of internal audit staff and legal service officer
of the company shall be present during the bid opening.
d) At least 3 employees from the procurement unit shall participate in the bid
opening process and to the extent possible, representatives from directorates of
the company benefiting from the procurement may attend the bid opening
process
5.19.2 For bid documents required to be submitted in one envelope, the company
shall open each bid and read out the name of the bidder, the bid price for the
contract and rebate offered by that bidder and the bidder’s conditions for such
rebate, the amount and kind of bid security, and any other information enabling
bidders to know their relative position in the bid concerned.
5.19.3 Where bid documents are required to be submitted in two envelopes:-
a) The envelope containing the technical proposal shall first be opened in the
bid opening process and the name and other salient points of the bid shall
be read out.
b) The envelopes containing the financial proposals of all bidders shall be put
into one large envelope unopened. The large envelope containing the
financial proposals shall be properly sealed and labeled with the bid
identification number and a statement indicating that the envelopes therein
contain financial proposals written on it and employees of the company
executing the bid opening proceeding putting their respective signatures on
it. The large envelope containing the financial proposals shall remain
sealed and kept carefully under the custody of the procurement unit or any
other unit entrusted with the custody of the envelope until the second bid
opening preceding.

c) The result of the technical evaluation shall be communicated in writing to

all bidders at the same time who participated in the bid after approval by
the competent body.
d) The letter of notification to be written to the unsuccessful bidders on the
technical evaluation shall state the reason for not being chosen as the
successful bidder. The unsuccessful bidders have the right of complaint
against the result of the evaluation. The procedure in accordance of which
such complaints may be lodged and reviewed shall be as provided in
chapter 3 of this policy.
e) The letter of notification to be written to bidders whose technical proposals
have been accepted by the company shall state the time and place of
opening of the financial proposals. The notification shall be sent to all such
bidders at the same time and adequate time should be given to all bidders
wishing to attend the financial envelopes opening proceeding. However, if
a complaint is lodged against the result of the technical evaluation, the
financial proposals shall not be opened pending decision on such
complaint.
f) The financial proposals shall be opened in the presence of the bidders whose
technical proposals have been accepted and to whom letter of notification
is written to attend the proceeding in accordance with article 5.18.3 (e)
above.
g) The envelopes containing the financial proposals of bidder successful in
the technical evaluation shall be opened and the name of the bidder, the
price offered and any discount given by such bidder and the conditions for
such discount, and any other information related to price shall be read out
to inform the bidders in accordance with article 5.18.3 (f) above.
h) Upon disclosure of the result of the technical evaluation, the bid security
and the envelopes containing the financial proposals shall be returned
unopened to the unsuccessful bidders. If, however, a complaint is lodged

against the result of the technical evaluation under article 16.18.3 (d), the
bid security and the financial envelopes shall not be returned to the
unsuccessful bidders pending final decision on such complaints.
5.19.4 The procurement unit of the company shall record the minutes of the bid
opening. Such minutes shall contain the names of the bidders, their bid price
and any other salient points raised in the bid opening proceeding. The minutes
and the original bid documents shall be signed by employees conducting the
bid proceeding. Bidders present during the bid opening shall sign the
attendance sheet.
5.19.5 Any bid document not opened and read out during the bid opening proceeding
shall not be considered for further evaluation.
5.19.6 No bidder shall be disqualified from a bid at the time of bid opening
proceeding.
5.19.7 The date for opening of bids and the last date for the submission of bids shall be the
same,
5.19.8 Bids shall be opened at the time specified in the bidding documents.
5.19.9 The bid opening date may be extended at the initiative of the company or in writing
where the bidders request for such extension 5 days before the opening date stating
the reasons for extension and the company shall extend the opening date if the reason
for the request for extension is acceptable to it,
5.19.10 If the request for extension is accepted, as per the extension bid, the opening date
shall be announced using the media the first bid was announced,
5.19.11 The reason for extension shall be recorded by the company.
5.20 Evaluating and comparing bids.

5.20.1 Preliminary evaluation.
a. A company may find a bid complete and qualify that bid for detailed
evaluation only if the bid document submitted by the bidder is opened during
the bid opening proceeding and complies with the prerequisites and essential
requirements stated in the bidding document.

b. The company may put a bid for detailed evaluation under the following
conditions:
i. Where the bid does not meet the minimum quality and other essential
requirements set forth by the company and, therefore, is found to be
non-responsive at first sight;
ii. Where the bidder is not willing to accept corrections of Arithmetical
errors made pursuant to Article 5.19.1.c
iii. Where the bidder does not furnish the bid security or is not willing to
furnish the performance bond required by the company;
iv. Where the bidder does not produce evidence of facts that need to be
proven in connection with the procurement.
c. Notwithstanding the provision of article 16.19.1.a above, a company may
correct Arithmetical errors detected during preliminary evaluation of bid
documents. The company shall promptly notify the bidder in writing of such
corrections. If the bidder does not agree to such corrections, the bidder shall
be dropped out of the bid proceeding. Where there is discrepancy of unit and
total price in the bid document, unit price shall prevail,
d. The company may accept a bid as complete notwithstanding that such bid
contains elements representing certain variance with the bidding document, in
so far as such elements do not alter the conditions of contract and other
essential requirements forming the fundamental aspect of the bidding
document, or bears minor errors or deviations which can be corrected without
affecting the essence of the bid. However, such deviations shall, as far as
possible, be expressed in monetary terms to be taken account of in the
Evaluation of bids.
e. Depending on the complexity of the Capital Goods, the company can establish
special bid committee for the technical evaluation or shall use the existing
Procurement committee for the technical evaluation ,
5.20.2 Evaluating bids and selecting the successful bidder.

1. The company shall conduct detailed evaluation of bids it receives at the initial
stage of the bid proceeding, on the basis of the requirements set forth in the
bidding document. The company may not evaluate bids against other criteria
than those stated in the bidding document.
2. The company shall conduct the evaluation by applying either of the following
methods; as indicated in the bidding document:
a. In respect of bids submitted in one envelope, by selecting the bidder offering
the lowest evaluated bid from among bidders submitting responsive
technical proposals.
b. In respect of bids submitted in two envelopes, by selecting the bidder
scoring the highest point in the total sum of results of the technical and
financial evaluation conducted on the basis of criteria applied to determine
the functional value of the capital goods procurement.
3. In conducting detailed evaluation of bids, the unconditional discount offered by
bidders shall be considered.
4. If necessary, verification may be done in post qualification to ascertain whether a
bidder has the legal competence to transact with the company, or possesses the
necessary financial and technical qualification stated in the bidding document.
5. Unless otherwise stated, price offered by bidders in respect of capital goods
procurement executed by means of international competitive bidding and the
evaluation thereof shall not include any taxes (without custom duty and VAT).
6. Where two bidders get equal merit points in the evaluation, preference shall be
given to local capital goods (products) in accordance with article 25/3 of the
proclamation.
7. Without prejudice to Article 5.19.2.(6) above, the company may require bidders
scoring equal merit points in the evaluation to submit further proposals on
certain aspects of the bid with a view to identifying the successful bidder. For the
purpose of singling out the successful bidder from among bidders getting equal
points in the evaluation,

a) the number of evaluation criteria shall not be more than three and shall be
such that can be expressed in figures;
b) The criteria shall be stated in the bid data sheet of the bidding document.
c) Bidders scoring equal merit points shall be notified of that fact and such
bidders are invited to submit final proposals in accordance with the
requirements stated in the bidding document.
d) The final proposals submitted by the bidders scoring equal points shall, as
far as possible, be opened and read out in their presence. The proposals
shall be evaluated and the bidder submitting the better proposal shall be
declared the successful bidder.
e) Where by reason of the bidders scoring equal merit points not submitting
final proposals they are invited to submit, or by reason of the evaluation
result of the final proposals submitted by the bidders being still equal, the
successful bidder cannot be singled out, the successful bidder shall be
determined by casting lot in the presence, as far as possible, of the bidders
concerned.
8. To the extent that the criteria the Company applies to select the successful bidder
is known, it shall be stated in the bidding document that the quantity of capital
goods to be supplied could increase or decrease by 20% without the unit price
offered for such goods or the terms and conditions stated in the bidding
document being changed.
9. The company shall complete and disclose bid evaluation results to bidders
concerned before the expiration of price validity period offered by such bidders.
However, if the Company cannot complete the evaluation within such period, it
shall require the bidders to extend their bid price validity period pursuant to
article 5.15.4.
10. Where an invitation to bid attracts only one bidder, the Company may sign
contract with that bidder if the proposal submitted by such bidder is satisfactory
to the Company and the price offered by the bidder is comparable to or less than

the market price of the required capital goods of procurement; it being necessary
to make sure that the failure of the bid to attract bidders is not due to the fact that
the content of the bidding document is restrictive of open competition.
11. The company shall prepare an evaluation report, containing a summary of the
examination and evaluation of bids,
12. The company shall announce local bid evaluation result in the form of a report giving
justification for acceptance or rejection of bids within seven (7) days after the bid is
opened
5.20.3 Re-advertising bids.

The Company shall issue invitation to bid for a second time under the following
circumstances:
a. Where the company finds it advisable to re-advertise the bid owing to the
best price offered by a bidder is significantly higher than the market price
estimate of the capital goods of procurement made by the company prior to
the issuance of the invitation to bid;
b. Where it is concluded that noncompliance with the rules and procedures
governing bids prescribed by the proclamation and this policy led to the
failure of the invitation to bid to attract more than one bidder, or where it is
believed that modifying the bidding document could attract adequate number
of bidders.
5.21 Preference
5.21.1 Pursuant to Article 25 of the proclamation, with the exception of request for
quotation and single source procurements, preference shall be granted in any
capital goods procurement to locally produced goods, to small and micro
enterprises established under the relevant proclamation.
5.21.2 The preference to be granted to capital goods as per article 5/20/1shall be
effective where it is certified by a competent auditor that no less than 35% of
the total value of such products is added in Ethiopia. For the purpose of this
sub-sub article, value added in Ethiopia shall be calculated by deducting from

the total value of the product in question, the cost , exclusive of indirect taxes,
of imported raw materials and other supplies used in the production of such
product abroad in connection with the production of that product.
5.21.3 For small and micro enterprises established under the relevant law,
a. Preference shall be given by a margin of 3% when such enterprises
compete with local suppliers in national competitive bidding.
b. In lieu of bid security, performance security or advance payment
guarantee, a letter of guarantee written by a competent body organizing
and overseeing small and micro enterprises shall be accepted.
c. They shall be entitled to obtain bidding documents free of charge by
producing their certificate of registration.
5.22 Cancelation of Bid and Disqualification of bidders

5.22.1 The company shall cancel any bid for the following reasons when:-
a. The bid document submitted does not comply with the (technical) specification or
instruction to bidders,
b. Bidders are proved for not complying the rules and regulations of the bid and
exhibit un accepted relations,
c. The company discovers that there is some defect in the specification,
d. The price is much higher than the budget approved and the company is not in a
position to negotiate with the successful bidder,
e. The company up on request communicates 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.
5.22.2 The company may disqualify a bidder for any of the following reasons:
a. Where a bidder offers to supply the required capital goods of procurement
originating in a country in respect of which the government of the Federal
Democratic Republic of Ethiopia has imposed trade ban;
b. Where the bidder offers to supply the required capital goods of procurement
originating in a country under trade embargo of the Security Counsel of the

United Nations in which transacting with any business organization or individual

who is the national of that country is prohibited;
c. Where the bidder commits an act of violating the provisions of the proclamation
and this policy;
d. Where the bidder is debarred by a decision of the Agency from participating in
capital goods procurements for breach of its obligation under previous contract;
e. Where it is proved that the bidder has given or has offered to give inducement or
bribe to an official or procurement staff of the Company to influence the result of
the bid in his favor;
f. Where it is proved that the bidder has committed an act of embezzlement, fraud or
connivance with other bidders.
g. Where the bidder has failure on his part to fulfill any obligation he has under
taken in previous bids,
h. When the bidder fails to deposit the required bid bond or performance Bond,
i. Where the bidders Failure to submit bids with all required forms and information
and non-compliance of the bidder to the bid requirements
5.23 Discussion with bidders

5.23.1 A Company may hold discussion with bidders in a procurement proceeding
only where it encounters extraordinary situations. Such discussions are held for
two purposes:
a) To exchange views with bidders on minute details of a capital goods
procurement;
b) To arrive at a decision through negotiation with bidders on the technical
requirements of a bid in procurement to be executed by means of two
stage bidding.
5.23.2 Except as provided in article 5/22/1 above, company may not require nor
allow bidders to change their offer in regard to price and other essential
elements of the bid, apart from seeking bidders to give it clarification on
certain points of their proposal for the purpose of evaluation after bid opening.

5.24 Approving bids

5.24.1 The company procurement endorsing committee to conduct evaluation of bids
in regard to certain procurement shall complete the evaluation and submit the
result together with its recommendation, to the Procurement Endorsing
Committee or other body having the authority to approve bid evaluation
results, within the bid validity period offered by the bidders.
5.24.2 The Procurement Endorsing Committee established in accordance with the
this policy shall examine the evaluation report in light of the procurement rules
and procedures as well as against the requirements of the bidding document
and give either of the following decisions:
a) Approve the evaluation report as a whole and authorize the
procurement to Proceed accordingly;
b) Reject the report and order re-evaluation.
5.24.3 Where the Procurement Endorsing Committee finds it necessary, it may
require the persons conducting the evaluation to account for the evaluation
report.
5.24.4 Where the Procurement Endorsing Committee rejects the report pursuant to
article 5.23.2 (b), it shall state the reason for its decision and refer the case
back to the evaluation team with instruction for the team to follow in re-
evaluating the bids in question. The evaluation team shall conduct re-
evaluation in accordance with the instruction of the Procurement Endorsing
Committee and report the result back to the committee.
5.24.5 Notwithstanding the provision of article 5/23/4 above, the evaluation team or a
member thereof objecting to the decision of the committee and the corrective
instruction given by the committee has the right to record its/his dissenting
opinion. However, the procurement shall be executed in accordance with the
decision of the committee.

5.25 Announcing the successful bidder

5.25.1 The company shall announce the result of a bid evaluation to all bidders alike
at the same time. The information to be disclosed to the unsuccessful bidders
shall be the reason why they did not succeed in their bid and the identity of the
successful bidder.
5.25.2 A letter of award to be sent by the company to a successful bidder shall not
constitute a contract between him and the company. A contract shall be
deemed to have been concluded between the company and the successful
bidder only where a contract containing detailed provisions governing the
execution of the capital goods procurement in issue is signed.
5.25.3 A letter of contract award to be sent to a successful bidder shall contain the
following information:
a) That the Company has accepted his bid;
b) The total contract price;
c) The amount of the performance security the successful bidder is
required to furnish and the deadline for providing such security.
5.25.4 Where the successful bidder cannot or is unwilling to sign a contract, the
company may either declare the bidder submitting the second most preferred
bid the successful bidder or invite such bidder to sign a contract or advertise
the bid afresh by assessing the benefit of the two options.
5.25.5 The company shall return to the bidders their bid security on the following
conditions:
a) If the successful bidder has signed contract and furnished the required
contract security;
b) If the bid validity period initially offered by a bidder not willing to
extend such period has expired or if a bidder is unsuccessful.
5.25.6 The contract shall not be signed by the company before the period to submit
complaint has lapsed.

5.26 Performance Security

5.26.1 Except for procurements executed by means of by quotations and direct
procurement of capital goods, the company has to require a supplier under
contract with it to furnish performance security in any procurement.
5.26.2 The Successful bidder has to provide performance security within fifteen days
from signing a contract in the amount of at least ten percent (10%) of the total
contract price, in the mode and manner prescribed in article 5.16.4 of this
policy.
5.26.3 Where a supplier fails to discharge its/his obligation in accordance with the
terms and conditions of the contract, the company shall exercise its right over
the security and demand or confiscate in whole such security, as the case may
be.
5.26.4 Notwithstanding the provision of article 5.25.3 above, the performance security
may be returned to the supplier where the Procurement Endorsing Committee
ascertains that the noncompliance of the supplier does not affect the interest
of, or entail additional cost on the company and is not due to the fault of the
supplier.
5.26.5 The company shall be required to submit any document in its possession in
relation to a capital goods procurement in which it authorizes the return of the
performance security to a supplier and account for its action under the
preceding sub article 5.25.4 of this policy to the BOD or other competent body
if and when required to do so.
5.26.6 Unless the parties agree otherwise, the performance security furnished by a
supplier shall be returned to him upon complete performance of the contract.
5.27 Advance payment

5.27.1 In any capital goods procurement, advance may be paid in an amount not
exceeding 30% of the total contract price. The amount to be paid in advance
shall be stated in the instruction to bidders.

5.27.2 Suppliers shall submit advance payment security in an amount equal to the
advance payment they receive in the form of a certified cheque or
unconditional bank guarantee at their option from a reputable bank, together
with their request for advance payment as per the contract.
5.27.3 Notwithstanding the provision of Article 5.26.2 above, local manufacturers of
capital goods may submit conditional advance payment security from reputable
insurance company.
5.27.4 Without prejudice to the provision of article 5.20.3(b) hereof, in respect of
small and micro-enterprises, a company may, where appropriate, require the
opening of special bank account into which the advance payment may be
deposited, which shall be withdrawn by join signature of the representative of
the company and the supplier for payment of capital goods procurement arising
from the performance of the contract.
5.27.5 Where in accordance with article 5.26.3, the advance payment security
provided by a supplier in the performance of a capital goods procurement of
contract is conditional, or in respect of advance payment made in favor of a
small and micro-enterprise in accordance with article 5.26.4, the company shall
enter into special agreement with the supplier or the small and micro-enterprise
as the case may be, for the use of the advance payment. Such agreement inter
alia includes the following:-
a) That the advance to be paid to the supplier or the small or
microenterprise in accordance with the agreement shall be deposited in
a special bank account to be opened for this purpose in the name of the
supplier or the small or micro-enterprise.
b) That the advance to be deposited in the account to be opened as per (a)
above can only be with drawn by joint signature of the company and
the supplier

5.28 Signing of Contract

5.28.1 The company has to sign with a supplier, an agreement containing the general
conditions of contract forming an integral part of the bidding document and the
special conditions of contract to be agreed upon by and between it and the
supplier.
5.28.2 Unless a agreement is signed between the company and the supplier, mere
notification of award doesn’t constitute a contract between the company and
the supplier.
5.28.3 The contract to be signed between the company and the supplier shall clearly
state the obligations of the two parties and incorporate provisions, inter alia, for
the following matters:-
a) The type, quality and quantity of capital goods to be supplied, as per the
contract, the manner and schedule of delivery of such goods, the unit
and the total price to be paid for such goods, and the terms and
schedule of payment.
b) Identifying the party responsible for securing the provision of incidental
services (Transport, Insurance, transit etc) from third parties, it being
necessary to obtain such services from reliable sources,
c) Discount and other offers proposed by the supplier in its bid document
and the application of such offers,
d) Procedure for resolution of disputes that may arise in the performance of
the contract,
e) The portions from the total payment to be effected in foreign and local
currency for a foreign supplier,
f) Procurement document forming an integral part of the contract and the
scope of application of such documents.
g) The conditions giving rise to forfeiture of performance security,
h) The liability of the supplier for delay in supplying the goods,
performing the works or rendering the services as per the contract.

5.28.4 The liability of the supplier for delay in performing his/its obligation under the
contract shall be as follows:-
a. He/it shall pay a penalty of 0.1% or 1/1000 of the value of undelivered
item for each day of delay,
b. The cumulative penalty to be paid by the supplier shall not exceed 10%
of the contract price.
c. If the delay in performing the contract affects its activities, the company
may terminate an agreement by giving advance notice to the supplier,
without any obligation to wait until the penalty reaches 10% of the value
of the contract.
5.28.5 The company has to carefully consider the obligations and liabilities it may
have to assume under a contract; it may not sign a contract involving
obligations that it cannot fulfill.
5.28.6 Subject to article 5.27.7 of this policy, unless an exceptional situation arises,
the successful bidder has to sign a contract with the company within 15 days of
notification of award.
5.28.7 The company shall not sign a contract before seven working days from the date
bidders are notified of the result of their bid or of any complaint against the bid
proceeding.
5.28.8 The contract document should be signed and stamped by both parties at the presence
of witness,
5.28.9 The contract is governed by the laws of the land,
6 Procedure of International procurement

6.1 Procurements by means of International competitive Bidding shall be made in accordance
with article 59 of the Proclamation and this article.
6.2 Subject to the provision of article 59 (1) of the Proclamation, capital goods procurement
may be made by means of international competitive bidding if the value of the contract
exceeds the threshold for capital goods above Birr 10,000,000.00

6.3 The company shall use international bid to purchase Capital Goods or services that are not
available in the required quantity at local market or the international Bid shall be issued
when the quality of the Capital Goods or services to be purchased from international market
are preferred in terms of quality,
6.4 If the Bidders for capital goods procured with international bid are not manufacturers of the
capital goods to be procured they are required to bring certificate of evidence that shows the
supplier is agent of the manufacturer if required by the company.
6.5 Bidders participating in procurement of capital goods made by means of international
competitive bidding have to produce manufacturers authorization if a company requires
them to do so, unless they themselves are manufacturers of such goods,
6.6 In addition to the procedure of national competitive bidding set forth in article 5 of this
policy, capital goods procurements made by means of International Competitive bidding
shall comply with the following procedure:-
a) The bid advertisement and the bidding documents shall be prepared in English,
b) The bid advertisement shall be published in a newspaper that has wide circulation and
accessible to foreign bidders, the bid advertisement shall be posted on the company’s
website if the value of the procurement is above the threshold stated in article 6.2 of
this policy.
c) Bidders must be given adequate time to prepare bid documents in response to the
invitation to bid in accordance with article 5.9 of this policy.
d) The schedule of requirements to be prepared shall comply with national standard and
be internationally acceptable.
e) Bid prices offered by foreign bidders shall be quoted and bid securities required of
such bidders shall be furnished in a freely convertible currency used for payment in
international commercial transactions.
f) Where a foreign bidder uses local inputs to satisfy the required capital goods
procurement under the contract, the portion of the portion of the total contract price
representing such local expenditure shall be expressed in birr in the price schedule of
the bidder price representing such local expenditure shall be expressed in birr in the
price schedule of the bidder.

g) An agreements concluded for procurements to be made by means of international

competitive bidding may incorporate standard terms and conditions applicable in
international commercial transactions to the extent that such terms and conditions are
not in conflict with the Proclamation, this policy and other documents governing
capital goods procurement
h) Unless the contract provides otherwise, disputes arising from the performance of the
agreement shall be adjudicated in accordance with Ethiopian Law.
7. Other International Procurement procedures

7.1 Where the participation of foreign companies is believed to be necessary to carry out
adequately competitive and effective procurement, the company may, without prejudice
to certain aspects of National & International Competitive bidding procedures set forth in
the Proclamation and this Directive which are appropriate to the particular method of
procurement in question, may execute International Procurement by means of two stage
bidding, request for proposals, restricted bidding, request for quotation or direct
procurement pursuant to article 59(4) of the Proclamation.
7.2 In carrying out International Procurement by means other than International competitive
bidding pursuant to article 7(1) above, the conditions and financial thresholds prescribed
for each method of procurement shall be complied with.
8. Procurement by means of two stage Bidding

8.1 Subject to the provisions of article 57 and 58 of the Proclamation, procurement made by
means of two stage tendering shall be carried out in accordance with the procedures set
forth for national or international competitive bidding, as the case may be, in article 5 or
6 of this policy respectively.
8.2 Notwithstanding the provision of article 8.1 above, the following bid procedures shall
apply in respect of two stage bidding:-
8.2.1 It shall be stated in the invitation to bid that the capital goods procurement shall
be carried out by means of two stage bidding,
8.2.2 Candidates shall not be required to furnish bid security during the first of the two
stages bidding,

8.2.3 Since the purpose of the first stage is to draw up detailed schedule of requirements
based on proposals from candidates, the bidding document prepared by the
company for the first stage shall state the requirements of the company in general
terms and incorporate the necessary description and questionnaires.
8.2.4 The technical proposal submitted by candidates during the first stage shall be
opened in the absence of the candidates in the manner stated in the invitation to
bid.
8.2.5 The first stage evaluation shall focus on examining the proposals submitted by
candidates at the first stage to identify the schedule of requirements necessary and
the bidders qualifying for the second stage bidding. During the first stage
evaluation, the company may also hold discussion with all, some or one of the
candidates as necessary. The discussion to be conducted accordingly shall aim at
creating better understanding of and develop the proposal/proposals submitted by
the candidates.
8.2.6 The bidding document to be proposed for the second stage bidding shall as far as
possible comply with the procedure of competitive bidding set forth in article 5&
6 of this policy.
8.2.7 Invitation shall be sent to the candidates whose proposals have been accepted in
the first stage bidding to participate in the second stage bidding. Such bidders
shall be required to furnish bid security.
8.2.8 The company shall send to such bidders or require them to collect person the
bidding document prepared for the second stage bidding.
8.2.9 The invitation to bid sent to the candidates pursuant to article 8.2.7 above shall
state clearly the requirements they have to fulfill to obtain the bidding documents.
9. Pre-qualification bid
9.1 Where, in view of the particular nature of the capital goods procurement, the company
finds it necessary to prequalify bidders, it may invite national or International
prequalification bids as the case may be.
9.2 Capital goods procurements requiring prequalification bids should satisfy at least one of
the following criteria:-

a) Where the capital goods procurement pertains to a work of design, manufacturing or

installation of a very high value or complex nature, or
b) Where the procurement pertains to supply of capital goods considerable importance
and includes installation, or
c) Where the cost of drawing up bidding documents is so high that only pre-qualified
bidders should participate in the bid.
9.3 It shall be stated in the invitation to bid that the bid is for prequalification.
9.4 Bidding documents for pre-qualification shall be prepared in conformity with the
standard bidding document concerning pre-qualification issued by the agency. Without
prejudice to the fact that the criteria applied in selecting pre-qualified bidders vary from
one type of procurement to the other, bidders under prequalification screening shall be
required to produce evidence in proof of the following facts to demonstrate their
qualification:
a) the experience of the bidder enterprise in producing the good, rendering the
service or executing the work required;
b) the capability of the enterprise to deliver the required capital goods of
procurement, in terms of having adequate human power, machinery, equipment
and complete infrastructure,
c) that the enterprise has good reputation and financial standing that enables it to
perform its obligations under the contract
9.5 Evaluation of bids shall be conducted in accordance with the criteria formulated by the
company to evaluate pre-qualification bids.
9.6 No restriction shall be imposed in the number of bidders passing to the second stage
bidding as long as such bidders have pre-qualified.
9.7 The company may allow bidders participating in a prequalification bid to compete in
Joint venture or partnership. However, bidders who have prequalified individually shall
not be allowed to compete in Joint venture or partnership unless it is established that the
joint venture or the partnership does not narrow the scope of the competition.
9.8 Notwithstanding the provision of article 9/6 above, bidders participating in pre-
qualification bid as joint venture or in partnership and pre-qualifying as such shall not be
allowed to compete individually in the next stage bidding.

9.9 The result of the pre-qualification evaluation approved by the appropriate authority of the
company shall be disclosed at the same time to all bidders participating in the bid
regardless of whether such bidders have prequalified.
9.10 A company may not sign a contract with a bidder declared to successful, if the
information given by such bidder in regard to its qualification, in its prequalification bid
is found to be wrong, or if it is established, with reasonable degree of certainty, that it no
longer possesses the capability on the basis of which it pre-qualified, and hence, cannot
perform the contract on the expected level.
9.11 The preparation of the bidding document to be sent to the respective addresses of the
pre-qualified bidders or to be collected by such bidders in person and the rest of the
capital goods procurement process shall be carried out in accordance with the national or
international competitive bidding procedure established by the proclamation and this
policy.
10 Procurement by Restricted Bidding

10.1 Procurement made by means of restricted tendering pursuant to article 49.1of the
proclamation shall be executed in accordance with national or International competitive
bidding procedures set forth in articles 5 and 6 of this policy.
10.2 Capital goods Procurement made by means of restricted tendering shall be carried out
in compliance with the following rules.
10.2.1 The invitation to bid shall be sent directly to the address of the candidate and:
a) If the required capital goods of procurement is available only with limited
suppliers, the invitation to bid shall be sent directly to the respective
addresses of those suppliers
b) At least five candidates shall be selected in a fairly manner from the
suppliers list if the value of the procurement falls within the threshold set
forth in article 10.3 of this policy for capitals goods procurement by
restricted bidding, notwithstanding that the number of prospective bidders
is large.
10.2.2 The company shall not disclose the identity of candidates invited to participate
in a procurement by restricted bidding

10.2.3 If all the candidates invited to participate in a capital goods procurement by

restricted bidding have submitted their bid documents before the date set for
expiration of the floating period, the company shall fix a new date for bid
opening and communicate this to all candidates to be present on that date
without having to wait until the initial closing date.
10.2.4 The company in its discretion may waive collecting from candidates charges
for bidding documents and send to such candidates the bidding document
together with the invitation to bid.
10.2.5 Pursuant to the provision of article 5(4) of the proclamation, if the Company is
of the opinion that in view of their limited number, requiring the candidates to
furnish bid security discourages them from participating in the bid. It may, in
lieu of bid security, require them to sign bid declaration form attached as
annex 5 to this policy and submit such form with their bid documents.
10.3 Without prejudice to the provision of article 10.2 above, the total contract value of a
procurement made by restricted bidding for Procurement of Capital Goods Birr
3,5001,000-5,000,000.00
10.4 The company shall select candidates to be invited from suppliers list. Any selection shall
allow equitable opportunities for suppliers on the list. The company ensures the short-
listed candidates by notification:
a. The place and time for opening of the bids
b. Those bidders or their authorized representatives are allowed to attend
the opening.
c. The number of suppliers to whom the invitation to bid is sent shall be
such that it is sufficient to ensure effective competition and shall not as
far as possible be less than five competitors.
d. The company determines during bid process whether it is necessary to
require the candidates to submit bid security.
10.5 To carry out procurement by means of restricted bidding pursuant to article 49.3 of the
proclamation, the following conditions must be satisfied in the order in which they are
listed.

10.5.1 Invitation to open bid for the procurement must have been published at least
twice, and the invitation must have attracted no bidder, or the bidder or
bidders responding to the second invitation to bid must have failed to meet the
technical requirements set forth by the company for that procurement
10.5.2 There must have been no factor associated with the invitation to bid, or
amount of bid security, bidding document or any other element of the
procurement process, restraining candidates from participating in the bid.
10.5.3 The company must have believed that inviting suppliers engaged in the field
pertaining to the object of procurement to participate in the procurement by
restricted bidding attracts such suppliers to participate in the procurement.
10.5.4 The company must, as far as possible, have established through inquiry that
the suppliers engaged in the field have no ulterior reason for not wanting to
participate in open bid for the procurement, which is illegitimate or prejudicial
to the interest of the company.
10.6 Without prejudice to the provisions of sub articles 10.1 through 10.4 of this article, the
procedure of national competitive bidding set forth in article 5 of this policy shall apply
to procurements made by means of restricted bidding.
11 Procurement by Request for Quotations

11.1 The company may engage in procurement by means of request for quotations for the
purchase capital goods for lessees depend on the nature of the capitals goods so long as
the estimated value of the capital goods does not exceed an amount stated in the
procurement policy to be issued by the company.
11.2 The company can purchase capital goods by price quotation (Proforma) when a single
price of Capital Goods birr 50,000.00 up to birr 3,500,000.
11.3 The company can purchase Capital Goods by requesting pro forma as follows:,
11.3.1 For the procurement of birr 50,000.00 up to birr 3,000,000 the Capital Goods
requesting MSMEs to identify suppliers and negotiate the price of the
machinery by themselves and then to present the quotation to the Company.
The company after ensuring whether the quotation presented is fair market
price, to conduct (effect) the payment.

11.3.2 In addition ,if the MSMEs cannot identify supplier and negotiate for price by
themselves and if delegates the company to procure on behalf of them, the
company can purchase the capital Goods of the range of the stated amount on
behalf of the MSMEs through collecting pre forma.
11.3.3 For the procurement between birr 3,000,001.00 up to birr 3,500,000.00, the
company with lessee to buy through collecting at least three per forma from
known suppliers of machineries. The MSMEs should agree with the price and
specification of the machineries before the company effect the payment.
11.3.4 Whereas, where the committee cannot find three per forma for the
procurement under this range (amount) and also confirm this condition
(inability to find three per forma) through the committee minute, the company
may use direct procurement buy through one per forma in the situation when
only one per forma is collected.
11.4 In any procurement of capital goods made by means of request for quotation, not less
than three candidates, as far as possible, shall be selected from the suppliers’ list in
compliance with the following rules to ensure fairness in the selection:
a) Unless the interest of the company requires otherwise, the same supplier or
suppliers shall not be selected repeatedly, so that other suppliers in the suppliers
list may have the opportunity of competition to sale to the company.
b) The company has to establish a system to prevent possible acts of connivance in
offering and accepting price in the process of capital goods procurement by
request for quotation and carry out price verification regularly in accordance
with article 11.8 below.
11.5 Each candidate shall be allowed to quote a firm price which may not be changed. No
negotiation shall be allowed between the company and the candidate on the price quoted
by the candidate.
11.6 The successful supplier shall be selected on best price basis, by comparing supplies
meeting the quality characteristics of the company’s requirements as described in the
specification.
11.7 For the purpose of evaluation, prices offered by suppliers in response to a request for
quotation shall not include Value Added taxes.

11.8 For the purpose of price verification in regard to procurements made by means of
request for quotation, company shall refer to the current price list posted on the
Agency’s website and to the price survey carried out by the procurement unit of the
company and accepts the lowest price in respect of an item as the prevailing market
price of that item.
11.9 In procurement made by request for quotation, the Proforma, a supplier presents to the
company and the letter of purchase order sent by the company to that supplier
constitutes a contract between the company and the supplier. Hence, it is not necessary
for the company and the supplier to sign a contract.
11.10 Company may not split procurements merely to take advantage of provisions
governing procurements by request for quotation.
12 Single source procurement

12.1 The company can purchase capital goods directly from sole suppliers where the
suppliers are Government affiliated companies or the suppliers are certified and known
as sole suppliers for the Capital Goods that to be procured.
12.2 The company may use direct procurement only where the following conditions are
satisfied:
a) When in the absence of competition for technical reasons the Capital Goods can be
supplied or provided only by one candidate or supplied or provided by the
manufacturer in the country.
b) Additional deliveries of Capital Goods by the original supplier which are intended
either as parts replacement of existing Capital Goods installations or as the extension
of existing Capital Goods installation where a change of supplier would compel the
company to procure equipment or services not meeting requirements of
interchangeability with already existing Capital Goods;
c) Within limits defined in this procurement policy, for new Capital Goods consisting of
the repetition of similar capital goods which conform to a basic business of which an
initial contract has been awarded on the basis of open or restricted bidding;

d) When the head of the company has determined that the need is one of pressing
emergency in which delay would create serious problems and therefore injurious to
the performance of company;
e) Where situations arise in which shopping becomes necessary to meet the special
procurement needs of company.
f) For purchase of capital goods made under exceptionally advantageous conditions
which only arise in the very short term. This provision is intended to cover unusual
disposals by firms, which are not normally suppliers. It is not intended to cover
routine purchases from regular suppliers.
g) The company may use direct procurement if this method is not with a view to avoid
possible competition or in a manner which would constitute a means of
discrimination among candidates:
12.3 The company shall ensure that this method is not resorted to with a view to avoiding
possible competition or in a manner which would constitute a means of discrimination
among candidates.
12.4 When the company engages in direct procurement it shall prepare a description of its
need and any special requirement as to quality, quantity, terms and time of delivery and
shall be free to negotiate on price and conditions of offer with the sole candidate. Any
agreement reached to conduct procurement shall be confirmed by contract signed by
both parties,
12.5 The salient points to focus in the negotiation of contracts for direct procurements shall
be approved by the Executive Managing Director of the company and communicated to
the negotiators,

PART V
Contract Administration
13 Implementing procurement contracts
13.1 Unless faced with a situation preventing or postponing the execution of contract, the
company has to implement any procurement of capital goods contract they have signed
with suppliers promptly.
13.2 The company has to fulfill conditions established in a contract to expedite the
implementation of the contract as provided in article 13.1 above. These conditions may
include the following:-
a. If the contract provides for advance to be paid to the supplier, effect such
advance payment to the supplier against advance payment guarantee in
accordance with the provision of this article.
b. Open letter of credit (L/C) promptly in respect of a procurement requiring the
issuance of letter of credit in favor of a supplier.
c. Fulfill such other conditions as are stipulated in the contract.
13.3 The company has to identify the duties of a supplier under a contract and insure that the
supplier performs such duties in due time.
13.4 The company has to record the date on which the actual implementation of the contract
has begun upon fulfillment of precondition set forth in the contract for the actual
implementation of the contract and, if necessary, notify this to the supplier.
14 Follow Up of Performance of Contracts

14.1.1 The company has to identify the party responsible for following up the
performance of a contract or make sure that the parties involved in following up
the performance of a contract are aware of their duties. (Where the task is carried
out through coordination of more than one parties)
14.1.2 The procurement unit within a company responsible for monitoring performance
of procurement contracts has to make sure that the supplier delivers the principle
tasks under the contract in accordance with the agreed work schedule.
14.1.3 The company has to carry out the following activities of contract administration as
per the contract agreement.
a. Effect payment or payments due in installment to the supplier on time.

b. Give certificates of performance to the supplier

c. Provide legitimate support to the supplier to enable him performs his
obligation under the contract.
14.1.4 Where it is called for, the contract may be amended in the course of its
performance; it being understood that such amendment shall not be detrimental to
the interest of the company and not favor one supplier or certain suppliers to the
prejudice of the other suppliers.
14.1.5 The company shall carry out the following activities in connection with the
following up of performance of contracts:-
i. Open letter of credit (L/C) in accordance with the terms and conditions of the
contract.
ii. Handle acceptable requests of amendment of letter of credit (L/C) promptly
iii. Exercise caution and follow-up so that the validity period of a performance
bond, L/C or guarantee does not expire before the supplier fulfills his/its
obligation to the company under the contract.
iv. Follow up that works are completed on schedule agreed in Goods are supplied
within the time stipulated in the contract.
v. Take the necessary precaution to prevent in the performance of a contract that
give rise to claims by suppliers
15 Completion of a Contract
15.1 The company has to ensure that the performance of a procurement contract is completed
with the terms and conditions of such contract being complied with and other
transactions incidental to such contract being finalized.
This involves ensuring that:-
a) The supplier has delivered the capital goods to be supplied under the contract.
b) Proper follow up is maintained and appropriate decision is taken in regard to
securities and warranties.
c) For all payments made to the suppliers, the corresponding obligations owed by such
suppliers to the company are satisfied and all payments due to the suppliers under the
contract are effected.

d) All rights of the company arising from the contract and involving third parties such
as Insurance companies, transporters, custom Authority, transistors, Banks are
satisfied and the company has performed its obligation towards such third parties,
15.2 The company shall settle pending accounts with the suppliers and third parties involved
in the performance of the contract.

PART VI
Miscellaneous provisions
16.Records of Capitals Goods Procurement
16.1 The company shall maintain records of procurements listed in article 23 of the
proclamation and other pertinent documents.
16.2 The time for which such records shall be kept corresponds to the time to be stipulated
in the financial Administration Regulations to be issued pursuant to article 73 of the
financial administration proclamation of the federal government, proclamation no
648/2001.
17. Registration of Suppliers
The company registers the suppliers who supply of capital goods in the supplier list in its
data base.
18. Reserved Right of the Company
The company shall reserve the right to reorder procurement of Capital Goods from the
supplier selected as per the bid process before or within six (6) months after the signing of
contract. However, the reorder amount shall not exceed 25% of the original quantity with no
change in price stated in the original bid document.
19. Duty to Cooperate

All authorities and employees of the company at all level shall have the duty to cooperate
with the company in the enforcement and implementation of this manual.
20. Black Listing Suppliers

a) A supplier who has failed to fulfill any of its contractual obligations with the
company shall be suspended from bids announced by the company,
b) The company shall notify the supplier in writing that it is suspended from the bid
announced by the company for its previous default.
21. Legality of bidders
The company shall purchase goods and services from and sell a bid documents to suppliers
who has:-
a) Valid Trade License;
b) Paid all taxes at least for the last financial year;
c) Been registered for VAT in accordance with the relevant law;

d) Submit TIN Certificate;

e) Been registered in supplier’s list
PART VII
Ethics in Capital Goods procurement
22. Professional ethics expected of persons engaged in Capital Goods
procurement.
Any employee or person of the company in a position of responsibility involved in
capital goods procurement shall observe the following and other rules of ethics:-
22.1 Where an employee or a person in a position of responsibility involved directly

in capital goods procurement realizes that the decision he makes in respect of
any procurement proceedings conflicts with the interest of himself or his family,
he shall notify this in writing to the CEO of the company and withdraw from that
particular procurement process.
22.2 Where a company receives information from any source that an employee or a
person in a position of responsibility engaged in capital goods procurement is
involved in a conflict of interest in the exercise of his duty,
22.2.1 It shall require the person concerned to respond to the allegation in

writing
22.2.2 The company shall determine whether the allegation of conflict of

interest is true on the basis of the response given by the person whom the
allegation concerns pursuant to article 18/1 above and other evidence
gathered by any means it considers appropriate.
22.2.3 Where the company ascertains as per article 18.2.2 above, that the person
whom the allegation concerns is in fact involved in a conflict of interest
in connection with his duty:-
a. It shall remove the person from that procurement process

b. It shall cause decisions given in participation of that person in connection

with that procurement process to be reviewed.
c. It shall take disciplinary measures on that person unless it is convinced that
the failure on the part of that person to notify the company of the fact of his
involvement in a conflict of interest is due to lack of awareness.
22.3 Any employee or person in a position of responsibility involved directly or

indirectly in capital goods procurement shall refrain from committing an act
which is prejudicial to equal opportunity of candidates or suppliers to compete in
a bid or enter into a contract with a company in any capital goods procurement.
For this purpose, the company have to ensure that:-
a. In inviting bids for procurement, all candidates have adequate
information, that is, a bidding document contains clear and complete
information enabling candidates to participate in the bid and come up
with responsive bids.
b. That the evaluation criteria and schedule of requirements embodied in a
bidding document is not prepared in such a manner as to favor a
particular candidate.
c. That the result of a bid evaluation is made known to all bidders at the
same time
d. The obligation of suppliers in a procurement contract is not deliberately
made simple or onerous in favor or against a supplier and, as far as
possible; the terms of contracts to be signed by various suppliers for
similar procurements are more or less similar.
e. Payment, monitoring, exchange of information or other activities
pertinent to contract administration are applied indiscriminately to all
suppliers.
22.4 Employees or persons in a position of responsibility engaged directly or
indirectly in capital goods procurement shall not accept gifts of any kind which

influences or has the potential to influence their action or decision in the exercise
of their duty. For the purpose of this sub-article, such persons shall observe the
following ethical precepts:-
Without prejudice to article 22.4(e) below:-
a. Not to accept gift which has monitory value especially from a supplier
or a candidate to the company or.
b. Not to accept offer of employment for himself or his family.
c. Not to accept special discount or service in his private transaction with
the person who is a supplier to the company or candidate.
d. Not to accept an invitation, which is likely to influence his action or
decision in relation to his duty; however, he may accept invitation
which does not involve travel or an invitation in which the inviter has
no business relation with the company.
e. Notwithstanding the provision of article 22.4 (a) above, such person
may accept items which are freely distributed for the purpose of
promotion or advertisement and not for sale.
22.5 Any employee or person in a position of responsibility has the obligation to
notify to the appropriate body, any act of corruption intended or perpetrated. For
the purpose of this article:-
a) It is necessary to make sure that the allegation is supported by evidence.
b) Isolate oneself from any act facilitating or assisting the intended act of
corruption.
22.6 An employee or a person in a position of responsibility has to keep in secret any
confidential information of the company, candidates or suppliers which he came
to know of on account of his duty. For this purpose,
a) no information shall be disclosed to any third party which is likely to
restrict competition or helps bidders to derive unfair advantage or which is
detrimental to the interest of the company except by order of a competent
court or by special permission of the head of the company.

b) Keep in secret decisions and other information of the company in dealing

with suppliers in the execution of contracts,
c) Not to disclose information of bidders and bid evaluation results to any
third party before such information is made the procuring company.
23. Ethics Expected from Candidates
Any candidates or suppliers in who supplied or involved in the capital goods
procurement shall observe the following principles of ethics.
a. no candidate or supplier shall give gift either by himself or through a third
party, to an employee or a person in a position of responsibility engaged
directly or indirectly in capital goods procurement.
b. Any candidate or supplier shall disclose to the company information which
he is aware of and which he considers helpful to the company in making
decisions in regard to a bid proceeding or contract administration.
c. He/it shall not connive with other bidders in an offer of price and shall not
exchange information which is harmful to the interest of the company nor use
other bidders documents or information in a bid proceeding conducted by
company
d. Disclose to the appropriate body an intended or perpetrated act of corruption
of which he is aware, and not to be complicit in such an act.

PART VIII
Procedure of Review of complaints presented to the company
24. The right of complaint of a candidate or a bidder
A candidate or a bidder aggrieved or is likely to be aggrieved on account of a company inviting a
bid not complying with the provisions of the proclamation or this policy in conducting a bid
proceeding may present complaint to the head of the company or to the secretariat to have the
bid proceeding reviewed or investigated.
25. Matters in respect of which complaint may not be lodged

Complaint may not be lodged in respect of the following matters:
a. The selection of procurement method carried out in accordance with the conditions
established in this policy.
b. The selection of bidders for capital goods procurement to be made by means of
restricted tendering or request for quotation or on the evaluation criteria set forth in the
bidding document beforehand.
c. Decisions given to reject bids, bid documents or price quotation pursuant to article 30 of
the proclamation.
d. no complaint presented to the head of a company after 5 working days have elapsed
from the date on which the company disclosed the result of a bid evaluation, or no
complaint presented to the board after 5 working days have elapsed from the date on
which the company responded to the complaint shall be accepted.
e. no complaint shall be accepted after a contract was signed, provided that such contract
was signed after seven working days from the result of the bid evaluation being
disclosed as provided .
26. Procedure for review of complaints presented to the head of a company

26.1 Before a procurement contract is signed:-
a) the company conducting bid proceedings shall wait for seven working days
after disclosing the result of the bid evaluation or after responding to a
complaint, to give bidders time to present complaint, if any, against the conduct
of the bid proceeding or against the decision of the company on such complaint

b) candidate or a bidder aggrieved in connection with a procurement proceeding

shall within 5 working days of when he became aware of or should have been
aware of the reason giving rise to the grievance, may submit his complaint to the
Executive Managing Director. A complaint submitted to the Executive
Managing Director of the company thereafter may not be entertained.
c) Unless the complaint is resolved by mutual agreement of the candidate or bidder
that submitted it and the company conducting the procurement, the head of the
company shall give decision on the complaint in writhing within ten working
days from the date of submission of the complaint Pursuant.
d) The company shall give to the complainant a copy of the decision within 5
working days from the date in which the decision was made.
26.2 Bid submitted by two envelopes
Without prejudice to the forgoing provisions concerning procedure of complaint, in

a bid in which bidders are required to submit technical and financial proposals in
two separate envelopes:-
a. The company shall communicate the result of the technical evaluation in
writing to all bidders at the same time.
b. The company shall indicate in the letter in which it discloses the result of the
technical evaluation to each bidder that any bidder claiming that the
technical evaluation has not been conducted in conformity with the
proclamation, this policy or the bidding document has the right to present his
complaint to the Executive Managing Director of the company within 5
working days of being notified of the result.
c. A bidder who can prove that the decision given by the Executive Managing
Director of the company on the complaint lodged by him concerning the
conduct of the technical evaluation is not inconformity with this policy or
the bidding document may present his complaint to the Board of Directors
of the company with in five working days of being notified of the decision.

d. A company may open the envelopes containing the financial proposals after
5 working days from the date of notification of the result of the technical
evaluation to the bidders. However, if a complaint is presented to the BoD in
due time against the decision of the Executive Managing Director of the
company on the complaint previously lodged by a bidder concerning the
technical evaluation, The company shall keep the envelopes containing the
financial proposals unopened until the board gives its final decision on the
case.
e. A procurement proceeding in respect of which a complaint is lodged shall be
reviewed only in accordance with the proclamation, this policy and the
bidding document.
26.3 The obligation of a procurement unit to suspend a procurement proceeding

1. The company procurement unit of shall suspend a bid proceeding if it
ascertains that a complaint is presented to Executive Managing Director of
the company in regard to a bid proceeding within the time stated in article
26.2 (b) above, until the head of the company gives decision on the
complaint.
2. Any decision made by a company in regard to a procurement proceeding
and the reasons on which the decision was based shall be kept as part of the
record of that procurement proceeding.
26.4 Procedure for presentation to and review of complaints by the BOD

a. a bidder may submit a complaint to the board with in five (5) working days
of notification in writing of the decision of the Executive Managing
Director of the company on that complaint if the bidder is not satisfied by
the decision of the by the company or where the Executive Managing
Director of the company does not give decision on such complaint within ten
working days as provided in article 74.3 of the proclamation, within five
days following the last day on which decision should have been given by the

company. A complaint submitted to the Board of Directors after such date

may not be entertained.
b. A bidder presenting complaint to the BoD of the company shall attach to the
application of his complaint a copy of the letter of the complaint submitted
to the Executive Managing Director of the company and a copy of the
decision of the company on the complaint if such decision was given by the
company and other relevant documents.
c. on receipt of the bidders complaint, the BoD of the board shall send a notice
to the company informing the company that a complaint is lodged against it,
and instructing it to submit within five working days its statement of
response together with the record of the procurement proceeding in respect
of which complaint was lodged and to suspend the procurement proceeding
until the board decides on the complaint.
d. The company against which the complaint is lodged has to make sure that
the documents it is required to send to the board in connection with the
complaint are received with in five (5) working days from the date of
notification.
e. the board shall review the complaint against the bidding document issued by
the company, the bid document submitted by the complainant to the
company in response to the invitation to bid, the bid evaluation report and
other documents relevant to the capital goods procurement in respect of
which the complaint was lodged and decide on the complaint in accordance
with the proclamation, bid document and this policy.
f. The board shall give its decision in writing to the complainant and the
company within fifteen (15) working days of receipt of the company’s
statement of response.
g. The board shall send forthwith copies of the decision of the board to the
complainant and the company.

27. Force Majeure

27.1 Force majeure results from an occurrence which the supplier could normally not
foresee and which prevents him absolutely from performing his obligation.
27.2 The following occurrences may accord the circumstances, constitute cases of
force majeure.
a. An official prohibition preventing the performance of a contract,
b. A natural catastrophe such as an earthquake, lightening or floods, or
c. International or civil war, or
d. The death or a serious accident or unexpected serious illness of the
supplier
e. Other instances of force majeure identified as such by the civil code.
27.3 Unless otherwise expressly agreed in a contract, the following occurrences shall
not be deemed to be cases of force majeure.
a. a strike or lock-out taking of a party or affecting the branch of business
in which he carries out his activities, or
b. an increase or reduction in the price of raw materials necessary for the
performance of the contract, or
c. The enactment of new legislation where by the obligations of the
debtor becomes more onerous.
28.REVIEW BY COURT
A supplier who is aggrieved by the decision of the company or Board of Directors of any
other, administrative organ may take the matter to the competent court.

PART IX
Repealed Directives and Effective Date
29.Repealed policy
The Oromia Capital Goods Finance Business Share Company Capital Goods
procurement policy issued in July, 2014 and the amendments thereto are hereby repealed
and replaced by this policy
30.Approval and AMENDMENT

This policy may be amended at any time once in a year and get approval by Board of
Directors at the initiative of the company.
31.Effective Date
This policy shall enter into force on this ….. date of ….. 2020
Addis Ababa May 2….., 2020
Sadat Nasha
Chairperson of BOD

Annex 1. Annual Capital Goods Procurement Plan
Annex 2. Responsibilities of the chair person and secretary of procurement endorsing

committee
RESPONSIBILITIES OF THE CHAIR PERSON COMMITTEE
The chairperson of the Procurement Committee shall have the following responsibilities:
a. Preside over every meeting of the Procurement Committee;
b. Be present on the closing date and time of the bid and seal the bid box;
c. On the bid opening day, ensures that the procedures and regulations of the bid before
the opening have been duly observed;
d. Exhibit that the bid box been properly sealed and shall cause to be opened in the
presence of the members and the bidders;
e. Ensure that the minutes of the bid opening and the process of the meeting, the
decision of the evaluation are properly recorded in the minutes and shall also ensure
that complete record of the minutes are presented;
f. Submit proposals of the Procurement Committee to the Executive Managing Director
or his authorized representative for final approval.
RESPONSIBILITIES OF THE SECRETARY OF THE PROCUREMENT COMMITTEE
a. Record in the minutes the proceedings of every Procurement Committee meeting and
maintain proper and complete records;
b. Record minutes of discussions with suppliers held during the procurement process;
c. Notify the members when and where the Procurement Committee meets;
d. Ensure that reliable bid box is available for each bid ensure that the bid box is properly
locked and keep the key to the bid box in a safe place.
e. After receiving such documents or samples that cannot be deposited in the bid box,
record their receipt, keep them in secret and present them to be Procurement Committee
at the appropriate time;
f. Close and seal the bid box together with the chairman at the bid closing time;
g. Prepare agenda in accordance with the instructions given by the chairman of the
Procurement committee,

h. Return to the bidder without opening any such bids that are received after the bid
deadline;
i. Cast votes in meetings of the Procurement committee.
Annex 3: Floating Period of Bids
Annex 4: Bid security form to be filled by bidders pursuant

Bid number :_____________________________________________________________
To :___________________________________________________________________
(Insert the name of the procuring Public Body)
(Insert the full name of the bidder) hereinafter referred to as the “bidder” have submitted a bid
with identification number (Insert identification number and descriptions of Capital Goods
Goods and related service ) to supply the required capital goods under procurement number
(Insert a short reference to the required objects of the procurement and the procurement
identification number) hereinafter referred to as the bid. Accordingly, I , the undersigned, - ,
(Insert the name of the bidder, individual or organization as the case may be, and the name
of the person authorized by the organization to sign the bid security if the bidder is an
entity) declare that I have read, understood and agree to be bound by the following terms,
(Insert in letter and figure the amount of the bid security and the currency in which such
amount is expressed).
The stamp of the bidder shall be affixed to the document (Insert the validity period of the bid
security days, weeks, months or years) and sealed.
a) Not to withdraw from the bid proceeding after the expiration of the period of bid
submission set forth in the bidding document or within the validity period of my bid
stated in my bid document, or
b) To sign a contract before the expiration of the validity period of my bid, in compliance
with a written notification of award which may be sent to me by the company if I am
the successful bidder, or
c) To provide performance security when I am advised by a notification of award to sign a
contract and furnish performance security,
d) To comply with other requirements stated in the bidding document.

e) To pay the stated amount of the bid security within five days from the date of receipt
of a written request from the Public Body, should I fail to fulfill any of the obligations
stipulated in a-d above,
This bid security shall remain valid for ________ days after the end of the validity period
of the bid. Any claim made in connection with this security thereafter shall not be
acceptable.
Name Insert the full name of the person signing the bid security form
Signature (Insert the signature, name and title of the person signing this document), or If
the person signing this document is an agent, (Insert the full name of such person)
Date (Insert date of signature)

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CAPITAL GOODS PROCUREMENT POLICY

5.14 PRESENTATIONS OF SAMPLES ....................................................................................................................27

PART VIII .......................................................................................................................................................... 67

Procurement Manual Page 1

AS it is clear “Procurement Manual” provides the essential information for procurement of

1.1 SHORT TITLE

Procurement Manual Page 2

b) “Bid” means a tender, or an offer, in response to an invitation, by a person,

Procurement Manual Page 3

Procurement Manual Page 4

1.3 SCOPE OF THE MANUAL

1.4 OBJECTIVE OF THE MANUAL

1.5 BASIC PRINCIPLES AND PROCUREMENT RULES

Procurement Manual Page 5

international bidders offering similar price and quality. However, preference

1.5.2 BASIC PROCUREMENT RULES

Procurement Manual Page 6

1.6 CODE OF ETHICS

Procurement Manual Page 7

2.1 THE BOARD OF DIRECTORS

2.2 The Duties and responsibilities of Executive Managing Director

Procurement Manual Page 8

e) Appoints member of the procurement committee;

2.3 Duties and Responsibilities of a Procurement Unit

Procurement Manual Page 9

o) In collaboration with the requesting MSMEs select candidates for procurement to be

2.4 Capital Goods Procurement Endorsing Committee

2.4.1 A Procurement Endorsing Committee will be established by the company to execute

Procurement Manual Page 10

Procurement Manual Page 11

Procurement Manual Page 12

Procurement Manual Page 13

Procurement Manual Page 14

3.2Identification and packaging of procurements

3.3 Selection of procurement Method

Procurement Manual Page 15

3.4 Deciding /Setting time table for Capital Goods procurement

3.5Content of a procurement plan

Procurement Manual Page 16

ii. Procedures to be followed in performing procurement and

3.6Approval and amendment of procurement plan

Procurement Manual Page 17

5 Procedure of National Competitive Bidding

Procurement Manual Page 18

5.3 Invitation to bid

Procurement Manual Page 19

5.4 Bidding Document

Procurement Manual Page 20

5.5 Instruction to bidders

Procurement Manual Page 21

e. A statement indicating that bidders attempting to influence the bid shall be

Procurement Manual Page 22

o. If advance payment is to be made in accordance with article 5/29 of this

5.6 Technical Specification of Capital Goods

Procurement Manual Page 23

5.7 Bid form and Price Schedule

5.8 General and Special Conditions of Contract

Procurement Manual Page 24

5.9 Setting of criteria for bid evaluation