PROCUREMENT

POLICY AND
PROCEDURES

MANUAL
GLOSSARY OF TERMS

BAFO Best and Final Offer. A negotiation tool that can be used
during the final evaluation phase of procurement using an
RFP when at least two qualified bidders remain within the
competitive range.

CEO Chief Executive Officer.

Contract A Contract is a written document, containing the agreement,
and the terms and conditions, between WPHL and the
Supplier and establishes the parties' respective rights and
obligations.

Evaluation Committee Evaluation Committee is a team of people that assesses the

ability of the potential suppliers to meet WPHL stated
requirements and provides a basis for determining the
merits of competing bids or proposals.

EXCO Executive Committee.

Incoterms International commercial trade terms often form part of a
contract for the sale of goods and are published by the
International Chamber of Commerce.

Purchase Order Legal authorization for the purchase of goods/services from

a vendor.
Procurement Office The unit or department is principally responsible for carrying
out procurement functions for WPHL.
Procurement Officer A staff member within the office who performs procurement
functions.

Proposal A bid submission in response to an RFP.

Procurement Committee A committee that is responsible for ensuring integrity,

transparency, and fairness in the procurement process.

Requisitioner
A WPHL staff member that is responsible for identifying the
procurement needs and submitting to the Procurement
Office a description of the user department’s requirements.
RFI Request for Information. All documents, whether attached
or incorporated by reference, are utilized to collect written
information about various suppliers' capabilities.
RFP
Request for Proposal. All documents whether attached or
incorporated by reference, are utilized for a formal
 solicitation for technical and pricing proposals for a
product/service requirement that includes the evaluation of
the proposals received and recommendation of an award by
the Evaluation Committee.
RFQ Request for Quotation. All documents, whether attached or
incorporated by reference, utilised to solicit price quotes for
a product/service requirement in a less formal procedure
than the RFP.
West Property Holdings Limited
WPHL
SOW Scope or Statement of Work is a document that captures
and defines the work activities, deliverables, and timelines a
vendor must execute in the performance of specified work.
Sole Source Procurement terms are employed when a requirement’s
procurement is available from only one source.

Solicitation Is a procurement exercise involving the issuance of an RFQ or

RFP.
Specifications A detailed description of the attributes of the required
products or services.

Supplier A participant in the procurement process either as a

contractor or an entity that submissions a bid.

Supplier Master A database of suppliers whose registration application has

been accepted by WPHL.

TCO Total Cost of Ownership The total cost of products or services over its entire expected
life span. It includes consideration of both direct and indirect
costs related to the purchase.
1. INTRODUCTION

Procurement is one aspect of supply chain management, and its key goal is ensuring timely
delivery of products, services, or works to WPHL at the right time, price, quality, quantity, and
place to deliver the best value for money. Procurement procedures are a specified set of
approved procurement activities that must be executed consistently and appropriately to ensure
that the best value is achieved in the procurement of products, services, and works.

Procurement encompasses the whole process of acquiring and utilising products or services. The
process spans a life cycle from identification of the need, through the selection of suppliers, to
post contract award management, including disposal.

This Procurement Policy is intended to guide procurement policies and procedures to all staff
members involved in the procurement processes. Equally, the procedures in this Policy are
designed to ensure that those seeking to do business with WPHL can be confident that their
proposals are considered and assessed in a fair, objective, and transparent manner.

Furthermore, this Policy reflects the segregation of responsibilities between the requisitioning
and procurement entities by specifying their separate and distinct functions within the
procurement process. At the same time, cooperation between the requisitioning and
procurement entities is essential to ensure that, WPHL obtains high-quality products and services
that meet the required specifications, at competitive prices, and within the time frame required,
to achieve the mandates of the organisation.

On the one hand, procurement is responsible for assisting the Requisitioners with the purchase
of products, services, equipment, and any other supplies. This function involves inviting suppliers
to submit quotes, bids, and proposals, negotiating contracts with suppliers, and overseeing the
commercial relationship between WPHL and its suppliers to ensure all aspects of our relationship
are held to the highest ethical and professional standards.

On the other hand, Requisitioners are responsible for identifying the needs of the organisation
and developing specifications or requirements to fulfil such needs.

Given that the commercial environment and technology change over time; this Policy may be
updated or modified from time to time. The changes will be provided in the form of amendments
to the Policy, or, if deemed necessary, a new version of the Policy will be issued.

2. PROCUREMENT POLICY OVERVIEW

2.1 Objectives

The objectives of the Procurement Policy are to:

• Simplify and clarify the policies and procedures that govern the end-to-end
procurement process
• Establish uniform and consistent procurement policies and procedures
throughout the organisation
 • Foster effective broad-based competition from all segments of the supplier
community
• Ensure the best value for money in the procurement of products and
services and fully maximize the purchasing power of the organisation
Safeguard the integrity of the procurement system and protect against
corruption, waste, fraud, and abuse.

2.2 Scope and application

The policies outlined in this manual shall apply to all purchases entered by WPHL.
Furthermore, the policies outlined in this manual shall also apply to all employees
acting as agents of the organisation for the procurement of products and/or
services. Any employee who expends company funds: (a) for personal benefit
without being authorised to act as an agent of the company; or (b), without
following the procedures as outlined in this manual will be subject to disciplinary
action.

2.3 Delegation of procurement authority

The Chart of Authority Policy outlines who may approve and sign contracts,
purchase orders, legally binding agreements, business ventures and other
agreements with external parties that obligate the company (including memoranda
of understanding).

User Departments are not authorized to:

• Instruct the supplier, consultant, or contractor to commence work before

the agreement is fully executed and the purchase order issued.
• Change the scope of the agreement without following the formal purchase
document amendment process.
• Direct the supplier, consultant, or contractor to perform work that is not
specifically described in and funded by the agreement.
• Extend the time period of the agreement without execution of an approved
amendment or purchase order revision.
• Allow the supplier, consultant, or contractor, to incur any additional costs
over the limit set by the agreement.

2.4 Guiding principles for procurement

The procurement processes of the organisation shall be governed by the following

guiding principles:
• Best Value for Money
• Effective Competition
• Probity & Accountability
2.4.1 Best value for money

The organisation's procurement process must achieve the best return and
performance for the money being spent. Price is not the sole indicator of value.

Value for Money includes:

• Cost-related factors, which include the entirety of the cost components

that comprise the Total Cost of Ownership (TCO) of the acquired products,
services or works, whether direct or indirect, fixed or variable (e.g. price,
maintenance, upgrade and storage, additional operating costs, disposal
costs, volume discounts, internal processing costs to support the
transaction, etc.)
• Non-cost related factors such as fitness for purpose, quality, service and
support

Non-cost factors that affect the value for money

Identifying the best value for money will include determinations about a range of
non-cost factors related to the functionality of the products or services offered and
supplier performance. Typical non-cost factors include:
• Compliance with Specification
• Risk Exposures
• Benefits to be Obtained from the Purchase
• Availability of Maintenance and Support; and
• Supplier Capability and Financial viability

2.4.1.1 Compliance with specifications

The first step in the evaluation of quotes/bids for products and/or services is a
determination as to whether the supplier is capable of complying with the
specification. Suppliers who are unable or unwilling to supply products that meet
specifications should receive no further consideration. The following factors should
be considered:

• Technical performance: this requires a technical comparison of quotes/bids

against specified requirements. Objectivity, defensibility and accountability
are paramount in these situations.
• Reliability: This relates to the degree to which an item meets the customer's
expectations in respect of functionality and performance. Contractual
guarantee conditions can be important. They may provide some measure of
fallback in the event that a product is defective.
• Economic life: Assessing the economic life of an item is important in
determining the point at which an item becomes more economical to replace
rather than maintain.
Risk exposures

• The identification, analysis, evaluation and management of risk must be

considered in all value for money considerations. Each purchase needs to be
assessed based on how it is intended to be used or the scope of its impact.

Benefits to be obtained from procurement

• There may be a range of benefits associated with a purchase that should be

taken into account when determining the value for money. For example,
some technical innovations associated with a purchase may deliver additional
value for money in the long run. Such benefits must be identified in the
planning phase and included as relevant evaluation criteria.

Availability of maintenance and support

• Availability of maintenance and support is often an important consideration

and should be taken into account in assessing value for money. Suppliers may
have various ways of making maintenance and support, available. It is the
responsibility of purchasers to determine the most effective means of
ensuring that maintenance and support is available.

2.4.1.5 Supplier capability and Financial viability

Supplier related factors usually concern supplier capability to WPHL's requirements.

Such factors may include the supplier's:

• Management capability
• Financial viability
• Technical expertise
• Process and technical capability
• Total quality performance, systems and philosophy
• Past performance of products and service
• Capacity to complete the supplier requirement as and when specified
• Understanding of the purchaser's requirements
• Innovation and value adding features
• Environmental regulation compliance
• Sourcing strategies, policies and techniques

2.4.2 Effective competition

All procurement shall be through competitive bidding, except as provided in Section 6
of this Policy Manual, which provides for the conditions for use of the alternative
methods of procurement.

Competitive bidding opens up the procurement opportunity to a greater number of

suppliers, contractors, or consultants who compete among themselves in providing
the best products or services to the organisation for the best value. This enables the
organisation to obtain products and services at the most advantageous terms.

2.4.3 Probity and accountability

Accountability means that the procurement office is responsible for the actions and
decisions that they take about the procurement process and outcomes. Probity
relies on accountability in the procurement process. Maintaining probity in
procurement involves more than simply avoiding corrupt or dishonest conduct. It
means ethical behaviour that upholds procurement values and ensures impartiality,
accountability, and transparency.

WPHL employees must comply with the following four inter-linked concepts of
probity and accountability in procurement:

• Fairness, impartiality and integrity

• Transparency of process
• Confidentiality and security of information and
materials
• Effective management of conflicts of interest.

Employees involved in any stage of the procurement process must:

• Behave ethically with honesty, impartiality, fairness, independence,

openness, integrity and professionalism in their dealings with
suppliers; Advance the interests of the organisation in all
transactions with suppliers in accordance with company policy.
• Attain a high level of credibility with suppliers.
• Account for how the procurement process achieved its anticipated
outcomes; and
• Effectively demonstrate how the organisation has achieved its
procurement objectives in a manner consistent with the objectives
of the Procurement Policies Manual.
• Probity and Accountability are achieved by WPHL employees.
• Performing their duties impartially, uninfluenced by receipt or
prospect of threats; reprimands or rewards.
• Not accepting or seeking gifts or other favours.
• Not entertaining approaches from suppliers that might be interpreted
as attempts to influence the evaluation process.
 • Ensuring that their private interests do not conflict with their duties to
the organisation.
• Maintaining confidentiality in all dealings.
• Developing systems and procedures that ensure a consistent approach
to procurement.
• Promoting professional procurement practices.
• Providing counselling to suppliers on how to do business with the
organisation; and
• Establishing means of measuring the achievement of the objectives of
the particular purchase.

3.ETHICAL STANDARDS IN PROCUREMENT

3.1 Conflict of interest

A conflict of interest is any activity that would create a conflict between a WPHL staff
member’s personal interest and the interests of the organisation. A conflict of
interest may arise in situations where a staff member is seen to benefit, directly or
indirectly, or allow a third party, including family, friends or someone they favour, to
benefit from the staff member's decisions.

As a general rule, WPHL shall not contract for any products or services with a
company that is owned in whole or part by a WPHL staff member, with the exception
of publicly listed companies. Furthermore, contracting for any products or services
with a member of the employee's immediate family, or a company in which a
member of his/her immediate family has a financial interest is permitted provided
strict adherence to the Procurement Department being notified immediately in
writing of such an ownership interest or financial interest. (For the purposes of this
Policy Manual immediate family is defined as a spouse, parent, child, or sibling).
All staff members are prohibited from any involvement in a procurement action with
a supplier in which they have a financial interest. In cases where a conflict of interest
exists or could occur, such conflict should be reported to the Procurement
Department or Head of Department and that staff member will be restricted from
any involvement in carrying out any procurement activity related to this supplier.

All WPHL employees are required to complete a Declaration of Business Interest

form. All WPHL staff members are, required to inform HR immediately in writing of
any material change in the information provided in the Declaration of Business
Interest form.

The primary goal of managing conflicts of interest is to ensure that decisions are
made on proper grounds, for legitimate reasons and without bias. Any declared
conflicts of interest shall be recorded in the minutes of the Procurement Committee
meetings.

3.2 Gifts and hospitality

32.1 Gifts
Employees should never solicit gifts from suppliers nor accept cash gifts from
suppliers. Gifts of a trivial nature, such as promotional material e.g. t-shirts, caps, etc.
and other items of modest economic value (that is US$100 dollars or less) may be
accepted if made voluntarily and there is no reasonable likelihood that the gifts will
influence an employee's judgment or actions in performing his or her duties.
Authorisation by the Head of Function should be obtained to accept these gifts.

Gifts above the value of US$100 must first be reported to the Head of Function and
to the COO and may only be accepted if approved by the COO.

3.2.2 Hospitality
Invitations to lunch or dinner: Business meals as the guest of a business partner may
be accepted if they are offered voluntarily, have a legitimate business purpose and
are an integral part of the work agenda (e.g. lunch during a seminar or meeting).
Authorisation by the Head of Function should be obtained to accept invitations of this
kind.

Invitations to conferences and trade shows: It is recognised that participation in

certain events such as supplier or industry conferences, seminars and trade shows
can be of particular value to the business or enhance the Company's knowledge or
understanding of a particular area. Prior written authorisation by the COO should be
obtained to accept invitations of this kind.

Invitations of a social kind: e.g., sporting and cultural events, should be declined
except where the interests of the Company can be demonstrated in advance and the
business justification is both compelling and exceptional. The COO must agree on
acceptance in advance in writing.

Travel & Overnight Accommodation: Hospitality that includes travel or overnight

accommodation must not be accepted. The only exception to this rule may be when
an employee is attending a conference and travel and accommodation is provided by
the organisers, and only then with the prior written approval of the COO.

3.2.3 Gifts and hospitality during the solicitation period

It is of overriding importance that a staff member acting in an official procurement
capacity should not be placed in a position where his/her actions may constitute or
could be reasonably perceived as reflecting favourable treatment to an individual or
entity by accepting gifts and hospitality or other similar considerations. Therefore, no
offers of lunch, dinner or gifts should be accepted during the time, or immediately
before or after, a related procurement or solicitation exercise is being undertaken.

3.3 Confidentiality
WPHL staff members maintain regular contact with many individuals and companies
seeking to initiate or expand business relations with the company. Employees who
come in contact with supplier representatives should be constantly aware of WPHL's
image and reputation with the supplier community and always act in a manner that is
fair, courteous and consistent with company policy.

WPHL is committed to fair and ethical business practices that encourages

competition and enhances our supplier relationships. A key component of this policy
is maintaining the confidentiality of all supplier proposals, quotations, prices,
contracts and other proprietary materials by all WPHL employees.

Confidential materials are not to be disclosed in any way to other suppliers, outside
organizations or to any unauthorized persons. Disclosure of confidential materials is
not only professionally unethical and damaging to WPHL ’s negotiations with
suppliers, but it also exposes WPHL to possible legal action.

If a staff member has questions about any request to provide information concerning
WPHL contracts, pricing, supplier proposals or other information, please contact the
Procurement Department.

3.4 Corrupt, fraudulent and unethical practices

Corruption may occur at any stage in the procurement process (budget, supplier
selection, contract management, etc.), either with the knowledge and consent of at
least some members within WPHL or through, well-orchestrated plans by a supplier
acting alone. The list set forth below indicates the most common types of corrupt
practices:

"Fraudulent practice" means misrepresentation of facts in order to influence a

procurement or selection process or the execution of a contract to the detriment of
the organisation and includes collusive practices among bidders;

"Corrupt practice" means the offering, giving, receiving or soliciting, directly or

indirectly, of anything of value to influence the actions of another party in the
procurement or selection process or in contract execution;

"Bribery" is the act of unduly offering, giving, receiving or soliciting anything of value
to influence the process of procuring products and services or executing Contracts;

"Collusion" is an arrangement between two or more suppliers designed to establish

prices at non-competitive levels. Common schemes of collusion include:

• Bid suppression where one or more suppliers agree to refrain from

bidding or withdraw a previously submitted bid so that the designated
winning competitor's bid will be accepted
• Complementary bidding where an agreement by suppliers whereby at
least one of them agrees to submit a bid that is either too high or
contains special terms and conditions that will not be acceptable to
WPHL
• Bid rotation where suppliers submit bids but agree to take turns being
the low bidder
• Subcontracting where suppliers agree not to bid or to submit a losing
bid in exchange for subcontracts from the successful bidder
• Market division where the suppliers divide markets among themselves
allocating specific customers, products or territories to themselves.

Employees involved in the procurement process should be vigilant to the risks of

these corrupt and fraudulent practices and manage the procurement process to
 mitigate such risks. Any staff member involved in the procurement process, who
becomes aware of any misconduct or wrong doing, including fraud or other
corruption, shall promptly report it to the Procurement Department, the Head of
Department where he/she is working or any member of the Executive
Management Team.

4. PROCUREMENT COMMITTEE GUIDELINES

The primary duties of the Procurement Committee are to ensure that proposed
procurement actions are based on compliance, fairness, integrity and transparency
and as such, are impartial.

[4.1] 4.1 Composition of the procurement committee

The Procurement Committee shall comprise five (5) voting members composed of
the chairperson and a representative, nominated by the respective Heads of
Department, from each of the following departments/offices:

• Procurement
• Finance
• Legal
The Chairperson shall serve a maximum of two years, renewable once, for a
maximum of four years. Four members of the Procurement Committee (including the
Chairperson) shall constitute a quorum.

Procurement Officers or the Requisitioners or representatives from the user

department may attend, as non-voting subject matter experts, the Procurement
Committee meetings at which the committee reviews a procurement action in which
they are involved.

EXCO members are de facto members of the Procurement Committee and can sit
together with the team whenever they wish.

In case of an actual or perceived conflict of interest, the concerned Procurement

Committee member should disclose the matter to the Procurement Committee and
excuse himself or herself from consideration of that matter.

4.1[4.2] Procurement committee chairperson

The Chairperson for the Procurement Committee shall be nominated by the

procurement committee and approved by the Chief Executive Officer. The
Chairperson is responsible for the following:

• Approving cases for inclusion on the Procurement Committee agenda

• Reviewing cases prior to the Procurement Committee meetings and, if
necessary, requesting clarifications or additional information from the Head
of Procurement
• Convening and chairing Procurement Committee meetings
 • Promoting fairness, integrity and transparency throughout the procurement
process
• Nominating a member of the Procurement Committee to serve as acting
Chairperson in his or her absence

[4.3] Secretary of the Pprocurement Ccommittee

The Secretary of the Procurement Committee is not a member of the Procurement

Committee and serves the Procurement Committee in a nonvoting capacity. The
Secretary is responsible for the following:
• Arranging and coordinating Procurement Committee meetings
• Ensuring the timely and efficient distribution of relevant documentation to
Procurement Committee members
• Preparing minutes of the Procurement Committee
• Maintaining records of all Procurement Committee minutes and
recommendations

4.2[4.4] Procurement committee responsibilities

The key responsibilities of the Procurement Committee shall be:

• To ensure that WPHL obtains the best value for purchased products and
services.
• To oversee the opening of bids to ensure integrity and transparency in the
formal solicitation process.
• To review bid evaluation conducted by the Evaluation Committee and
approve the bid evaluation results; and
• To finalise the decision on whether or not to suspend or remove a supplier
from the WPHL supplier database.

5 SUPPLIER REGISTRATION

The Procurement Office maintains a Supplier Master register for sourcing the supply
of WPHL's needs for products and services. The Procurement Office is responsible
for administering and maintaining the Supplier Master.

5.1 5.1 Registration process

The registration process consists of the following:

5.1.1 A new supplier can only be added if there are goods

or services needs that cannot be satisfied by the
existing /preferred suppliers on the master file

5.1.2 The End User in conjunction with a Procurement

Officer proposes a new supplier with a sound
commercial justification.
 5.1.3 The prospective supplier completes the Supplier
Registration Form attaching ALL required
documentation – as listed on the form.

5.1.4 The Procurement Officer verifies the documentation

submitted by the supplier by conducting background
checks and completing the pre-qualification
evaluation. The verified documents are then
forwarded to the Procurement Manager for vetting.
If all is order, the Procurement Manager approves
and application is pushed through for further
approvals.

5.1.5 For Contractors, a Pre-qualification form must be

completed by the Contractor and evaluated by the
Procurement Manager. All Contractors shall not
subcontract without prior authorization from WPHL.
The subcontractor shall abide to all WPHL Code of
Business Conduct.
5.1.6
5.1.7 All new suppliers are required to meet WPHL
Regulatory requirements. Suppliers for specialist
works / hazardous chemicals etc. must provide valid
and relevant licenses.
5.1.8
5.1.9 All approved listed forms together with documentary
evidence are forwarded to Finance (Accounts
Receivable) for uploading into the Supplier Master
file in the ERP.
5.1.10
5.1.11 Should the FD e=rejects the inclusion of the supplier
into the Master File, reasons for such rejections must
be clearly marked on the documents and returned to
the Procurement Manager for amendements.
5.1.12
5.1.13 The Procurememnt Manager generates additions to
supplier Master File report on a Quarterly basis to
check assistions or amendments to the SMF.

5.1.14 If any exceptions are found, they are documentated

and investigated. Corrective action is documented,
tracked and resolved within thirty (30) days of
completion of the review.
5.1.15

• Supplier is requested for via a justified business need - can be requested by

other parties other than Procurement.
• Identified and verified supplier(s) complete the WPHL Supplier Application
form and submits the completed form including supporting documents (e.g.

Supplier Registration Process

 certificate of incorporation verifying the legal status of the entity) to the
Procurement Office.
• The Procurement Manager, Finance Director and COO complete the
evaluation and acceptance of the supplier registration application.
• Procurement Department completes the registration of the supplier in the
Supplier Master and makes sure that the documents are properly filled.

It is important to note that the registration of a supplier in the Supplier Master

indicates the supplier is eligible to participate in WPHL procurement with respect
to the products and/or services for which it is registered. However, it does not
guarantee that the supplier will be selected to participate in any solicitation or be
awarded any contract.

Unregistered suppliers must first be reported to the Procurement Manager and

may only be used if approved. Any request by a Procurement Officer that an
unregistered supplier be used shall be accompanied by a written explanation of
why the supplier is not registered. This written justification shall be approved and
signed off by the Procurement Manager and filed for audit purposes.
Procurement Officers should make use of the Unregistered Vendor Justification
Form.

5.2 Supplier master maintenance

All registered suppliers are required to inform WPHL immediately in writing of any
material change in the information or documentation provided to WPHL. The
Procurement Office may, from time to time, conduct supplier audits of strategic
suppliers to ensure supplier standards meet WPHL requirements. Suppliers who fail
to comply with WPHL requirements may be subject to suspension or removal from
the Supplier Master.

Identified and verified The Procurement Procurement Department

Supplier is requested for supplier(s) complete the Manager, CPO, Finance completes the registration
via a justified business WPHL Supplier Application Director and COO approve of the supplier in the
need - can be requested form and submits the the application, and Supplier Master and
by other parties other completed form including uploading into the ERP makes sure that the
than Procurement. supporting documents to system is done by Finance documents are properly
the Procurement Office. Department. filled.
 Based on its examination, the Procurement Committee shall decide whether to
suspend the supplier for a specific period of time or remove the supplier indefinitely
from the Supplier Master.

5.3 Suspension or removal from supplier master

The following circumstances shall be factors for considering whether to suspend or

remove a supplier from the Supplier Master.
• The supplier has failed to adhere to the terms and conditions of one or more
contracts to justify suspension or removal
• Genuine concern about the supplier's ability to satisfactorily perform
contractual obligations such as filing for bankruptcy or entry into judicial
management
• Violation of any pre-requisite conditions after having been confirmed to
meet the pre-requisites for eligibility and having been duly registered

Removal or suspension of a supplier requires approval of the Procurement

Committee prior to action being taken. Upon recommendation to suspend or remove
a supplier from the Supplier Master, the Procurement Committee shall review the
information and/or documentation submitted and shall decide on whether the
supplier registration status should be changed. The Procurement Committee shall
thoroughly consider any mitigating factors prior to finalising suspension or removal
from the Supplier Master.

5.4 Supplier Deactivation

Registered suppliers will be deactivated if the company has not done business with
them for a period of one year (365 days). Deactivation, unlike suspension or removal,
is merely removing the supplier from its active status to an inactive one to show that
the supplier is dormant. These suppliers will be reactivated once we resume doing
business with them. The supplier can only be deactivated once they have no open
balances in finance.

6 SUPPLIER SELECTION PROCESS

The procurement of all products and services shall be based on competitive bidding
except in cases as outlined in section 6.2. The competitive procurement process is
designed to foster an impartial and comparative evaluation of multiple quotes, bids,
or proposals, leading to the selection of the most responsible supplier who can
provide the best value to the business. This procurement method also eliminates
corrupt and unethical practices, or the appearance of such, in our procurement and
contracting processes.

Furthermore, it is the policy of WPHL to use, whenever possible and practical, local
suppliers or contractors that can provide products and services of required quality on
a timely basis at competitive prices. The benefits of sourcing locally include:

• Promoting the use of local suppliers demonstrates WPHL's investment in the

local community.
 • Close proximity makes it far easier to travel to our suppliers for supplier
development and contract management purposes, as well as for site
inspections.
• The local knowledge of local suppliers means that they are well-placed to
appreciate and satisfy local preferences - this is particularly relevant where
specialised products and services are concerned.
• Supply chains are generally shorter, leading to greater certainty and
predictability of delivery times. An associated benefit is that logistics costs
(e.g., freight, insurance, duty, etc.) are therefore correspondingly lower.

[6.1] 6.1 Competitive bidding procedures

WPHL's procurement approach is based on different levels of the request’s
complexity and expenditure. There is Informal methods (RFQ) and Formal methods
(RFP) of solicitation for purchases.

[6.1.1] 6.1.1 Informal Methods of Solicitation

A request for quote (RFQ) is a solicitation for goods or services in which the company
invites vendors to submit price quotes and bid on the job. All quotations must be
recorded and maintained on file for future reference. Copies of the written quotes
and the supplier quote analysis must be attached to the Purchase requisition.

Where reasonable effort has been made to gather three (3) quotes and for whatever
reason it is not possible, and it is in the interest of WPHL to go ahead with the
available quote(s) then evidence of such efforts must be produced and signed off by
the same officers mandated to sign off the supplier quote analysis to go ahead with
less than 3 quotes. A Purchase Order must be raised for the purchase.

The Procurement Officers are responsible for sourcing the quotations, maintaining
records of the quotes, negotiating pricing, and submitting analyses of the quotes
received. Records kept of the communication are in writing (i.e., by email).

[6.1.2] 6.1.2 Formal methods of solicitation

A Request for Proposal (RFP) is a document used by the Procurement Department in
accordance with proper procurement methods for formal solicitation of bids from
suppliers for the procurement of products and services. The Request for Proposal
(RFP) process is an objective method of contracting for products or services whereby
proposals are solicited from qualified suppliers or contractors. A contract must be
executed, and a purchase order must be raised for the purchase.

6.1[6.2] Exceptions to competitive bidding

The following types of purchases are declared exempt and do not require
competitive bidding:
• Sole Source Purchases
• Emergency Purchases
• Purchases from Preferred Supplier
Contracts
 6.1.1[6.2.1] Sole (single) source purchases

A sole source purchase is a request by the user department to restrict the purchase
to one supplier. Sole sourcing is permissible if a requirement is available from only a
single supplier. Some circumstances that could necessitate sole sourcing
procurement are:
• The purchase of technical equipment for which there is no competitive
product, and which is available only from one supplier.
• The purchase of professional services from a supplier who is uniquely
qualified to provide such services.
• The purchase of a component or replacement part for which there is no
commercially available product and which can be obtained only from the
manufacturer
• The purchase of a particular product for trial or testing
• The use of other than OEM (Original Equipment Manufacturer) parts would
void a still valid warranty

Any request by a user department that a purchase be restricted to one (1) potential
supplier shall be accompanied by a written explanation from the requester or from
the Procurement Officer as to why no other supplier will be suitable or acceptable to
meet the need. This written justification shall be signed off by the Head of the
requesting department, Procurement Manager and Finance Director and filed for
audit purposes. Requisitioners should make use of the Non-Competitive Bid
Justification form.

6.1.2[6.2.2] Emergency purchases

An emergency, for purposes of this policy, shall be defined as any situation whereby,
if not corrected immediately, includes the following:

• Would result in a hazard to persons or property.

• Could result in damage to buildings or facilities.
• Would be seriously detrimental to the interest of the business.

Poor planning or failure to anticipate an operating need is not considered a bona fide
emergency. To initiate an emergency purchase, the authorised person in the
department may contact the Procurement department to obtain guidance on the
way forward.

The above notwithstanding, Procurement shall attempt to conduct a market survey,

to the extent possible, to ensure that the costs of the products or services procured
under an emergency waiver are reasonable. All urgent requests must be
accompanied by an Urgent Form signed by the Head of the requesting department.

6.1.3[6.2.3] Purchases from preferred supplier contracts

When several departments have requirements for similar products and/or services,
and when it is in the best interest of all departments involved, cooperative
 procurement is a viable and useful tool. Quantity and delivery discounts may realize
considerable savings for all departments involved.

Each year, the Procurement Department, for the benefit of the business, establishes
company-wide preferred supplier arrangements or contracts for the supply of
products or services. These agreements are competitively sourced to ensure the best
overall value for the business. Since these agreements have already been completed,
user departments may place orders against these agreements without having to
obtain additional competitive quotes.

Examples of Preferred Supplier Contracts include the following:

• Stationery
• Raw Materials
• IT Hardware / Software
• Promotional Materials / Branded Collateral
• Engineering Spare Parts & Service

Contracted suppliers should always be used in preference to other companies. If a staff member is
unable to use a contracted supplier or has questions regarding the preferred supplier arrangements,
please contact the Procurement Department.

[7] 7. FORMAL SOLICITATION PROCESS GUIDELINES

[7.1] Formal solicitation process (RFP)

[7.1.1] 7.1 Development of specifications

The first step process is the determination of a need to procure the products or services. Once the
need is determined the Requisitioner should develop the Specifications/Scope of Works (SOW)
document and submit it to Procurement for preparation of the RFP. An effective SOW document
contains sufficient detail to ensure that the supplier fully understands the requirements.

The success of the procurement activity relies heavily on the SOW document being an accurate
statement of the Requisitioner’s requirements.

The SOW should be general in nature to allow for sufficient competition in meeting the
requirements. They should neither reference nor be written specifically to a particular brand or
company. The preference is to avoid altogether the use of brand names in specifications, but when it
is a necessity for practical reasons, the brand name may be specified followed by the words "or
equivalent".

[7.2] 7.2 Funding requirements

The requisitioner ensures that sufficient funding is available by completing the operating expense
request form, which will be approved or rejected by an accountant after confirming whether the
budget is accessible. Such funding shall be in place prior to issuing the requisition to the
Procurement office unless otherwise agreed with the Procurement Office.
If Procurement accepts later availability of funding, such funds must be secured prior to contract
award. If funding is not available when contract award is imminent, the Procurement Office shall
suspend the award of the contract until funding has been secured for the procurement. Additionally,
having a budget does not guarantee that the purchase order will be approved immediately. Even
when the budget is present, there are occasions when things like cash flow aren't running smoothly.
The Finance Manager will make the decision regarding whether to proceed with the purchase in this
scenario.

[7.3] 7.3 Preparation of solicitation documents

The Procurement Officer will review submitted Specifications or SOW to ensure that all necessary
information is included and that there are no requirements that unnecessarily restrict or limit
competition. The Procurement Officer shall prepare the RFP in cooperation with the Requisitioner.
The RFP documents will usually consist of the following:

• Specifications and/or SOW

• RFP Terms and conditions
• Instructions and information to bidders concerning the bid submission requirements,
including the time, and closing date, method of submission, the address of the office to
which bids are to be delivered.

[7.4] 7.4 Evaluation criteria

The criteria to be used in evaluating proposals shall be included in the solicitation documents.
Depending on the requirement, additional information regarding weights and scoring may be
disclosed. The evaluation criteria list (i.e., technical, financial, commercial, etc.) must be exhaustive,
measurable, clear, and all-inclusive to ensure that the evaluation process is thorough, complete,
and robust. The Evaluation Criteria must be approved by the Procurement Committee before
issuance of the RFP.

Evaluation criteria can be categorised on the following basis:

• Variable — variable criteria evaluate the degree to which the submission meets the
requirements. Variable factors are usually expressed in terms of numerical ratings.
• Pass/Fail — Pass/Fail criteria are used when an attribute is not conducive to varying degrees
of superiority and merely requires acceptance or rejection by the organisation.
• Minimum Requirements establish the minimum of quality or performance that is necessary
to meet the requirement.

[7.5] 7.5 Samples

If samples are required for the evaluation, the RFP document shall state the sample requirements.
The RFP shall specify that failure to provide the required samples renders the submission non-
compliant. The RFP shall also state that samples shall be provided by the invited suppliers free of
charge with no guarantee for return unless the suppliers pay for their return.

[7.6] 7.6 Identification of bidders & solicitation timelines

A key element of obtaining the best value for money for procured products or services is identifying
suppliers to fulfil the Requisitioners' needs. The goal is to have multiple suppliers that can meet or
exceed the performance criteria so that competitive pricing can be secured. This can be achieved by
utilising various market research techniques including, obtaining source lists from similar
organisations or other sources, issuing Requests for Information (RFI), conducting internet research
on the industry, involving registered suppliers in the WPHL database, etc.
The Procurement Officer should endeavour to invite the following minimum number of suppliers to
ensure an appropriate level of competition.

• For urgent purchases a minimum of 3 suppliers shall be given a minimum of one (1) week to
submit proposals
• For normal purchases a minimum of 3 suppliers shall be given a minimum of three (3) weeks
to submit proposals
• For complex purchases a minimum of 3 suppliers shall be given a minimum of five (5) weeks
to submit proposals

If the minimum number of suppliers or bidders and minimum proposal submission time cannot be
met, the Procurement Officer shall document the reason and seek approval from the Procurement
Committee for including a lower number.

[7.7] 7.6.1 Extension of submission closing deadline

The submission closing date and time may be extended at the discretion of the Procurement
Committee where circumstances prevent timely submission of bid documents. Invited suppliers shall
be notified accordingly in writing.

[7.8] 7.7 Period of validity of bids or proposals

Bids and Proposals shall remain valid for a period specified in the Solicitation Documents, depending
on the circumstances and complexity of the case.

[7.9] 7.8 Communication procedures

All communications relating to the Solicitation between the invited suppliers and WPHL may only
take place with the Procurement Officer designated as the WPHL's point of contact during the
Solicitation period. This is to ensure the fairness and integrity of the procurement process.

[7.10] 7.9 Amendment of solicitation documents

Amendments to the solicitation documents constitute a serious change from the normal execution
of the RFP process. Amendments must be fully justified and must ensure there is integrity,
transparency and fairness to all suppliers. If it becomes necessary to modify solicitation documents
in any way after they have been submitted to the invited suppliers, a written amendment shall be
issued to all suppliers who received the original documents

The Procurement Committee shall evaluate whether ample time remains for invited suppliers to
consider the amended solicitation documents. If it is determined that sufficient time is not available,
a written notice to all suppliers extending the closing date for submission shall be issued.

[7.11] 7.10 Cancellation of solicitation documents

To the extent possible, WPHL should avoid cancelling an RFP, unless the purchase is unnecessary or
will not give satisfactory results. The cancellation of an RFP reflects a shortfall in the procurement
planning process.

If it becomes, necessary to cancel the RFP prior to the closing date for submissions, the
Procurement Officer shall promptly notify all invited suppliers in writing that the RFP has been
cancelled. After notifying the invited suppliers of the cancellation, and it is agreed to issue a new
RFP, all suppliers invited to participate in the cancelled RFP shall be invited again.

[7.12] 7.11 Clarification requests from bidders

All clarifying questions from bidders must be received in writing to the Procurement Officer through
the mechanism specified in the RFP document. All clarifications and responses to questions must be
de-identified to ensure that the suppliers' commercial offer is not compromised by including
information that identifies the supplier. Responses to clarifying questions should be shared with all
potential bidders The Procurement Officer must file all correspondence and file notes pertaining to
the suppliers' requests for further information and clarification regarding the request
documentation.

[7.13] 7.12 Meetings with invited bidders

For technical and complex purchases, the Procurement Officer in collaboration with the
Procurement Committee may decide to conduct meetings with the bidders during the Solicitation
process. Such meetings may be in the form of pre-closing conferences or site surveys. One-on-one
meetings with the supplier and either the Procurement Officer or the Requisitioner are prohibited
during the evaluation process.

If such meetings are deemed necessary, the Solicitation Documents shall provide a provisional date
for the meeting. The Solicitation Documents shall state whether participation at the meeting is
mandatory for submitting a response to the Solicitation Documents. The date and place for the
meeting will be decided with caution to prevent penalisation of certain vendors due to inability to
obtain a visa, lead time or long travel distance, etc. The Procurement Officer shall file and maintain
an attendance register and meeting minutes of such meetings.

[7.14] 7.13 Receipt and opening of proposals.

Upon receipt, each bid/proposal shall be recorded in the tender register and shall be stored in a
tender box in Reception at WPHL Head Office until bid opening time or tenders may be received by
e-mail upon prior authorisation by the Tender Adjudication Committee. The opening of bid or
proposal submissions should be carried out in the presence of at least three members of the
Procurement Committee. The aforesaid committee members shall be required to sign the bids or
proposals as they are opened to acknowledge their presence and for audit-keeping purposes. The
tender register shall be the responsibility of the Procurement Manager.

[17.14.1] 7.13.1 Late Bids or proposals

Late offers will not be accepted, except where circumstances beyond the bidder’s control were the
cause of the late submission and that accepting the late offer will not compromise the integrity of
the solicitation process. This decision will be made by the Procurement Committee in consultation
with the responsible Procurement Officer and the Procurement Manager.

[17.14.2] 7.13.2 One bid received

If only one (1) responsive bid is received, an award may be made to the single supplier if the
Procurement Officer finds that (1) the price(s) submitted is fair and reasonable; (2} other prospective
bidders had reasonable time to respond; or (3) there is not adequate time for re-solicitation.
Otherwise, the bid may be rejected, and new bids may be solicited. In all instances, feedback will be
sought and recorded on the reasons why other bidders failed to respond.
17.14.1[17.14.3]
[17.14.4] 7.13.3 Minor irregularities in bids
A minor irregularity is merely a matter of form and not of substance. It also pertains to some
immaterial defect in a bid or variation of a bid from the exact requirements of the invitation that can
be corrected or waived without being prejudicial to other bidders. The defect or variation is
considered immaterial when the effect on the price, quantity, quality, or delivery is negligible when
contrasted with the total cost or scope of the services being acquired e.g., failure of a supplier to
submit the required number of copies of bids.

If the Procurement Committee determines that the bid submitted contains a minor irregularity, the
bidder shall be given an opportunity to cure any deficiency resulting from a minor irregularity in a
bid or waive the deficiency, whichever is to the advantage of WPHL. In no event will the bidder be
allowed to change the bid amount.

[7.15] 7.14 Evaluation of proposals

The RFP evaluation process shall be conducted as a fair and objective process that requires the
Evaluation Committee to evaluate all proposals on the specific criteria in the RFP.

Complete confidentiality is an ethical and legal requirement and is vital to fair and equitable
evaluation. Supplier proposals received, results and other evaluation proceedings should be always
kept confidential. During the entire RFP process, the Procurement Officer serves as the sole contact
for suppliers and provides all RFP procedures and communication. Technical issues will be
addressed by the appropriate staff and relayed to vendors by the Procurement Officer

Evaluation Committee members will be selected by a minimum of two (2) representatives from the
User Department and the Procurement Officer. The Evaluation Committee should also consist of a
minimum of one (1) member that is not part of the User Department. A Procurement Officer may be
a member of the committee, but it is preferred that procurement personnel only facilitate the
evaluation process.

The Evaluation Committee is responsible for establishing the evaluation criteria, weighting and
rating system as well as assessing the ability of the potential suppliers to meet WPHL's
requirements. The evaluation committee shall be approved by the Procurement Committee prior to
the issuance of the RFP.

The Procurement Officer may also ask for clarification on any of the information submitted as part
of the bid. Clarifications will be requested to allow for a fair evaluation of the information received.

Evaluation Committee members shall score each proposal individually and independently.'
However, group discussions are encouraged to discuss technical views to arrive at a better
understanding of technical proposals during the evaluation process. The results of the scoring by
the evaluating committee shall be consolidated to determine the overall highest rated proposal.

[7.16] 7.15 Shortlisting suppliers

Shortlisting is the process of eliminating unsatisfactory proposals, usually with the intention of
subjecting the remaining short-listed suppliers to further evaluation e.g., asking suppliers to make
presentations, conducting supplier site visits, and completing reference checks. Short-listing may not
be necessary where there are only a small number of bidders to evaluate. The Evaluation
Committee's decision for eliminating unsuccessful bidders must be documented so that the rationale
for the decision can be justified and explained.
 [7.17] 7.16 Best and final offers (BAFOS)
The 'Best and Final Offer' (BAFO) is an optional step in the supplier selection process that has the
objective of enhancing competition, and thus ensuring the best value for money for WPHL. All
requests for BAFOs must be made in writing to all shortlisted suppliers and all eligible bidders shall
be requested to submit their BAFO by a specific date and time. The BAFO process effectively triggers
a second round of evaluations and may lead to revised rankings.

[7.18] 7.17 Supplier negotiations

The purpose of negotiations is to ensure that the technical proposal is in line with the requirements
and that the financial proposal is competitive on all aspects of the "price and offer the best value for
money for the organisation. Negotiations with the vendor regarding the contents of their offer
should be conducted with the supplier presenting the winning proposal.

[7.19] 7.18 Recommendation for award

A Recommendation for Award report will be completed by the Procurement Officer and will include
the following:
• Details regarding the evaluation process
• Outcome of the evaluation process and
• Recommendation regarding the successful offer

This report will be reviewed by the Procurement Manager and then forwarded to the Evaluation
Committee, Head of User Department and Procurement Committee for approval.

After the approval 'is obtained to award the contract, and provided expenditure approval has been
granted, the Procurement Officer shall advise the successful bidders in writing that their proposal
has been accepted, in accordance with the original terms and conditions of the contract together
with any variations negotiated and agreed. Written advice should also be sent to unsuccessful
bidders, preferably at the same time.

[7.20] 7.19 Two-step (multi-step) sealed bidding

Two-step (or multi-step) sealed bidding is a process consisting of a technical phase, composed of
one or more steps in which suppliers are required to submit unpriced technical offers to be
evaluated by the Evaluation Committee, and a pricing phase in which those suppliers whose
technical offers are determined to be acceptable during the technical phase have their price
considered. It is designed to obtain the benefit of competitive sealed bidding by the award of a
contract to the lowest responsive, responsible supplier and at the same time obtain the benefits of
the competitive sealed proposals procedure through the solicitation of technical offers and the
conduct of discussions to determine the acceptability of technical offers.

Two-step (or multi-step) sealed bidding is especially useful in acquisitions requiring technical
proposals, particularly those for complex items.
The process followed shall be the same as that of any other formal solicitation process except for
the following:

• The solicitation documents shall state that an unpriced technical offer is requested and
whether prices are to be submitted at the same time as the unpriced technical offers; if they
are such prices shall be submitted in a separate sealed envelope.
 • After receipt of proposals, only the unpriced technical offers shall be opened in the presence
of at least three (3) members of the Procurement Committee.
• The Evaluation Committee, in accordance with the criteria set forth in the solicitation
documents, shall evaluate the unpriced technical offers. The unpriced technical offers shall
be categorised as (a) acceptable or meets requirements or (b) unacceptable or do not meet
requirements. The Procurement Officer shall record, in writing, the basis for finding an offer
unacceptable and file it for record keeping purposes:
• Upon completion of evaluation of the unpriced technical offers, the Procurement
Committee shall open prices submitted by suppliers whose technical offers were acceptable
or met the requirements or invite these suppliers to submit pricing if it was not initially
requested.

[8] 8. CONTRACTUAL INSTRUMENTS

[8.1] 8.1 Overview

A contract is a written, legally binding agreement between WPHL and a supplier, which establishes
the terms and conditions, including the rights and obligations of the organization and the supplier.
A contract may take many different forms, e.g., agreement, purchase order, or memorandum of
understanding.

A Purchase Order must always be issued for all procurement activities except the following:

 Regulatory obligations e.g., Mandatory industry Subscriptions, Import / Export licenses,

taxes, etc.
• Rental Payments
• Hotel Accommodation
• Utilities e.g., electricity, water, and rates, etc.

[8.2] 8.2 Contract preparation

After the formal solicitation process, a supplier is selected and offered a contract. Upon signature of
the contractual document by both parties, the contract is legally binding. Contracts shall be awarded
within the offer validity period. If it is not possible to award the contract within the original period of
offer validity, an extension of the offer validity period must be requested.

The WPHL contract templates must be completed using contract specific data. Modifications and/or
addition; to the standard contract templates cannot be made without prior consultation with Legal.

[8.3] 8.3 Contract negotiations

The purpose of contract negotiations is to clarify any remaining issues that are not defined by the
requirements in the solicitation documents, or by the supplier's offer, but which are essential for
proper implementation of the contract (e.g., defining milestone payments against deliverables).
Contract negotiations should result in a clear understanding of the terms and conditions agreed by
the parties and their respective responsibilities under the contract.
 [8.4] 8.4 Advance payments
Advance payments refer to payments made prior to receipt of products or performance of any
contractual service or works. In general, WPHL shall not enter into any contract that requires
payment in advance of the delivery of products or the performance of contractual services.
However, exceptions can be made in certain cases, i.e., if necessary to comply with normal
commercial practice e.g., construction works, rental leases or when deemed to be in the best
interest of WPHL. In the event of a supplier failing to provide goods and services for which they
would have been paid for, normal legal processes apply for the complete recovery of the money
paid.

[8.5] 8.5 Contract execution

All contracts must be signed by the relevant person as per the WPHL Delegation of Authority and by
a duly authorised individual on behalf of the supplier. The contract must be issued in two original
copies, both signed, one for the supplier and one for the WPHL's file. All pages of all the documents
forming part of a contract or agreement, including all attachments, need to be initialled by duly
authorised representatives of the parties, except for the page that contains the full signature block,
which shall be signed by such representatives. Once the contract has been prepared, there is no
particular practice regarding which of the contracting parties should first sign.

[9] 9. LOGISTICS

9.1 Logistics planning

Logistics is the process of planning, implementing, and controlling the efficient, cost-effective flow of
products from point of origin to point of consumption for the purpose of conforming to customer
requirements.

Effective logistics planning considers activities throughout the various steps of the procurement
process. It is one of the key factors in ensuring the efficiency of the procurement process and
minimising risks of increased costs and delays. Logistics planning begins at the needs assessment
phase of the procurement process by considering the desired result of the Requisitioner and
identifying the actions needed to ensure the successful completion of the activity.

The following steps in the logistics planning process should be considered at the various stages of
the procurement process:

• Determine the urgency of the requirement. Urgency may determine the location of the
purchase and the mode of transport.
• The use of different modes of transport as well as different logistics corridors incurs
different costs but also has an impact on lead-time and the environmental impacts of the
transport. A sea and/or overland route may be less expensive but might lead to difficulties
and delays such as clearing the products while transiting through different ports and
countries and then route to the destination. An alternative air route may be more costly, but
it may significantly reduce transport time.
• Verify completeness of the delivery and transport requirements and available budget. The
cost of transportation may become a significant component in the cost of products procured
and delivered to the designated destination. In logistics planning, the seemingly cheapest
alternative may not always be the option that offers the lowest overall cost.
 • Determine the most cost-effective means of contracting transport, i.e., should the selected
supplier of the products arrange the transport of the purchase products, or should WPHL
contract transport independently.
• Ensure the completeness and accuracy of shipping documents received from the supplier
and the freight forwarder.
• Ensure that necessary arrangements are in place to clear the cargo on arrival.
• Throughout this process, the Requisitioner and/or end user should be kept informed of
expected and actual delivery dates for them to consider the updated information in their
local planning.

9.2 Freight forwarders

WPHL or the supplier contracts forwarding agents, also referred to as freight forwarders, to carry
out the formalities and operations of forwarding consignments. The use of an appropriate freight
forwarder reduces the risk of the procurement operation, due to the forwarder's experience and
specialised knowledge. The Procurement Office must ensure that the respective forwarding agent
has all necessary documents for the release of products in transit.

9.3 Incoterms
International Commercial Terms (Incoterms) are internationally recognised standard terms defining
the obligations of both the buyer and seller during the transportation of products. The International
Chamber of Commerce (ICC) established Incoterms. Reference to an appropriate Incoterm shall be
made in all contracts requiring shipment.

9.4 Shipping documents

Complete and correct shipping documents are critical for timely delivery. The content of documents
depends on the type of products being shipped, the mode of transportation, the party responsible
for shipping the products (freight forwarder, supplier, etc.), and any other special requirements.
While the required shipping documents may vary, every shipment should have documented
evidence of contents of the shipment, weight and volume of contents, origin of products, price of
the products, and evidence of transport of the products.

9.5 Customs clearing

Clearing Agents are involved in the clearing of products through customs on behalf of the importer
and exporter. Clearing involves the preparation of documents and/or electronic submissions, the
calculation (and usually the payment) on behalf of the client of taxes & duties and facilitating
communication between the importer/ exporter and customs authorities.

Clearing Agents need to be familiar with the Tariff Schedule, the list of duty rates for imported
items, and the regulations governing importations. Knowing the requirements for each type of
import can avoid costly delays, penalties, or seizure of the Merchandise. It is the responsibility of the
Procurement Officer and the Procurement / Logistics Manager to check the tariffs being applied by
the Clearing Agents.

Clearing Agents normally arrange the trans-shipment or local delivery of cleared merchandise
through relationships with trucking companies and others.
All employees are required to contact the Procurement Office prior to shipment of products to
ensure that the relevant shipping documents are made available to avoid unnecessary delays and
costs with the clearance of products.
9.6 Receipt of products
Calculation of landed cost for the consignment and receipt of products must be completed within 24
hours of delivery of products. Failure to receive products in a timely manner may result in several
challenges such as loss in revenue due to unavailability of stock, delayed payments to suppliers,
inaccurate inventory records, etc.
Any problems with the delivered consignment e.g., damaged packaging, missing or damaged items,
etc. should be reported to the Procurement Office immediately and the supplier of the products
shall be expeditiously informed so that the issue can be rectified timeously.

10. CONTRACT MANAGEMENT

10.1 Overview
Contract management and administration refers to all actions undertaken after the award of a
contract relating to the administrative aspects of the contract. Active and ongoing management of
contractual arrangements is critical to the success of the purchase and the achievement of value for
money.

Contract management and administration is the responsibility of the Procurement Officer in charge
of the procurement process and requires the involvement of the Requisitioner.

Effective contact management and administration involves monitoring and control of:

• Supplier Performance Management

• Contract Amendments, Extensions and Renewals
• Payments
• Dispute Resolution
• Contract Closure

10.2 Supplier performance management

10.2.1 Supplier performance monitoring

Supplier performance monitoring includes observing the performance of the supplier to ensure that
a quality product or service, in the right quantity, is delivered on time and within budget. The
Procurement Officer, the Requisitioner, and the end user should conduct an evaluation of the
supplier's performance jointly. The individual in charge of the procurement process has primary
responsibility for supplier evaluation; however, procurement officials depend on input from the
Requisitioner and the end user in order to conduct a thorough evaluation.

It is important to carefully document contract performance in order to provide evidence of the

performance of the supplier; in the event of disputes; in order to form an institutional memory, and
for audit purposes.

The extent to which it is necessary to monitor and manage a supplier's performance should be
determined based on risk management and cost benefit assessments. Monitoring and managing
performance, on the other hand, should be a priority for strategic suppliers or those with high
expenditures.

10.2.2 Supplier Audits

A supplier audit is a formalised system for evaluating the reliability and competency of suppliers to
deliver quality services or products. Auditing suppliers is foundational to establishing strong
customer-supplier relationships. A supplier audit inspects a supplier’s usage of industry regulations,
including health and safety and correct manufacturing processes. Generally, auditing a supplier
covers a large area with several practises. The supplier auditing process can differ from industry to
industry.

The supplier audit process is typically initiated by the Procurement Manager, led by the
Procurement Officer and the SHEQ Department as a part of their due diligence review or annual
review. The User Department is also required to be part of these audits. This internal team will then
determine what information should be collected from suppliers.

10.3 Contract amendments, extensions, and renewals

Contract modification is the handling of changes that arise during contract execution, typically
involving variations in costs or requirements that were not originally anticipated but are not in
dispute. Contract variations can present a significant risk to the Agency if they are not effectively
managed. The Procurement Officer should therefore ensure that the variation is justified and that it
is properly approved.
It is the responsibility of the Procurement Officer to:

• Negotiate the appropriate contract changes regarding cost, schedule, quality, and
performance ensuring that the contract is always amended so that, it defines the agreed
expectations of both parties under the contract.
• Ensure that the change conditions are reasonable and justifiable in terms of cost, time, and
quality.
• If the contract amendment is an extension for contract duration, any such amendment must
be requested, reviewed, approved, and signed prior to the expiry date of the original
contract.

10.4 Payments
It is important that payments to suppliers are strictly controlled and made in accordance with the
provisions of the contract and current departmental financial delegations.

All supplier invoices should be submitted to Accounts Payable (AP) and will be subsequently
forwarded to the Requisitioner who is responsible for validating that the required work has been
completed in accordance with the contract requirements.

Where products or services prove to be unsatisfactory the Procurement Officer will document the
deficiencies and seek rectification from the supplier. For major purchases where satisfaction cannot
initially be obtained, a formal dispute resolution process may be necessary.

10.5 Dispute resolution

Effective supplier performance monitoring should provide the business with a timely warning if the
supplier is having difficulty in meeting the terms of the contract or the agreed performance
standards. Prompt action must be taken if monitoring reveals that supplier performance does not
meet the agreed standards. Early intervention may prevent a potential problem from escalating into
a full-blown dispute.

Suppliers should be made aware of any shortcomings in their performance as soon they occur. For
most performance problems, particularly for more serious or recurring problems, suppliers should
be given a formal warning that their current level of performance is not satisfactory, an explanation
of why this is the case and details as to what changes are required to meet the performance
expectations. This enables performance issues to be identified clearly and addressed by all parties
and provides an opportunity for the supplier to improve performance to a satisfactory level before
more serious actions are taken.

Where problems are identified, communication between the parties should increase, more frequent
milestones should be set, and closer monitoring should occur. It may be necessary to renegotiate
some elements of the contract. The supplier should be informed, when appropriate, that
termination of the contract may be considered and must be made fully aware of any required
changes in their performance if they wish to avoid having their contract terminated. Legal advice
should be sought prior to acting on any breaches of the conditions of contract.

There may be cases where a formal dispute resolution process will be necessary.

• Any concerns with supplier performance will be immediately communicated to the supplier
and must be documented by the Procurement Officer.
• Reasons for the problems will be identified and documented including any contributing
factors caused by the WPHL.
• Initially rectification of the problems will be sought through negotiation.
• The Procurement Officer will document a dispute resolution process where a negotiated
resolution cannot be obtained (this may already be available in the contract documents).
• Legal advice will be sought prior to acting on any breaches of contract.

10.6 Contract closure

Contract completion includes the confirmation that all obligations have been met, identification of
any residual obligations and completion steps, settlement of final payments, assessment of
contractor, and the administrative closing, which the Procurement Officer must verify that the
following activities have been carried out:

• All products and/or services required have been provided.

• Documentation in the contract file adequately shows receipt and formal acceptance of all
contract items.
• No claims or investigations are pending on the contract.
• Any WPHL furnished property has been returned to WPHL and discrepancies in number
and condition resolved.
• All actions related to contract price revisions and changes have been concluded.
• All outstanding subcontracting issues have been settled.
• Any required contract audit has been completed.
• The final invoice has been submitted and paid.
11. RISK MANAGEMENT

Effective risk management ensures the continuity of company operations, the maintenance of
services to customers, and the protection of the interests of the company. The risk environment
has been changing rapidly as advancing technological developments bring new dormant risks
associated with hazardous materials, pollution, electronic data, and exposure to legal liability. The
organization must be fully aware of the state of art in risk management, and to prevent losses and
unnecessary expenditures.

Risk management can be extremely cost effective when departments assess their risks properly and
determine the most economical way to avoid them entirely or reduce them to minimum and limit
potential expenditures arising from product failure and inconsistent supply of materials.

11.1 Objective
To safeguard the organisation’s property, interests, and certain interests of the employees during
the conduct of the organisation operations.

11.2 Statement
To identify, reduce or eliminate risks to its property, interests, and employees to minimise and
contain the costs and consequences in the event of harmful or damaging incidents arising from
those risks and to receive or provide adequate and timely compensation, restoration, and recovery.

11.3 Identification
Each department must identify the potential perils, factors, and types of risk to which their assets,
program activities and interests are exposed.

The Procurement department should identify the following:

11.3.1 The supplier
11.3.2 Source of goods
11.3.3 The value of goods
11.3.4 Method of transportation
11.3.5 Method of payment
11.3.6 Insurance cover
11.3.7 Ownership of goods and services
11.3.8 Product certification
11.3.9 Government policies
11.3.10 Toxic operation and waste

Factors influencing risks should be identified. These include:

11.3.11 Acts of nature

11.3.12 Human inefficiency
11.3.13 Negligence
11.3.14 Error and wilfulness

And physical factors such as availability and quality of materials and the state of a particular
technology.
11.4 Minimisation
11.4.1 The Procurement department must analyse and assess the risks identified and design
and implement cost effective risk prevention, reduction, and avoidance control
measures.

11.4.2 The Stores department together with the user department must select underwriting
options available for the goods or services to be purchased.

11.4.3 All goods or services provided to the company must be under a guarantee that will
minimise the company’s hazard.

11.4.4 Product certificates issued by the Standard Association of Zimbabwe or international

recognised associations may be required from suppliers for critical services or goods.

11.5 Containment
11.5.1 The Procurement department together with Stores must plan and budget for
containment, compensation, restoration, and disaster recovery. Product failure
should be communicated to the supplier in writing.

11.5.2 The suppliers must provide information regarding control and recovery of dangerous
goods, and expenses incurred in such mishaps may be borne by the suppliers.
Documents relating to product failures should be sent to the suppliers by the
Procurement department.

11.6 Compensation restoration and recovery

The Procurement department together with the requester must:

11.6.1 Investigate each incident to determine its causes.

11.6.2 Assess the extent and the value of damages and loss or determine the potential
legal liability or claim.

11.6.3 Prepare an incident report.

11.6.4 In cases of product failure or poor workmanship by the supplier or independent

contractor and an agent, the supplier must repair or replace damaged assets
and operating systems to return operations to normal as soon as possible.