CHAPTER 6

PROCUREMENT OF WORKS
6.1 Unique nature of procurement of works

Nature of Work: Under general supervision, performs work at the full-performance level by
overseeing a service unit within a state agency, which is responsible for providing purchasing,
inventory, and records management activities. Obtains both goods and/or services in adherence
to fluctuating state purchasing regulations. Contacts are extensive and include those both
internal and external to state government. Uses discretion and independent judgment to select
cost-effective goods/services within prescribed parameters. Performs related work as required.
Contracting authorities are required to estimate the value of the whole works project even
though it may be made up of a number of separate contracts for different activities. For
example, if the construction of a new building requires site clearance, construction and fitting
out, the threshold must be applied to all three phases (total value) even though the activities are
different and may involve different contractors. Related services, for example architectural
services may be purchased under separate contracts, in which case their value need not be
counted against the whole works project value.

Works contracts are generally complex in nature and occur over a longer timeframe. Large
construction projects such as the building of a new motorway require expert project
management and the input of a number of key stakeholders. Means all work associated with
construction, reconstruction, demolition, repair or renovation, which include civil, electrical,
mechanical and other related engineering works. This could also include supply and installation
of equipment and specialized engineering incidental services that are related to the works.

Examples of Work

 Establishes and/or maintains a system or conform to the statutes of the State rules and
regulations.
 Prepares, or causes to be prepared, objective specifications for all items to be purchased.
 Analyzes commodities or services provided by vendor to assure conformity to user
specifications.
 Establishes and/or maintains an inventory control system and a records retention and
disposal system.

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  Supervises clerical and other staff positions.
 Recommends policy changes and/or policies in the areas of property control,
acquisition and/or management.
 Prepares technical or statistical reports.
Minimum Qualifications
Training: Graduation from a standard high school or the equivalent.

Experience: Four years of full-time or equivalent part-time paid experience in volume

purchasing,
property control, specification writing or product analysis, as a buyer or procurement
officer
functioning in a supervisory or lead worker capacity.

Substitution: Successful completion of college courses or business school courses may be

substituted for the experience on a year-for-year basis.
6.2 statements of requirements

The work to be done on each procurement is called procurement statement of work. The
procurement statement of work must be clear, complete and as concise as possible. It should
also describe the work and activities that the seller is required to complete. The activities also
include meetings, reports and communications.

Works are related to civil works; this includes new construction of structures of all kinds
(buildings, highways, bridges, etc), renovations, extensions, and repairs. This category can also
include, water and sanitation, transportation and electrical plant infrastructure.

Types of Procurement Statements of Work

 Procurement; this conveys what the final product should be able to accomplish.
 Functional; this conveys the end purpose or the results than the specific procedures or
approach
 Design; this type precisely conveys what work is to be done.
Design procurements statement of work is most commonly used in construction and equipment
purchasing. Performance and functional procurements statement of work is used in areas that
have never been done before such as Information systems, information technology, research
and development, etc.

Procurement Documents (BID Documents)

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Once the contract type is selected and the procurement statement of work has been created, the
buyer can put together the procurement document, which describes the buyers’ needs to the
sellers. The different types of procurement documents include:

 Request for proposal (RFP);

RFPs request a detailed proposal on how the work will be accomplished, who will do it, etc.

 Invitation for Bid (IFB);

IFB usually just requests the total price to do all work.

 Request for Quotation (RFQ);

RFQs request a price quote per item, hour, meter, or other unit of measure.

The objective is to provide the seller a clear picture as much as possible. The procurement
documents should include:

Information for sellers

Background information about the purpose of the buyer wanting to get the work done

 Procedure for trying to win the work

 Guidelines for preparing the response
 The formats for responses
 Source selection criteria the criteria the buyer will use to evaluate responses from the
sellers
 Pricing forms
 Procurement statement of work
 Proposed terms and conditions of the contract (legal and business)
6.3 suppliers’ prequalification

What is a Prequalified Supplier?

A Pre-Qualified Supplier is one that has completed a formalized and competitive selection
process (RFP, RFI, RFQ, or Co-operative) and has been chosen by the company as a supplier
or provider who can provide products, materials and/or services that are in the best interests of
the organization as related to:

• quality of products, materials and/or services;

• length of contract;

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 • advantageous pricing;

• payment methodologies;

• delivery practices/performance;

• supplier operational support and services;

• ethical business practices; and

• Social and community support.

Considerations under prequalification:

1. Quality of Service

• Pre-established minimum order quantities and amounts.

• Delivery requirements.

• Warranty.

• Value-added Services.

2. Economic Considerations

• Pre-established pricing structure.

• Price increase limitations.

• Allow for competition.

3. Mode of Operation

• Signed agreement/contract.

• Standardization of Terms and Conditions.

• Customization of transaction interface (e-Commerce portal).

• Statistical ad-hoc account reconciliation.

6.4 standard procedures for procurement of works (the case of Ethiopia)

Procurement Methods. The "MOF Directives" and the “Procurement Manual” of March 1999
describes the various procurement methods used by the Federal Government. It includes six
methods, “open tendering”, “two-stage tendering”, “requests for proposals”, “restricted

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tendering”, “requests for quotations” and “single-source procurement”. Procurement planning
is done at the Federal level in major procuring entities and in parastatals, often with the help of
consultants, but is weak or non-existent at the regional and woreda levels, where much
procurement will be launched in the future. Procurement monitoring and administration is only
beginning to get computerized in some IDA financed projects to help track delays in the process
and alert managers, but is generally done manually and not very efficient or complete. For
goods and works, open tendering, with or without prequalification, is the norm. Use of the other
methods must be justified in accordance with pre-set criteria, which are in accordance with
international norms. “Two-stage tendering” is used only exceptionally, under strict criteria.
“Negotiated procurement” occurs under a two envelop system, using sequential opening of the
technical and financial proposals. Only those bids that meet the technical criteria are opened
and the contract is negotiated with the lowest bid, in order to lower the price. This procedure
is obviously not transparent and unfair and should not be used.