Procurement Manual for CIPORD Liberia

Identification of need


Negotiation


Logistics Management


Supplier Identification


Supplier Communication


Supplier Liaison











CIPORD, INC.
Procurement Manual



For procuring goods, services,& works








Contents

Meaning of Abbreviations iii
Background 1
Procurement Planning 1
Procurement Methods 3
Separation of Duties in Procurement Process 4
List of Approved Pre-qualified Suppliers 4
Required Legal Documents during Procurement 4
Quality Assurance Mechanisms 5
Warehouse Control System 5
Fixed Asset Management System 7
Standard Procurement and Warehousing Recordkeeping 8








Meaning of Abbreviations

CIPORD………Christian Impact Program for Rural Development
CPT…………….Computer
FAR……………Fixed Asset Register
GPS……………Geographic Positioning System
GRN…………..Goods Received Note
LD…………….Liberian Dollars
MTB…………..Motorbike
NGO…………..Non-Governmental Organization
PCA……………Program Cooperation Agreement
SSR……………Stock Status Report
UNICEF……….United Nations International Children Emergency Fund
USD……………United States Dollars
VHC……………Vehicle
WASH…………Water and Sanitary Hygiene


Background

Christian Impact Program for Rural Development (CIPORD) is a national NGO founded under the laws of the Republic of Liberia in 2006 to serve the Water and Sanitary and Hygiene (WASH) needs of rural communities. CIPORD was founded on Christian values and its strategic vision is fully based on such Bible-based ethics like transparency, trust, and love for humanity and God in serving the needy. CIPORD principally operates by receiving funds from donors who build high trust and confidence in its management in exercising financial transparency and accountability in implementing projects that serve the needs of rural dwellers in Liberia. Donors always place key emphasis on the soundness of financial and internal control systems in CIPORD for the attainment of desired Program Cooperation Agreement (PCA) goals.

Procurement is payment by an entity for goods, services, or works from external parties. Sound financial control and proper procurement go hands-in-hands. Therefore, this procurement manual serves as a pivotal tool in the sound usage of donor funds during project implementation by CIPORD. This procurement manual stands to ensure the procuring of quality materials and services for proper project implementation. It further lays down the steps for procurement by CIPORD and the management of items or services already procured by CIPORD in order to obtain the maximum benefit. The Log/Admin, closely supervised by the Executive Director, is responsible for the full implementation of the provisions of this manual.
Procurement Planning

The Log/Admin, coordinating with line managers, shall produce quarterly procurement plans for CIPORD. Procurement planning shall cover goods (e.g.: cement), services (e.g.: consultancy or facilitation) or works (e.g.: latrine construction). The procurement plans shall be generated across all departments of CIPORD based on their quarterly procurement projections and anticipated needs, as compiled by departmental heads and submitted to the Log/Admin for consolidation. Copies of the procurement plan shall be circulated to all senior staff, especially the Executive Director. The procurement plan shall serve as the guidance for all procurement activities of CIPORD within the quarter until another procurement plan is developed.


Steps for procurement planning

The procurement planning activities of CIPORD shall follow these six processes:
Identification of need: This is an internal step for CIPORD that involves understanding of CIPORD's needs by establishing a short term strategy (quarterly) followed by defining the technical specifications and requirements for items or services to be procured.
Supplier Identification: Once CIPORD has answered important questions like: Make-buy, multiple vs. single suppliers, then it shall identify the supplier of the required product/service. The appropriate procurement method shall be identified after supplier identification.
Supplier Communication: When one or more suitable suppliers have been identified, requests for quotation, requests for proposals, or requests for information shall be announced. Direct contact shall be made with the suppliers when expedient.
Negotiation: Negotiations or bargains shall be undertaken here between CIPORD and the selected supplier. Price, availability, and customization possibilities are established. Delivery schedules and terms are negotiated and a contract to procure the product/service is completed between CIPORD and the selected supplier.
Logistics Management: Supplier preparation, expediting, shipment, delivery, and payment for the product/service are completed based on contract terms. Installation and training provisions shall also be included.
Supplier Liaison: During this phase, CIPORD evaluates the performance of the product/service and any accompanying service support as they are consumed.

Pictorial layout of procurement planning steps

Procurement Methods

CIPORD shall carefully select and use any of the four (4) procurement methods outlined below when condition dictates:
No.
Procurement Method
Conditions for Use
1.
Selective Bidding
Limited number of suppliers or contractors
Cost of evaluating large number of bids uneconomic
Emergency demand and only few trusted suppliers or contractors
An approved list of pre-qualified vendor is available
2.
Single Source Procurement
Goods, works or service only available from a particular supplier
There is emergency demand and all alternative sources will take long to deliver
There is need for prompt response to an emergency
Materials have been standardized by specification
3.
Request for Quotation

Specification for goods or services is not important
More vendors available
such goods or services are readily available
Goods or services are of standard quality and they are priced reasonably
4.
Local Shopping

comparison of informal price quotations obtained from potential Suppliers to assure best value for money
appropriate method for the procurement of readily available off-the shelf goods or standard specification commodities
Most of the real low value shopping can be done using petty cash, if applicable.

Separation of Duties in Procurement Process

The Log/Admin shall ensure that all procurement duties are separated among senior staff members. Formal request for procurement shall be submitted by an end-user or line manager. Procurement requests shall be approved by the Log/Admin and Project Officer. When a procurement request is approved by the Log/Admin and project Officer and the cost is known, the Finance Officer prepares and signs a procurement payment voucher and takes it to the Executive Director for approval. When the voucher is approved, payment is done by check or cash, whichever is appropriate. All four (4) senior staff members shall participate in the entire procurement process for independence and objectivity. Procurement payments shall strictly follow the payment terms set out in the procurement contract. A procurement contract is a contract between CIPORD and an external party for the provision goods, services, or work for payment by CIPORD. For payments that are done by installment, every installment shall be done by following standard transaction procedures but with all supporting documents attached. The Finance Officer shall develop the appropriate template for installment contractual payments.
List of Approved Pre-qualified Suppliers

The Log/Admin shall establish and maintain a full list of pre-qualified suppliers for major kinds of goods, services, and works that CIPORD frequently uses during its operation. These suppliers shall be selected among dealers of construction materials, stationeries and office supplies, petroleum products, electronic devices, food and general household items. Suppliers of consultancy and training services and construction contractors shall be listed also.
In constructing this lit of pre-qualified suppliers, the Log/Admin shall consider the qualities of their respective product and service. The history of every supplier in serving the need of CIPORD shall be considered also. Supplier listed as pre-qualified, shall be prioritized or quickly contacted for any procurement transaction at the appropriate time by CIPORD.
Required Legal Documents during Procurement

CIPORD shall deal with legally recognized suppliers as indicated by documentary evidence of legal operation in Liberia. Required supporting documents for procurement transactions at CIPORD include, among others, updated copies of the following:
Tax clearance
Business registration certificate
Certificate from professional or regulatory bodies
Credentials of Consultants or Facilitators
In all procurement transactions by CIPORD, priority shall be given to suppliers with up-to-date legal document except where it is inexpedient to do so.
Quality Assurance Mechanisms

The Log/Admin shall follow the steps outlined in procurement planning (page 2) to ensure that CIPORD procures standard quality goods, services and works. Quality assurance practices shall include:
Buying from list of pre-qualified suppliers
Window shopping/surveying suppliers before buying
Buying according to brand name and manufacturer
Ensuring that supplier guarantee support services like training and installation
Soliciting the opinions of previous buyers and users
Thorough scrutinizing and careful selection of suppliers for services and works
Examining the relevant experience levels of suppliers for services and works before selection
Warehouse Control System

Stock entry into warehouse
The Storekeeper shall issue out Goods Received Note (GRN) for all newly procured items of supply deposited in the warehouse. All GRNs shall be submitted to the Finance Officer. The Storekeeper shall maintain adequate record system capturing information on the receipt and release of all supply items by names. The warehouse shall be divided into well-labeled sections. Stationery items and petroleum products shall not occupy the same section. Goods transferred from another warehouse for storage shall be properly labeled also, except for temporary storage.
Stock release from warehouse
The Storekeeper shall properly record the release of every supply item from the warehouse based on properly processed and approved request. Waybill shall be issued for items/supplies being sent away. Empty utilization forms shall accompany supplies sent on the field use. All documents facilitating the release of items from the warehouse shall be properly filed the Storekeepers for future reference.

Physical Stock (Inventory) Count
CIPORD shall commission physical counts of all items in the warehouse as determined by the Executive Director. There shall be physical stock counts every three months (quarterly) and at the end of every Project. The physical stock counts shall serve the purpose of validating and confirming the correctness of the data presented on the Stock Status Reports. The Executive Director or his designate shall conduct all physical stock counts
Stock re-order limit setting
The Log/Admin, closely assisted by the Storekeeper, shall establish and maintain the acceptable minimal levels of all items of supply in the warehouse(s).These limit shall help in alerting the Log/Admin about possible shortages. These limits shall also avoid unnecessary procurement and stockpiling of items that are also in sustainable quantities in the warehouse(s).Monthly stock balances, from SSRs, shall be compared with these limits in facilitating possible procurement decisions. Special attention shall be placed on items that are most frequently consumed by CIPORD's operations. The Log/Admin shall identify such frequently used items.
Stock status reporting
The Log/Admin, closely assisted by the Storekeeper, shall compile and submit, to the Executive Director, monthly reports on the status of all items of supply in the warehouse(s).The Stock Status Report (SSR) shall give details of every item. The required contents of the SSR for a particular month shall include: beginning balances, incoming quantities, ending balances, etc.
field supply utilization reporting
The Log/Admin shall ensure that utilization reports for supplies (e.g.: fuel/gas) issued to field workers or drivers are returned to Central Office. Utilization reports shall be required for all previous reports before any new issuance is done, except in emergency. Utilization reports shall cover dates, quantities of fuel/gas consumed, point-to-point movement of vehicle or motorbikes, name of driver or operator, and ending quantities.





Fixed Asset Management System

coding of fixed assets
Assets, worth at least twenty five United States Dollars (25 USD), that CIPORD expects to use for at least two (2) years shall be treated as fixed assets. The Log/Admin shall properly code and mark all fixed assets for specific identification. The identification codes of homogenous fixed assets shall begin with similar numbers/letter. Donated fixed assets shall be marked with identification codes beginning with the name or initials of the donor, e.g.: UNICEF/CIPORD/VHC-3 for a vehicle donated by UNICEF which brought the number CIPORD's vehicles to three (3).A motorbike bought by CIPORD (bringing the bikes to three (3)) shall be coded as CIPORD/MTB-3.Similarly, a computer bought by CIPORD (bringing the computers to three (3)) shall be coded as CIPORD/CPT-3.The codes shall give fixed asset a specific identity by which it shall be accounted for.

formal memo of fixed asset assignment
The assignment of all fixed asset to any CIPORD staff shall be done upon a formal and written memorandum of understanding between with the staff. The memo shall stipulate the terms of assignment and the staff shall consent to the terms by means of signature with at least two witnesses.
fixed asset registry
The Log/Admin shall establish and maintain a Fixed Asset Registry (FAR) capturing every fixed asset. The FAR shall state the kinds, codes, ownership, assigned persons (previous & current), dates and condition of acquisition, and estimated useful life of every fixed asset. The FAR shall be updated whenever there is a change in the assigned persons of fixed assets.
generic rules for use of fixed assets
The Log/Admin shall establish firm rules governing the use of all fixed assets by CIPORD. The rules shall first be approved in a senior staff meeting and authenticated by the Executive Director. The rules shall be generic for all assets but shall be specific for certain delicate fixed assets. The careful and proper use of vehicles, bikes, computers, printers, generators, GPS devices, etc shall be covered by the rules. These rules shall be communicated to all staffs and they shall be held accountable for their observance.

Standard Procurement and Warehousing Recordkeeping

It shall be the duty of the Log/Admin to gather and systematically file the following documents:
This procurement Manual
List of all pre-qualified suppliers(with contact details)
All legal documents for pre-qualified suppliers
All procurement-related documents
Storekeeper's reports
Stock status reports
Fixed asset register
Fixed asset assignment memos
Generic rules for fixed asset use
Fixed asset coding scheme
Supply utilization reports
Stock re-order limits



CIPORD's Procurement Manual 7

Identification of need
Supplier Identification
Supplier Communication
Negotiation
Logistics Management
Supplier Liaison