procurement policy manual – goods, works and …

PROCUREMENT POLICY MANUAL – GOODS, WORKS AND SERVICESRev 03/December/2021

PROCUREMENT POLICY MANUAL – GOODS, WORKS AND SERVICES

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ContentsAbbreviations and Acronyms iv

1. Introduction 11.1 Objectives of the Manual 11.2 Scope 11.3 Ineligibility Criteria 2

2. Procurement Policy 2

3. Procurement Integrity and Transparency 53.1 Confidentiality 53.2 EthicsandConflictofInterest 63.3 Anti-fraudandAnti-corruption 63.4 Debarment of Firms 73.5 Protest and Complaint Process 73.6 Negotiations 8

4. Vendor Selection Methods 84.1 Open Competition 84.2 Direct Contracting (Sole Sourcing) 84.3 QualificationofFirm(RequestforQuotation) 94.4 RestrictedCompetition 9

5. RolesandResponsibilities 9

6. Procurement Flow 11

7. CreationofPR 127.1 Flowchart 127.2 Key Activities to be Performed 13

7.2.1 DetailsofPR 137.2.2 ApprovalofPRbytheHeadofUser’sDepartment 147.2.3 Validation and Approval by Finance Department 147.2.4 AmendmentsandCancellationsUser,Accountant 14

8. Vendor Management 158.1 Pre-qualificationofVendors 158.2 Approved/RegisteredVendorDatabase 158.3 ContinuousEvaluationofVendorPerformance 168.4 Vendor De-registration 178.5 Key Performance Indicators 17

9. PO Creation 189.1 Flowchart 189.2 Key Activities to be Performed 18

9.2.1 PO Generation 189.2.2 PODistribution 199.2.3 Cancellations and Amendments to the POs 209.2.4 Validity of POs 20


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9.2.5 PO File Maintenance 209.2.6 Internal Monitoring of POs 20

10. ReceiptofGoods 2010.1 Flowchart 2010.2 Key Activities to be Performed 21

10.2.1 ReceiptofGoods 2110.2.2 CreationofGRN 2110.2.3 Vendor Payments 22

11. Inventory Management 2211.1 Key Activities to be Performed 23

11.1.1 Maintenance of Stock Levels 2311.1.2 Managing Store Location and Space 2311.1.3 Issuing of Stock Items 2311.1.4 Mandatory Stock-takes 23

12. Monitoring and Performance Evaluation 2412.1 Key Activities to be Performed 24

12.1.1 Assessing Vendor Performance 24

Abbreviations and Acronyms

AC Air Conditioner CAPEX Capital ExpenditureCGIAR A global research partnership for a food secure futureCSD Corporate Services DirectorDG Director General FC Financial ControllerFIFO First In First OutGL General LedgerGRN GoodsReceivedNote(MIGO)ICT Information and Communications TechnologyIWMI International Water Management InstituteMIGO Material DocumentsMIN Material Issue NoteMRN MaterialReturnNoteOPEX Operational ExpenditurePO Purchase OrderPR PurchaseRequisitionsRVL RegisteredVendorListSLA Service Level AgreementSPO SeniorProcurementOfficerUPS UninterruptiblePowerSupplyWBS Work Breakdown StructureRFQ RequestforQuotationRFP RequestforProposal


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1. Introduction

This Procurement Policy Manual has been created by the International Water Management Institute (IWMI) to provide its userswith clear, conciseandaccurate informationon theprocurement ofgoods and services. The steps that need to be followed have been explained.

ThepoliciesandprocedurescoveredhereinshouldbefollowedbyallIWMIstaffwhoaredirectlyor indirectly involved in the procurement of goods and services.

1.1 Objectives of the ManualThe objectives of the Procurement Policy Manual are as follows:

● AcquaintIWMIstaffwiththeessentialpoliciesandproceduresthatneedtobefollowedin the procurement of goods and services.

● Ensureeconomyandefficiencytoachievequality,cost-effectivenessandtimelydeliveryinprocurement.

● Ensure equitable, fair and open competition, giving all eligible/qualified bidders anopportunity to participate.

● Ensureaccountabilityandthecost-effectiveuseoffunds.

● Ensure transparency of the procurement process.

● Provide fundamental guidance on the best practices that need to be followed in conductingprocurement activities.

1.2 ScopeThe principles and processes outlined in this manual apply to the following:

● Procurementofgoodssuchascapitalitems,consumablesandotherspecialitems.

● Outsourcedservicessuchasprinting,equipmentmaintenance, vehicle rental, groundservices, cleaning services, freight forwardingand clearing (in situationswhere IWMIhasachoice),accommodation,rentalofoutdoorconferencefacilities,externalcatering,banking,insurance,actuarialandinvestmentservices,andotherprofessionalservices,etc.

● In situationswhereaparticulardonormay requirecertainprocurementprocedures tobefollowedratherthanthoseoutlinedinthismanual,donorpreferencesandrestrictionsshall prevail.

● Thismanual canonlybegeneric toa certaindegree.TheProcurementUnit at IWMIand theCSDshouldbecontacted foranyclarification regarding themostappropriateprocesses that need to be followed in a particular situation.

Hosted Institutions● Unlessotherwisestatedinwriting,theprocurementpoliciesandproceduresstatedinthis

manualwillapply toall IWMI-hosted institutionsandprogramsbasedat the Institute’sheadquartersinColombo,SriLanka.


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Regional Offices● Incertaininstances,regionalofficesmaynotbeabletofullycomplywiththepoliciesand

proceduresstatedinthismanualduetotheirsize,requirementsandlimitedresources.

● Thus,supplementarymanualshavebeendevelopedfortheseofficeswhichwillberevisedperiodically. It is,however,requiredthat theregionalofficesfollowtherules laidout inthispolicy,especiallywithrespecttomonetarythresholds,capitalpurchases,high-valuepurchases and consultancies.

1.3 Ineligibility CriteriaThe following ineligibility criteria should be taken into account when carrying out procurement processes:

● Firms,andanyofitsaffiliates,engagedbyIWMItoprovideconsultancyservicesshouldbedisqualifiedfromsubsequentlyprovidinggoods,worksorservicesthatareconnecteddirectly or indirectly with the consulting services already provided unless it is a projectrequirementorisbasedonsoundrationale.

● Firms declared ineligible by theWorld Bank andUnitedNations or those that areprohibitedbyCGIARcentresbecauseofdisbarment,asper theprovisionsofarticleb2.4of theCGIARProcurement ofGoods,WorksandServicesGuidelines -FinancialGuidelinesSeries,No.6.

● Firms,inwhichIWMIstaff,ortheircloserelatives,whoareinvolvedintheprocurementprocess or hold amanagerial position at IWMI, and have a financial interest in thetransaction,shallbedisqualifiedunlessotherwiseapprovedbytheDGortheirdesignateand is based on acceptable rationale which should be properly documented

2. Procurement Policy● Clearspecifications,evaluationmethodsandcriteriashouldbedefinedbeforeacontract

is awarded.

● The decision to award a contract to a vendor should be based on a variety of Procurementactivitiesshouldadheretothehighestprofessional,ethical,moralandlegalstandards.

● First consideration should be given to open competition when determining the procurementmethod to be followed.

● The procurement process should comply with the Authorization Policy and be welldocumented.Thisimpliesthatallspecifiedprocurementactivitiesaresubjecttoapprovalby the appropriate level of authority. Technical units or other expertise are also taken intoconsiderationinthedecision-makingprocesswhenrequired.

● Procuringgoodsandservicesthatarecost-effectiveforIWMI,i.e.,thegoodsandservicesareoftherequiredqualityandareusableinatimelymanner.

● TheProcurementUnitshouldprocureallservicesandallstockitemsirrespectiveofvalueandallnon-stockitemsvaluedatoraboveUSD100.Anypurchaseofnon-stockitemslowerthanUSD100canbemadebytherespectivedepartmentatIWMI.


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● Allpurchases/consultingservicesvaluedaboveUSD10,000shouldbemadewiththeprior approval of the Procurement Committee. This Procurement Committee shouldcomprisethefollowingpersonnel:Chairperson-CSDordesignate,PermanentMembersshallconsistofHeadofFacilitiesandAdministration,HeadofFinance,Manager-ProjectsandAnalysis,SeniorProcurementOfficer and a representative fromUser/requestingdepartmentfortechnicalinputifrequired.PrincipalManager-Grants,FinanceshallbeanalternatememberofthePCtorepresenttheHeadofFinanceortheManager-Projectsand Analysis in their absence.

● ProcurementOfficer,Accountant and othermembers (respectivemembers of therelevant technical unit and/or representatives of user groups). All discussions held bythe Procurement Committee should be formally documented through meeting minutesandmaintainedbytheProcurementUnitforfuturereference.

● Procurement Committee is vested with the authority and responsibility to ensure thatall procurement decisions are made in a transparent manner in accordance with theprocurement policy manual of IWMI

● Allpurchases,contractsandconsultingserviceswithavalueofUSD50,000andaboveshall be made on the basis of open competition. All the open tenders should be publishedinIWMI’swebsiteunderhttps://www.iwmi.cgiar.org/about/tenders/

● AVendorDatabase,includingalltherelevantinformationofregisteredvendors,shouldbemaintainedbytheProcurementUnit.Vendorregistrationshouldbedonewiththeapprovalof theFC.All vendors should be treated fairly andprovidedequal opportunities.Theperformance of vendors should be monitored annually and reviewed by the ProcurementCommittee.

● All goods and services should be procured from vendors registered with IWMI. If thecircumstances for considering vendors are not in the list of pre-requisites, necessaryvendor registration procedures should be followed before initiating the procurementprocess.

● In order to reduce the administrative costs andefforts associatedwith duplicationofprocurementactivity(e.g.,purchaseofidenticalgoods),bulkpurchasesshouldbemadeonceevery6monthsoratsuchregularintervals,andlong-termcontractsmaybeawardedfor services whenever possible.

● Usually, service contractswith vendors should not be in effect formore than3 yearswithoutgoingthroughare-tenderingprocess.However,vendorscanbeidentifiedasthe“SoleSource”dependingontherequirements.

● All ICT equipment purchases should bemadewith the prior approval of the ICTdepartment.AlistofICTequipmentshouldbemaintainedbytheICTdepartment.ThislistshouldbemadeavailabletoallprospectiveusersofICTequipmentatIWMI.

● For ICTPurchasespertaining toscientifichardwareandsoftware(eg.networkstoragedevices ,workstations, statistical analysis) theGRANDDunitwill be consulted .Thiswould include participation in Procurement Committee meetings.

● All procurement should bemadeaccording to the quotation requirement specified inIWMI’sthresholdlimit.However,directcontractingisallowedwithclearjustificationandapprovals.


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● TheStoresOfficeratIWMIisthemaincustodianofinventoryitems.ThisofficershouldacknowledgereceiptofeveryitemcomingintoIWMI’sstores,givingdueallowanceforitemsreceivedduringnon-workinghours/days.However,onlygoodsprocuredthroughtheProcurementUnit should be accepted by theStoresOfficer (except for donatedgoods).Goods should be checked against the specifications stated in thePObeforethey are accepted.

● Goodsheldatthesupplier’sstoresaretheirresponsibilityuntilphysicallyhandedoverto IWMI.

● Stocks should only be held in stores when it is critical for business continuity and whenholding costs are lower than the costs of non-availability of the items. Stock levels shouldbemaintainedbytheStoresOfficertomeetIWMIrequirements.

● All inventory items should be stored and maintained in proper safe condition. Items ofsimilarclassificationshouldideallybelocatedtogetherregardlessofdifferencesinsize,weight and source. Valuable items that are subject to pilferage should ideally be kept inlockable cabinets.

● Inventory itemsshouldbe comprehensively insuredunder a general policy (e.g., fire,burglary),andcapitalitems,mobilephonesandITequipmentareinsuredunderthe“AllRisks”policy.

● Inventory items should be valued at historical cost in line with IWMI’s financialmanagement policy.

● A system of “First in First Out” (FIFO) is followed in the issuing of goods where

● deterioration/expiry may result from holding materials for an extensive period.

● Ad hoc physical counts as well as yearly systematic counts of goods should be carriedout by the Finance department. The annual stock count should be carried out with theparticipationofIWMI’sauditors.Reconciliationreportsforstockcountvariationsshouldbe promptly prepared and approved. Necessary adjustments to the stock value shouldbe made in the inventory accounts accordingly.

● Slowmovingandobsoleteitemsshouldbeidentifiedonanannualbasis,atleast,andappropriateaction(disposal,transfer)shouldbetaken.

● TheProcurementUnit shouldprepareanannual report, includingstatistics, toenableIWMI’smanagementtoevaluatetheoperationsoftheunit.Thestatisticsshouldincludethe following minimum details:- Total number of POs processed.- Average number of bids received (if any).- Total number of POs signed and their value according to all types of procurement

methods.- Number of POs and contract amendments.- Description of PO disputes, number of POs terminated, and cases of fraud,

corruptionanddisqualificationoffirms.


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Procurement value Number of quotations

UptoUSD100 Noquotationisrequired.Purchasescanmadebytherelevantunitthemselves.

USD100-USD500 OnequotationisrequiredfromaregisteredvendorunlesstheProcurementUnitorrequesterseetheneedforobtainingmorequotations.RFQmethodmaybeusedforthiscategory

USD500-USD3,000 Atleasttwoormoreindependentquotationsarerequiredfromregisteredvendorlist.RFQmethodmaybeusedforthiscategory

USD3,000-USD10,000 ShouldbesupportedwiththreeormorequotationsfromregisteredvendorlistandthesupportingdocumentstobereviewedbyIWMIHQProcurement Department

AboveUSD10,000-USD50,000

ThreeormoresealedquotationsshouldbeobtainedfromsuppliersregisteredwithIWMI.ProcurementCommittee’sapprovalisneededforallpurchasesaboveUSD10,000.FinalApprovaloftheDGisrequiredforallpurchasesaboveUSD25,000consequenttotheevaluationandapprovaloftheProcurementCommittee-RFQmethodmaybeusedforthis category

Above>USD50,000 Open competition in the form of sealed bids to be used for all purchases aboveUSD50,000.SeekapprovalfromProcurementCommittee.Final approval of the DG should be sought for all purchases of goods and services made under this category and the tender notices to bepublishedinIWMI’swebsiteunderhttps://www.iwmi.cgiar.org/about/tenders/.Inaddition,advertisementmaybeplacedinnational,international newspapers and procurement related websites.

● PCapprovalisrequiredforallindividualconsultancycontacts>USD20,000Andfor consultancycontactsfororganizations>USD10,000.

● DGandCSDshallhavetheauthoritytoapprovequotationswithoutobtainingprior approval from the Procurement Committee as and when the need arises or under exceptionalcircumstances.Aclearaudittrailbywayofemailjustificationshouldbe available with the Finance department for such procurements. Such procurement instances should be highlighted in the annual report prepared by the procurement unit

● All orders for reprinting could be given to the same suppliers at a lesser or the same rate.Ifthepriceofthereprintingincreases,thoseinvolvedintheprintingofpublications shouldobtainthreefreshquotations(accordingtothevalue).AllthePRapprovalsshall be processed through SAP system.

3. Procurement Integrity and Transparency3.1 ConfidentialityUndertheseguidelines,theprocurementprocessmustallowfirms,individualsorresearchentitiestocompeteforbusinessonafairbasis.Staffassociatedwiththeprocurementprocesshavearesponsibilitytoprotecttheintegrityoftheprocess,maintainfairnessinthetreatmentofallpotentialsuppliersofgoods,worksandservices,andshallbefullyaccountablefortheactionsofthesesuppliers.

Staff shall not allowany firm, individual or researchentity to access information on a specificcompetitive procurement before such information is available to the business community at large.After thesubmissionofbidsanduntil theaward isnotified,no information relating to theexamination, clarificationandevaluationof bids, or to the recommendation concerningawards,shouldbecommunicatedtoanybidderorpersonwhoisnotofficiallyinvolvedwiththeprocurementprocess.Proprietary informationoffirms,suchaspricedetails,shouldbekept inconfidencebyIWMIstaffandshouldonlybedisclosedtothoseindividualswhoneedtoknowsuchinformation.

Procurement Thresholds


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Tenderopeningisaformalprocessofopening,readingandrecordinginwritingallbidsreceivedinresponsetothesolicitation,atthedate,timeandplacestipulatedinthesolicitationdocuments.Itisrecommendedthattheofferopeningtakesplaceimmediatelyafterthedeadlineforreceiptofoffers.Apartfrombeingefficient,itwillreduceanyriskofmanipulatingoffersreceivedoracceptinglate bids. The bid opening process is normally conducted by the Procurement Committee.

3.2 Ethics and Conflict of InterestProcurementactivitiesshalladheretothehighestprofessional,ethical,moralandlegalstandards.Procurement activities must be conducted in a manner above reproach with complete impartiality andwithnopreferential treatment.This requires thehighestdegreeof trustandan impeccablestandardofconduct.StaffshallstrictlyavoidanyconflictofinterestorevenanappearanceofitinIWMI-contractorrelationships.Itisunethicalforstafftopresentcompetitiveinformationtoinduceafirm tomeetnonexistentcompetitiveprovisionsand to release thefirm’sprice information,oranothercompetitor’stechnicalorproprietarydata,toanotherfirm.

Conflictofinterestariseswhenofficialsinvolvedintheprocurementprocessalsohaveapersonalinterestintheoutcomeofthedecisionstheyaremakingbecauseofsomebenefitthey,theirfamiliesorassociatesmayderivefromthedecisionmade.Staffmembersfacingaconflictofinterestmustinformtheirsupervisors,disclosesuchconflictstotheprocurementcommitteeofIWMI,andrefuseto participate in the relevant procurement activity.

Staff shall not solicit or accept, directly or indirectly, any gratuity, gift, favour, entertainment oritems of monetary value from anyone who has or is seeking to obtain business from IWMI or hasintereststhatmaybeaffectedbyprocurementawards.Also,staffshallnotaccept,directlyorindirectly,anypromiseoffutureemploymentorfavourswithanypersonfromafirmseekingtodobusiness with IWMI. To avoid ethical issues related to gifts/gratuities or other types of honors from arising:ProcurementstaffcanensurethatallvendorsandcontractorswhoworkwiththeIWMIareawareoftheIWMI’sstrictpolicyregardingthegivingofgifts.

3.3 Anti-fraud and Anti-corruptionContractorsandpartnersprovidinggoods,worksandservicestoIWMImustobservethehigheststandard of ethics during the selection and execution of such contracts1.Inpursuanceofthispolicy,these guidelines must include the following:

(a) Define,forthepurposesofthisprovision,thetermssetforthbelow:(ii) “corrupt practice2”istheoffering,giving,receivingorsoliciting,directlyorindirectly,

ofanythingofvaluetoinfluenceimproperlytheactionsofanotherparty;(iii) “fraudulent practice3” is any act or omission, includingmisrepresentation, that

knowinglyorrecklesslymisleads,orattemptstomislead,apartytoobtainfinancialorotherbenefitortoavoidanobligation;

(iv) “collusive practices4” is an arrangement between two or more parties designedtoachievean improperpurpose, including to influence improperly theactionsofanotherparty;

(v) “coercive practices5” is impairing or harming, or threatening to impair or harm,directlyorindirectly,anypartyorthepropertyofthepartytoinfluenceimproperlytheactionsofaparty;and

(vi) “obstructive practice” refers to the following:

1. Inthiscontext,anyactiontakenbyacontractororsubcontractorto influencetheselectionprocessorcontractexecutionforundueadvantage is improper.

2. Forthepurposeoftheseguidelines,“anotherparty”referstoapublicofficialactinginrelationtotheselectionprocessorcontractexecution. In thiscontext, “publicofficial” includesCGIARstaffandemployeesofotherorganizations takingor reviewingselectiondecisions.

3. Forthepurposeoftheseguidelines,“party”referstoapublicofficial;theterms“benefit”and“obligation”relatetothese-lectionprocessorcontractexecution;andthe“actoromission”isintendedtoinfluencetheselectionprocessorcontractexecution.

4. For thepurposeof theseguidelines,“parties”refer toparticipants in theprocurementorselectionprocess(includingpublicofficialsandindependentexperts)attemptingtoestablishcontractpricesatartificial,non-competitiverates.

5. Forthepurposeoftheseguidelines,“party”referstoaparticipantintheselectionprocessorcontractexecution.


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● Deliberately destroying, falsifying, altering or concealing of evidencematerial tothe investigation or making false statements to investigators in order to materiallyimpedeaCGIARinvestigationintoallegationsofacorrupt, fraudulent,coerciveorcollusivepractice;and/orthreatening,harassingorintimidatinganypartytopreventthem from disclosing their knowledge of matters relevant to the investigation or frompursuingtheinvestigation;or

● Acts intended tomaterially impede theexercise ofCGIAR’s inspection andauditrights.

(a) Rejectaproposalforawardifitdeterminesthatthecontractorrecommendedfortheawardhas,directlyorthroughanagent,engagedincorrupt,fraudulent,collusive,coerciveorobstructivepracticesincompetingforthecontractinquestion;

(b) Inthecaseofanallegationorsuspicionthatafirmhasbeeninvolvedin,orissuspectedof, practicing fraudor corruption, staff shall bring thematter to theattentionof seniormembers and/or theProcurementUnit which, in consultationwith the Finance andAdministrationunits,shall investigate thematterbyconstitutingacommittee.Where itis found that therearegrounds for theclaims, thecommittee, inconsultationwith theLegalUnit,will determine the termsofdebarment.Afterapprovalby theDGof IWMI,firmsshouldbenotifiedbytheProgramUnitofanysuchdebarments.

(c) DebarredfirmswillbesubjecttotheWorldBankprocurementpolicyondebarredfirmsandtheirnameswillappearonthelistofdebarredfirms.

3.4 Debarment of FirmsAfirmshallbedebarredfromdoingbusinesswiththeIWMIforanyofthefollowingreasons:

● Ifthefirmhas,inthepastthreeyears,beendebarredbyanynationalgovernment,the

● WorldBankGrouporUnitedNations.

● Ifthefirmisinvolvedin“fraudulentpractice”or“corruptpractice.”

● If,intheperformanceofacontract,thefirmwasengagedinillegalorunethicalpractices.

● If there is a consistent failure in the performance of contracts over the last two years.

● IfthefirmfailstocomplywiththeguidelinesandproceduresofIWMI’sProcurementPolicy.

Theperiodofsuspensionofafirmdependsuponthegravityofeachcase.

Underspecificcontractualagreements,subjecttotheprocurementrulesofadonor, thedonor’slistofdebarredfirmswillbegivenprecedence.

3.5 Protest and Complaint ProcessProcurement-relatedinquiries,whichareaddressedtoIWMI,shouldbesentbyemailorposttotheProcurementUnit.Ifthereareanycomplaintsorgrievancefromfirms,suppliers/vendorsmaysubmit such grievances in accordance with the process outlined in the Procurement Grievance Procedure https://www.iwmi.cgiar.org/About_IWMI/Policy/procurement-grievance-submission-process-for-suppliers.pdf.IWMIshouldestablishaprocessforhandlingsuchcomplaints,but,ingeneral,complaintsthataredeterminedasbeingseriousbytheDGwillbesubmittedforreviewbytheCommitteeconstitutedbytheDG.Complaintsshouldbedealtwithinaprompt,carefulandconsistentmanner.Acommunicationmadetotheprotestershouldnotcompromisetheconfidentialityof the procurement process of other bids received.


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IWMIprovidestheprotestorwithformalwrittennotificationofthedecisionreachedandthebasisuponwhich this was made.

IWMImaynotnormallydebriefunsuccessfulfirms.However, in thecaseofhigh-valuecontracts,adebriefingmaybeconducteduponwrittenrequestfromanunsuccessfulfirm.TheUnitHeadconcernedshouldconduct thedebriefingandmay inviteotherstaffto jointhedebriefing, ifsuchattendance isdeemed appropriate.

3.6 NegotiationsProcurementstaff,inclosecooperationwithotherconcernedtechnicalstaff,cannegotiateonbehalfofIWMIifthelowestofferisdeemedinterestingbutdoesnotfullymatchtherequirementsofthetender;or if it is expected that substantial gains can be realized through negotiations.

NegotiationsshallincludediscussionsoftheTOR,themethodology,staffing,IWMI’sinputs,andspecialconditionsofthecontract.ThesediscussionsshallnotsubstantiallyaltertheoriginalTORorthetermsofthecontract,lestthequalityofthefinalproduct,itscost,andtherelevanceoftheinitialevaluationbeaffected.Majorreductionsinworkinputsshouldnotbemadesolelytomeetthebudget.ThefinalTORandtheagreedmethodologyshallbeincorporatedin“DescriptionofServices,”whichshallformpartof the contract. Such negotiations shall be done with the concurrence of the Procurement Committee.

4. Vendor Selection MethodsThis section will cover selection methods and circumstances under which they are acceptable. IWMI shallcoveroneofthefollowingmethodssuchasOpenCompetition,DirectContracting(SoleSourcing),QualificationofFirm(RequestforQuotation-RFQ)andRestrictedCompetition.

4.1 Open CompetitionThepurposeofopencompetitionistogivealleligibleprospectiveindividuals,firmsorotherentitiesadequateand timelynotificationof IWMI’s requirements,and togive themequalaccessanda fairopportunitytocompeteforcontractstosupplytherequiredgoods,worksorservices.

The procurement opportunity should be advertised to allow all those who are eligible with reasonable facilitiestoparticipate.Opencompetitionrequiresformalbiddingproceduresanddocumentation.Fortheprocurementofgoodswithcomplextechnicalspecificationsandstandards,a two-stagebiddingproceduremaybeused,underwhichthefirstun-pricedtechnicalproposalsareinvitedandaftertechnicalclarificationsandadjustmentsaremadethefinaltechnicalproposalsandpricedbidsaresubmitted.

ThisshouldbethefirstconsiderationindeterminingtheprocurementmethodthatIWMIshouldfollowforallprocurementofgoodsandservicesabovethevalueofUSD50,000

4.2 Direct Contracting (Sole Sourcing)TheDirectContractingmethoddoesnot facilitateselection.Due to this reason, thismethodshouldonlybeused if itpresentsaclearadvantageoverOpenCompetition.Thesignificanceofselectingdirectcontractingshouldbeclearlyjustifiableandadequatelydocumented.However,approvalshouldbe obtained from the Procurement Committee or other applicable authority level to proceed with this method of selection.

● IWMI can use this method under the following circumstances:● Continuation of previouswork handled by the same vendor,where the vendorwas

selected competitively.● In an emergency situation.● Whentheindividual/firmistheonlyvendorthatisabletocatertotherequirement.

However, it is possible for theDGorCSD to decide to award the same contract to the samevendor according to the situation.


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4.3 Qualification of Firm (Request for Quotation- RFQ)This procurementmethod is a variant of theRestrictedCompetitionmethod and is based oncomparingpricequotationsobtained fromseveral vendors, preferably according to thenumberofquotationrequirementspecifiedinprocurementthresholds,nationalorinternational,toassurecompetitive prices are obtained. This method may be appropriate for procuring goods of standard specificationsorcontractingofsmallworkswithalowvalue.TheRFQsisthemethodusedwhen

theanticipatedcostisexpectedtobebetweenUS$3,000toU$50,000.Requestsforquotationsshouldincludedescriptionofgoods(ifnecessary,withindicationofequivalencywithpartnumber,trademarkorqualitystandards)orscopeofwork,aswellasthedesireddeliveryorcompletionperiod.

QuotationsmaybesubmittedbyfaxormailforprocurementsbetweenthevaluesofUSD3,000-USD10,000andsealedquotationsobtainedforprocurementsofUSD10,000andabove.andarenotsubjectedtoaformalinvitation,acceptance,andopeningandevaluationprocess.Theevaluationof quotations should take into consideration price, quality, delivery terms, and standardizationaspects of goods and works.

4.4 Restricted CompetitionRestrictedCompetitionisessentiallyacompetitionbydirectinvitationwithoutopenparticipation.Invitations tosendproposalsshallbecirculated toa fewqualifiedvendorschosen from IWMI’sVendorDatabase.IfthevendorisnotregisteredinIWMI’sVendorDatabase,approvalshouldbesought from the FC before they are invited.

Thismethod should be followed by providing clear justification for using thismethod. Someillustrativejustificationsforusingthismethodareasshownbelow:

● When circumstances do not permit open invitations due to urgency or country-levelrestrictions;and

● Only a limited number of prospective vendors is available for the circumstance

5. Roles and ResponsibilitiesSteps/stages in the process Responsible person/unitCreatePRsaccordingtothematerialorservicerequirements • User

• SeniorOfficer–Maintenance(forregularservices)

• Conference Coordinator

Checktheavailabilityofbudgetedfundsfortherequiredpurchase Project Accountant

Provideconfirmationregardingthetechnicalaspectsandpricesof IT-related items to be purchased

ICT Department

ConfirmthatthePRvalueiswithintheCAPEX/OPEXbudget HeadofUserDepartment

ApprovethePRifthepurchasevalueismorethanUSD100 Project Leader

Approval for the purchase of un-budgeted items CSD

ChecktheaccuracyofPRfields Project Accountant

Steps/stages in the process Responsibleperson/unit

AmendorcancelthePR Users/Accountant/FC

Maintenance of Vendor Database ProcurementOfficer

Approve the creation of new vendors FC

Annualevaluationofthevendors’performance Procurement Committee


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Procurement value Number of quotationsThe maintenance of a vendor list in the Finance Division and ensure that the following operations are carried out:• Check whether the list is current and accurate and corresponds

totheVendorlistheldbytheProcurementUnit.

• Block the accounts of vendors with whom IWMI has not placedorders for the last one or more years.

• Check that no miscellaneous or suspense vendor accountismaintained,andnoduplicatevendorrecordsexistunlesstheyarevalid/legalrequirements.

• Vendor accounts are blocked rather than expunged as longas the vendor is not debarred.

Finance Department

CreatethePOaspertheapprovedPRforthepurchases RelevantprocessowneroftheProcurementUnit

ConfirmingthesuitabilityofwarrantycoverforgoodsandservicesorRequester

ProcurementUnit/ICTDepartment

Approval of the PO FC/Accountant

Cancellation or amendment of the PO FC/Accountant

Maintenance of a printed copy of the PO RelevantprocessowneroftheProcurementUnit

RetrievethestorescopyofthePOandinspectthegoodstoverifythatthequantities,specificationsandqualityofitemsdeliveredare consistent with the PO

CreatetheGRN(MIGO)forgoodsreceived

StoresOfficer

StoresOfficer

AssisttheStoresOfficerbystampingandsigningtheDeliveryNotetoconfirmacceptanceofthegoods,ininstanceswherethestores unit is not competent to verify the technical aspects of the goods

Originator or the relevant Technical Manager

CreatetheMRNandindicatethereasonforrejectinganitemand sending it back to the vendors (after recording the details in IWMI’sbooks)

StoresOfficer

Issue the “Gate Pass” for the items returned from the stores StoresOfficerorunitconcerned

Processing the payment after performing a three-way match Finance Department

Schedule and supervise a stock-take on an annual basis Finance Department

Support to carry out an independent stock count StoresOfficerandotherStoresstaff

Perform the following duties in terms of mandatory stock-taking:• Responsibleformanagingstockinputcontrolandother

designatedstaffinvolvedinthestock-takeschedule.• Produce a variance report for the custodians to explain

reasons for deviations.• ForwardthevariancereporttotheStoresOfficerfor

reconciliation.• Submit the reconciled variance reports to the CSD for

review.

Finance Department

Makenecessaryadjustmentstostockbalancesasidentifiedfromthe stock count

Finance Department

Approvalofthefinalcompositionofthe“ProcurementCommittee” CSD


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6. Procurement Flow

Incorrect Entries

Validating Entries

Corrected Entries

Approval Of Project Accountant

Purchases Order And DeliveryInstructions Are Forwarded To The Vendor

Delivery From Supplier

Local

Foreign

Rejected

Stock

Custom Clearance Through

Release Of Goods From CustomsReceipt Of Goods at Shipping Unit

Inspection Of Goods With UserRespective

Accept or

Reject?Shipment Returned To Vendor

Deliver To Warehouse

Accepted

Stock Or Non-stock

Item?

Non-stock

Distribution To End-user

From Local OrForeign Suppliers?

Purchases Order Creation And Approval

Stock or a NonStock Item

Non Stock Item Stock Item Approval Is Obtained

Warehouse Insurance

Approval from therelevant Department

Head

End User Prepares And SubmitPurchase Requisition

START

END


12

7. Creation of PR

Process Objectives ● GeneratevalidPRs.

● GetthePRsapprovedbytheHeadofuser’sdepartment.

● GetthePRsapprovedbytheICTDepartmentforcomputeritems(CAPEXitems).

● GetthePRsapprovedby the Finance Department.

Process Owners ● UserDepartment.

● Finance Department - Project Accountant.

● ProcurementUnit-ProcurementOfficer.

Key Inputs to this Process ● Approved budgets.

● Itemrequirement

7.1 Flowchart

START

Process Flow DiagramInternational Water

Management Institute

PurchaseRequisition will be

prepared Available or

not?Available

PurchaseRequisition

Proj

ect A

ccou

ntan

tFi

nanc

e D

epar

tmen

tD

irect

Fin

ance

and

Adm

inis

tratio

nTh

eme

Lead

rer

Use

r Dep

artm

ent

Validating Purchase Requisition

Check in the system whetherbudget allocation is availablefor the item and budget codes

are available in the system

Receives the details of theselected supplier from the

procurement Officerthrough an e - mail

A Nortification willbe sent to the ThemeLeader regarding the

purchase of item

Approve thepurchase of itemand charge the

cost to theutilized budgeted

cost category

Receives theNortificationregarding the

purchase of an item

Exceedsvalue of $ 100

Yes

Get approvalfrom Theme

Leader

End

Use

rU

ser D

epar

tmen

t No

System configurationautomatically forwards

the Purchase Requisitionto Project Accountant

Approves thePurchase

Requisition afterchecking all the

validities

Is it possibleto avoid any

other budgeted costcategory to

purchase thisitem?

YesNo

Satisfied with the verifications?

Verifies the codesfor budgetary

compliance & otherProprietary aspects

No

End

Yes

Request the DirectorFinance and

Administration foradditional approval

Evaluate the request andapprove for a fund

allocation if the request isreasonable

Rejects the PurchaseRequisition and return it

through system

System configurationautomaticallyforwards the

Purchase Requisitionto Purchasing Officer

Not Available


13

7.2 Key Activities to be Performed

Activity Responsible Party

7.2.1 Details of PROncetheneedforgoodsorservicesarises,theuser’sdepartmentshallcreatePRsaccordingtotheirmaterialorservicerequirements.AnymemberofstaffcaninitiateaPR.ThesystemwillcarryoutanautomaticbudgetcheckandacceptthePR,ifbudgetisavailable.Ifthereisnobudget,therequestershouldcontacttheFinancedepartmentforbudgetreclassificationortouseadifferentbutrelevantbudgetline.ThecompletedPRwillbepassedontotheFinanceDepartmenttoobtainfinancialconfirmationsuchasWBS,GLcode,etc.

IT-related purchases should be carried out with the coordination of the ICT Departmentbyrequestingconfirmationoftechnicalaspectsandpricesof items given by them. The ICT Department shall coordinate with the ProcurementUnittocommunicatepricestotheuser.AllthePRsshouldbecreatedthroughthesystemmodule.TheProcurementDivisionshallstartthePOprocessonlyafterobtainingavalidPRfromtheuser’sdepartment

TherequestershouldcompletethePRsbyincludingthefollowinginformationintherelevantfields:• Purchase Requisition type-relevanttypeofpurchaserequisition.• Requisition number–theprocurementmoduleinthesystemwillautomatically

generateaPRnumberaccordingtotheserialorderofrequisitions.

• Description of goods or services required -detailedspecificationsofthegoodsandservices(forexample,technicalrequirements)requiredshouldbeincluded in this section.The description should include all the details in respect of the item or service required.

• Quantity to be procured-therequiredquantityshouldbeenteredmanually.• Unit of measure-thenumberofitems,numberofdaysorrelevantmeasuring

factor.

• Estimated price or cost - price or estimated unit cost of the item.

• Required delivery date - the date the goods are to be delivered. This should be manuallyenteredbytheuserbasedonthequotationorex-stock.Thetimeframegiven for delivery should be practical.

• Requested person–theRequesternumbershouldbeindicated.• Desired vendor - name of the supplier who has been selected for procurement

of the relevant item or service.

• Relevant budget line category–thebudgetlineshouldbeidentified.Budgetcodesareavailablewithinthesystemmodule,andtheuserneedstoselecttherelevantcode.Un-budgeteditemsshouldbeprocuredwiththeapprovaloftheCSD

• Any additional information–anyadditionalinformationthatmaybehelpfulandbeofassistancewhenprocessingthePR.

a. Creation of PRs for GoodsWhenpreparingthePRformaterials,theuserdepartmentmustcheck whether the itemsareavailableandinstock,bysendingane-mailtothestorekeeper.

User


14


If the items are not available and not in stock, therequestershouldinformtheProcurementOfficerofthegoodsrequired,andobtainthenecessaryinformationforPRfieldsthroughquotationsreceivedfromvendors.

b. Creation of PRs for ServicesCreationofPRsforregularservicesshouldbecarriedoutbytherespectiveheads of divisions.

These services include the following:

1.Tea services

2.AC services

3.Generator services

4.Sanitary services

5.AuditoriumandUPSservices

6.Electricianandengineeringservices

7.Janitorial services

8.Security services

9.Morning/afternoonstafftransport

10.Fire protection/detection system service

11.Pest control service

12.Other services

It is the responsibility of the respective heads of divisions to follow-up theservice contracts in order to avoid service interruptions Evaluation of quotationsforthoseservicesshallbehandledbytheProcurementCommittee.However,previoussuppliersandperformanceshallbeconsidered.

7.2.2 Approval of PR by the Head of User’s Department

Prior to approving the PR, budgetary compliance should be checked by the Head of Department.AllthePRsshouldbeapprovedbytheProjectLeader.PurchasesthroughNon-PRscanbeapprovedbytherelevantusersuptothesumofUSD100.ItshouldbeconfirmedthatthePRvalueiswithintheCAPEX/OPEXbudget.However,forcapitalitems,thespecificitemdescriptionshouldbeincludedinthe CAPEX budget.Un-budgeteditemsshouldonlybeapprovedbytheCSD

SeniorOfficer-

Maintenance/HeadofOfficeSupport

SystemsOffice/AdministrativeOfficer-Transport

Headofuser’sdepartment

7.2.3 Validation and Approval by Finance DepartmentAllPRsshouldbeforwardedtotheProjectAccountantbytherespectiveHeadsofDepartment(ProjectLeaders)tochecktheaccuracyoftheinformationenteredinthefieldsofthePR.TheProjectAccountantwillreceiveane-mailnotificationthataPRhasbeensentbyauserdepartmentforhisapproval. The Project Accountant will check the information entered in the fieldsofthePRandpassitontotheProcurementUnitforthepurposeofcreating a PO.

7.2.4 Amendments and Cancellations User, AccountantAnyamendmentsrelatedtotheinformationenteredinfieldsofthePRcanbedonebytheuserbeforepassingthePRtotheFinanceDepartmentforapproval.

TheAccountantcanmakeamendmentsorcancelthePRifsuchchangesaresoughtaftertheFinancedepartment’sapproval.

Project Accountantof FinanceDepartment

UserAccountant


15

8. Vendor Management

Process Objectives ● Selectthebestpossibleandmostcost-effectivevendorforprocurement.

● Identify and develop new vendors with an aim of creating a comprehensive database

approved vendors.

Process Owners ● FinanceDepartment-ProcurementOfficer.

Key Inputs to this Process ● Vendor Master Data.

● Approval.

Key Activities to be Performed


8.1 Pre-qualification of VendorsVendors for each category should be reviewed at least once every two years. The following steps shall be adopted prior to including the Vendor in the system:

1. dentification of VendorsIdentifyingvendorsthroughnewspaperadvertisements,e-mailcontacts,websites and catalogues which are publically available.

2. Evaluation of VendorsVendorswillbecontactedbye-mailortelephone.Theywillberequestedtosend us a signed and stamped version of IWMI Vendor registration from with theircompanyprofile,authorizationlettersfromtheirprincipals,andotherrelevant information which are used by IWMI to evaluate the vendor based on the Institute’srequirementsandpolicy.

3. FinalstepsandopeningofaVendorfileOncethereviewiscompleted,vendorswillbeincludedinthelistofRegisteredVendors.

This list will be approved by the FC.

Afileisopenedforeachselectedvendor.Thisfilewillcontainallthedocumentation leading to the decision to select the vendor as well as the forms completed by the vendor.

This information is provided to the Finance department to enable updating

ofthevendormanagementinformationinthefinancialsystem.

8.2 Approved/Registered Vendor DatabaseTheProcurementUnitshallmaintainanelectronicdatabaseofqualifiedvendors,whichissufficienttoensurecompetitionamongstdifferentcategoriesofgoods/services.Allvendorsaresubjecttoaprequalificationprocessandthencontinuousmonitoringoftheperformanceprocess.TheRegisteredVendor

List(RVL)isapprovedaccordingtocertaincriterionandreviewedbytheProcurement Committee annually.

ProcurementOfficer


16


Foreachcategoryofgoods/services,theVendorListshallcontainatleastthreevendors.Allthingsbeingequal,manufacturersarepreferredoverauthorizeddealers.Ifthreereliablevendorscannotbefound,otherless-qualifiedvendorsFor eachcategoryofgoods/services,theVendorListshallcontainatleastthreevendors.Allthingsbeingequal,manufacturersarepreferredoverauthorizeddealers.Ifthreereliablevendorscannotbefound,otherless-qualifiedvendorsmaybeaddedwithaqualificationtoensurethatanalternatesolutioncouldbeeasilyfoundifthemainsupplierwasnotabletorespondtoIWMI’srequestforwhatever reason.

Both local and international suppliers should be listed. A categorization of vendors may be put in place depending on the evolution of the market and the vendors(e.g.,partner,preferredvendor).

The Vendor Database will contain the following information of vendors:• Vendor code• Name,emailaddresses,telephoneandfaxnumber,physicaladdressof

the supplier• Category of goods/services that can be provided• Natureofthevendor(manufacturer,soleagent,agent,distributor,etc.)• Registrationnumberoffirm(registrationcertificate,taxdetails)• Names of contact person• Banking information• Credit period• Delivery and payment terms

• Any limitation on the list of goods they can provide to IWMI

The FC should approve the Vendor List by entering the Vendor Creation Form. The Finance Department needs to ensure that the approved Vendor Listisreflectedinthelistmaintainedinthefinancialsystemandconfirmthefollowing:• Thelistmaintainedinthefinancialsystemiscurrentandaccurate,and

correspondstotheVendorListheldbytheProcurementUnit.• Blocked accounts of vendors with whom IWMI has not placed orders for

the last one or more years.• No miscellaneous or suspense vendor accounts are maintained and no

duplicate vendor records are created unless there exists a valid/legal requirement.

• Vendor accounts shall be blocked rather than expunged as long as the vendor is not debarred.

FC

8.3 Continuous Evaluation of Vendor PerformanceVendorevaluationshouldbeconductedforpurchasesaboveUSD1,000anddocumentedinthefile.Otherincidents(positiveornegative)willbedocumentedinthefileaswell.Thisevaluationisundertakenannually.

Documentation should be retained for as long as the supplier is registered with IWMI.

The objective of vendor performance management is to determine whether IWMIisreceivingthequantityandqualityofthespecifiedgoodsandservicesthat it is paying for.

a. Evaluation of goods supplied by vendorsTheProcurementUnit,assistedbytheTechnicalSupervisorandusersofthegoods,shallbeaccountablefortheday-to-daymanagementoftheperformance of vendors and their relationship with IWMI. A formal evaluation should take place for each vendor at least once a year before the list is presented to the Procurement Committee.

ProcurementOfficer

ProcurementOfficer


17


The criteria to assess vendor performance should include parameters as shown below:• WhethergoodsdeliveredmatchthespecificationsonthePO.• Whetherpackagingisofsufficientqualitytoensurethegoodsarriveun-damaged.• DeliveryismadeasspecifiedinthePO.• Timelysubmissionofadequatesupportedinvoicesandstatements.• Accuracy of invoices and statements.• Number of partial deliveries made against the PO (this would be due to stock

availability).• CompliancewiththetermsandconditionsofthePO,includingreturnofgoods

andfinancialconditions.• Service orientation/problem-resolution.

Iftheresultsoftheevaluationarenotuptostandard,theProcurementUnitwill meet with the supplier to understand the causes of the problems and then decide whether tokeepthevendoronthelist,putthemunderprobationorde-registerthem.

b. Evaluation of Service VendorsWheneverrequired,meetingsshouldtakeplacebetweentheServiceProviderand the responsibleunit,inordertoevaluatetheregularperformanceoftheServiceProviderwhich should be documented.The key part of large service contracts is the SLA. It is a tool to manage expectations,clarify responsibilities and improve communication between a service provider and a service recipient.

The SLA explains the following:• The exact nature of the services to be provided and how they will be delivered.• Performance measurements against plans (Key Performance Indicators that help

definesuccessandmeasureprogressagainstaplan).• Comparison of duties and responsibilities of the service provider against the

agreed responsibilities.• Timelysubmissionofadequatelysupportedinvoices.

8.4 Vendor De-registrationWhenavendorfailstodelivertherequiredgoodsorservicetoIWMI’ssatisfaction,theProcurementUnit,aftersecuringauthorizationfromtheFC(whoauthorizesvendorregistrationaspertheAuthorizationPolicy),cande-registerthevendor.TheProcurementUnitwillupdatetheProcurementCommitteewithdetailsofvendorsthathavebeende-registeredonanannualbasis.TheProcurementUnitwilladvisethe system administrator to block the vendor account once approval to de-register is secured.

SeniorOfficer- Maintenance andHeadofOfficeSupportSystems Office

FC,Procurement Officer

Some possible reasons for de-registering a vendor are as follows:• Unsatisfactoryperformanceindeliveringaproductorservice.• Repeatedfailuretomakeasatisfactoryefforttorendercompetitivepricesand

service.• Misconduct.• Refusaltoreplacefaultyproductsduringthewarrantyperiod.• Financialdifficulties(e.g.,insolvency).• Debarmentbyanynationalgovernment,theWorldBankGrouporUnitedNations.• Involvementin“fraudulent”,“corrupt”,illegalandunethicalpracticesinthe

performance of contracts.• ConsistentorveryseriousfailuretocomplywithIWMI’sprocurementguidelines

and procedures.

8.5 Key Performance IndicatorsListing of Key Performance Indicators:• Price• Lead time deviation• Quantity

• Service support• Qualitative and servicing parameters


18

9. PO Creation

9.1 Flowchart

START

Fin

ance

Div

isio

nV

endo

rF

inan

cial

Con

trol

ler

Fina

nce

Dep

artm

ent

Pur

chas

ing

Off

icer

Proc

urem

ent

Dep

artm

ent

Validating Purchasase Order

Process Flow DiagramInternational WaterManagement Insititute

Receive emailnortification regardingthe complited Purchase

Requisition

Prepare Purchase Orderaccording to the PurchaseRequision and approves it in the capacity of preparer

PurchaseOrder

Receives the thirdcopy of the

Purchase Order fortiling purposes

End

Receives thePurchase Order

Receives the secondcopy of the

Purchase Order

Purchase Order willbe canceled

Approves thePurchase Order after

checking theaccuracy

No Yes

Get a print out of the relevant PurchaseOrder and signs it and distributed as

follows:1. Original Copy - sends to Vendor with

the mail specifying the conditions.2. Second Copy - Finance Department

3. Third Copy - Procurement Department

Approves thePO within 5

Days?

Process Objectives ● Tocreateanorderrequestingthevendortosupplythematerial/servicesrequiredasperthe

agreed terms and conditions.

Process OwnersProcurementUnit–SeniorProcurementOfficer.



9.2.1 PO GenerationPOsaregeneratedbytheProcurementUnit.AllPOsshallbecreatedthroughtheprocurement system module according to the serial order.ThePOcreationprocessishandledbytheSPOintheProcurementUnit.Theprintedand signed PO is a legal document committing IWMI to a purchase transaction as specifiedtherein,andthevendortothetermsonthefaceoftheorderdocuments.

POpriceandotherspecificationsshouldbeinaccordancewiththespecificationsofthePR.

Orderdetailsshallbeenteredintothesystembythedesignatedstaff.APOshouldcontainthefollowingfields:• Vendor’snameandaddress• Across-referencetothePR• Listofgoodsandtheirspecifications• Prices including discounts (if any)• Delivery date (with penalty conditions)• Full name and address for delivery

Procurement Officer


19


• Full name and address for delivery• Name and address for invoices• Terms and conditions for payments• PO number• PO date• Currency• Total amount• Signature of authorized signatory

Beforegeneratingacontract/PO,theProcurementUnitshouldconfirmthesuitabilityofwarranty cover for goods and services by taking into account the following:• Liabilitybythevendorfordefectivegoods,otherthandefectsarisingfromfair

wearandtear,appearwithinaspecifiedperiodfromeitherthedateofdeliveryorafterthegoodshavebeenputintouse,whichevercomesfirst.

• Look into the possibility of extending the warranty cover with the vendor• for goods that may be held in stores without being used for a period of time.• Forexample,ifanitemwithaone-yearwarrantyis• notusedfortheinitial6months,checkthepossibilityofextendingthecover

periodfromthedatewhentheitemwasfirstused.• LiabilitybythevendorforcostsincurredbyIWMIintherepairofgoods,duetofailure

by the vendor to replace/repair the goods within a reasonable period of time.• All warranty cards/invoices should be maintained by the person in-charge of the

stores (if the invoice is the warranty card).

All completed POs should be printed through the system in a standardized form with the IWMI logo.The PO should then be passed for manual approval.

Guidelines on documents to be uploaded to the Purchase Orders in SAP System Procurement of Goods & Services: - UptoUSD100–Noquotations

- USD100–USD500–Onequotation

- USD500–USD3,000–Twoquotations

- USD3,000–USD10,000–Threequotationsormore

- USD10,000–USD50,000–Threeormorequotationsreceived,PCApprovaldocument&CSD’sandDG’sApprovaldocument

- AboveUSD50,000–Allquotationsreceived,PCApprovaldocument&CSD’sandDG’sApprovaldocument

FC/Accountant

ProcurementOfficer

9.2.2 PO DistributionTheprintedandsignedPOshallbedistributedasfollowsbytheProcurementUnit:

Original PO - sent to the vendorAphotocopy-afiledcopyismaintainedwithintheProcurementUnitApprovedPOsshallbescanned/mailed,faxedorcollectedbythedesignatedrepresentatives of the vendor. POsaboveUSD3,000havetobeacknowledgedbythevendor,bysigningthePO.

9.2.3 Cancellations and Amendments to the POsCancellations and changes to the PO can be carried out by the Accountant/FC. If any amendmentsaretobemadetothedetailsofanexistingPO,IWMIshouldgenerateanew PO.

FC/Accountant


20

10. Receipt of Goods10.1 Flowchart

START

IT D

epart

ment

User

Repre

sentat

iveof

spec

ial ite

ms

Sends the goodswith the Invoice, POand Delivery Note

Receives the goods with reasonsfor rejection

Receives the Items

End

No

Process Flow DiagramInternational WaterManagement Insititute

Goods Received Note

Vend

orSto

res O

ffice

rSto

res

Compare the items receivedwith the Invoice and

Purchase Order

Is there anymaintenances? Yes Informs the Procurement Officer

and returns the goods

No

Item is an ICT item/special feature item or

Stores item?

Goods ReceivedNote

Prepare the GoodsReceived Note in the

system(MIGO)Stores Item

ICT related item/ Special item

Produces "EquipmentInspection Report" after

inspecting the item

Inspect the itemwith the stores officer

EquipmentInspection Report

Inspectionsatisfied?

Yes


9.2.4 Validity of POsTohelpreduceadministrativecostsandeffortsassociatedwithduplicatingprocurementofidenticalgoods,“Call-off”contractsbetweenIWMIandavendormaybeawarded.Suchcontractsdefinefixedpricesandothertermsfor6monthstooneyear,therebyfacilitatingtheuninterruptedflowofsuppliesandvaluefor money.AllotherPOsofferedforthesupplyofgoodsorservicesshallbevalidforaperiodspecifiedinthePO.IfthevendorisunabletoprovidegoodsorservicesaccordingtothePO,thePOshouldbecancelledandthevendorshouldbeinformedimmediately.

9.2.5 PO File MaintenanceAprintedcopyofthePOisretainedasafilecopyaccordingtotheserialcontinuity of PO numbers. This is a responsibility of the PO.

ProcurementOfficer

ProcurementOfficer

9.2.6 Internal Monitoring of POsTheProcurementUnitshallensurethatallopenPOsareeitherfacilitatedforreceiptofgoods/servicesorclearedfromthesystem.TheProcurementUnitshallreviewalloutstandingPOsinthesystemat20leastonceevery6monthsandadecision should be made as follows:1. WhethertokeepthePOopenorcloseit.Inthelattercase,thesupplier

should be informed that the PO has been cancelled in line with the standard provisions.

2. POs may be cancelled/deleted in instances where incorrect purchasing details(price,vendor,account,etc.)havebeenmadeorwheregoodsarenotgoing to be received.

3. Insuchcases,theProcurementUnitshallensurethedeletionofPOssothatthewholeprocessofcreatinganotherPOcanbegin.Inallothercases,e.g.,unsatisfactoryperformanceofvendors,forcemajeure,etc.,approvaloftheperson who authorized the PO shall be obtained before the cancellation or deletion of procurement documents.


21


10.2.1 Receipt of GoodsAlldeliveriesmustbeaccompaniedbythesupplier’sDeliveryNotequotingthePOnumberagainstwhichthesupplyisbeingmade.ThereceivingStoresOfficerwill retrieve the stores copy of the PO and inspect the goods to verify that the quantities,specificationsandqualityofitemsdeliveredareconsistentwiththespecificationsonthePO.IninstanceswheretheStoresOfficerisnotcompetenttoverifythetechnicalaspectsofthegoods,theywillobtaintherequesterortherelevantTechnicalManager’sinputbeforestampingandsigningtheDeliveryNotetoconfirmacceptance.IfanyTechnicalManagerisinvolvedinthisprocess,theyshouldissue a test report on items observed specifying whether the items were acceptableornot.Paymentsshouldbesupportedwiththespecificationreportissued by the Technical Manager.

IfthegoodshavebeendeliveredaccordingtothespecificationsofthePO,theStoresOfficeracceptsthegoods.IfthegoodsdeliveredarenotinaccordancewiththespecificationsofthePO,theywouldbereturnedtothevendorstatingthe reason for rejecting the items.

StoresOfficer,ICTDepartment,User

Goods delivered to IWMI could be rejected for any of the following reasons:1. DeliverieswithoutanofficialPO.2. DeliveryofitemsisnotinaccordancewiththespecificationsofthePO.3. Deliveryofpoorqualitygoods.4. Delivery of excess goods.5. Deliveries without an Invoice or Delivery Note.

IftheStoresOfficeridentifiesanydefectsafteracceptingthegoodsandrecordingitsreceiptinIWMI’sbooks,theyshallcreateaMRNandindicatethereasonforrejection.TheStoresOfficerandthesupplier’sagentsigntheform,and the original copy is issued to the supplier and a copy is retained by the ProcurementUnit.TheStoresOfficerwillissueagatepasstoreturnthegoodsto the vendor.

10.2.2 Creation of GRNWheregoodsdeliveredareaccepted,theStoresOfficershallcreateaGRNforall items by logging into the system. The system will create a MIGO number for each and every item entered.

AlltheGRNsshouldbecreatedaccordingtotheserialcontinuity.ThesystemwillautomaticallyallocatetheserialnumbertotheGRN.AftercreatingtheGRN,theStoresOfficershallforwardthesupplierinvoiceandtestreport,ifapplicable,to the Accounts Assistant in the Finance Department for payment processing purposes.

StoresOfficer

Process Objectives ● TocreateavalidGRN(MIGO).

● To accept the correct goods and return mismatched/damaged goods at the receiving point itself.

Process OwnersFinanceDepartment-StoresOfficer.

Key Inputs to this Process ● Approved PO.



22


10.2.3 Vendor PaymentsThe vendor shall only issue its invoice to IWMI for payment after delivering the goodsorderedandobtainingconfirmationofreceiptfromIWMI.TheinvoicewillbeprocessedaftercomparingtheinformationonthePO,GRNandInvoice(three-way match). The following guidelines should be followed when processing payments:• IWMI’sstandardpaymenttermsvaryaccordingtoeachsupplier.Payments

shouldbemadetothepayeeasspecifiedonthePO/contract.

• Invoices that do not have a PO/contract will not be processed unless the purchaseisforlessthanUSD100.TheProcurementUnitshallcontinuouslyremind vendors to include the PO number on their invoices before it can be processed.

• Onamonthlybasis,theFinanceDepartmentwillrevieweachvendor’sstatement,reconcileitwiththecreditor’sledgerandadvisethevendorofany disputable transactions.

GoodsvaluedatlessthanUSD100willbepaidasfollows:• FrompettycashfundsforgoodsuptothevalueofUSD100.Aninvoice

and proof of receipt should be attached to obtain payment. If it is a reimbursement,theproofofpaymentshouldbepresented.

• Bycheque/banktransferonpresentationofaninvoiceandproofofreceipt.Ifitisareimbursement,theproofofpaymentshouldbepresented.

Toensurethatsplittingofpurchasesisavoided,athoroughreviewofthereceiptsandjustificationformakingacashpurchasewillbeundertakenbytheFinance Department before reimbursement.

Officer-GeneralAccounting

11. Inventory Management

Process Objectives ● Maintain proper stock levels to ensure the smooth operations of IWMI.

● CreatevalidGRNs(MIGO).

● Issuegoodsbasedonvalidrequisitions.

● Identifying items that are essential for business needs.

● Managing store location and space.

Process OwnersFinanceDepartment-StoresOfficer.

Key Inputs to this Process ● Approved PO


23


11.1.1 Maintenance of Stock Levels• StocklevelsarekeptatthelowestlevelnecessarytomeetIWMI’s

operationalandfinancialrequirements.IWMIshouldidentifytheslow-movingitems,takingintoaccountpreviouspurchases,beforeproceedingwith making further purchases.

11.1.2 Managing Store Location and Space• All inventory items should preferably be stored together in the central stores.• Stores should be kept clean and well organized at all times.• Itemsofsimilarclassificationarekepttogetherregardlessofdifferences

insize,weightandsource.Valuableitemsthataresubjecttopilferagearekept in lockable or suitable cabinets.

• Itemsmustbewellarrangedonshelvesandkeptonpalletswhenrequired.Noitemshouldbeleftdirectlyonthefloor.Noitemshouldbeclosetotheceiling or light bulbs either.

• Itemsshouldbearrangedtofacilitateaccess,controlandcounting.• OnlytheStoresOfficerortheirofficialdelegateandFC/Accountanthave• access to the keys to the Main Stores.• Accesstostoresislimitedtoitsstaff,whohastoescortanyotherperson

who needs to enter stores in the course of conducting IWMI related business.

11.1.3 Issuing of Stock ItemsItems can be issued if they are available in the store. The user will create an IssueOrderapprovedaspertheAuthorizationPolicy.OnreceiptofsuchMIN,theStoresOfficershallcheckthequantitiesrequestedagainstthestockavailable.ItemswillbeissuedaspertheIssueOrderandtheissuingdate,requester’sname,budgetcode(WBScode),itemdescriptionandquantitiesoftheitemsrequestedintheappropriatecolumnsoftheform.

Thereceiptofgoodsshouldbeconfirmedbytheauthorizedstafffromtheuser department by signing on the receipt.

TheStoresstaffshallupdatetheinventorymoduleinthefinancialsystemandIssueOrdersfiledaily.

11.1.4 Mandatory Stock-takesTheStoresManager,inliaisonwiththeFC,willscheduleandsuperviseastock-take on a yearly basis and when it is necessary to independently count allphysicalstocks.ThisannualstockcountshallbedonealongwithIWMI’sauditors.TheStoresstaffareenlistedasobserversduringthisexercise.TheFCwillberesponsibleformanagingstockinputcontrolandotherdesignatedstaffsas per the stock-take schedule.

The FC will produce a variance report for the custodians to explain reasons for deviations.ThereportisforwardedtotheStoresOfficerandCSD/designateforreview.Thereportisthenupdatedoncereconcilingitemsareidentified.AnyfurtheradjustmentthatisrequiredisapprovedaspertheAuthorizationPolicy.

StoresOfficer

StoresOfficer

FC/StoresOfficer

11.1 Key Activities to be performed


24

12. Monitoring and Performance Evaluation

Process Objectives ● To facilitate in the assessing of Vendor Performance.

Process Owners ● FinanceDepartment–ProcurementOfficer.

● UserDepartment.

Key Inputs to this Process ● Key Performance Indicators.

12.1 Key activities to be performed


12.1.1 Assessing Vendor PerformanceTheProcurementUnitshouldreceivefeedbackfromthevendorsystematicallywhen a large procurement has taken place.

Feedback from the Vendor shall be documented in the Vendor PerformanceEvaluationfile.

ProcurementOfficer


25

IWMI is a CGIAR Research Center

Contact InformationInternational Water Management Institute

127 Sunil Mawatha Pelawatta

Battaramulla Sri Lanka

Mailing AddressP O Box 2075

Colombo Sri Lanka

Telephone+94-11-2880000

Fax+94-11-2786854

[email protected]

Websitehttp://www.iwmi.cgiar.org/