1. Project Procurement Plan

2. Starting the procurement Project team has to prepare the Procurement Plan It can be Master Plan It can be Annual plan

3. Master plan for projects running for more than one year Master plan is usually prepared for the life of the period Annual plan is formulated on the basis of master Plan

4. Master Plan example Product Specificatio n Estimated cost Procuremen t type Type of contract Year 1 Transport vehicle Able to carry 10,000 kg load ,fuel efficient, four wheel, 45,00,000 RFQ Fixed price/single contract Year 2 Year 3 Year 4 Year 5

5. Content of Master plan Description of Goods: type quantity and estimated cost Procurement type Type of contract Time schedule of procurement ( only annual detail optional)

6. Procurement types International competitive bidding National competitive bidding(above Rs 10 lakh) Quotation(shopping method) (upto 10 Lakh) Direct purchase(upto 1.5 lakh)

7. Types of Contract Single contract vs Package contract Fixed cost contract Turnkey contract Time and material contract Cost reimbursible contract Multi arrear contract

8. Turnkey contract : the contract covers all the activities to bring the final output of the contract in a running condition

9. Time and material contract Time-and-materials contracts provide for acquiring supplies or services on the basis of direct labor hours at a set rate. The rate includes wages, overhead, general and administrative expenses, cost for materials and profit. Time and materials contracts are used when it has been impossible presenting an accurate estimate or where the schedule cannot be defined.

10. Cost reimbursible contract A cost-reimbursable contract is a variant of a contract that involves making a payment from the buyer to the seller in reimbursement for the sellers actual costs Those categories are direct costs and indirect costs.

11. What is reimbursed to a supplier Direct costs are defined as the costs that have been incurred only for the purpose of the project eg cost can be the salaries of the full time staff members, or equipment purchased exclusively for use in the project. Indirect costs represent costs refer to costs, such as administrative costs and general overhead costs. PLUS a fee or profit

12. Multi arrear contract It is extendable contract

13. Master Plan Product Specificatio n Estimated cost Procuremen t process Type of contract Year 1 Transport vehicle Able to carry 10,000 kg load ,fuel efficient, four wheel, 45,00,000 RFQ Fixed price/single contract Year 2 Year 3 Year 4 Year 5

14. What is there in annual plan Details of products and detail specification (drawings) with justification statements and timelines Type of contract to be used Contract approval process Decision criteria Establishing contract deliverables and deadlines Vendor Management Contract administration and close Performance metrics for procurement activities

15. Produ ct Type of procurem ent Type of contract Procurem ent process start Decision Criteria Vendor manageme nt Transpor t vehicle 45,00, 000 quotation Specific goods and service contract July 2011 45 Days lead time LC with evaluation(Pa st record of vendor, delivery date, brand image, technical inspection, delivery date) Schedule of after sales service and other support Abel to carry 10,000 kg load, fuel efficient, four wheel,

16. What is contract approval process purpose of this section is to define the process through which contracts must be approved. Mention of the procurement team

17. Establishing contract delivery ad dead lines Prepare the schedule of delivery deadlines

18. Establishing decision criteria The purpose of this section is to define the criteria used by the contract review board to decide on selecting the eligible suppliers There are three bid evaluation approaches Least cost method Least cost with quality evaluation Best value of money Supplier evaluation and product evaluation criteria to be fomulated on basis of above

19. Least cost method(selection based on lowest bidder) Without evaluation of supplier With evaluation and minimum score requirement for suppler Best value of money There is weightage for technical evaluation and financial evaluation Different Bid opening methods

20. Vendor management To Ensure the vendor buyer relationship -Schedule meeting and review with vendor -Type of after sales service required

21. Contract administration and close Process of administering the contract after contract has been signed How to close the account

22. Performance metrics Compile data on the performance of various vendors in order to assist with future procurement activities vendor selection criteria.