Procurement Methods

PROCUREMENT METHODS
A regulation provides a range of methods to be used and circumstances to use.

However there must be justification on the use of other methods (restrict
competition)
 It is up to PE to decide method and give reasons to justify the method of
selection.
 Because of lack of planning, PE fails to start procurement process early and resort
to restricted procurement process.
 Choice of Procurement Methods. The choice of procurement methods is interlinked with
contract packaging and scheduling the tree aspects is interlinked.
 Depending on nature and size of procurement procuring entity may use any method of
procurement stipulated in PPA 2004. However, the most preferred method is competitive
tendering.
The choice of procurement depends on:
a) The nature of the goods and services to be procured.
b) The value of the procurement
c) The like hood of interest by foreign tenderers which is function of the local
availability and cost of goods and service.
d) Critical date for deliver and
e) Transparency of procedure
f) Pre-qualifications results.
International Competitive Tendering R. 65
Under International Competitive Tendering, a procuring entity shall invite suppliers,
contractors, service providers or asset buyers regardless of their nationality, by means of
tender notice that shall be advertised nationally and internationally requesting for tenders.
Suitable application:
a) Payment may be in whole or part in foreign currency
b) Large contracts where estimated cost exceeds the threshold for such tenders
provided in second schedule of Regulations.
c) There is interest to attract wide range of suppliers – Foreign Suppliers
To attract foreign supplier the procuring entity shall advertise the invitation to
tender notice in the Authority’s website and Journal at least one newspaper of wide
circulation in Tanzania and in any International Newspaper. For specialized
contracts the notice may be advertised in well known magazine or trade publication
or newspapers.
Approximate Times
International Tendering requires 45 days.
National Competitive Tendering R. 66

Under the National Competitive Tendering, procurement method procuring entity
shall invite suppliers, service providers, contractors or asset buyers of tender notice
advertised in Tanzania only.
Suitable application
(a) Where the project is financed by Tanzania Government – or payment
is made wholly in Tanzania shillings.
(b) The goods, works or services are available within the country at lower
price than International price
(c) The estimated cost of procurement does not exceed the threshold
shown in the second schedule of Regulation
(d) The contract is labour intensive
(e) Works or services are scattered geographically or spread over time
(f) The capability and competitiveness of local bidders makes it
unattractive for foreign bidders to compete for contractors below a certain
value
- Tender documents may be in Kiswahili language
- The invitation to tender notice shall be advertised in local newspapers.
- Domestic or national preference shall apply in evaluation of tenders where
foreign firms here participated.
Limit Of Application
GOODS WORKS NON CONSULTANCY DISPOSAL OF ASSET
800 MILL 3,000 MILL 500 MILL 3,000 MILL
Standard Procurement Processing Time in accordance with Third Schedule of
Regulation of the Public Procurement (Goods, Works Non Consultant
Regulations, 2005 (GN. No. 97)
1. Preparation of documents 7 days
2. Advertise and issue documents 7 days
3. Evaluation of pre-qualification 14 days
4. Preparation of tender documents 14 days
5. Review and approval by tender board 30 days
6. Advertise and issue tender 14 days
7. Evaluation of tenders + Notification
Of award 30 days
8. Award of contract 7 days
123 days
Tendering stage 30
Restricted Tendering R. 67
Procuring entity may restrict the issue of tender documents to limited number of
suppliers under the following circumstances:
(1) Suppliers, contractors and service providers have been pre-qualified.
(2) Specialized items i.e. can be obtained from limited number of
suppliers.
(3) Estimated value is within limit of restricted tendering
(4) Urgency
NB: Justification for restriction must be shown in the Record of

Procurement Proceedings.
 PE may seek tenders for list of suppliers pre-qualified
 PE shall use Standard Tendering Documents under restricted
tendering procurement method.
International And National Shopping R. 68
1) Procurement Method of comparing quotations from
several suppliers.
 It is appropriate method for off-the shelf goods or
standard specification of small value
2) A Tender Board may approve competitive quotations
where:-
 The goods procured are so diversified that it would be of no
commercial value for single supplier to tender then,
 Goods are readily available – off-the shelf or standard specification.
3) PE shall not divide procurement to avoid tendering

method.
4) Quotations must be obtained from at least three suppliers
5) The list of suppliers to be conducted must be approved
by Tender Board.
6) The minimum period for preparation of quotation
stipulated in third schedule must be adhered. For National shopping 7 days
while for International Shopping 14 days.
7) The invitation for quotation shall be made in writing.
8) Assure same information is provided to all bidders at
same time.
9) Suppliers are permitted to submit only one bid/quotation
10) The contract shall be award to the lowest price quotation
meeting the requirement of PE.
The limit of Authority
Goods Works Non Consultancy Disposal
80mill 100mill 50 N/A
Single Source R. 69
The use of single source procurement method must be approved by Tender Board
Circumstances:
(a) Goods or Services are available for a
particular supplier or has exclusive right sole source.
(b) Urgency
(c) Proprietary Item – Purchase of parts from
original supplier of equipment.
(d) Research, experiment study
(e) Procurement involving National defense
or National Security.
(f) Purchase of critical items from
specialized suppliers
(g) Where standardization equipment is
essential for economic and technical reasons. Compatibility with existing
equipments.
(h) Standardization of parts.
(i) Additional items required for on going
project.
NB:
 Invitation for quotation shall be in
writing
 The quotation shall be examined
carefully to ensure the requirements are property address and prices charged
are reasonable.
 The quality of goods must not be
compromised for sake of cost reductions.
 The justification for single source
procurement must be shown in the record of procurement proceeds.
Direct Contracting For Works
The PE may obtain quotation from single contractor and enter into direct contract
when:
(i) Urgency
(ii) Limited number – only one contractor
(iii) The advantage of using the particular
contractor who is at site.
(iv) Extension of work done satisfactory.
The contractor must be the one who was award competitively.
NB:
 The Invitation of quotation must be in writing
 The quotation received shall be examined to ensure the meet the required
and prices quoted are reasonable. If necessary negotiation will be done.
 Quality should not be compromised because of cost.
Record of Procurement Proceedings must be shown to justify the used of
procurement method.
Minor Value Procurement

Circumstances:
(i) The value does not exceed the limit stipulated in
Regulations
(ii) Prices are reasonable.
(iii) No advantage for seeking quotations
The contract for provision such goods, services or works may be LPO
urnkey R. 72
PE Contractors Supplier to perform all activities until completion Turnkey Contracts
may be issued for contracts involving specialized work such as construction of
industrial plan where supply of goods and performance of installation done by one
contractor.
 Procurement may be done through National/International competitive
tendering.
Alternatives:
(i) PE prepares design and engineering and contracts single
contractor to undertake the responsibility for supply and
installation.
(ii) Design and build contract supply of goods by other supply
Issue a single tender for Management of Contractor who shall subcontract all design,
engineering supply and works.
Force Account R. 73
Is construction by use of public or semi-public agencies or departments own
personnel and equipment.
Circumstances:
1) Small works scattered or in remote locations.
2) Works is required to be carried without disrupting ongoing operations.
3) Emergency cases
Better performed by PE
Public Private Partnership R. 74

Public Private Partnership (PPP) is contractual arrangement between public agency
(at central or local government level) and private sector entity. Through this
agreement the skill and assets of each sector (public and private) are shared in
delivering a service or facility for the use of the general public. In addition to sharing
resources, each party shares in the risks and rewards potential in the delivery of the
service and /or facility.
Public Private Partnership(PPP include different forms:
 Service contract
 Management contract
 Leasing
 Joint venture
 Partnership
 Build Operate, Build Own Operate
 Design Build Operate and concessions
Advantages
- It is an alternative means of developing infrastructure
- PPP promotes overall efficiency which lead to high development
- Reduces public borrowing
Services for which there are no governmental, legal or operational limitations that
dictate to be performed by public sector may be outsourced under PPP
Things to be done by PE in order to enter into PPP contract:
 Ensure it has expertise to proceed
 Appoint project team and transaction advisor
 Undertake feasibility study
 Advertise the request for qualification in form of SPN in wide
and general circulation
The selection of service provider shall be done in accordance with Regulations of
Public Procurement (Selection and Employment of Consultants) Regulations, 2005
Community Participation R. 75
Community participation may be feasible where interest of project sustainability or
to achieve certain specific social objectives:
 Participation of local community is required
 Increase local know how utilization
 Labour intensive
 Procurement function performed by members of community

Procurement Methods

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PROCUREMENT METHODS

A regulation provides a range of methods to be used and circumstances to use.

National Competitive Tendering R. 66

NB: Justification for restriction must be shown in the Record of

3) PE shall not divide procurement to avoid tendering

Goods Works Non Consultancy Disposal

80mill 100mill 50 N/A

Minor Value Procurement

Public Private Partnership R. 74

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