Vendor Negotiation Policy

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Questions and Answers

What is the main objective of negotiating with selected vendors?

Minimize the involvement of SCM representatives in negotiations

Expedite the process of awarding contracts

Reduce costs for the organization

Provide clarity with respect to negotiable and non-negotiable contract terms (correct)

When is negotiation with a contractor deemed necessary?

Whenever there is a need for a new single source contract

When there is unanimous agreement among JV partners

If the original approving authority provides written approval

When best value needs to be achieved on any of the terms/components of the contract (correct)

Who should attend all negotiations with contractors?

The JV partners exclusively

A representative of SCM and at least two NNPC Limited personnel (correct)

Only the original approving authority

The relevant authority's designee

What is the role of JV partners in specific negotiations?

To provide approval where necessary Signup and view all the answers

What is the specific requirement for negotiation with a new single source contract?

Specific approval of the original approving authority or written approval of the relevant authority Signup and view all the answers

What is the responsibility of a representative of SCM during negotiations?

Ensuring that NNPC Limited’s commercial interests are fully protected Signup and view all the answers

What is the responsibility of the SCM focal point during negotiations?

Ensure that the staff attending is really needed to conclude the discussions Signup and view all the answers

When are minutes of negotiation meetings required to be signed?

By the most senior tenderer’s personnel present, SCM representative, and JV Partners representative Signup and view all the answers

What should be added to the minutes of negotiation meetings when prices, rates, and costs have been agreed?

'Take further notice that this meeting minutes shall therefore not constitute a contract or an intention to award a contract and no such liability shall arise there from.' Signup and view all the answers

Who should present the negotiation report to Tenders Committee?

Negotiation committee Signup and view all the answers

What document should be provided to the bidder after documenting tender negotiation minutes?

A copy of the signed-off minutes Signup and view all the answers

6

Word Signup and view all the answers

Who is responsible for setting up tender negotiation meeting with bidder?

SCM N-4/5 Signup and view all the answers

What is required prior to commencement of negotiations?

List of representatives with their designation from tenderers organization Signup and view all the answers

Who should represent the contractor during negotiations?

Management level personnel vested with authority to make commitments on the contractors’ behalf Signup and view all the answers

When is attendance of NNPC Limited’s personnel other than SCM representative subject to prior agreement?

When prices, rates and costs have been agreed. Signup and view all the answers

What is the specific requirement for negotiation with a new single source contract?

Approval of the original approving authority Signup and view all the answers

What is the responsibility of a representative of SCM during negotiations?

Ensuring NNPC Limited’s commercial interests are fully protected Signup and view all the answers

When is negotiation with a contractor deemed necessary?

To achieve best value on any terms/components of the contract Signup and view all the answers

What is the role of JV partners in specific negotiations?

They should be invited to attend specific negotiations requiring their approval Signup and view all the answers

Who should attend all negotiations with contractors?

No less than two NNPC Limited personnel and a representative of SCM Signup and view all the answers

What is the main objective of negotiating with selected vendors?

Agree on a fair and reasonable price Signup and view all the answers

What is the minimum number of NNPC Limited personnel required to be present during any negotiation?

Two Signup and view all the answers

When can negotiation take place without specific approval?

When there is no relevant authority Signup and view all the answers

What is the role of additional staff in negotiations?

To provide support in particularly sensitive negotiations Signup and view all the answers

What is the purpose of inviting JV partners to specific negotiations?

To obtain their approval where necessary Signup and view all the answers

What is the purpose of ensuring clarity with respect to negotiable and non-negotiable contract terms?

To avoid confusion and disputes during negotiations Signup and view all the answers

What is the primary objective of the Stock Write-Off & Disposal process?

To ensure all identified moribund materials are written-off for disposal Signup and view all the answers

What does the Stock Write-off and Disposal Policy mandate before disposing of inventory items?

Confirmation from the primary user department about further use Signup and view all the answers

What transaction type is used to conclude the disposal process of goods in compliance with NNPC Asset Write-off and Disposal procedures?

Transaction type 551 (withdrawal for scrapping) Signup and view all the answers

Who must approve the removal of non-moving items based on risk analysis before disposal?

Primary user department Signup and view all the answers

What is the purpose of treating excess, obsolete, or damaged stock as disposal stock?

To avoid wastage and improve warehouse efficiency Signup and view all the answers

What is mandatory before disposing any item from inventory?

Confirmation from the primary user department about further use Signup and view all the answers

What should be added to the minutes of negotiation meetings when prices, rates, and costs have been agreed?

An addendum detailing agreed terms Signup and view all the answers

What should conclude the disposal process of goods in compliance with NNPC Asset Write-off and Disposal procedures?

Transaction type 551 (withdrawal for scrapping) Signup and view all the answers

What is required prior to commencement of negotiations?

Clear understanding of negotiable and non-negotiable terms Signup and view all the answers

When are minutes of negotiation meetings required to be signed?

After management review and approval Signup and view all the answers

Who must confirm that there is no further use for an item before it can be disposed from inventory?

Primary user department Signup and view all the answers

What is the purpose of the Disposal Request Form (DRF)?

To initiate a disposal process and track its progression Signup and view all the answers

Who is responsible for identifying materials to be written off and disposed of for stock items?

Asset Holder Signup and view all the answers

What action does the SCM MRP Controller take if materials can be used elsewhere in NNPC?

Transfers the materials to other departments in NNPC Signup and view all the answers

When are materials proposed for disposal considered suitable for return to inventory?

When they have been approved by the asset owner Signup and view all the answers

What is the responsibility of the SCM MRP Controller regarding potential hazards identified in the DRF?

Make appropriate recommendations based on the review Signup and view all the answers

What is one of the methods of disposal mentioned in the text?

Incineration Signup and view all the answers

Study Notes

Upon completion of a project, the Project Manager and Supply Chain Manager review any surplus materials.
Materials can be returned to inventory or disposed of based on guidelines.
Materials proposed for disposal should be no longer fit for use, in excess of requirements, obsolete, or damaged.
All disposal requests must be executed in a controlled, detailed, and transparent manner.
The Disposal Request Form (DRF) is used to initiate a disposal process and track its progression.
For stock items, the asset holder identifies materials to be written off and disposed of, obtains approval from the asset owner, and forwards the approved DRF to the SCM MRP Controller.
For stock items, the SCM MRP Controller registers the DRF details, circulates it to other departments, arranges for the transfer of materials if they can be used elsewhere in NNPC, and forwards the DRF and all documentation to Finance & Accounts for financial adjustments.
For assets that cannot be used elsewhere in NNPC, the SCM MRP Controller forwards the DRF and all backing documentation to Finance & Accounts for the insertion of the book value and removal from the asset register.
The SCM MRP Controller reviews the DRF to ascertain if a potential hazard exists and makes appropriate recommendations based on the review.
Methods of disposal include sales to third party (open bidding), sales by auction, and destruction.
The approved DRF with all relevant documents is forwarded to the Assets Disposal Committee to commence the disposal process.

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Description

Learn about the procedures involved in negotiating with selected vendors, including negotiable and non-negotiable contract terms, fair and reasonable pricing, timely contract performance, and control over the manner of performance.

Vendor Negotiation Policy

Podcast Beta

Questions and Answers

What is the main objective of negotiating with selected vendors?

When is negotiation with a contractor deemed necessary?

Who should attend all negotiations with contractors?

What is the role of JV partners in specific negotiations?

What is the specific requirement for negotiation with a new single source contract?

What is the responsibility of a representative of SCM during negotiations?

What is the responsibility of the SCM focal point during negotiations?

When are minutes of negotiation meetings required to be signed?

What should be added to the minutes of negotiation meetings when prices, rates, and costs have been agreed?

Who should present the negotiation report to Tenders Committee?

What document should be provided to the bidder after documenting tender negotiation minutes?

6

Who is responsible for setting up tender negotiation meeting with bidder?

What is required prior to commencement of negotiations?

Who should represent the contractor during negotiations?

When is attendance of NNPC Limited’s personnel other than SCM representative subject to prior agreement?

What is the specific requirement for negotiation with a new single source contract?

What is the responsibility of a representative of SCM during negotiations?

When is negotiation with a contractor deemed necessary?

What is the role of JV partners in specific negotiations?

Who should attend all negotiations with contractors?

What is the main objective of negotiating with selected vendors?

What is the minimum number of NNPC Limited personnel required to be present during any negotiation?

When can negotiation take place without specific approval?

What is the role of additional staff in negotiations?

What is the purpose of inviting JV partners to specific negotiations?

What is the purpose of ensuring clarity with respect to negotiable and non-negotiable contract terms?

What is the primary objective of the Stock Write-Off & Disposal process?

What does the Stock Write-off and Disposal Policy mandate before disposing of inventory items?

What transaction type is used to conclude the disposal process of goods in compliance with NNPC Asset Write-off and Disposal procedures?

Who must approve the removal of non-moving items based on risk analysis before disposal?

What is the purpose of treating excess, obsolete, or damaged stock as disposal stock?

What is mandatory before disposing any item from inventory?

What should be added to the minutes of negotiation meetings when prices, rates, and costs have been agreed?

What should conclude the disposal process of goods in compliance with NNPC Asset Write-off and Disposal procedures?

What is required prior to commencement of negotiations?

When are minutes of negotiation meetings required to be signed?

Who must confirm that there is no further use for an item before it can be disposed from inventory?

What is the purpose of the Disposal Request Form (DRF)?

Who is responsible for identifying materials to be written off and disposed of for stock items?

What action does the SCM MRP Controller take if materials can be used elsewhere in NNPC?

When are materials proposed for disposal considered suitable for return to inventory?

What is the responsibility of the SCM MRP Controller regarding potential hazards identified in the DRF?

What is one of the methods of disposal mentioned in the text?

Study Notes

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