NNPC Limited SCM Framework Agreements PDF

NNPC Limited SCM Processes and Procedures 10.0 Frameworks Agreement This process is designed to allow NNPC Limited initiate the procurement of goods and services from external vendors which are called off when required. The frequency of the request is on a need-basis and may or may not be predictab...

NNPC Limited SCM Processes and Procedures 10.0 Frameworks Agreement This process is designed to allow NNPC Limited initiate the procurement of goods and services from external vendors which are called off when required. The frequency of the request is on a need-basis and may or may not be predictable. This enables NNPC Limited to negotiate bulk discounts and initiate purchase orders over a period with multiple supplies or deliveries from a single/multiple suppliers. Objectives The objective of the framework agreement process is to ensure: • • • Reduced transaction cycle time and buying effort as administration process of multiple purchase orders is eliminated. Cost savings through elimination of mark-ups on local purchase orders by negotiating pre-determined price and leveraging bulk discounts. The supply of materials to be secured over multiple delivery dates, meaning that NNPC Limited does not have to hold excess stock at various sites. 10.1 Frameworks Agreement Policies S/N Description 1. Basis for Call-Off When procuring for goods and services that are required in large quantities, but required as at when needed, Framework agreement via call off contracts should be negotiated. This should include proactive measures to leverage economies of scale by negotiating bulk discounts and reduce stock holding cost by minimizing inventory. 2. Compliance with Procurement Plan To execute the framework agreement process, the approved blank order shall be based on the approved annual procurement plan and corresponding budget for each financial year. This is to ensure that resources are available to undertake the requests and if not, extra budgetary approvals would be required where applicable. 3. Compliance with Stock Holding Policy Stock holding shall be optimised at the most economic cost, taking into consideration the criticality of the equipment, maintenance option, lead- 91 NNPC Limited SCM Processes and Procedures 10.1 Frameworks Agreement Policies S/N Description time, and sourcing strategy without compromising plant availability, health, safety, and environment. Competent local suppliers shall be encouraged to hold adequate stock of materials in their warehouses for direct and immediate purchase when needed. Sourcing of new materials shall not be initiated without confirming stock availability or existence of a framework agreement. 10.2 S/N 1. 2. Frameworks Agreement Procedures Responsible Party Description Job Aid User Department If Procurement Request is covered under an approved framework agreement Email (N-5/6) Visit any of the approved Departmental Stores to collect Pro-forma Invoice (PFI) as per discounted terms and forward the copies of all relevant approvals (e.g., Budget, etc.) to SCM (N-4/5). User Department Create PR and forward to SCM (N-4/5) (N-5/6) 3. SCM (N-4/5) Create Purchase Order (PO) departmental store to pick up. and call ERP 4. SCM Departmental Store (N-5/6) /Vendor Pick up PO and deliver goods to SCM (Receiving Bay) within stipulated time frame and notifies User Department (N-5/6). Purchase Order 5. User Department (N5/6) Receive goods and carry out Audit Attestation & Quality Inspection at receiving bay and forwards to SCM(N-4/5). Inspectio n Report 6. SCM (N-4/5) Perform goods receipt on ERP. ERP Go to payment process 92 NNPC Limited SCM Processes and Procedures 10.3 S/N Frameworks Agreement Input & Output Documents Document Description Type Frequency Input As required Source Recipient User Department (N-5/6) 1. Approved procurement request memo. 2. Financial Commitment Control Slip (FCCS) and AFE (assets). Input/Ou tput As required CP&S 3. Purchase Requisition (PR). Input As required User Department (N-5/6) SCM (N-3/4) 4. Pro-forma (PFI). As required Supplier/ Vendor User Department (N-5/6) 5. Purchase Order. Input/Out put As required SCM (N-4/5) Supplier Vendor 6. Goods Receipt Note. Output As required SCM (N-4/5) Finance Invoice Output User Department (N-3/4) User Department (N-4/5) or (N-4/5) 10.4 Frameworks Indicators Agreement Key S/N Performance Measure Performance Basis of Measurement Timeframe Target 1. Timeliness of request process. Latest date for completion of the request process. As required 2 days 2. Accuracy of Purchase Order Number of material errors, omissions, and misrepresentations in the purchase order. As required Zero error the 93 NNPC Limited SCM Processes and Procedures 94