NNPCL SCM_Purchase Requisition.pdf

NNPC Limited SCM Processes and Procedures 4.0 Purchase Requisition This refers to the process through which procurement needs are initiated and approved by the sponsoring Business Unit for progression along the procurement process chain. This process includes the review and approval of a requisitio...

NNPC Limited SCM Processes and Procedures 4.0 Purchase Requisition This refers to the process through which procurement needs are initiated and approved by the sponsoring Business Unit for progression along the procurement process chain. This process includes the review and approval of a requisition to be converted to a purchase order. It covers both automated approval workflow and manual approvals that are conducted primarily by the business partner. This includes considerations on approval decisions such as threshold amounts and preferred vendors. Objectives The objectives of the process are to ensure: • Commitment of resources for procurement needs are duly reviewed and approved to ensure compliance with the Budget and Procurement Plan. • Provision of key information required to guide subsequent procurement-related activities. 4.1 Purchase Requisition Policies S/N Description 1. Compliance with Procurement Plan To initiate the procurement requisition process, every request shall be assessed 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. 2. Delegation of Procurement Authority As detailed in the delegation of authority (DOA) and delegation of financial authority (DFA) manuals, all requests shall be treated according to the corresponding approval limits and thresholds for budgetary control purposes at NNPC Limited and its subsidiaries (where applicable). 3. Purchase Requisition Approval Every requisition shall be reviewed by the immediate supervisor of the person making the requisition in addition to the approval by the budget owner. 36 NNPC Limited SCM Processes and Procedures 4.1 Purchase Requisition Policies S/N Description 4. Prohibition of Purchase Requisition Splitting No transaction may be split to circumvent the approval limits of this DFA. Multiple Purchase Requisitions and Orders will be considered as one transaction where: The transactions are of similar nature over a closely related time period. Purchase Requisitions are from the same Business Unit and are for the same or similar equipment/projects. It is the primary responsibility of the originating department to ensure that the requisitioned expenditure is within the procurement plan, is in the best interest of the company and complies with the procurement policies and procedures. 5. Contracting Limits by type of Tendering – NNPC Limited Approving Competitive Single source Contract Authority Tendering ($) ($) Variation* NNPC Limited >$100m >$8m Unlimited Board Level 1 Tenders Committee (Company >$8m, <=$100m >$4m, <=$8m 15% Tender Committee) Level 2 Tenders Committee (Directorate <=$8m <=$4m Not Applicable Tender Committee) Level 1 (CEO) <=$1m <=$0.5m 15% Approval Limits for Expenditure – NNPC Limited Approving General and Significant CAPEX Authority Admin Recurring Expenses OPEX**** NNPC Unlimited** Not Unlimited** Limited Applicable** Board Emergency* ** Unlimited** 37 NNPC Limited SCM Processes and Procedures 4.1 Purchase Requisition Policies S/N Description Level 1 (CEO) Level 2 (GED equivalent) >$8m, <=$100m <=$8m Unlimited** Not Applicable** >$8m, <=$100m <=$8m $0.25m Not Applicable** The Contracting Limits by type of Tendering and Approval Limits for Expenditure for the subsidiaries are detailed in the Delegation of Financial Authority manual. 4.2 Purchase Requisition Procedures S/N Responsible Party Description Job Aid User Department (N5/6) Initiate Procurement Request (PR) indicating intended purpose of procurement/ scope, cost estimate & other relevant documents and forward to Supervising Officer (N-4/5). Email & PR Template 1. Note: Relevant documents could include budget item, product description, inventory levels etc. 2. User Department (N4/5) Verify the request and forward to User Department Head (N-2/3) for approval. Email Note: Review request in order to: Assess value to the organization. Ensure project is not replicated and there is no ongoing project expected to deliver the same objectives. Establish unavailability of in-house capacity to address the need. Ensure requisitioning is in the Annual Procurement Plan and Budget. 38 NNPC Limited SCM Processes and Procedures 4.2 Purchase Requisition Procedures S/N Responsible Party Description Job Aid Where procurement request is not included in the procurement plan, go to step 3. Where procurement request is included in the procurement plan, go to step 6. 3. User Department (N2/3) Where procurement request is included in the procurement plan not Email 4. User Department (N1) Review appropriateness of request and approve exceptional requisition (as required) in consultation with SCM and Budget and forward decision to N-2/3. Email 5. User Department (N2/3) Receive the approved exceptional requisition and provide treatment guidance to (N-4/5). Email 6. User Department (N2/3) Where procurement request is included in Email the procurement plan Develop a Business Case for the unplanned procurement request and escalate to N-1 for approval. Approve request, and forward approval notification to User Department (N-4/5). Where Procurement Request is related to a subsisting Call Off/ Framework Agreement, go to Call Off Process. Where Procurement Request is NOT related to subsisting Call Off/ Framework Agreement, go to step 7. 7. Divisional Head (N-4/5) Where Procurement Request is NOT related to subsisting Call Off/ Framework Agreement Email Receive approved request and send along with any relevant documents to User Department (N-5/6). 39