NNPC Limited SCM Plan Procurement PDF

NNPC Limited SCM Process and Procedures 2.0 Plan Procurement The Plan Procurement process defines the policies, procedures for creating Procurement Plan -a description of the estimated procurement, value, time schedule, method of procurement, packages/lots. Objectives The objectives of this proc...

NNPC Limited SCM Process and Procedures 2.0 Plan Procurement The Plan Procurement process defines the policies, procedures for creating Procurement Plan -a description of the estimated procurement, value, time schedule, method of procurement, packages/lots. Objectives The objectives of this process are to: Harmonize individual procurement plans of Business Units to harness economies of scale. Develop a plan to guide the activities of the Procurement Teams/ Tenders Committees in the course of the year. Align budget with procurement needs and provide a basis to track compliance. • • • 2.1 Plan Procurement Policies S/N Description 1. Annual Procurement Plan There shall be an Annual Procurement Plan with the corresponding Budget for each financial year. The annual procurement plan shall reflect all foreseeable procurement items required for the budget year. 2. Approach to Pre-Budget Procurement Planning There shall be a pre-budget approved and post-budget approved procurement plan. By the second quarter of each year, in consultation with the relevant functional areas of the business, a pre-budget approved Procurement Plan of the upcoming year shall be developed by: a. Conducting a needs assessment and evaluation. b. Identifying the goods, works or services required. c. Carrying appropriate market and statistical surveys and on that basis prepare an analysis of the cost implications of the proposed procurement. d. Aggregating its requirements whenever possible, both in NNPC Limited and across its related businesses to obtain economy of scale and reduce procurement cost. e. Prescribing any method for effecting the procurement subject to the necessary authorisation thresholds defined in the Delegation of Financial Authority. NNPC Limited SCM Processes and Procedures 2.1 3. Plan Procurement Policies Approach to Post-Budget Procurement Planning Based on an approved budget and in consultation with relevant functional areas, a post-budget approved Procurement Plan shall be developed as an update to the pre-budget approved Procurement Plan, to aid efficient procurement implementation. 4. Content of a Procurement Plan At a minimum, a Procurement Plan shall reflect: a. A description/ specification of the goods works or service. b. Quantity or definite deliverables. c. The owner of the contract, i.e., the designation of the contract holder, Department. d. The proposed procurement method (Open Competitive or Restrictive Tendering (Selective, Single Sourcing/ Direct Purchase, etc.)). e. Vendors, if already determined through: i. Single sourcing / direct purchase. ii. The procurement is on repeat order. iii. For procurement that are carried over from previous years, in which case the vendors were already determined. f. In-house estimate gotten from the pricing intelligence or as worked out total. g. Reasons for the chosen contracting strategy. h. Estimated timeline for the procurement. 5. Procurement Planning Committee A Procurement Planning Committee shall be established with representation (at a minimum) from various functions in the business: Functions Expected Inputs Procurement Team Provide overall committee leadership and guidance on the preparation and implementation of the Procurement Plan. Head of SCM shall chair this committee and be responsible for ensuring that the committee carries out its duties in accordance with the stipulated NNPC policies. Key Business Units Provide unit perspective on the objectives, basis for suggested mode of procurement, profile of target 22 NNPC Limited SCM Processes and Procedures 2.1 Plan Procurement Policies vendors and key considerations of the procurement need. Finance & Accounts Legal Subject Matter Experts {When Necessary) 6. Provide a guidance based on approved budget and cashflow (local and foreign currency) implications of procurement plan and timing. Provide legal guidance on the effort that will be required for contract development and if external resourcing will be required. This optional requirement depends on the nature and size of the procurements. The Procurement Team in liaison with the relevant Business Units will determine this need. Role of Procurement Planning Committee The role of the Procurement Planning Committee shall include the following: a. Prepare the needs assessment and evaluation. b. Identify the goods. works or services required. c. Carry out appropriate market and statistical surveys and on that basis prepare an analysis of the cost implications of the proposed procurement. d. Aggregate requirements whenever possible, both within and between NNPC Limited and its subsidiaries. to obtain economy of scale and reduce procurement cost. e. Integrate each subsidiaries' procurement expenditure into its yearly budget. f. Prescribe any method for effecting the procurement subject to the necessary approval. 7. Quarterly Review of Procurement Plan On a quarterly basis, there shall be a review of compliance of procurement requests with the Procurement Plan. The Report shall identify opportunities for improvement and highlight any developments that impact other procurement activities in the course of the year. 23 NNPC Limited SCM Processes and Procedures 2.2 Plan Procurement Procedures S/N Responsible Party Description Job Aid 1. SCM (N-4/5) By the second quarter of each year Email Reach out to all budget holders to prepare plan for procurement for the upcoming financial year for submission by a stated deadline. Note: The procurement Plan template will also be shared to guide submissions and ease consolidation. 2. Business Unit Procurement Planning Committee Based on guiding template, prepare prebudget Procurement Plan for Business Unit and forward to Business Head for review and approval. Email 3. Business (N3) Review, update (or request for updates) and approve the Procurement Plan as required and forward to the SCM N4/5 Email Unit Note: • • • • 4. SCM (N-3) Each unit carries out assessment and evaluation of their needs for upcoming year based on their projected activities. Itemize the requirements in form of goods, works and services for actualizing the above objective. Compile a list of all known goods, works and services needed to achieve the set objectives. Specify quantities and preferred timing for the goods, works and services where applicable. On receipt of Business Unit Procurement Plans Setup a Procurement Planning Committee to review and consolidate the Procurement 24 NNPC Limited SCM Processes and Procedures 2.2 Plan Procurement Procedures Plans aggregating services, goods and works where necessary. 5. Procurement Planning Committee Review and consolidate Business Unit Procurement Plans. Excel Note: Procurement Planning Committee shall also: • • Identify goods, works and services that are similar in nature or can be handled together. Aggregate requirements where possible, within the departments and sections for each Business Unit. 6. SCM (N4) Based on inputs from Procurement Planning Committee, prepare a consolidated Procurement Plan, update as required and forward for review and approval. Excel 7. SCM (N/2) For pre-budget approved Procurement Plan Email Review Procurement Plan, approve as required and forward to CP&S for planning and inclusion in the budget. 8. 9. NNPC Senior Management Team (SMT) For post-budget approved Procurement Plan SCM (N4) On a Quarterly Basis Review and approve in line with budget and circulate to Business Units and SCM. ERP Review compliance with the Procurement Plan, identify opportunities for 25 NNPC Limited SCM Processes and Procedures 2.2 Plan Procurement Procedures improvement and recommend adoption of lessons learnt. 10. SCM (N/3) future Review Procurement Plan Compliance Report, update as required and approve recommendations for adoption in subsequent quarters. To Purchase Requisition Process 2.3 Plan Procurement Input & Output Documents Document Description Type Frequency Source Recipient 1. Business Plan Input As required Planning Department / CP&S Procurement Planning Committee/ SCM 2. Approved Budget Input As required SMT / Finance Procurement Planning Committee 3. Procurement Plan Output As required Procurement Planning Committee • • SCM N-4 • • S/N 4. Procurement Plan Compliance Report Output As required • • • SCM Team Tenders Committee CP&S SMT SCM Team Tenders Committee Business Head 26