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Procure-2-Pay Procurement Manual

Published Date: April 1st 2017 Auditable Date: July 1st 2017

Photo by Michael Stulman/CRS

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Since 1943, Catholic Relief Services has held the privilege of serving the poor and disadvantaged overseas. Without regard to race, creed or nationality, CRS provides emergency relief in the wake of natural and man-made disasters. Through development projects in fields such as education, peace and justice, agriculture, microfinance, health and HIV and AIDS, CRS works to uphold human dignity and promote better standards of living. CRS also works throughout the United States to expand the knowledge and action of Catholics and others interested in issues of international peace and justice. Our programs and resources respond to the U.S. Bishops’ call to live in solidarity – as one human family – across borders, over oceans, and through difference in language, culture and economic condition. Published in 2017(version #2) by: Catholic Relief Services 228 West Lexington Street Baltimore, MD 21201-3414 USA Written by: Linda Olale Edited by: Ashley Rytter Kline © 2017 Catholic Relief Services. Any reproduction, translation, derivation, distribution or other use of this work is prohibited without the express permission of Catholic Relief Services. Document Revision Control: key stakeholders including DRD-MQs, Finance, and OpEx will review any significant revisions.

Revision # Date: Summary of changes: 1 09.08.16 Procurement Manual made contract-ready, Anson Holzer 2 11.01.16 Moved USG Assistance and Contracting to Annex, Anson Holzer 3 06.08.17 [Clarification] Section 1.4: PO internal approvals by Bid Price Analysis

Comparison Form; Contracts internal approvals by Agreement Review Summary -ARS, Barry Ridgeway and Sergey H.

4 08.11.17 The Global Fund approved this P2P manual and the two annexes located in the Resource section; Global Fund Annex to Procurement Manual; and the Health Products annex

5 10.03.17 Revised ASL policy and Due Diligence Questionnaire and added new ASL FAQ’s and ASL Guidance to the Resource section

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Acknowledgements The following CRS staff participated in the 2014 Casablanca writeshop for the procurement manual and provided invaluable contributions to the development of this resource. Kwame Akangah Kwasi Attuahene-Mensah Patrick Daniere Ousmane Dembele Mamadou Diop Martin Hartney Ebrima Jawneh

Irène Youmbi Kemmegne Barry Ridgeway Ramatoulaye Seck Sene Ingrid Some Victor Tsuma Sarah Weber

Thank you to the many staff members who provided excellent input and feedback, including: Zongo Abdoulaye Sharon Abraham-Gordon Raed Aburdene Hodali Deborah Achol Dorisbel Acosta Santos Ahmad Wali Ahmadi Abduelrahim Ahmed Getenet Alemayehu Morie Richardson Bangura Lisa Bell Hassan Benbaha Ramatou Boukari Justin Brownen Talent Bunya Hussein Burhan Randa Canawati Maureen Capps Kambeu Chipimo Jolene Coachy Melkamu Dereb Ty Dexter Michele Dockery Amosa Espiritu Cecilia Fraga Amule Goja Angela Grigorian Christeen Hanna Leigh Hartless Sergey Hayrapetyan Anson Holzer Suzanne Hoza Luis Hurtado Fanny Nathalie Irangabiye Lucy Kachaka Yemane Kahssay Bob Keller Hala Khoury

Mathieu Lompo Monika Lussier Hannah Macapeges Miguel Mahfoud Noureldin Maryoud Elisabeth Mendes Atlibachew Moges Ruth Navaya Msiska Rose Emanuel Mugashe Mohammed Mukhaimar Carol Mukiri Syon Niyogi Kingstone Njari Athanas Ntaganyamba Samson Nzayisenga Sunday Obayelu Alice Obeng-Sintim Erick Okoth Odongo Ron Otteson Brohs Ou Eunice Ambiyo Paul Mathieu Ramiaramanana Haingotiana Raneboson Christine Rodecker Andrea (Drew) Rogers Tony Russell Reena Santosh John Service Darko Simeunovic Nebiyu Solomon Cyrille Somboro Chris Stanley Hong Dao Thi Thuy Nguyen Thu Bebel Tonguino M. Mme Traore Rachel Vas

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Marie-Ange Kilima Richard Kocik Lisa Kuennen-Asfaw Lionel Lajous Gerry Lambert Abdoul Aziz Laye Scott LeFevre Anson Holster Monika Lussier Akim Kikonda Michele Broemmelsiek Mark Palmer Sebastian Jayasuriya

Christopher Vaughn Jackie Veader Sophat Vourng Charles Wambua Matthew Wingerter John Worthington Irene Kemmegne Youmbi Leigh Hartless David Alt Tammie Emuron John Shumlansky TJ Noble

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Foreword The CRS Procurement Manual is a core set of guiding polices created by and for the CRS community. Financial procure-2-pay (P2P) transactions require a significant investment of our human and financial resources and are a core responsibility of CRS’ operational staff. They can also be high-risk areas for international nongovernmental organizations, therefore requiring formal business processes and systems to mitigate any potential risk. Well-designed business processes also set the foundation for compliance with the many donor regulations CRS must adhere to. This manual describes the absolute minimum standards for procurement; donor or local context requirements may be more stringent and, if so, should govern particular procurements. For specific donor requirements, we will utilize annexes located in the ‘resources’ section of this manual. These annexes will also be part of the table of contents. When performing financial transactions, global engagement and access to comprehensive resources and guidance are critical. The first CRS procurement manual was released in the 1990s. The next version was released in May 2003. In June 2013, we released the “core” procurement manual which replaced all of the individual, regional office and country program manuals. This new manual will serve as the sole procurement guide for the entire agency, aligning with CRS’ One Agency strategic framework. The manual was revised again in November 2016 to incorporate a USG contracting annex. This manual is more comprehensive than previous versions, including many useful templates and information on specific donor regulations, CRS business processes and best practices. With the release of this manual, we are formalizing the business processes related to services and consultant services for the first time in CRS history, globally. We would like to thank all CRS staff at headquarters and around the world who worked to develop this very important resource over the last three years. Their high level of effort reflects their dedication to making a difference in the lives of the people CRS serves. With respect and appreciation, Mark D. Palmer – Chief Financial Officer Barry A. Ridgeway – Director of Global Procurement _____________________________________________ ___________________________________________________________

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Preface In 2013, the CRS Procurement Manual was updated to include the formalization of business processes for goods. At that same time, we made a conscious effort to respond to the new agency strategy that emphasized our “One Agency” concept. In line with the new strategy, the Global Procurement Department eliminated all of the individual country program and region procurement manuals and released one ‘core’ manual in 2013. Based on the needs of the CRS community and increased funding from institutional donors, we updated the manual to help us better support our signature program areas — emergencies, health, and agriculture — and ensure compliance with all donor regulations. This new version also formalizes the business processes for both services and consultant services. This table highlights content carried over from the 2013 manual and new, noteworthy content in the manual published in 2017.

2013 ‘Core’ Procurement Manual Revised 2017 Procurement Manual Formalized business process for goods

Formalized P2P business process work stream for services

Eliminated separate procurement manuals

Formalized P2P business process work stream for consultants

Created one “core” agency wide procurement manual

Issued comprehensive ‘One Agency’ manual

Identified sanctioned countries Templates for requests for proposals, requests for quotes, and procurement plans

Implemented Patriot Act Bridger XG compliance procedures

Guidance on performing different types of procurement tenders (international competitive bidding, national competitive bidding, restricted tender, and sole source procurement).

Guidance on creating solicitation documents Formal bid committee guidance Health products procurement Incoterms Request for Goods and Services template Approved Supplier List - ASL and template ASL Supplier Due Diligence Visit Questionnaire Sole Source Authorization Form Emergency manual and waiver request template CRS and UNHCR Supplier Code of Conduct P2P Manual made contract-ready After Action Review – AAR guidance and template The website of the System for Award Management (SAM) The website of the United Nations Security Council (UNSC) The website for Office of Foreign Assets Control CRS Negotiation Memo Template Expression of Interest – EOI template

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Table of Contents Acknowledgements ............................................................................................................................... 3 Foreword .................................................................................................................................................. 5 Preface ....................................................................................................................................................... 6 Acronyms ............................................................................................................................................... 10 Glossary of Terms ............................................................................................................................... 11 Section 1: Introduction ..................................................................................................................... 14

1.1 Purpose of the Procurement Manual ..................................................................................................... 14 1.2 When to use the Procurement Manual .................................................................................................. 14 1.3 CRS Procurement Principles ..................................................................................................................... 14 1.4 Authorization of Procurement Actions ................................................................................................. 15

Purchase Requisition ........................................................................................................................................................ 15 Quote Response and Internal Approvals Prior to Commitments ................................................................... 15 Commitments ...................................................................................................................................................................... 16

1.5 Ethical Standards in Procurement .......................................................................................................... 16 1.6 Conflict of Interest ........................................................................................................................................ 16 1.7 Confidentiality ............................................................................................................................................... 17 1.8 Anti-Fraud and Corruption Compliance ............................................................................................... 17

Credits and Donations ...................................................................................................................................................... 18 Reporting concerns about fraud and corruption .................................................................................................. 18

Section 2: Roles and Responsibilities in Procurement .......................................................... 19 2.1 The CRS Procurement Department ........................................................................................................ 19 2.2 Global Procurement Department and Typical CP Structure ......................................................... 19 .................................................................................................................................................................................... 20 2.3 Description of Roles and Responsibilities for Procurement Positions ..................................... 21

Director of Global Procurement ................................................................................................................................... 21 Procurement Manager (HQ and Field) ...................................................................................................................... 21 Procurement Agent ........................................................................................................................................................... 22 Buyer II ................................................................................................................................................................ ................... 22 Procurement Officer ......................................................................................................................................................... 23 Procurement Assistant .................................................................................................................................................... 23

2.4 Segregation of Duties ................................................................................................................................... 23 Section 3: The Procure-2-Pay Work Stream .............................................................................. 25

3.1 Procurement Needs Assessment ............................................................................................................. 26 Reconciliation of Procurement Needs and Available Budget .......................................................................... 26 Market Research ................................................................................................................................................................. 26 Repeat/follow on purchases ......................................................................................................................................... 27

3.2 Procurement Planning ................................................................................................................................ 27 3.3 Contents of a Procurement Plan .............................................................................................................. 28 3.4 Approved Supplier Lists – ASL ................................................................................................................. 28 3.5 Pre-qualification of Bidders ...................................................................................................................... 29

Section 4: Developing Specifications for Goods and a Scope of Work for Services ..... 30 4.1 Developing Specifications for Goods ..................................................................................................... 30 4.2 Key Considerations in Preparing Specifications for Goods ........................................................... 30 4.3 Specifications Checklist .............................................................................................................................. 31 4.4 Designing a Scope of Work ........................................................................................................................ 31

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Section 5: Selection of a Procurement Method ....................................................................... 32 5.1 International Competitive Bidding (ICB)/Open Tender ................................................................. 33 5.2 National Competitive Bidding (NCB) ..................................................................................................... 33 5.3 Limited/Restricted Bidding ...................................................................................................................... 34 5.4 Direct Procurements below $1,000 ....................................................................................................... 34 5.5 Waiver of Competition ................................................................................................................................ 35

Single Source Procurement ............................................................................................................................................ 35 5.6 Thresholds for Bid Committee, Tender Type, Type of Solicitation Document, and Tendering Checklist ............................................................................................................................................ 36

Section 6: Preparation of Solicitation Documents .................................................................. 39 Types of Solicitation Documents ................................................................................................................................. 39 Request for Proposals – RFPs ....................................................................................................................................... 40 Request for Quotes – RFQ ............................................................................................................................................... 40 Oral RFP or RFQ ................................................................................................................................................................ .. 41 Request for Expressions of Interest (EOI) ............................................................................................................... 42

6.1 Contents of Solicitation Documents ....................................................................................................... 42 6.2 Instructions to Bidders ............................................................................................................................... 42 6.3 Method of Evaluation and Defining Evaluation Criteria ................................................................. 44 6.4 Sample Contract and Due Diligence Requirements .......................................................................... 44 6.5 Logistical Arrangements ............................................................................................................................ 45

Transportation and Delivery of Goods ...................................................................................................................... 45 6.6 Bid Security, Performance Bonding, and Payment Bond Requirements .................................. 46 6.7 Finalization of Solicitation Documents ................................................................................................. 46 6.8 Notification and Advertising ..................................................................................................................... 46 6.9 Clarifications/Bid Conference .................................................................................................................. 47 6.10 Amendments to Solicitation Documents ........................................................................................... 47

Section 7: Receiving and Opening of Bids .................................................................................. 48 7.1 Creation of a Bid Committee ..................................................................................................................... 48 7.2 Receiving and Safeguarding of Bids ....................................................................................................... 49

Bid Withdrawal ................................................................................................................................................................... 49 Bid Amendment ................................................................................................................................................................ .. 49 Late Bids ................................................................................................................................................................ ................ 50

7.3 Bid Opening ..................................................................................................................................................... 50 Public Bid Opening ............................................................................................................................................................ 50

Section 8: Evaluation of Bids ........................................................................................................... 51 Preliminary Evaluation of Bids..................................................................................................................................... 51 Evaluation Process ............................................................................................................................................................ 51 Developing an Evaluation Plan ..................................................................................................................................... 52

8.1 Technical Evaluation of Bids ..................................................................................................................... 52 Technical Evaluation of Goods ..................................................................................................................................... 52 Technical Evaluation of Proposals for Services ..................................................................................................... 53

8.2 Financial Evaluation of Bids ...................................................................................................................... 54 8.3 Requirements and Best Practices for Bid Evaluations .................................................................... 54 8.4 Bid Clarification Requests ......................................................................................................................... 55 8.5 Documentation of Evaluation Results ................................................................................................... 55 8.6 Actions to Avoid During Bid Evaluation ............................................................................................... 56

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8.7 Bid Analysis and Evaluation Report ....................................................................................................... 56 8.8 Conducting Supplier Due Diligence Visits:........................................................................................... 57

Anti-Terrorism Vetting – Bridger XG ......................................................................................................................... 57 Office of Foreign Assets Control: Sanctions Programs and Information ..................................................... 58 Rejection of all Bids and Cancellation of Procurement Process ..................................................................... 58

8.9 Selection of the Winning Bidder .............................................................................................................. 59 Section 9: Procurement of Consultant Services ....................................................................... 59

9.1 International Consultants .......................................................................................................................... 60 9.2 Contracting of Public Officials to Provide Consulting Services .................................................... 61

Section 10: Procurement during Emergencies ......................................................................... 61 Section 11: Contract Negotiation ................................................................................................... 65

11.1 Contract Preparation ................................................................................................................................ 66 11.2 Types of Contracts ...................................................................................................................................... 66

Firm-fixed-priced Contracts .......................................................................................................................................... 67 Cost-reimbursement Contracts .................................................................................................................................... 67 Time-and-materials Contracts ...................................................................................................................................... 67

11.3 Contracting Instruments ......................................................................................................................... 68 Purchase Orders ................................................................................................................................................................. 68 Blanket Purchase Agreements ...................................................................................................................................... 69 Indefinite Delivery Indefinite Quantity Contracts (IDIQ) .................................................................................. 69 Consulting Agreements ................................................................................................................................................... 69 Contract Modifications ..................................................................................................................................................... 69

Section 12: Non-Stock Based Receipts for Indirect Procurement/Expensed Articles 70 12.1 Receipt and Inspection of Goods ........................................................................................................... 70

Special Requirements ....................................................................................................................................................... 71 Discrepancies in Delivery Documents ....................................................................................................................... 71 Discrepancies in the Quantity of Goods .................................................................................................................... 72 Defects in Quality ............................................................................................................................................................... 72

12.2 Receipt and Acceptance of Delivery of Services .............................................................................. 73 12.3 Supplier Monitoring .................................................................................................................................. 73

Section 13: Payment of Suppliers .................................................................................................. 74 13.1 Payments in Country Programs/Regions .......................................................................................... 75

Payment for Goods and Services ................................................................................................................................. 75 13.2 Payments in Headquarters ..................................................................................................................... 75

Section 14: Contract Closeout ......................................................................................................... 75 14.1 Lessons Learned and Document Retention Period ........................................................................ 76

Section 15: CRS Specific Office Location Appendix ................................................................. 76 References: ............................................................................................................................................ 79 Resources .............................................................................................................................................. 80 • Health Products annex .............................................................................................................................. 80 • Global Fund Annex to Procurement Manual ..................................................................................... 80 • USG Regulations, Assistance and Acquisition annex ...................................................................... 80

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Acronyms AAR: after action review ADS: Automated Directives System ASL: approved supplier list BAFO: best and final offer BPA: Blanket Purchase Agreement CCN: Cooperating Country Nationals CP: Country Program CR: country representative CRS: Catholic Relief Services DFID: Department for International Development (UK) DAP: Delivery at Place (Incoterms®) DAT: Delivery at Terminal (Incoterms®) ERRWR: Emergency Rapid Response Waiver Request EOI: expression of interest EU: European Union FCPA: Foreign Corrupt Practices Act (U.S.) HCN: Host Country Nationals HoOps: head of operations HR: Human Resources Department ICB: International Competitive Bidding IDIQ: indefinite delivery indefinite quality Incoterms®: International Commercial Terms IQC: Indefinite Quantity Contract ISO: International Organization for Standardization LLINS: long-lasting insecticidal nets LOE: level of effort LTA: Long Term Agreement NCB: National Competitive Bidding OFAC: Office of Foreign Assets Control PO: purchase order P2P: procure-2-pay PSM: Procurement and supply management RFGS: Request for Goods/Services RFQ: Request for quote RFP: Request for proposal SOW scope of work SOP: Standard operating procedure TCNs: Third Country Nationals TCO: Total Cost of Ownership TOR: Terms of Reference The Global Fund: Global Fund to Fight AIDS, Tuberculosis and Malaria USAID: United States Agency for International Development USG: United States Government

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USNs: US Nationals UN: United Nations VFM: value for money WHO: World Health Organization Glossary of Terms Automated Directives System - ADS: The ADS contains the organization and functions of USAID, along with the policies and procedures that guide the Agency's programs and operations. It consists of over 200 chapters organized in six functional series: Agency Organization and Legal Affairs, Programming, Acquisition and Assistance, Human Resources, Management Services, and Budget and Finance. Bid/tender/proposal/quotation: documents submitted by potential bidders and consultants in response to an RFP, or RFQ process. The terms are used interchangeably throughout this manual. Both bids and proposals are referred to as “bid”. Consultant, which can be either an individual or organization, includes the following two distinct categories:

• A Local National Consultant is an expert or professional in one’s field who provides services to CRS on a non-employee, contract basis, only in the consultant’s country of citizenship for a particular contract and in a country in which CRS has program beneficiaries, except if the consultant is also a U.S. taxpayer, in which case the U.S. taxpayer consultant would be defined as an International Consultant. (Note: For a Local National Consultant, compensation terms are stated in the local currency and compensation is paid in the local currency.) • An International consultant is an expert or professional in one’s field who provides services to CRS on a non-employee, contract basis, who may be conducting a consultancy anywhere in the world irrespective of citizenship, except if the consultant meets all of the following three conditions, in which case the consultant would be defined as a Local National Consultant: (1) Is a citizen of a country in which CRS has program beneficiaries, and (2) Where condition 1 is met, is conducting the consultancy exclusively in the consultant’s country of citizenship, and (3) Where condition 1 and 2 are met, is not a U.S. taxpayer. If all three conditions are not met, then the consultant is defined as an International Consultant. If all three conditions are met, the consultant would be defined as a Local National Consultant. (Note: For an International Consultant, compensation terms are agreed to in U.S. dollars.)

Corrupt practice or corruption: offering, giving, receiving or soliciting, directly or indirectly, anything of value to influence the actions of another party in the procurement or selection process or in contract execution. Cost driver: a factor that influences or contributes to the expense of certain operations or goods. Delivery at Place - DAP: an Incoterm® which means the seller is responsible for door-to door delivery. CRS is responsible for any custom clearance and import taxes, if applicable. Delivery at Terminal - DAT: an Incoterm® which means the seller is responsible for delivery to the terminal at country of import. CRS is responsible for custom clearance, import taxes, and delivery from terminal to the CRS office/warehouse. Goods: all commodities, equipment, vehicles, and supplies purchased by CRS. Invitation to bid/invitation to tender: Oral or written invitation to prospective suppliers to submit a bid on materials or services.

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Limited tender/restricted tender: is essentially an international competitive bid by direct invitation without open advertisement. These terms are used interchangeably. Procurement staff: any staff member who works in the Global Procurement Department or country program/regional procurement department and has responsibilities for procurement of goods and services. Procurement: purchasing of goods, services and works. Procurement integrity: a procurement and/or purchasing process that is fair and competitive and in line with CRS’ Business Code Ethics and Business Conduct and CRS’ anti-corruption compliance program, Ethics Point. Public official: an individual holding legislative, administrative or judicial posts; anyone carrying out a public function for a foreign country or the country's public agencies; or an official or agent of a public international organization. Purchase order - PO: a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed upon prices for products or services. Acceptance of a PO by a seller forms a contract between the buyer and seller, so no contract exists until the PO is accepted. It is used to control the purchasing of products and services from external suppliers. Purchase requisition - PR: a document generated to notify the procurement department of items to be ordered. The purchase requisition includes the quantity, timeframe and anticipated budget number for the order. Receiving – non-stock based goods: are associated with indirect procurement/expensed items where the customer is typically a budget holder and that are non-inventoried items such as IT hardware; office supplies; generators; and other operating expensed supplies. Receiving – stock-based goods: are associated with direct procurement/inventoried supply chain items where the customer is typically the beneficiaries. Examples of stock-based items would be food; medicine; LLINS; HRD emergency items, and other inventoried items. Within an ERP system stock-based items must have a SKU# and Item Master setup. Repeat/follow on purchases: Repeat orders, which have previously under gone a bidding process, do not need to go through the bidding process again if the supplier has already agreed to “hold” specifications and pricing for a specified amount of time. Document this fact by making copies of the previous quotes and include as documentation with the new Purchase Order or reference the original PO #. If the ‘repeat order’ is more than (6) six months after original order then re-bid entire purchase request as market prices may have changed. Request for goods and services online Form -RFGS: a form used by a country program or region to order goods and/or services from another country program or region. Request for information: a standard business process used to collect written information about the capabilities of various suppliers to inform decisions. Normally, the process follows a format that can be used for comparative purposes. Request for proposal - RFP/invitation to tender - ITT/invitation to bid - ITB: the type of solicitation documents used to request bids. RFPs tend to be used for services that are more complex and have a SOW associated with them. Request for quote - RFQ: primarily used for goods and services that are standardized and typically commercially available. Significant gift: any tangible item, service, favor, credit, or discount of value, not available to others, that could influence actions.

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Single Sourcing: Single sourcing exists when the agency selects one supplier although many are available. Reasons for this could be for administrative simplification, pricing benefits, and lower TCO associated with logistics. Specifications: descriptions of the characteristics of a commodity or service required or desired. They are the explicit requirement furnished with a solicitation upon which a bid is made and a PO or contract is to be based. Sole source procurement: Sole sourcing exists when only one source is available, like local water and utility companies. Sole sourcing also exists when only one source makes the item or service. It could be a special product or technology. Vendor/supplier: any independent third party with whom CRS enters into a contract for provision of goods or services including individuals and firms. The terms vendor and supplier will be used interchangeably throughout this manual. Works: engineering structures such as bridges or dams, plants, factories, or other building types. In agreement with USAID ADS 303maw, “Works,” or “Construction,” for purposes of this policy means: construction, alteration, or repair (including dredging and excavation) of buildings, structures, or other real property and includes, without limitation, improvements, renovation, alteration and refurbishment. The term includes, without limitation, roads, power plants, buildings, bridges, water treatment facilities, and vertical structures.

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Section 1: Introduction 1.1 Purpose of the Procurement Manual The Catholic Relief Services P2P Procurement Manual was developed by a team of representatives from different departments and country programs as the prescribed guide for CRS staff who are involved in the procurement process. The manual outlines the procurement P2P work stream and procedures to be used in procurement as well as explains the responsibilities of CRS staff. The policies and procedures in this manual provide a foundation for complete and consistent consideration of all aspects of the implementation of the procurement. 1.2 When to use the Procurement Manual This manual must be applied to all “financial transactions” that fall into the following categories, consultant services, ordinary services, and both non-stock and stock-based goods, carried out by CRS headquarters, U.S. regional offices, and country programs/regional offices. The processes described in this manual apply to all procurements unless a written waiver is obtained from the director of global procurement. The manual applies to all CRS staff who are involved in the procurement process and have either direct or indirect interaction with vendors, manufacturers, and/or consultants. Situations of non-compliance or breaches of the procedures in this manual must be reported to the director of the Global Procurement Department. Non-compliance will be dealt with in accordance with CRS’ Code of Ethics and Business Conduct and Fraud Allegation Management Procedure (FAM). For more information, please refer to the Code of Ethics and Business Conduct document: Insert link when new policy is issued. (OGC) For more information, please refer to the Fraud Allegation Management Procedure (FAM) document: Fraud Allegation Management Procedure (FAM) Link This manual is not applicable to gifts in-kind - GIK or in-kind donations for goods and services. Each Country Program should undertake to comply that all the procurement conducted in the country conforms with the regulatory framework of that country. 1.3 CRS Procurement Principles CRS aims to procure goods and services in a manner that maximizes the value of resources available for our beneficiaries and donors worldwide; contributes to the agency’s strategic objectives; and is in accordance with agency procurement policies and procedures, donor requirements and applicable laws. CRS does this while concurrently providing value to our programs through procurement processes that are fair, open and competitive. CRS’ procurement process is based on the following principles:

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a. Transparency: Open access to information helps to ensure that any deviations from fair and

equal treatment are detected very early, and makes such deviations less likely to occur. It protects the integrity of the process and the interest of the organization, stakeholders, and the public.

b. Accountability: Employees involved in the procurement process are required to take responsibility for their actions and decisions, and ensure that they are compliant with CRS’ procurement policies and relevant donor procurement regulations.

c. Value for money: VFM helps to ensure that every procurement is economical, efficient, and effective. VFM does not mean that CRS procures the cheapest items, but that CRS is able to procure the best quality of items at the lowest cost.

d. Timeliness: CRS employees must ensure they conduct procurement in a timely manner to ensure efficiency.

These principles were developed to ensure that CRS:

• delivers high quality programs within required timelines; • is accountable to our beneficiaries and compliant with donor policies and regulations; • mitigates the risks relating to fraud and corruption during the procurement process; and • maintains its good reputation and achieves its mission.

1.4 Authorization of Procurement Actions Purchase Requisition Before a requestor submits a requisition form to the Procurement Department, s/he should have the budget holder and subject matter expert review and approve the request. It is important that an accurate and comprehensive requisition is generated for every purchase. The same process should also be used for an RFP solicitation, which is issued through a SOW instead of a requisition. Quote Response and Internal Approvals Prior to Commitments Each bid response submitted by suppliers to either an RFQ or an RFP solicitation must go through an approval process. The approval(s) should come from the authorizing official for that budget or from a bid committee who will recommend the winning supplier(s) for approval. In addition, the Overseas Internal Control Policy requires approvals as per the Authorization Chart for commitments and payments respectively. Therefore, for:

- POs, the approvals are provided on a Bid Price Analysis Comparison Form, and - for the procurements requiring a contract, the approvals will need to be solicited using the

Agreement Review Summary (ARS) as per OOD Agreements Policy & Procedure #POL-OOD-001

CRS personnel, overseas, should refer to the Authorization Chart in Finance’s Internal Control Policy # POL-FIN-ICS-024 for any updates or revisions to the global approval levels for commitments and

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payments. CRS employees at HQ and U.S. Regional Offices should refer to HQ Expenditure Authorization policy # POL-FIN-ICS-024.03. The limits indicated in these charts are for internal approvals from the authorized personnel listed, which are required before a commitment is made. For more information, please refer to the Finance’s Overseas Internal Control Policy # POL-FIN-ICS-024 document: Overseas Internal Control Policy Link For more information, please refer to the HQ Expenditure Authorization policy # POL-FIN-ICS-024.03 document: HQ Expenditure Authorization Link Commitments Individuals who sign for procurement commitments with external parties should have signing authority granted in accordance with the Delegation of Signing Authority. Contact the Office of General Counsel to request any clarifications related to signing authority. For the purposes of this manual, a commitment is a legally binding obligation, such as a purchase order, contract, agreement, or other obligation to pay for goods, services, and consultant services. 1.5 Ethical Standards in Procurement

As an agency which lives its mission through the moral teaching of the Church, CRS has the responsibility to ensure that all procurement is carried out with integrity and all employees of CRS adopt the highest standard of ethics. Strict observance of procurement integrity procedures maximizes VFM. Procurement integrity forms an integral part of the CRS procurement process. CRS does this through mitigation of conflict of interest situations and ensuring that CRS employees do not engage in fraudulent or corrupt practices during procurement. 1.6 Conflict of Interest Conflict of interest is defined as any situation in which a bidder is given or is perceived to have been given an unfair advantage over other bidders, because of a relationship or other connection to a CRS employee involved in a procurement process. Conflict of interest can be related to a financial or personal interest. CRS policy is to prevent and mitigate conflict of interest situations that may arise during the procurement process. CRS policy requires employees involved in the procurement process to disclose any perceived or actual conflict of interest situation and recuse themselves from the procurement process. For more information, please refer to the CRS Conflict of Interest policy: Conflict of Interest link

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1.7 Confidentiality Disclosing any, non-public information related to procurement to a third party is strictly prohibited. All procurement related information provided to CRS by bidders during the procurement process must be treated confidentially and not be disclosed to other bidders or to any other third party. Employees participating in the procurement process must not disclose information related to provider quotes, bids/proposals or other sensitive information to any co-worker without a specific business reason to know. 1.8 Anti-Fraud and Corruption Compliance As an organization funded by the United States Government, CRS is required to adhere to the U.S. Foreign Corrupt Practices Act. The U.S. FCPA makes it illegal for supervisors to influence anyone with any personal payments or rewards. The act also applies to any action by U.S. businesses, foreign corporations trading securities in the United States, American nationals, citizens, and residents whether or not they are physically present in the United States. The UK Bribery Act makes it a crime for a person to receive or give a bribe. CRS employees involved in procurement are prohibited from engaging in any form of fraudulent and corrupt practices during the procurement process. Staff members must not accept any gift, remuneration or favor from any individual or entity doing business with or seeking to do business with CRS. Certain indicators —referred to as red flags — often signal the risk of fraud and corruption in procurement. When planning or undertaking procurement, employees must be mindful of the following red flags:

a. Influential vendors: Where research reveals that a vendor is politically connected or otherwise influential, there is a risk that a transaction with the vendor may appear improper.

b. Due diligence refusals: If a vendor refuses or delays completing due diligence forms, it may be something more than a reluctance to do paperwork. Vendors who do not fully cooperate in the due diligence process must be considered suspect and disqualified from the competition.

c. Unusual vendor requests: Vendors who request special arrangements for payment or delivery must be evaluated as a potential fraud or corruption risk.

d. Corrupt environments: Corrupt transactions are more likely in some locations than in others. Where procurement occurs in a country where corruption is endemic, employees must be sensitive to anomalies or other indications of fraud and corruption. CRS procurement personnel must ensure that CRS’ anti-corruption policy is strictly adhered to.

Gifts The acceptance of gifts (including entertainment and meals) from potential or active bidders may be considered corruption or appearance of corruption. In order to avoid corruption, employees should

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not solicit, request, accept, or agree to accept any gift from an active bidder or significant prospective bidder. Credits and Donations Any applicable credits afforded to CRS by a bidder must be applied to the donor funding the activity. All donations given to CRS by bidders or vendors must be directed to the Donor Services Department. In the country program/region, this person may be the head of programming or staff that are responsible for donor relationships. Reporting concerns about fraud and corruption CRS has instituted a confidential reporting system to allow employees and partners to report any concerns they may have regarding fraud and corruption. Ethics Point, an independent third-party company, administers this reporting system. Click below to access Ethics Point or copy and paste the following URL: https://secure.ethicspoint.com/domain/media/en/gui/12748/index.html Employees must report any red flags or fraudulent and corrupt actions that occur during the procurement process in Ethics Point. Red flags should then be investigated. Where a red flag reveals that there is the potential for fraud and corruption, CRS should not do business with that vendor. CRS employees must avoid any involvement in fraudulent or corrupt practices. Any involvement by CRS staff in fraudulent or corrupt activities may result in the staff being subject to the sanctions indicated in the donor policies. This will be determined on a case by case basis. Employees will also be subject to termination of their services at CRS within the confines of local labor law. Staff involvement in fraud and corruption can expose CRS to risk of criminal sanctions and loss of business with CRS donors. To access the CRS’ Fraud Allegation Management Procedure please clink on link below: https://global.crs.org/teams/evpoverops/policies/pro-ood-rsk-001.pdf

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Section 2: Roles and Responsibilities in Procurement Procurement policies and procedures at CRS are managed by the Global Procurement Department in order to provide standardization and efficiencies. The sections below provide details on the roles and responsibilities for implementing procurement at CRS. 2.1 The CRS Procurement Department As it relates to procurement issues, maintaining professional relationships with vendors is primarily the responsibility of the procurement departments in each country as well as HQ. Other departments within CRS may contact vendors on technical matters as needed, however they should keep the procurement department informed and/or copied in these communications when they do occur. The Procurement Department:

• provides staff with guidance on the procurement policies and procedures of CRS and its donors;

• receives requests related to the procurement of goods and services; • handles correspondence with bidders; • maintains an open line of communication with other departments for purposes of facilitating

and implementing procurement requests; • carries out market research on vendors and prices of goods, commodities and services; • compiles data, checks market availability, vendor lead-times and costs; • provides the requestor with timely feedback during procurement planning to help them meet

their goals and objectives; • recommends procurement methods and develops solicitation documents; • involved with P2P transactions from the planning stage to the successful delivery of goods and

services, and payment to the vendor(s). • follow-up and tracking of all ongoing procurement actions; • assists in guaranteeing prompt payment to vendors according to the procurement agreement; • monitors vendors to ensure timely delivery of goods and services; • negotiates any returns or adjustments with the vendor; • negotiates contracts with bidders; • suggests final source, price, and delivery on a bid comparison form and submits for approval

(in conjunction with the bid committee and other departments when appropriate); and • should be involved in proposal development for better budget planning outcomes.

Procurement personnel can be a resource for costing budget items as well as communicating standard lead-times for sourcing, acquisition, and delivery.

2.2 Global Procurement Department and Typical CP Structure Below is the organizational structure of the Global Procurement Department that is located in Baltimore at CRS’ headquarters. The structure of the procurement staff within country programs varies depending on the size of the program.

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The country program may ask the Global Procurement Department to procure directly on their behalf or may request to procure locally. Please refer to the following links for the:

• Global Procurement P2P Business Process Flow utilizing a ERP solution (Global Procurement P2P Business Process Flow)

• Country Program and Region Procurement P2P Business Process Flow, a manual process (CP and Regional P2P Process link)

• Global Procurement and CP-Regional P2P Business Process Flow Global Procurement and CP-Regional P2P Business Process Flow

• The Local Purchase Approval Form Local Purchase Approval Form link to use for procurements over $5,000;

• A list of commodities in country programs/regions exempt from headquarters review and approval regardless of requisition value List of commodities exempt from HQ review

• List of commodities exempt from requiring a requisition at headquarters. HQ - list of procurements not needing a requisition

Table 1: The Global Procurement Department Organizational Chart (November 2016) Table 2: Country Program Procurement Organizational Chart

Procurement Manager

Head of Operations/ Operations Manager

Procurement Officer

Procurement Manager

Procurement Assistant

Country Representative

Procurement Agent (2)

Buyer II (2)

Procurement Assistant (vacant)

Procurement Manager

Director of Global Procurement

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2.3 Description of Roles and Responsibilities for Procurement Positions Director of Global Procurement The director of global procurement oversees the development and implementation of effective global procurement systems, business processes, policies, and procedures required for all aspects of procurement compliance. Specific responsibilities include:

• providing strategic direction and directing the development of global sourcing; • streamlining, revising, updating, and implementing procurement policies and procedures; • identifying a capable, reliable, and high quality supplier base; • directing the development of automated, ERP, global procurement systems and the integration

of these systems into overall financial and managerial information systems; • ensuring current global procurement procedures are promulgated and implemented agency-

wide; • developing appropriate relationships with USG officials in procurement; • ensuring all policies and procedures support the requirements of USG grants/contracting; • supporting the efforts of Compliance/Internal Audit to review and report on procedural

compliance levels and developing strategies to enhance actual compliance levels; • providing support for emergency operations to best balance resource requirements with

stewardship needs; • developing training and communications materials to ensure agency staff makes optimal use of

procurement policies and systems; • developing and maintaining detailed job descriptions for each position in the Global

Procurement Department; • making recommendations and reporting key issues to enhance procurement performance,

meet donor compliance regulations, and accomplish strategic objectives; and • developing and managing an operating plan and budget for the Global Procurement

Department.

Procurement Manager (HQ and Field) The procurement manager is responsible for coordinating all local and international procurement activities. Specific responsibilities include:

• assisting with hiring, training, and supervising procurement department staff; • reviewing and managing staff performance; • overseeing procurement actions and processes; • participating in procurement committees as a non-voting member; • overseeing the facilitation of anti-terrorism due diligence checks; • ensuring adherence to CRS and donor policies, regulations and laws relating to procurement; • in CP/Regions, compiling quarterly consolidated procurement plans for each project and

reviewing them with program staff; • monitoring supplier performance for all procurement contracts; • recommending amendments and updates to CRS procurement procedures per CRS donor

requirements;

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• informing CRS management of significant economic and business issues that may affect the prices of commodities and services that are usually procured by CRS; and

• meeting with bidder and supplier representatives as appropriate. Procurement Agent The procurement agent is responsible for day-to-day procurement activities. Specific responsibilities include:

• reviewing purchasing requisitions for completeness and required approvals; • preparing and maintaining procurement tracking reports for ongoing procurement actions; • preparing solicitation documents to advertise procurement opportunities; • evaluating bids and preparing and documenting bid analysis and bid evaluation results; • preparing procurement contracts for approval; • carrying out market research to determine cost and pricing information for various goods and

services that are regularly procured by CRS; • maintaining product and vendor data information; • negotiating prices and contracts with vendors; • communicating and meeting with representatives of potential bidders as appropriate to

discuss procurement actions as necessary; • carrying out due diligence checks on bidders such as anti-terrorism checks.

Buyer II The procurement buyer is responsible for day-to-day procurement activities. Specific responsibilities include:

• verifying authorizations and processing incoming requisitions; • soliciting quotes/bids; • preparing, analyzing, reviewing, and awarding PO contracts; • performing negotiations with suppliers regarding pricing, payment terms, and shipping related

costs. Get with logistics staff if necessary • issuing approved procurement contracts on behalf of the agency; • working with the Office of Legal Counsel when the specifics of a particular financial transaction

require a formal contract; • searching for new sources for agency-wide goods and services; • participating in the emergency response working group and support agency relief operations. • performing currency exchange rates conversions; • monitoring supplier quality/performance for delivery schedules; • meeting with suppliers, making plant visits to facilities; and • providing coverage for buyers and procurement agents when required by workload or

absence.

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Procurement Officer The procurement officer manages and coordinates all aspects of procurement typically for the CPs/Regions. Specific responsibilities include:

• identifying the main types of goods and services that will be needed based on the current portfolio of programs and operations;

• conducting regular market assessments of best sources and prices; • working with peer agencies and the private sector to identify new potential suppliers; • maintaining working relationships with local suppliers; • reviewing all purchase requisitions, verifying price targets, and ensuring that all specifications

and requirements are clear and that all authorizations have been obtained; • ensuring that all requests for quotes clearly present all specifications and requirements; • receiving and reviewing all bids and preparing quotes summary sheets; • tracking the status of each procurement request and updating management and requestors

through regular procurement status reports; • organizing bid committees if needed and ensuring they analyze bids in a competitive manner; • coordinating with other departments to make sure purchase requisitions, supplier quote

responses, and purchase orders are complete and clear; and • providing support and training on procurement management to CRS staff and partners.

Procurement Assistant The procurement assistant is responsible for the administrative duties relating to the procurement process. Specific responsibilities include:

• maintaining procurement master files and records and ensuring completeness and accuracy of documents;

• performing administrative tasks relating to the procurement process; and • reviewing procurement related correspondence and documentation for accuracy.

2.4 Segregation of Duties Segregation of duties helps ensure accountability and transparency and must be strictly enforced throughout the procurement process. The person initiating the procurement request must be different from the person managing the invitation for bids, who will, in turn, be different from the person approving the procurement and signing the contract. When duties are segregated, employees are unable to conceal inappropriate actions such as fraud and corruption that may occur during the procurement process. Positions that may interact with the Global Procurement Department and their responsibilities during the procurement process are outlined below. a. Local Procurement Officer/Manager: They are Global Procurements functional counterparts and are the primary contact between the Field and HQ when conducting procurements.

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b. Country Representative: The CR works with the Global Procurement Department to ensure that procurement in country offices is carried out in accordance with CRS and donor procurement policies and regulations, including award-specific requirements, if any,

c. Head of Operations: The HoOps collaborates with the Global Procurement Department when the local procurement officer/manager needs to escalate an issue they need help on. The HoOps may be one of the members of the bid committee.

d. Budget Holder or Program Manager: The budget holder is responsible for authorizing expenditure commitments for local procurements within their expenditure authority and to ensure the alignment of budget/needs/objectives when they sign the local purchase requisition. Email approvals from budget holders for procurement is acceptable provided it be from the approver’s official CRS email address. The budget holder is usually a member of the bid committee.

e. Finance Manager: The finance manager is responsible for ensuring proper review of documentation submitted for payment and that policies and procedures issued by the Finance Department were followed during the procurement process. The finance manager also monitors expenditures for procurement to confirm that all procurement is in accordance with the approved budget. The finance manager participates in the bid committee as needed. CRS offices that do not have sufficient staff to ensure segregation of duties should seek assistance from the regional office, the Global Procurement Department or the Finance Department. These departments will assist country programs to develop strategies for segregation of duties during procurement. The CR should confirm that the procurement process is in compliance with the CRS Segregation of Duties Procedure - PRO-FIN-ICS-024.02. Please see below for a list of typical segregation of duties. Table 3: Examples of Incompatible Functions

The Person who Performs This Function...

Should Not Perform This Function

Initiates purchase requisitions Receive goods, prepare receiving documentation Procurement Requisition goods or services for other depts. or projects Procurement Approve POs or service contracts Procurement Receive goods, prepare receiving documentation Procurement Acknowledge or approve receipt of services Procurement Perform quality control tests or evaluate goods received Procurement Return goods to vendor Procurement Prepare, record or distribute payments to vendors Procurement Have custody over assets or goods purchased Procurement Receive invoices from vendors Procurement Have custody of blank checks

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Section 3: The Procure-2-Pay Work Stream The P2P procurement work stream defines the steps in the procurement process. The following diagram illustrates the P2P work stream. Diagram 1: The P2P Work Stream

Procurement needs

assessment and procurement

planningProcurement

methods, preparation and

issuance of solicitation documents

Receipt, opening and evaluation of

bids

Due diligence checks

Contract preparation and

negotiation

Contract finalization

approval and execution

Delivery, receipt and monitoring

Payment of supplier invoices

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3.1 Procurement Needs Assessment A procurement needs assessment must be carried out prior to initiating any procurement process. The assessment involves reviewing requests for procurement and confirming with the budget holder that the items requested are required for project activities. The needs assessment may fall into one of the following categories:

Start-up: At start-up, the procurement needs assessment involves reviewing the award for items approved for purchase at the beginning of a project (e.g., equipment and furniture for office set up, office space, vehicles, Internet services, etc.). The assessment also involves reviewing the budget to find out the quantity and costs budgeted for procurement of goods and services. Implementation: During implementation, the assessment involves reviewing the needs of the ongoing project and the award to identify specific goods or services required to achieve the objectives of the project. The needs assessment should determine the quantity, specifications, timelines and budget available for procurement.

Reconciliation of Procurement Needs and Available Budget The budget holder is required to review the budget to confirm there are adequate funds approved for procurement of the goods or services identified during the needs assessment. Procurement may also carry out market research on the items to be procured to determine the cost and review it against the budget. If the items have been procured in the past, review the most recent pro forma invoices or quotations from a number of bidders to obtain the cost information. The budget must also be reviewed to ensure there are adequate funds for transport and delivery from primary storage points (where the bidder delivers the goods) to where the goods must be delivered for usage. Other costs to review include:

• international and local shipping/transport; • transit fees, customs clearing and forwarding fees; • installation, configuration and user training; • maintenance or quality testing fees; and • storage costs (this might be ongoing, for the duration of the program or a shorter time).

If the approved budget is not closely aligned with anticipated costs (after taking into consideration all possible cost savings), procurement and budget holder must review the quantities and/or specifications and make necessary adjustments so procurement costs are within the approved budget or discuss ways to offset higher costs with the donor. Market Research The Procurement Department can carry out market research by gathering information on the prices of different goods and services procured by CRS. Pricelists can be requested from suppliers and used as a

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reference for current prices. CRS procurement personnel can ask suppliers to send updates on prices to them on a monthly basis. This information is kept by the Procurement Department as reference information to make sure CRS is aware of the prevailing market prices for the items that the agency procures on a regular basis. Repeat/follow on purchases Repeat orders, which have previously under gone a competitive bidding process, do not need to go through the bidding process again if the supplier has already agreed to “hold” specifications and pricing for a specified amount of time. Document this fact by making copies of the previous quotes and include as documentation with the new Purchase Order or reference the original PO #. If the ‘repeat order’ is more than (6) six months after original order then re-bid entire purchase request as market prices may have changed. 3.2 Procurement Planning Procurement planning helps staff ensure goods and services are obtained on time and at a reasonable cost. Planning also helps projects avoid poorly planned last minute procurement. During the planning process, CRS procurement must ensure donor requirements are identified and lead times for receiving approvals are taken into consideration and documented in the procurement plan. Good procurement planning has many benefits, including:

• encouraging transparency as there is advance knowledge of the items to be procured and the lead-time needed to procure items;

• ensuring early identification and forecasting of right commodities and quantities to meet project needs;

• enabling program managers and requestors to identify important information gaps related to product specifications;

• helping procurement and the requestor to make sure expected procurement dates and vendor lead-times correspond to programmatic needs;

• allowing CRS to identify bidders in good time and avoid rush procurements which can result in higher prices for goods;

• helping procurement identify the appropriate procurement method or contracting mechanism, as well as potential bidders when procurement is through limited competition, and avoid unexpected bottlenecks that lead to delays in procurement;

• ensuring early requisition to reduce delays in procurement and timely delivery to project sites; • allowing procurement to group procurement of several common goods together and obtain

better discounts with larger quantities purchased; and • serving as an execution and monitoring tool for procurement of goods and services.

Although procurement planning is not necessary when CRS is carrying out a one-time procurement of a single item, it is good practice, especially for high risk time sensitive projects, for country programs, but not a requirement, to have procurement plans at the beginning of each project especially if the Agreement specifies that one is required. Procurement plans should be reviewed and updated as

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necessary. Prior to carrying out any procurement, procurement together with the Budget Holder should review the award document and determine whether a procurement plan is required. 3.3 Contents of a Procurement Plan Procurement plans may include the following items.

1. A description of the technical quality and quantity of goods or services to be procured. 2. A breakdown of activities to be carried out by CRS procurement and the project team based on

the selected procurement method and contract type [Firm fixed price (FFP); Cost-plus fixed –fee (CPFF); Time-and-materials (T&M); Indefinite-quantity (IQC); Long Term Agreement (LTA).

3. The name and contact information for the responsible party for each activity. 4. The timeline and specific delivery dates for each item being procured. 5. How procurement risk is to be managed, how risks are identified, assessed and managed

within the constraints of the procurement process. And how the supplier relationship will be managed to ensure continued delivery and performance.

6. Details on logistical requirements such as transportation, import clearance, insurance requirements and storage requirements as necessary. Get with logistics staff for input.

7. Compliance and administrative requirements, including information on donor approval requirements, budget codes and estimated budget allocations for each item to be procured.

Please refer to the following link for a procurement plan template: Procurement Plan link 3.4 Approved Supplier Lists – ASL Country programs must establish and continuously maintain, as a living document, an up-to-date approved supplier list (ASL). The ASL is a critical internal control, which is intended to ensure that CRS does business with reputable and reliable suppliers. New suppliers can be added to the ASL without a prior due diligence visit, but the visit should be completed within six months. One-time suppliers do not need to be added to the ASL. To avoid a conflict of interest with the country program’s procurement function, these due diligence visits must be performed by someone who works outside the procurement function and does not have any other conflict of interest with respect to the suppliers. Procurement personnel can be part of the CRS team visiting the suppliers. Please complete the RACI chart associated with due diligence visits that is part of Section 15 – Local Appendixes. To demonstrate compliance with this policy, country programs must maintain a centralized file of historical documentation. At a minimum, the documentation must be sufficient to demonstrate the nature and extent of the due diligence performed for each supplier shown on the ASL, along with evidence of the required management approvals. Please click on the following link for the ASL Policy POL-PUR-SUP-001 - ASL Policy link. Please see the Resource section for the ASL FAQ’s; ASL Guidance; Due Diligence Questionnaire, and ASL templates.

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3.5 Pre-qualification of Bidders Pre-qualification is used to assess bidders of particular goods, services or construction works against pre-determined qualification criteria, and only bidders who meet the criteria are invited to tender in future opportunities. Pre-qualification is also known as a two-step procurement process. A pre-qualification process must be carried out in the same way as a competitive procurement tender described in this manual. After the initial competitive process, whenever there is a need to procure items for which bidders have been prequalified, only pre-qualified bidders are invited to submit bids for consideration. Pre-qualification of bidders ensures that bids are only requested and received from bidders who are able to comply with the requirements. Pre-qualification is recommended when:

• complex or specialized goods or services are procured (e.g., health products, construction services);

• specific goods or works or service is procured on a regular basis (e.g., travel services, office supplies, conference and workshop locations, and IT consumables);

• a high degree of risk is involved in the procurement (e.g., security and safety equipment and services and construction services); or

• the importance of the goods or services for the project is high (e.g., late delivery or the delivery of a wrong product or service would have costly implications).

Once pre-qualification is carried out, the qualified suppliers should be added to the ASL.

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Section 4: Developing Specifications for Goods and a Scope of Work for Services 4.1 Developing Specifications for Goods Specifications describe the nature and technical functionality of the goods to be procured. At CRS development of specifications typically originate with the program manager, budget holder, and/or stakeholders. Specifications must state as many of the following that are relevant: Table 4: Specifications Chart

Specification Description Functional Indicates what the product does (e.g., the vehicle must be able to drive on rough

terrain). Performance Describes what is to be achieved rather than providing a fixed description of how

it must be done. To ensure the quality, a reference to the concerned product standards (e.g., International Organization for Standardization) and environmental requirements, must be made.

Technical Defines exact design and details of a good (e.g., the physical attributes, material to be used, power input and output, the manufacturing process required, or in the case of a service, the working methods to be used).

4.2 Key Considerations in Preparing Specifications for Goods Well-drafted specifications:

• indicate the quantities and essential characteristics (technical, functional and performance) of the item being purchased, so that all bidders know exactly what is required;

• include enough information for bidders to identify what is required and to cost it accordingly; • include the size, units and intended use of the products; • define the packaging, presentation and appearance to confirm that it is relevant to the local

context (e.g., instructions for use must be in a language that is used locally so that users can easily understand them);

• provide equal opportunity for all potential bidders to offer goods which satisfy the user’s needs, including alternative solutions; and

• include CRS and donor requirements for inspecting, testing, or preparing a material, equipment, supplies, or service for delivery.

• Consideration should be given to consolidating or breaking out procurements to obtain a more economical purchase.

When preparing complex specifications, technical experts within CRS should be asked to provide input. CRS personnel may also seek information from suppliers CRS commonly uses for similar equipment. This information can then be used to draft the specifications. CRS personnel must be careful not to reveal too much information to a supplier so they do not have a potential advantage nor should CRS personnel allow the supplier to draft the specifications.

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When preparing specifications, CRS personnel must ensure:

a. requirements are not over-specified as this may limit the number of responses; b. unnecessary features that may prevent some bidders from submitting bids are not included; c. a brand name, manufacturer name or model number are not included unless the term “or

equivalent” is utilized as part of the specifications or if CRS has standardized use of a certain manufacturer by commodity (e.g., CRS has standardized our IT hardware with HP®);

d. CRS requirements regarding delivery and after sales service, etc. are indicated; and e. products covered by sole patent rights are not included as only that provider would be able to

supply the goods and/or services that CRS seeks. If there is no other option but to include a product with sole patent rights, then it is important to get documentation to confirm that the identified supplier is indeed the sole provider of that good and complete the sole-source authorization form. You may also have to get approval from the donor; always comply with the terms of the agreement and specific donor regulations.

4.3 Specifications Checklist Once specifications have been developed, review them using the following checklist: Are the specifications clear and accurate, yet simple? Are the specifications understandable to the bidders and CRS? Are the specifications as flexible as possible? Inflexible specifications defeat the competitive

bidding process. Are the specifications clear and concise? Are the specifications capable of being checked? Specifications that are written in such a way

that a product or service offered cannot be checked as meeting specifications is of little value and results in confusion.

Are the specifications as fair to bidders as possible and do they allow for competitive bidding by several bidders?

4.4 Designing a Scope of Work A scope of work is used to provide detailed information about a procurement activity to potential bidders. A SOW helps bidders to submit relevant and accurate proposals that meet the objective of the procurement. A good SOW should be clear, concise and minimize any risk of ambiguities during the preparation of proposals. The SOW is the bidder’s first introduction to the assignment and forms the basis for the bidder’s preparation of the technical and financial proposals. The SOW specifies activities, milestones, deliverables, timelines and responsibilities of the consultant or service provider. It eventually becomes an integral part of the contract between the bidder and CRS. An unclear SOW requires bidders to make assumptions. When bidders make different assumptions, comparing and evaluating technical proposals becomes difficult. An unclear SOW can also lead to less successful projects, as the winning bidder might not provide what is really needed. To be as clear and precise as possible, the SOW should include the information shown in the following

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table. Please click on link for a consultant SOW example: HQ HR SOW template Table 5: Sample Scope of Work for Consulting Services

Section Content Guidelines Purpose Statement of Problem

A description of the problem to be addressed, the expected situation at the end of the consultancy, target beneficiaries and reasons for the donor’s assistance (in relation to donor’s policies and involvement in the sector).

To explain the reasons for undertaking the assignment and why it is designed the way it is.

Goal/Objectives State the goal and objectives of the consultancy To specify what is expected to be achieved by the consultancy

Activities

Describe activities typically starting with a verb (to assess, to identify, to prepare, to conduct, to review, etc.).

Necessary tasks to be carried out to achieve the objective.

Deliverables

1. Supported by at least one activity. 2. Ensure all deliverables necessary for the achievements of the activities are described. 3. If possible, describe deliverables in time location, quality, quantity (when, where, what quality, how much). 4. A deliverable is stated as an end result.

The results that can be guaranteed by the consultancy as a consequence of its activities and which are necessary in order to accomplish the objectives.

Reporting List the reports required (quarterly, final, etc.). Include requirements such as contents, number of copies, language, who should receive the reports and whether they must be submitted electronically, in hard copy, or both.

To provide bidders with information on the reporting deliverables required under the project.

Timing State the timelines for provision of the services. The total number of days required for the potential consultant to carry out the work.

To provide the bidder with information on when the services are required by CRS.

Section 5: Selection of a Procurement Method Procurement methods can be competitive (open/public), limited competition (restricted) or involve no competition (sole source). CRS policy is to ensure that procurement adheres to donor requirements and is carried out in a way that encourages fair and open competition so CRS can obtain VFM. Most competitive procurement is carried out through sealed bids. In order for sealed bidding to be feasible, the following conditions must be present:

a. a complete, adequate, and realistic specification or purchase description; b. three or more qualified bidders are willing and able to compete effectively for business; c. the procurement lends itself to a firm fixed-price contract and the selection of the bidder can

be made principally on the basis of price or a combination of technical and cost criteria; d. time permits the solicitation, submission, and evaluation of sealed bids; e. it is not necessary to conduct discussions with the responding offerors about their bids; and f. there is a reasonable expectation of receiving more than one sealed bid.

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Where procurement is carried out through sealed bids, public bid opening may be held as necessary. Sealed bids at CRS are used primarily for public tenders. The various procurement methods are outlined below. 5.1 International Competitive Bidding (ICB)/Open Tender Table 6: International Competitive Bidding

Description A formal tender process advertised internationally. All interested bidders can apply and do not need to have a presence in the country where the project is being implemented.

When to Use For large, complex projects, where the equipment or service is not available locally or where there is not much local competition

Advantages

• More competition and access to a wider choice of bidders • Access to goods, services or technology that may not be available locally • Procurement is transparent (i.e., fair and open to all interested bidders)

Disadvantages • Involves a long process as long and rigorous procedures are involved • High administrative costs • Solicitation documents can be complex and detailed

ICB is an open/public tender and provides all eligible and qualified bidders adequate and timely notification of the requirements, equal access and fair opportunity to compete for contracts for required goods, works, services, and consultant services. 5.2 National Competitive Bidding (NCB) Table 7: National Competitive Bidding

Description Formal bidding process similar to ICB but typically limited to local bidders. Tenders are typically advertised in (2) of the largest national newspapers.

When to Use If the good or service is only available locally, if it is cheaper locally, if the contract size is small or the advantages of an international tender are outweighed by its disadvantages

Advantages • Can be quicker, with less administrative burden, than ICB • Can hold the tender in the local language • Can get a better price for some goods and services • Can be used to promote local businesses • International firms can still bid if they have a local office

Disadvantages • The administrative burden and costs relating to ICB are still incurred • Competition is artificially reduced

NCB is an open/public tender under which typically only local, in-country, organizations in the country where the project is being implemented are invited to participate in bidding. This method, an open/public tender, is appropriate when procurement of goods and consulting services are unlikely to attract foreign competition due to their nature or scope. It is best practice to use NCB when:

a. due to the size and value of the contract, foreign organizations are not interested in the procurement;

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b. the goods, works, and services are available locally at prices at or below the international market; or

c. when the CRS donor requires that procurement be limited to national entities. 5.3 Limited/Restricted Bidding Table 8: Limited International Bidding or Restricted Tender

Description A formal but limited tender process, not an open/public tender, in which specific bidders are invited to submit their bids. Limited competition can be used where bidders have already been pre-qualified by CRS and are on an ASL.

When to Use • For large, complex projects, or where the equipment or service can only be performed by a limited number of vendors

• For goods or services that are required by CRS on a regular basis and bidders have been pre-qualified and are listed in the ASL

Advantages

• Limited procurement saves time as bidders are already identified and there is no need to spend time advertising the procurement

• The recurring work for CRS and the overall workload is significantly lower than that in an open tender

• Product quality may be more easily assured through a restricted tender Disadvantages • Fewer bids and more limited options may result in prices that are less

competitive • New potential bidders who may be able to provide quality goods or

services are kept out of the process Limited/restricted bidding is essentially an ICB by direct invitation without open/public advertisement. The majority of CRS country program procurements use this method when conducting these types of procurements. Competition is restricted to a short list of bidders selected in a past-performance based manner from ASL’s, pre-qualifications, expressions of interests, market research, etc. CRS procurement personnel should seek bids from a list of bidders that is broad enough to assure competitive prices and should include all potential bidders when there are only a limited number. In the case of limited competitive bidding, where solicitation documents are only made available to a short list of selected suppliers, the names of these suppliers should not be disclosed. This will help safeguard competition. 5.4 Direct Procurements below $1,000 Table 9: Direct Procurement/Oral RFQ <$1,000

Description Informal process where quotes are obtained from at least one bidder, but where three might be preferred to determine market price

When to Use For readily available, off-the-shelf goods; standard commodities; small values Advantages • Quick to implement

• Low administrative burden • Low cost to CRS and bidders

Disadvantages • Does not work for large and complex or non-standard items • Does not work for most types of services

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• Potential perceptions of lack of transparency since few potential bidders are directly invited to submit a bid

Direct procurement can be used by country programs to procure off-the-shelf goods and simple services from a supplier on the ASL of a value below $1,000. If the direct procurement is at or below the petty cash limit or it is a limited or one-time procurement, suppliers do not need to be on the ASL. Direct procurement is used for goods that are necessary for the day-to-day operations of the office. Direct procurement should not be used for items that require complex specifications or are for repetitive services, repair and maintenance of equipment, transportation or logistics services. Country programs may reduce the $1,000 threshold for requiring three bids, depending on the local risk and value of the local currency in comparison with U.S. dollars. If a country program/regional office chooses a lower threshold, this should be documented in Section 15 of their manual. CRS can use the direct procurement method when buying from the CRS Approved Suppliers List, although a new supplier can be utilized after performing the vetting process, and the due diligence process is conducted within (6) months. 5.5 Waiver of Competition Competition is normally the most effective method to ensure best VFM. Nonetheless, exceptions may be made for circumstances in which competitive bidding does not provide an adequate response for the CRS projects. In such cases, procurement can be carried out through single sourcing. Single Source Procurement Table 10: Single Source Procurement

Description A single bidder is invited to submit a bid When • There is an urgent need for the goods or services, for reasons other than

poor planning, and there is no time to run a full tender. • A competitive process was already carried out and there is a need for

additional goods or services. Advantages • Quicker than a full bidding process

• Low administrative burden for CRS • Low cost for CRS and for bidders

Disadvantages • Less competition can be disadvantageous to CRS • CRS may miss out on other qualified bidders • The selected bidder may not be able to deliver the goods or services

procured • This process lacks transparency

Goods or services can be procured through the single source method in the following instances. An existing contract for goods, and services, awarded competitively, may be extended for additional goods, works, and services of a similar nature if specific donor regulations allow. CRS procurement personnel must be satisfied that no advantage could be obtained by further competition and that the prices on the extended contract are reasonable by conducting a full price/cost analysis.

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Standardization of equipment or spare parts, to be compatible with existing equipment, may justify additional purchases from the original bidder through single source procurement. For these purchases to be justified the number of new items must be less than the existing number. CRS procurement personnel must ensure that the prices for the additional goods or services are still competitive. In exceptional cases, such as in response to natural disasters and emergency situations approved by the CRS donor funding the procurement. Even if only one bidder will be invited to present a bid, a formal solicitation must be issued and the proposed prices reviewed by CRS procurement personnel to confirm that the prices are competitive by referring to published prices lists, or market studies. Requests for procurement through a single source method must provide a justification for the reasons why competitive bidding must be waived. Justifications for single source procurement must be done by submitting a Sole Source Authorization Form. Sole-source Authorization Form link A CRS authorized official, the Budget Holder, must approve the justification based on the expenditure authorization matrix. Where applicable, donor specific approval must also be sought. Reference donor specific annexes for further information.

5.6 Thresholds for Bid Committee, Tender Type, Type of Solicitation Document, and Tendering Checklist The following procurement process requirements are a minimum for all CRS offices. Individual locations may elect to make local standards more but not less rigorous; differences should be expressed in the Location Specific Appendix outlined in Section 15. The only exception to this as a minimum requirement is Headquarters, where standards for the use of bid committees and for the treatment of services and consultants are less stringent because duties in HQ can be better segregated.

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Table 11: Field Thresholds for the use of different Methods and Types of solicitation documents Note: Specific donor regulations always prevail over the thresholds established below. If a donor’s regulations are more stringent than the thresholds expressed below, that donor’s regulations must be followed. Institutional donors who have approved the CRS Procurement manual:

Donor Threshold(s) Valid Period UNHCR PQP status > $10,000 must be advertised

public/open tenders Expires 31 December 2020

The Global Fund Follow USG Threshold Amounts for Public Tenders

N/A: CRS will keep the Global Fund appraised of any changes

to its procurement policies

Note: CRS commits to comply with the threshold amount for UNHCR for requiring open/public tender at $10,000, when using UNHCR funds. (This is required to maintain UNHCR PQP status1)

Dollar threshold < $1000* $1000 -

$5000 $5001 - $50000

$50001 - $150000 > $150000

Minimum number of

bid responses 1 3 3 3 3

Bid committee2 No No Yes Yes Yes

Goods Solicitation type3 RFQ RFQ RFQ RFQ or RFP

RFQ or RFP

Method type4 Restricted -ASL

Restricted -ASL

Restricted -ASL

Restricted or Public

Restricted or Public

Bid committee No No Yes Yes Yes

Services Solicitation type RFQ RFQ or RFP RFQ or RFP RFQ or

RFP RFP

Method type Restricted - ASL

Restricted - ASL

Restricted - ASL

Restricted or Public

Restricted or Public

Bid committee No No Yes Yes Yes Local National Consultants** Solicitation type RFQ RFQ or

RFP RFQ or RFP RFQ or RFP RFP

Method type Restricted - ASL

Restricted - ASL

Restricted - ASL

Restricted or Public

Restricted or Public

* Below the threshold but above the petty cash limit.

1 The note is added to ensure compliance with UNHCR PQP requirements, do not remove. 2 A minimum of three people are required to participate in each bid committee. 3 Where an “or” option is provided, the determination of which solicitation type to use would be made in consultation with the procurement manager. In general, an RFQ would be used for goods and services that are standardized and typically commercially available. An RFP would be used for services that are more complex and have a SOW associated with them. 4 Where an “or” option is provided, the decision to launch a restricted or public tender is determined by specific donor requirements. Where the donor does not provide specific requirements, CRS will follow USG guidance. For amounts greater than $150000 that express restricted tender, these can be for emergency situations.

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** For “international consultant” requisitions coming from the “field” refer to Section 9 of this manual. HQ thresholds are detailed in the HQ appendix at this link: HQ Appendix CRS procurement personnel should refer to the following checklist when performing most tenders: Requisition: Is it comprehensive? Does it answer what is needed and when is it needed by?

Does it specify the shipping address? Donor regulations: Who is the donor? Are there special donor requirements? Request for quote(s): The selected suppliers should have been vetted against Patriot Act and

be on the Approved Supplier List – ASL. If different types of commodities are on the requisition, then split the requisition into multiple RFQs and assign suppliers from the ASL to quote. Ask the supplier(s) to break out the freight/shipping charges from the commodity unit price. This is a requirement for purchased inventoriable goods (policy # PRO-FIN-INV-025.01). Reference the requisition number on quote(s).

International shipments: CRS encourages the use of Deliver at Place –DAP as the preferable International Commercial Terms - INCOTERMS for the procurement of goods because this term places most of the risk for transportation on the seller for ‘door-to-door’ delivery. Deliver at Terminal -DAT can also be used when the seller is responsible for delivery to the terminal at the country of import. Under this term, CRS is responsible for custom clearance, import taxes, and delivery from the terminal to the CRS office/warehouse. CRS procurement personnel can request on their RFQs to have the suppliers quote shipments that are DAP and DAT in order to see the cost difference, which can be significant. There may be cases where the country programs prefer to clear and take possession of goods at the terminal.

Supplier quote responses: Did the supplier(s) provide a comprehensive quote response on their company letterhead or company stamp? If you solicit (3) suppliers and only two provide a response and the third supplier “no bids” then get that in writing and make part of the tendering package. It’s a good practice that you solicit at least four or five suppliers in order to get back a minimum of three bid responses. If you have time solicit from another supplier to reach the minimum of (3) quote responses then do so. Quote responses should include validity period, payment terms, pricing, the CRS quote # (if available), and shipping cost information.

Bid Review or Bid committee: Based on the amount of the tender responses, do you need to hold a bid committee meeting? If no, then complete the bid review template which summaries the supplier responses, if yes, call a bid committee meeting and complete the bid committee price analysis review template that indicates which supplier(s) will be issued a PO. Reference your local appendix, Section 15, to see who sits on your local bid committee.

CRS PO approvals: Seek approval from authorizing official(s) based on the dollar threshold of tenders being received. Reference your local authorization matrix to determine who must approve.

PO(s): CR/ delegate or procurement agent sign PO(s) for the winning supplier(s). Procurement should have supplier(s) confirm receipt of approved PO by mail or email.

Documentation: Unless using an ERP system, send the original requisition, request for RFQs, RFQ responses, bid committee price analysis review template, a copy of the approved PO and any other documentation that allows an outside party to determine how and why the decision to go with a certain supplier was determined to the Receiving Department so they can prepare the payment request.

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Section 6: Preparation of Solicitation Documents Solicitation documents provide specific instructions to guide bidders on how to prepare bids or proposals for the goods or services being procured. Solicitation documents should:

a. have clear technical specifications or SOW and indicate the method of procurement; b. indicate whether there will be a pre-bid or pre-proposal conference and/or site visit; c. state the due date for request for clarifications on the solicitation documents; d. specify the deadline for submission of bids or proposals. e. list the name, address, phone number and email address of the CRS authorized point of contact

for information on the requirement; f. outline the bid/proposal validity period required; g. denote whether CRS will require bidders to provide bid security and/or performance bond; h. clearly describe and provide adequate details relating to the bid/proposal evaluation criteria; i. indicate the bid/proposal opening date as necessary.

When drafting solicitation documents it is good practice to use clear, simple and accurate language and use short descriptive headings for each paragraph. CRS procurement personnel should do the following to ensure the solicitation process provides an equal opportunity for all bidders.

a. Make sure all bidders receive the same information at the same time and are given an equal amount of time to prepare the bids if it’s a restricted tender. If it’s a public tender, then bidders might see the solicitation a day or more after it has been posted, but all bidders will have to respond by the set date.

b. Confirm the evaluation criteria are measurable and allow bidders fair chances to win the award.

c. Ensure solicitation requirements are clear and specific to avoid unnecessary time spent providing explanations.

All requirements must be clearly expressed in terms that allow all qualified bidders the opportunity to provide a responsive bid and CRS to receive a sufficient number for a competitive procurement. Types of Solicitation Documents It is good practice to have standard solicitation documents for each procurement method. The use of standard documents:

a. ensures consistency from one transaction to another; b. helps mitigate and avoid repetition and omissions; and c. streamlines the procurement process.

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Request for Proposals – RFPs A request for proposals is a solicitation document used in competitive procurements to communicate CRS requirements to prospective bidders and to solicit proposals or bids from them. RFPs must contain the information necessary for prospective contractors to prepare proposals properly. The RFP process allows for negotiations and discussions with bidders after the initial bid opening. RFPs, at a minimum, describe:

a. specifications for goods required and/or the SOW for the services required; b. anticipated terms and conditions that will apply to the contract, including the vetting process

bidders will be subjected to prior to award; c. where CRS requires some level of innovation, the RFP may authorize bidders to propose

alternative proposals and terms and conditions; d. factors and significant sub-factors that will be used to evaluate the proposal and their relative

importance; e. specific requirements relating to eligibility, certifications, key qualifications, past performance,

bid security, proposal format, delivery date and location for delivery, number of copies of the proposal to be delivered and mode of delivery (hard copy or electronic); and

f. The Bidder also must verify that it does not appear on: • the website of the System for Award Management (SAM) formally known as the

Excluded Party List System (EPLS): https://www.sam.gov; • the website of the United Nations Security (UNSC) sanctions committee established

under UNSC Resolution 1267 (1999) (the “1267 Committee”): http://www.un.org/sc/committees/1267/aq_sanctions_list.shtml,

• The Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List https://www.treasury.gov/ofac/downloads/sdnlist.pdf

Some goods or services usually procured using RFPs include technical consulting services, travel services, and conference and workshop related services, for example. Click here for CRS’ RFP template. CRS RFP Template link Request for Quotes – RFQ An RFQ is a solicitation document used to gather information on the prices for goods or services being procured. Bidders may submit quotes in the form of pro forma invoices. Office supplies and basic off-the-shelf commercial goods are procured using RFQs. Staff should use an RFQ when the requirement is definitive, pricing is known and is stable, competition is expected, and there is not a need to hold discussions with potential bidders. RFQs can be used to lease property, obtain goods such as vehicles, furniture, office supplies, etc. Click here for CRS’ template for goods and services. [CRS Request for Quote (RFQ) Public or Restricted Tendering Template]; [RFQ Goods Template (8) pages]; [ RFQ for Services Template link]

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Oral RFP or RFQ Oral RFQs can be used during direct procurements when CRS needs to buy simple off-the-shelf supplies within the established threshold. Oral solicitations are transmitted through speech, usually a phone call. In rare cases, under conditions of unusual and compelling emergencies, procurements may be initiated through oral RFP/RFQ’s. During an emergency, time does not permit CRS to undertake a structured process of issuing a written solicitation and awaiting responses from vendors. The table below describes this process. Diagram 2: Illustration of Oral RFP /RFQ

Budget holder or other program staff sends a request to CRS procurement person .

2. Describe requirement .

3. Discuss quantity, delivery and

terms and conditions

1. Call potential suppliers

4. Document file with supplier’s

price and terms and conditions.

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Requests must be made to a minimum of three bidders, unless the amount of the order is under the established threshold for requiring three bids. It is mandatory to document this process immediately once CRS procurement personnel has obtained the oral proposal or bid. Request for Expressions of Interest (EOI) An expression of interest is a multi-staged procurement process. CRS seeks EOI’s to shortlist potential bidders before then seeking detailed bids. EOI’s are used when CRS is seeking to gather more information about a possible procurement, such as data on specifications, innovations, and alternatives available in the market. Once an EOI is reviewed, a short-list is prepared and pre-qualified bidders are invited to submit detailed bids. Click here for the CRS EOI template: EOI - Expression of Interest Template 6.1 Contents of Solicitation Documents Solicitation documents for an RFP and more complex RFQs have the following general structure:

a. Letter of invitation. b. Instruction to bidders. c. Schedule of requirements, which includes the technical description (specifications, TOR, SOW

including design/drawings/technical specifications for works). d. A proposed timeline of activities associated with the tender. e. Evaluation method and criteria. f. General terms and conditions and special terms and conditions. g. Sample contract and other forms, such as due diligence forms, that potential bidders are

required to complete. The sections below provide a detailed description of the contents of solicitation documents. 6.2 Instructions to Bidders The instruction to bidders section is critical in the solicitation documents. It provides key information to help potential bidders decide whether they are interested in bidding on a project. The instructions must be drafted to reflect the specific requirement of the solicitation. As shown in the table below, instructions to bidders should convey all relevant guidelines to govern the preparation, submission and evaluation of responsive bids, in accordance with CRS requirements. Table 12 illustrates the information that must be contained in the instructions. Table 12: Instructions to Bidders

Section Content Administrative details • Reference to the specific procurement (title and tracking number),

and a list of supporting documents issued. • CRS point of contact for receipt of bid and clarification questions.

Important dates • Deadline for submission of clarification questions and deadline for

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submission of proposal/bid. • Where the information is available, the instructions should also

indicate the due dates for delivery and the start dates for services. Pre-bid conference • Date, time and location details for pre-bid conference if necessary. Instructions for bid preparation

• All relevant guidance regarding bid preparation and submission of bid.

• Information relating to eligibility requirements. • A list of documents required to form a complete bid, as well as notice

to bidders that bids may be rejected unless responsive. • A responsive/compliant/acceptable bid is one that conforms to all the

terms, conditions and specifications included in the solicitation documents.

• Information relating to: mode of submission (electronic, hand-delivered, mail, fax) and contact information for CRS point of contact.

• Instructions on how the bids must be packaged (e.g., sealed, number of copies, one or two-envelope system etc.)

Description of need • Information necessary to prepare a responsive and meaningful bid: o the context of the procurement o the intended purpose of the procurement

Instruction on the content of the bid

• Information on how the technical and financial bid must be structured (e.g., language of the bid, potential bidder’s work plan, timelines for delivery, deliverables required, past performance requirements, and cost breakdown).

• Where goods are being procured, the quantity of the goods must be clearly indicated.

• Any required warranties that apply to the goods or services. Currency • The currency of the bid and the currency that will be used in the final

contract. Eligibility • Eligibility requirements for bidders. This should include registration

requirements, anti-corruption certifications and other due diligence requirements that will be required from bidders.

• Documents should indicate that bids must be signed by an authorized representative of the bidder.

Instructions on bid validity

• Instructions on how long the bid must be valid (60 or 90 days, for example). The validity period must be long enough for CRS to evaluate bids and negotiate and issue a contract.

Method of evaluation and evaluation criteria

• The evaluation method including order of importance and weight of each major criterion and how it will be applied.

Bid security and performance bond

• Information on whether bidders are required to submit a bid security or whether a performance bond will be required if a bidder is selected.

Alternative bid • The instructions should indicate whether alternative bids will be acceptable. Alternative bids are bids that do not comply with the exact requirements of the solicitation, but which may be proposed by bidders as an optional way of fulfilling the needs of the end-user.

Delivery terms • The bidders must be informed about the delivery terms expected. The best practice is to use Incoterms® 2010 (see section 6.5).

Destination, locations and mode of transportation

• Instructions should specify the address of all location(s) and mode of transport(s). When procuring services, the exact location(s) must be specified.

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Past performance information

• Instructions to bidders should include the requirements relating to the past performance information that shows the bidder has carried out similar work. Best practice is to require the bidder to provide contact information for three former clients.

Responsibility statement and supporting documentation

• Instructions to bidders should require bidders to include a responsibility statement. The supporting documents should include proof of financial capacity to carry out the requirements (e.g., revenues available, the ability to deliver the goods, the human resources to carry out the services).

6.3 Method of Evaluation and Defining Evaluation Criteria Evaluation criteria should not give an unfair advantage to one bidder over another, or be tailored around the attributes of favored bidders. The method of evaluation and the evaluation criteria must be established and indicated in the solicitation documents. Solicitation documents should indicate the importance of each criterion and in the case of procurement by RFP, whether technical factors will be more important than price. CRS procurement personnel works closely with the technical requisitioner to establish this criteria during procurement planning and preparation of bidding documents. Pass/fail criteria: For the procurement of off-the-shelf goods, simple equipment and similar items, pass/fail criteria may be appropriate. If a factor either meets or does not meet a simple requirement, it is characterized as pass/fail, and the pass/fail criteria should be well-documented. Weighted criteria: Weighted scoring can be used to evaluate how well bids meet a certain requirement (e.g., on a scale from 1-5). This method is appropriate for a competitive solicitation to seek the best VFM. When weighted scoring is used, it should be used for both technical and financial criteria. All criteria must be impartial. It cannot be designed in a way to give an advantage to certain bidders. 6.4 Sample Contract and Due Diligence Requirements It is good practice to include a sample contract with the terms and conditions in the bidding package that will be applicable to the contract resulting from the procurement. Click here for a Long Term Agreement template LTA link developed by the Office of General Counsel. It is also important to include any due diligence forms that the winning bidder will be required to complete upon award. This helps potential bidders decide whether or not they will be able to comply with the requirements if they are selected for award. If this is procurement under a USG contracting instrument, all relevant FAR and other regulation clauses should be shown in the solicitation

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6.5 Logistical Arrangements Transportation and Delivery of Goods The solicitation documents should state the requirements relating to delivery in detail. Transportation and delivery are important evaluation criteria, where large quantities of goods are procured. Get with the budget holder to establish delivery requirements, if necessary. When goods are of a special nature, the solicitation documents should indicate the preferred mode of transportation. When goods are being procured internationally for delivery, the requirements relating to insurance and delivery requirements of International Commercial Terms must be included in the solicitation documents to the bidders. International Commercial Terms or the Incoterms® rules are a series of pre-defined commercial terms published by the International Chamber of Commerce. They are widely used in international commercial transactions or procurement processes. INCOTERMS link. At CRS, virtually all international shipments are performed by the suppliers on our ASL’s who have their own logistics capabilities in-house. This eliminates inefficiencies, cost, and non-valued added activity. If a supplier does not have in-house logistics then consult with CRS logistics staff. The solicitation must provide information relating to the following expectations.

a. Packing goods for shipment: The packing and shipping instructions are critical when procuring goods as they serve to protect the goods from being damaged during transportation. Solicitation documents should require bidders to use industry standard packaging so that goods are not damaged during transportation.

b. Export and import clearance: Where goods are bought internationally, it is best practice for solicitation documents to indicate whether the bidder will deliver the goods to CRS at the port of entry, DAT (deliver at terminal), in the country, or whether the goods will be delivered to the CRS country offices, DAP (deliver at place).

c. Solicitation documents should require bidders to consider all issues relating to transport from source to port/airport of shipment including international transport and transport from port of arrival to final destination and handling.

d. Solicitation documents should indicate whether CRS has waivers for customs and import duties for imported goods. Most of CRS’ donors have bilateral agreements with the governments in the country of implementation and tax waivers can usually be obtained.

e. Requirements relating to the shelf–life and packaging of goods such as food and health products. This information should be obtained from CRS technical experts on the type of packaging required for the goods being procured.

Solicitation documents must require that costs of transportation and handling be stated separately on the bids submitted to CRS by its potential suppliers in order to comply with CRS’ Finance Department procedures about the capitalization of purchased inventory, which requires that transport costs be excluded from the value of capitalized inventory. If a supplier states that shipping and delivery is at no cost, this must be specifically noted in the quote and the PO.

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6.6 Bid Security, Performance Bonding, and Payment Bond Requirements Bid security is required when CRS is procuring construction services. The bid security requirements must be realistic and reasonable so as to enable qualified bidders to participate in the procurement. Bid security is the deposit of cash, certified check, cashier’s check, bank draft, money order, or bid bond submitted with a bid and serving to guarantee to the owner that the bidder, if awarded the contract, will execute such contract in accordance with the bidding requirements and the contract documents. CRS policy is to adhere to donor requirements for bid security, performance bonding, and payment bonding in terms of reasonableness. The CRS policy for bonds, that exceed USG’s Simplified Acquisition Threshold ($150K), is as follows:

a. The bid security should be five percent of the bid price submitted and must consist of a firm commitment such as a bid bond, certified check, or other negotiable instrument and should accompany the bid response. A bid security bond guarantees the bidder will perform the contract for the cost and terms they submitted.

b. The performance bond should be for 100 percent of contract award price. Where CRS is procuring complex goods or services such as construction services, a performance bond is required of the bidders. The bond serves to protect CRS against contractor non-performance according to the obligations expressed in the contract. A performance bond, also known as a contract bond, is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor.

c. A 100% payment bond to assure payment as required by law of all persons supplying labor and materials in performance of work specified in the contract.

6.7 Finalization of Solicitation Documents The CRS procurement staff should finalize solicitation documents by crosschecking the draft components for consistency and completeness. The CRS procurement staff should also confirm that sufficient time has been allowed to bidders to adequately respond to the solicitation. At this point it is important to ensure that all terms and conditions applicable to the purchase activity are included, as no additional clauses can be added after bid closure. 6.8 Notification and Advertising Once the solicitation documents are complete, they must be issued and distributed. When the procurement is open/public tender, an ICB, then the solicitation should be on at least one international website (e.g., devex.com, devbusiness.com, or RFPDB.com). If the solicitation is a NCB, then the solicitation can be advertised in two local newspapers and/or local websites. Remember that donor requirements will dictate what method of solicitation will be required. In cases where the local custom is for bidders to collect hard copy solicitation documents, the advertisement should provide information on where they must be picked up and the CRS person to

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contact to facilitate pick-up. Bidding documents should be provided to bidders for free. In a restricted/limited competitive process, where only selected bidders may participate in the solicitation, the solicitation documents should be made available to the bidders on the ASL or suppliers approved by WHO or other international entities. Bidders must be provided with adequate time to submit their bids. For RFP’s a minimum of twenty business days, or four weeks, may be provided for local procurements and thirty business days for international procurements, RFP’s are typically used for acquiring services. RFQs, which are typically used for goods, may be published for ten business days for national procurements and fifteen business days for international procurements. 6.9 Clarifications/Bid Conference The period between the issuance of solicitation documents and the deadline for submitting bids is referred to as the solicitation period when a competitive method of solicitation is used. Bidders are allowed to submit questions during this time. Questions from bidders must be in writing and responses must be published or sent to all the short listed bidders. For technical, complex acquisitions, a pre-bid conference between CRS and the bidders could be held in addition to, or instead of, issuance of written clarifications. This conference may be in the form of a meeting, a site survey or an inspection. When conducting a pre-bid conference, it is recommended to adhere to the following guidelines.

a. Set a time for the conference, allowing sufficient time for all bidders to plan attendance of the conference.

b. Inform bidders in the solicitation documents if participation in the pre-bid conference is mandatory.

c. Written queries from bidders may be forwarded to the CRS procurement personnel prior to the conference, with responses to the written questions to be given orally during the conference.

d. Within a reasonable time after the conference, procurement should publish or send a full set of minutes to all potential bidders, recording all queries and formal replies. Typically, stakeholders/SME provide responses to bidder’s questions to procurement. The minutes should prevail over any oral responses provided during the conference.

If the clarifications given in the meeting alter the requirements indicated in the solicitation documents, CRS should consider extending the closure time for bid submission. 6.10 Amendments to Solicitation Documents At any time before the deadline for submission of bids, CRS may, for any reason, whether on its own initiative or following a request for clarification by a bidder, modify the solicitation document. An example of a modification would be the extension of the closing date.

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Amendments to solicitation documents must be made in good time before the deadline for submission of bids in order for bidders to address changes in their bids. In certain cases, amendments will justify an extension of the submission deadline. This must be assessed on a case-by-case basis. Amendments of solicitation documents containing changes, giving clarifications, or providing additional information, must be made available simultaneously in writing to all invited bidders. Providing one or more bidders with additional information unavailable to other bidders during the procurement process offers an unfair advantage. This is not in line with the principle of transparency and must be avoided at all costs. Substantial changes to the requirements may call for re-tendering, especially in cases where the change could potentially mean that the short list is no longer appropriate. Amendments to solicitation documents must be subject to the same approval by the appropriate CRS authorities as the solicitation document itself. Section 7: Receiving and Opening of Bids 7.1 Creation of a Bid Committee A bid committee must be created to evaluate bids that are valued at >$5,000, if procurement is carried out locally within the country program, unless a different threshold amount is specified in Section 15, the local appendix. Where procurement is carried out by the Global Procurement Department at CRS headquarters, a bid committee is required for RFPs and for RFQs that are conducted via a public tender. The bid committee should have the following members, including a minimum of 3 to 5 voting members:

a. the head of procurement or his/her representative, who is a non-voting member, and who also acts as secretary of the committee;

b. a representative from the Finance Department may attend the bid evaluation, however this is not mandatory;

c. project representative, budget holder, or the end users; d. a representative of the stakeholders, such as a government official in the country of

implementation, if required by the donor funding the project; e. a technical expert, as necessary, with particular skills required to provide guidance on

specifications or the SOW; and f. a member of the Senior Management Team.

Please refer to your country program/region and headquarters appendix, Section 15, for details on the use of bid committees by CRS location. Procurement staff should not be voting members of committees and should not be counted as one of the 3 to 5 members. The bid committee should normally consist of representation from technical, end-use, financial, procurement (non-voting) and senior management or international staff.

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7.2 Receiving and Safeguarding of Bids Sealed bids, associated with public/open tenders, will be sent to one person in the procurement department, or another CRS department outside of procurement that is not part of the tendering team. No other persons should have access to these sealed bids until bid opening. As specified in the solicitation documents, bids must be received:

a. at the place, date and time indicated in the solicitation documents; b. in writing (unless the procurement was done orally as described in Section 6); c. via mail, courier service, hand delivery, fax or email (enforce a procedure to make sure bids are

not shared before opening all bids); and d. by the authorized CRS person designated in the solicitation documents.

Sealed envelopes marked as bids but not identifying the bidder or the solicitation may be opened solely for the purpose of identification. If a sealed bid is opened by mistake (e.g., because it is not marked as being a bid), the envelope must be signed by the person who opened the bid. The person should include their name and position on the envelope and deliver the bid to the CRS officer designated to receive bids. On the envelope, CRS staff should write:

a. an explanation of the opening; b. the date and time opened; c. the invitation for bids number; and d. should sign and immediately reseal the envelope.

All bids received before the time set for bid opening must be kept securely to make sure they are kept confidential. Bids should not be opened or viewed and should remain in a locked bid box, a safe, or in a secured, restricted-access electronic bid box (e.g., the CRS SharePoint site). If an invitation for bids is cancelled, bids should be returned to the bidders. Necessary precautions should be taken to ensure the security of the bid box or safe. Bid Withdrawal Bidders may withdraw their bids prior to the opening of the bids. Bidders seeking to withdraw their bids should do so in writing to the CRS procurement person issuing the tender. This documentation should be part of the package for the tender. Bid Amendment Bidders are allowed to amend their bids in writing prior to the solicitation closing date. The latest bid must be considered the binding one. After the closing date, bidders should not be permitted to alter their bids.

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Late Bids Bids received after the established closing date must not be accepted. 7.3 Bid Opening Bid opening must be scheduled as soon as possible after the deadline for receipt of bids. This allows for efficiency during procurement and reduces the risk of manipulating bids received or accepting of late bids. Generally, bids must be opened in the presence of the bid evaluation committee. The type of procurement method used will determine whether the opening of the submissions will be conducted in public and which type of information will be disclosed. Best practices as to when to plan for a public bid opening are as follows: • when solicitation documents call for a public bid opening, especially on complex procurements. • when CRS needs to demonstrate fair and objective treatment of all bids, such as when relevant to

the political environment, corruption and public bribery risk, other types of procurement risk etc. Public Bid Opening The following practices must be adhered to during the bid opening:

a. Only bidders who have submitted bids or their authorized representatives are invited to the public opening.

b. During the public opening, no bid will be rejected immediately, except for late bids. c. Bids must be opened by and in the presence of the bid committee. Each bid must be subjected

to a preliminary review to ensure that it meets the mandatory requirements indicated in the solicitation documents (e.g., the right number of copies was submitted, each bid was signed by the bidder, and the bid security was submitted where required).

d. All information related to the opening, records of attendees, records of all bids, including returned bids, must be recorded in an opening record/report, and read aloud to the attendees.

e. When proposals are submitted using a two envelope sealed bid system (i.e., one envelope for the technical proposal and another separate envelope for the financial proposal) the technical proposal must be opened first. Financial proposals should only be opened after technical evaluation has been completed. A second opening should be scheduled at a later stage in order to open the financial proposals.

f. The opening official/panel and appropriate witnesses should certify the opening process by signing the opening record/report.

g. Discussions on a bid or an award are not entered into at the time of opening. h. CRS procurement personnel or designated member of the bid committee must officially open

and close the public opening of the bids. A report on the bid opening must be prepared by the bid committee. The report should include:

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a. bid submission deadline (date, time and extensions, if any); b. names of bidder or bidders’ representative present at public opening of bids, where relevant; c. bids received: name and country of origin of the bidder; d. type of submission (mail, fax, telephone, etc.); e. date and time of the beginning and end of the opening of bids; f. bid securities, if requested; g. bid validity period (and extensions, if any); and h. list of bids rejected for various reasons (e.g., late submissions, incompleteness, etc.)

Section 8: Evaluation of Bids Preliminary Evaluation of Bids The preliminary examination helps eliminate bids that do not meet the mandatory criteria specified in the solicitation documents from further consideration. Some examples of items to be considered when evaluating the mandatory requirements include reviewing bids to confirm that:

a. the bid is properly signed by an authorized official and certified; b. the bid is accompanied by the required bid securities; c. the bid is accompanied by the required documentation and the package is complete; d. the bid validity period conforms to the requirements in the solicitation documents; and e. the CRS terms and conditions and due diligence requirements are accepted by the bidder.

The preliminary evaluation is a pass/fail exercise. Bids that do not meet the mandatory requirements are considered unresponsive and are rejected at this stage. If bids are rejected at the preliminary stage, the company name and reason for rejection must be documented in writing as part of the bid evaluation report. The bids that meet the mandatory requirements are considered for further evaluation. Evaluation Process The bid evaluation stage is the most critical part of the procurement process and is the culmination of all the processes and procedures described above. Bid evaluation is comprised of three main components:

a. Administrative evaluation: Bids are evaluated to ensure that they are responsive to the mandatory requirements and related instructions to bidders indicated in the evaluation criteria set out in the solicitation documents. Logistical requirements should be included under administrative requirements of the bid.

b. Technical evaluation: Bids are reviewed and assessed for responsiveness to the specifications and technical requirements indicated in the evaluation criteria.

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c. Financial evaluation: Bids are reviewed and assessed based on the financial and pricing requirements in the evaluation criteria. The financial evaluation must be undertaken after the administrative and the technical evaluations are completed.

In addition to electronic or hard copy bids and as required in solicitation document, bidders may be asked to make presentations or demonstrations explaining their bids. When the bid is for complex equipment or services, CRS should make a site visit to the bidder’s location to confirm their ability to deliver the items indicated in their bid. In addition, references checked in person can be a useful supplement if there is concern about a supplier’s ability to deliver according to specifications. Developing an Evaluation Plan Establishing an evaluation plan while preparing the solicitation documents is best practice. The plan should detail the timeframe and responsibilities of the bid committee members during the evaluation process, the evaluation criteria and the evaluation method that will be applied. The country program, if they desire, can call a meeting of the bid committee to decide their process for review, prior to opening the bids, so that they know how they will approach the review. The evaluation plan can be summarized in a few lines, or consist of long and precise descriptions of each stage in the evaluation process. The evaluation plan, like the evaluation criteria and method, should not be changed after the solicitation document has been issued. Each member of the bid committee must review and discuss the evaluation plan to ensure consistency during bid evaluation. 8.1 Technical Evaluation of Bids Technical evaluation is the process of comparing bids with the technical and quality requirements as specified in the specifications or SOW of the solicitation document. The bid committee should discuss the process of how the evaluation should be carried out so each member of the team understands the criteria and how the bids will be compared and scored. The CRS end-user representative must be a part of the bid committee to ensure technical compliance of the bid, but should not have majority vote in the team. Depending on the type of procurement, they may only be involved in the technical evaluation and not the financial evaluation process. Technical Evaluation of Goods Goods must be evaluated based on the specifications in the solicitation documents. It is best practice for the bid committee to use an evaluation worksheet to break down the specifications contained in the bidding document. The worksheet should assign a score to each specification based on its importance. Some items to be evaluated include:

a. whether the specifications match the functionality, performance and technical qualities required in the bidding documents;

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b. whether the bidder proposes to provide the required quantity of goods; and c. whether the bid adheres to the packaging and delivery schedule required in the bidding

document. When the goods being procured are commercial off-the-shelf goods, then the technical evaluation criteria used is pass/fail. Evaluation of goods should include evaluation of samples of goods to confirm that the bidders’ products meet CRS requirements. Technical Evaluation of Proposals for Services A weighted scoring method is used for procurement of services, where the relative importance of each evaluation criterion needs to be weighted. It can also be used to evaluate offers for complex goods and construction projects which require the criteria not be based on price in order to achieve best VFM or when it is difficult to evaluate an offer on the compliant/non-compliant scale. Where bids are for services that are not very complex, the evaluators should score the different factors based on the information in the solicitation documents. These factors may include the following:

a. Does the proposal demonstrate that the bidder has a good understanding of the requirements and goals set forth in the SOW?

b. Does the proposal address each requirement and goal set forth in the scope of work and is a work plan for performing the services included?

c. Do the technical solutions included in the proposal indicate that goals and requirements will be met within the required schedule?

d. Does the bidder’s plan in the proposal demonstrate that appropriate personnel and equipment will be positioned efficiently to carry out the requirements?

e. Does the proposal contain past performance information that shows the bidder has performed similar services before?

f. Does the proposal provide an organization chart showing lines of authority, responsibility, and communication for management, supervisory, and technical personnel that indicates who will perform the services and how they will be managed?

g. Does the proposal include the names and resumes of qualified key personnel if required in the solicitation documents?

h. Does the evaluation plan indicate the percentage score within which bidders will be considered to have met the competitive range?

After the evaluation, each member of the bid committee scores each bid in accordance with the solicitation documents. Bids that do not fall in the competitive technical range can be rejected at this stage when required by the evaluation criteria. It is both best practice and a donor requirement to analyze the scores and summarize the results of the technical evaluation and the scores for each bid in a technical evaluation report. The report should include some narrative that explains the basis of the scores. Each member of the bid committee should sign the report and proceed with the financial/commercial and bidder evaluation.

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8.2 Financial Evaluation of Bids Financial evaluations involve ensuring bids fall within the project budget, comply with the financial and commercial requirements stated in the solicitation documents, and are reasonable. This is especially important when the technical bid carries more weight than the financial bid. The bid committee should review the breakdown of cost information submitted by the bidder and evaluate whether bids are reasonable by comparing the bid to:

a. the current market price; b. a catalogue or list price where available; c. price paid in the past for the same/similar goods or services; and d. prices submitted by other bidders.

Once the evaluation of the financial bid is completed, the bid committee will prepare a report on the evaluation which includes an analysis of the bids and how the score was generated. 8.3 Requirements and Best Practices for Bid Evaluations Requirements:

• Evaluators must follow the evaluation methodology set out in the solicitation. • The same evaluators must evaluate all competing proposals against the same criteria. • Evaluation conclusions are important at both the individual and consensus level and a separate

evaluation worksheet must be used for each bid. The evaluators should have an initial meeting to ensure that they are on the same page on the mode and structure of the evaluation.

• Evaluators must make sure that there is complete documentation throughout the process. • No new information can be introduced by the bidders or evaluators at the close of the bid

period. Best practices:

• Where a two-envelope/sealed bid method is used, there must be a clear separation between the technical and financial evaluations so knowledge of financial proposals cannot influence the technical evaluation scoring.

• Each bid should be evaluated on its own merits solely against the published evaluation criteria. Bids should not be compared to one another to arrive at the final score.

• Each bid must be considered in its entirety and only the information provided by the bidder in its submissions must be evaluated. While information presented within a bid may be verified with references provided in the bid, no prior knowledge of or experience with a bidder can be taken into account to arrive at an evaluation outcome of a specific bid.

• It is assumed all bids enter the evaluation process as compliant with the requirements and where weighted criteria are used in the solicitation, the bid has achieved 100 percent of the available technical points. The evaluation criteria are then applied to each bid separately to

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validate that the requirements are met and to determine whether any of the requirements have not been met to their fullest extent.

• The bid committee should use a rules of evidence approach: find and record ‘facts’ from within the bid (including page numbers) to support the evaluation findings – what was found and what was not?

• To be fair, any ambiguities in the published criteria must be interpreted in favor of the bidders. However, critical matters should be verified by direct communication with the bidder.

• The bid committee should watch for artful evasion and deliberate partial compliance (e.g., if a bidder claims to possess the experience required in the solicitation, but this experience is not substantiated in the bid). Does the proposal provide the type and level of evidence required in the solicitation?

8.4 Bid Clarification Requests The bid committee may seek clarifications from bidders after the technical and financial evaluations. The request for clarifications must be in writing (email clarifications are allowed) and sent to the authorized representative of the bidder by the CRS procurement person involved with the bid. The request should provide the bidder with adequate time to respond, depending on the nature of the questions. Bidders must be given a timeframe to submit clarifications to CRS. Where two or more bids fall within the competitive range and the bid committee considers both responsive except for a small difference in pricing, the bidders can be invited to send their best and final offer (BAFO) for consideration. Depending on the type of bid, the BAFO should cover either the financial bid or both the financial and technical proposal. When procurement is for services, the BAFO usually addresses both the technical and the financial proposal. Once the evaluation is completed, the bid committee should consolidate the scores for each bidder. 8.5 Documentation of Evaluation Results All of the documents generated during the evaluation process must be retained by the evaluators for submission to CRS procurement person involved with the bid at the completion of bid evaluation, and a negotiation memorandum should document this process. The documentation, including the negotiation memorandum, serves as procurement records that tell the story of the procurement process. Documentation of bid evaluations must be clearly written and complete so that the basis of procurement decisions is likely to be understood by internal and external auditors at a later time. Completing the negotiation memorandum is a good practice but not mandatory unless the donor requirements call for one. CRS Negotiation Memorandum Template: neg memo template (Required for USG “Contracts”) The documents also provide information to debrief bidders who ask questions or challenge CRS’ final selection.

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8.6 Actions to Avoid During Bid Evaluation The following list outlines some actions to avoid during bid evaluation:

• Inconsistent evaluation • Errors or omissions • Lack of fairness and objectivity • Benefit of doubt • Deviation from published evaluation

methodology and criteria • Use of unpublished evaluation criteria • Comparison of proposals • Failure to ensure that all information in

a bid is found and evaluated • Ignoring information in the bid

• Absence of written rationale for determinations

• Incomplete documentation • Destruction of documents (e.g.,

evaluation work sheets, bids received etc.)

• Unauthorized disclosure (before, during or after)

• Reliance on/use of personal knowledge of a bidder. Personal knowledge of a bidder should be documented.

The key to a successful evaluation is to maintain an impartial, fair, consistent, documented and confidential evaluation process. 8.7 Bid Analysis and Evaluation Report After the evaluation of the individual bids, the bid committee determines which of the bids meet all the requirements of the specifications or SOW and which bids have the best price or the best VFM. The bid committee must prepare a comparative analysis of the results of the evaluation and select a winning bidder. The last step in the evaluation process is the preparation of an evaluation report. The evaluation report is used as the basis for the recommendation of award. Link to: Bid Evaluation Plan Template A good evaluation report contains:

a. a summary of how the procurement process was carried out; b. a summary of the evaluation process and its individual steps as outlined above; c. information relating to any invalidation, rejection, non-compliance, and clarification of bids;

and d. a list with the final ranking of the bids with an explanation on the reasoning for how the best

bid was selected. All members of the bid committee must sign the evaluation report. Click here for CRS ’Bid Response Price Analysis Comparison with Confidentiality Statement: Bid Price Analysis Comparison Template link

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8.8 Conducting Supplier Due Diligence Visits:

Only those bidder(s) that CRS is contracting with need to go through the due diligence process. Due diligence supplier visits only need to be performed once, and within (6) months of being added to ASL, unless the program feels that another one is warranted. It is expected that a CPs’ supplier due-diligence procedures should be carried out by persons outside of the CPs procurement function, or as a team in order to avoid a conflict-of-interest. Someone from procurement can be part of the visiting team. Please refer to the ASL policy #POL-PUR-SUP-001 in the “resources” section of this manual for the complete policy. Refer to Section 15 for who in your local CP typically conducts these visits. The due diligence processes are outlined below. Due Diligence- reference checks: Prior to recommending an award to any bidder, CRS procurement personnel and budget holder must confirm that reference checks is completed, this is especially important when hiring consultants. The process serves to ensure that the bidder whose bid was determined to be most advantageous has actual capacity to supply the goods or undertake the services. CRS procurement personnel, budget holder, or subject matter expert must check the past performance references provided by the bidder(s) and prepare a number of relevant questions to ask the references. Sample questions include:

• What kind of work did XX carry out on behalf of your organization? • Was the work performed or goods delivered by XX determined to be of the required quality? • Did XX perform the work within the approved budget? • Did XX perform the work on time? • Did XX deliver the goods on time? • Any other necessary questions to help determine whether the bidder is able to perform the

work or supply the goods. Reference checks can be carried out in one of the following ways:

• Orally through a phone call: When carrying out an oral reference check, CRS procurement personnel, budget holder, or subject matter expert calls the reference provided in the bidding document and documents the information provided. Although the reference is provided orally, information must be documented as part of the procurement record. Typically reference checks are done by the budget holder and /or subject matter experts.

• In writing: A written reference can be requested from the references indicated in the bidding

documents. CRS procurement personnel or subject matter expert must send out the questions indicated in Section 8 via email and request written responses.

Anti-Terrorism Vetting – Bridger XG Anti-terrorism vetting is required for all procurement. CRS is required to comply with all anti-terrorism laws.

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CRS is prohibited from doing business with any individuals, organizations or businesses known to be involved in terrorist activities. This includes all CRS bidders and consultants. CRS uses the automated BridgerXG Insight system to stay in compliance with these laws. CRS staff must check the names of each individual bidder, unless the bidder(s) are on the ASL to ensure that they are not among blacklisted individuals or organizations that are prohibited from being funded due to their engagement in terrorist activities. Only those bidder(s) that CRS is contracting with need to go through the Bridger XG vetting. To comply with Patriot Act, each supplier, when it's a restricted tender, is vetted prior to receiving a RFQ or RFP. When it is a public tender, only the supplier(s) who will be issued a PO or formal contract award are vetted prior to receiving the CRS commitment. Records from Bridger vetting are maintained in the location where the vetting was conducted, either in headquarters or in a country program. All existing names of individuals and organizations doing business with CRS are revalidated every year. The U.S. Treasury Department, State Department and Commerce Department each maintain lists of companies and people that all U.S. citizens and companies including CRS are forbidden to do business with. The lists can be found on the following website: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx Office of Foreign Assets Control: Sanctions Programs and Information Although economic and trade sanctions exist relative to certain countries, OFAC regulations provide general licenses authorizing the performance of certain categories of transactions. OFAC also issues specific licenses on a case-by-case basis under certain limited situations and conditions. Guidance on how to request a specific license is found at 31 C.F.R. 501.801 [06-16-06]. CRS must check the above lists and ensure that the bidder selected and the origin of the items or services being procured are not included in the list of persons or countries that CRS is prohibited from doing business with. Rejection of all Bids and Cancellation of Procurement Process CRS has the right to reject any or all bids when it is in the agency’s best interests. This information must be included in the solicitation documents. Instances when this might happen include, but are not limited to:

a. when no bid has been received within the specified deadline; b. when CRS establishes that the bidding documents contain terms or technical specifications that

cannot be met by any of the bidders or they are specific to a certain bidder; c. when the prices of all bids meeting the terms and the technical requirements of the bid

documents are unrealistic or appear to be the product of collusion between the bidders, resulting in the circumvention of fair and open competition;

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d. when the circumstances under which the bid procedure was announced have changed to such an extent that the scope of the bid process is no longer necessary; and

e. when bids received do not meet the CRS requirements for the goods or services. 8.9 Selection of the Winning Bidder The overall objective of the evaluation process is to ensure that the final bidder selected to provide goods or services has the capacity and capability to perform the requirements in the solicitation documents. Where required, donor approval also must be sought as part of the process of selecting the winning bidder. The bidders who were not selected should be notified. Section 9: Procurement of Consultant Services CRS has identified (9) types of consultant services in the table below. International (both “TCN” and “USN”) consultants should flow through HQ HR and local national (“CCN” or “HCN”) consultants should be processed through the CP/Regions. Types or categories of consultant services, either from individuals or organizations:

1) Conduct Studies/Research/Report Writing 2) Conduct Evaluations 3) Facilitate Workshops 4) Write Proposals 5) Editing/Publications Design/Layout 6) Take Photos/Videos 7) Perform Written Translations (English to Spanish, English to French, English to Arabic, English

to Portuguese or vice versa) 8) Fill Short-Term Staff Needs 9) Emergency Response

Providers of other services may also be considered consultants if the service being provided could not appropriately and reasonably be performed by an employee. HQ HR can support making determinations about whether to categorize a service provider as a vendor, a consultant, or an employee. To get that support, submit a completed, unsigned International Consultant Requisition and SOW to HRresponse@crs.org CRS hires individuals or organizations to provide services CRS employees are unable to provide. Consultants are usually hired to provide specialized knowledge or expertise that is not available within CRS. It is important to note that consultants are not considered employees of CRS and are procured to perform non-staff duties. Consultants should never supervise CRS staff. To view HQ HR’s consultant policy click on this link: HQ HR Consultant Policy POL-HRD-EMP-0004 Please click on link for a consultant SOW example: HQ HR SOW template

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When requested to initiate procurement of consultant services, CRS personnel should review the donor award to identify any prior approval requirements. The requisitioner should design a SOW in accordance with Section 4.4 of this manual. The SOW must be measurable and results-oriented. The SOW should provide a definite period of time linked to deliverables within which the consulting services will be undertaken and completed. A clear and comprehensive SOW should include the following:

• Statement of problem • The goals and objectives • What activities will be conducted such as an ‘assessment’ for example • What are the deliveries you expect from the consultants work; • Reporting – how often and content requirements; • Timing – specify the timelines for the project, such as the number of days allotted for the

consultancy. Always refer to and follow the grant or contract for any donor specific requirements.

When putting together solicitation documents for consultant services, the CRS budget holder must indicate any expenses that CRS will cover under a consulting agreement. These may include travel costs, accommodation costs and per diem costs. Consulting services must be procured competitively in accordance with this manual. It is good practice to prequalify consultants to provide specific technical services through a competitive process and prepare a list of approved consultants who can be called upon to provide specific services through a limited competitive procedure as described in this manual. CRS should keep a list of potential consultants who can then be invited to respond to a specific SOW. The competitive process can also be done via a request for potential consultants to submit expressions of interest for specific services. CRS’ HQ Human Resources Department manages the competitive process for international consultants. Local or host country national (“CCN” or “HCN”) consultants should be processed through the CP/Regions. CP/Regions are responsible for carrying out a competitive process and keeping documentation on file and ensuring compliance with local labor laws. Regions are responsible for establishing procedures for waiving competitive requirements when/if required (e.g. processing a “sole source waiver”). 9.1 International Consultants For international consultants CRS personnel should engage CRS’ HQ Human Resources Department. In procuring international consultants, the end user/budget holder will select a consultant, but will be required to validate the consultant rate against HR’s “Consultant Competitive Compensation”. A “Variance Authorization Form – Consultants” can be used when the required rate exceeds the HR Consultant Competitive Compensation. Click on link below to access consultant process and related business templates such as the Consultant Requisition and the Consultant Agreement: https://global.crs.org/communities/EmployeeServices/Pages/Consultants.aspx

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9.2 Contracting of Public Officials to Provide Consulting Services In rare cases, CRS may hire public officials to provide consulting services. Procuring the services of public officials must be carried out in a manner that ensures that CRS is not seen to be making unauthorized payments or salary supplements to public officials. Prior to procuring the services of a public official, CRS personnel must make sure the following steps are carried out:

a. The public official’s employer (through his/her direct supervisor or ethics officer) must confirm in writing that the official is allowed to carry out consulting assignments.

b. The public official must acknowledge that the consultancy assignment will not be performed during the official’s regular working hours.

c. The public official must certify that they will not in any way exercise influence on any projects being implemented in the country which may create a conflict of interest.

Section 10: Procurement during Emergencies An acute emergency is defined as an unplanned shock (natural or manmade) that leads to urgent programming needs, with a related significant increased requirement for operations focused activities on the part of CRS and/or local partner, and the acute emergency lasts until programming and operational capacities can reach a similar balance as existed prior to the shock. When acute emergencies occur, more often than not the respective CP’s normal procurement structures and systems will soon become overloaded and dysfunctional/strained causing bottlenecks to develop, which in turn will inevitably lead to significant delays in sourcing much needed materials, inputs and services for our emergency response. Though the impact on our structures and systems does depend on the magnitude of the emergency shock, the resiliency of local markets, and the level of preparedness and capacity that the CP team has built up over time, even so small emergencies can cause some degree of havoc for a period of time and throw off normal procurement planning and organization. In significant emergencies (medium to large) it is quite normal for procurement processes to start to backlog quickly as CRS procurement personnel are not able to handle the increased demand and process requests fast enough, and unless mitigating actions are taken quickly the overloading will eventually create bottlenecks that will cause even more delays. In order to avoid potential problems and delays with carrying out emergency responses missions, CPs and Regions should consider in non-emergency down times how best they can prepare for such situations and become familiar with agency recommendations and best practices on how to adjust and overcome potential obstacles and constraints. When an acute emergency strikes then all preparedness efforts will assist greatly to make sure that the right management decisions are made early on to enable for an agile response. A well designed response that is flexible and adaptable to the operational

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reality at hand can both increase processing capacity (flow) and delivery speed, while also maintaining satisfactory internal control to avoid losses, fraud and misuse. The most important thing a CRS procurement person can do in an emergency response is to setup up a simple prioritization system with emergency needs taking precedence over developmental needs, and then within emergency needs it should be possible to separate into two groups: 1) immediate operational needs and 2) next intervention needs. Input from the programing team is vital for determining what is in each category and what the proper sequencing should be. For non-strategic actions outsourcing is always an option to consider when the costs are comparable, and the response duration is limited. It is possible to outsource kitting from suppliers, outsource fleet transport from renting companies, and it is even possible outsource sourcing functions from external procurement agents. HRD team has created two Emergency Procurement Guidance documents: Emergency Procurement Guidance Section I -- Office Setup and Emergency Procurement Guidance Section II -- Programming Sectors, which are quick reference guides on specifications for common materials needed during the acute stages of emergency humanitarian interventions. In addition, please see the HRD Emergency Field Operations Manual (EFOM). This chart examines the following interconnected focuses that work in a continuous improvement cycle: Diagram 3: Continuous Improvement Cycle for Procurement during Emergencies

1. Situational awareness: Understand operational reality &

markets well to develop SCM Plan, & identify bottlenecks real time

2. Expedite flow: Clear specifications, prioritization & other proactive steps to increase

speed immediately, along with good tracking & communication

3. Increase flexibility:Engage donor flexibility & ERRWR

Template to increase flow temporarily with mitigating actions

4. Increase capacity: Increase procurement unit

capacities and sourcing options longer term

EMERGENCY RAPID

RESPONSE

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Under normal circumstances, the three key factors that are considered during procurement in order of priority at CRS are quality, delivery, and price. In emergency situations the ranking factors change order of priority to: delivery, quality, and price. Delivery time becomes the critical factor in emergency situations, especially during “rapid onset” or acute emergencies. Humanitarian emergencies may thus override the principle of fair and open competition in procurement transactions in favor of limited competition or directed procurement. In the cases where the emergency needs are urgent, then the CP procurement team can use sole sourcing options and contact one known supplier in order to obtain a quote for the goods or services required. However, whenever operating conditions permit, and there is adequate time to carry out limited competition, the CP procurement team must shift back to more inclusive procurement methods and try to contact two or three known suppliers and request quotes for the goods or services to be procured. In emergencies the CP procurement team needs to adopt a proactive sourcing stance where the team goes out and gets the quotes and verifies quality as needed, instead of passively requesting information from suppliers. It is advisable to go to the vendors we have already vetted and used to see if they have the required goods in stock and compare prices, quality and quantity available. If the quality and price are acceptable then the CP procurement team should carry out on the spot negotiations for discounts, final prices, and payment and delivery terms, and obtain a quote for decision making. All procurement process should ensure adherence to donor and CRS requirements and ensure that incurred costs are allowable and recoverable for the donor funding the procurement. Various of the key donor agencies that CRS works with have recognized the need to be practical in emergency contexts, and with this in mind they have established guidance on how controls and requirements can be adjusted in the procurement process to increase flexibility and improve responsiveness. The CP procurement team should work with CP leadership and grant managers to engage donors directly to agree upon and activate any built in flexibility options, such as waiving the normal donor requirement to conduct public tenders. Make sure to obtain permission in writing prior to taking corresponding actions. IMPORTANT: CRS can never provide a waiver for any donor specified procurement requirement and any permission to deviate must be solicited from the donor directly in writing before any subsequent action may be taken. During emergencies it may be necessary to procure new goods and services not normally procured in regular programming conditions, and regardless of the urgency of the moment, the CP procurement team needs to make sure that all new vendors are fully vetted for eligibility prior to utilization. The CP procurement teams must always consider the humanitarian principles of neutrality, impartiality and independence particularly in any man-made disaster or conflict, and if a supplier is known to have links to one of the parties to a conflict, such as a company that supplies or transports arms or other supplies to a military actor or other combatant, then it is not advisable to engage this actor for goods or services and to seek alternative options if available.

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The CP procurement team must ensure that process thresholds and approval levels are followed as set forth in the CRS Procurement Manual, and by the country program and region (including adjustments made with ERRWR template), and each part of the procurement process should be fully documented to ensure compliance with CRS and donor regulations and requirements. However, documentation does not imply additional delays in the delivery of goods (which is the priority factor in emergencies), and should a particular situation dictate an expedited response, the situation should be documented— as with any purchase— noting the reasons, why Standard Operating Procedures (SOPs) were not followed completely. This documentation can simply be a memo to file written by the responsible actor for the procurement, which justifies thoughtfully the creative solutions found to the purchasing problem at hand, and the memo should be signed by the Country Representative to provide CP authorization. In order to facilitate program and operations planning the CP procurement team should develop a procurement log or tracking sheet that can be provided to all requestors on a daily basis with updated estimated receipt and delivery times. In order to obtain competitive prices, the Global Procurement Department and CPs, if resources permit, may carry out regular research on the prices of goods or services that are usually procured by CRS during emergencies. Each CP should maintain on their Approved Supplier List (ASL) a tab for “emergency suppliers”. Contact information for suppliers who provide such goods should also be collected and retained by CRS on their ASLs, and this will enable CRS to have easy access to information on prices during emergencies. CP procurement teams should likewise carry out local and regional market studies to improve preparedness. The HRD team will be responsible for maintaining all the specifications associated with standard emergency relief supplies such as tarps, jerry cans, blankets. During emergencies CRS procurement Standard Operating Procedures (SOPs) may be adjusted and waived in order to allow the Country Program to procure items faster. To make these adjustments the Country Program should use Emergency Rapid Response Waiver Request (ERRWR) Template ERRWR Template Link and the adjustments will be for a limited time period only to be determined based on the operational situation at hand. The CPs should place special attention on establishing robust mitigating actions if using the ERRWR Template, and in particular they should consider bringing in high level TDY support for the duration of the waiver, such as a senior HQ finance or procurement staff member or an internal auditor, who can just focus on helping reduce risks, and supporting the CP to comply progressively more fully with CRS procurement SOPs and internal control requirements. If the country program considers that the adjustments requested under Section B of the ERRWR Template would still be insufficient to enable adequate procurement and delivery of needed goods and services in the context of the acute emergency, then the CP can request via their Region (RD or DRD MQ) to set up a conference call with the Global Procurement Director, the Senior Director for Overseas Finance, and the VP Humanitarian Response to discuss the possibilities of soliciting a blanket waiver. Blanket waivers are only considered for exceptional circumstances in large scale acute emergencies, and all parties to the conference call must agree on the need for the blanket waiver, its effective duration, and all mitigating actions to be taken to control potential risks and liabilities. The conditions

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for blanket waiver as discussed in the conference call would then be documented by the CP in an internal memo, which would be signed by the same authorities as the ERRWR: Regional Director, Global Procurement Director, and the Chief Financial Officer. Section 11: Contract Negotiation Procurement may negotiate with the bidder that provides the best VFM during the tendering process after the selection process has been completed, but only in very exceptional cases such as:

a. when the available budget is not sufficient to purchase the requested item(s) and the bidder agrees to reduce the price;

b. when the offer contains additional equipment or services which were not required in the solicitation document. These negotiations should seek a lower price through the removal of the additional items from the bid; or

c. when a marginally higher quantity, not more than 10%, is required compared to original quantity in the solicitation document leading to a potential quantity discount.

Negotiations during the tendering process are allowed, if provided for in the solicitation document and the selection of a number of bidders who meet the competitive range in the technical evaluation has been completed. Negotiations are carried out as follows:

a. Bidders are requested to submit a BAFO. The objective of the BAFO is to enhance competition, and give CRS the best VFM. The purpose of the BAFO, negotiations is to clarify ambiguities, correct obvious mistakes, point out weaknesses and deficiencies, and generally seek improvements in both the technical and financial aspects of the offers (e.g., regarding lower prices, prolonged warranties, additional discounts, shorter delivery time, etc.).

b. Bidders chosen to submit a BAFO must be provided with information about the deficiencies in their bid, and be asked in writing to submit a decisive and final offer as a follow up to their proposal by a certain deadline.

c. The bidders must be informed that price increases will not be accepted, however, they may decline to alter the terms of their original proposal, and this decision will not render them unacceptable. The request to submit a BAFO should not contain any information regarding the evaluation, or any information on the chances for contract award.

d. Once the BAFOs are received, they are evaluated and a final bidder is selected for award of a contract.

In negotiating the contract, each CRS country program/region should ensure that local taxes are included in the contract. The country program should also check with the donor to find out whether they have a bilateral agreement with the country government under which CRS can obtain tax exemption for goods or services procured for the project.

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The table below provides examples of elements that can be negotiated during the procurement process. Table 13: Elements that can be Negotiated Prior to Contract Signing

Elements Example Technical aspects Warranties, after sale service, life cycle support maintenance agreements,

quality output issues Remedies Liquidated damages for non-performance Special terms Type of bonds, guarantees, insurance, payment schedule Management information

Frequency and content of reports, acceptance criteria for certain milestones.

Timeframes Duration of contract, key milestones, delivery dates, response times. Personnel Key team members and focal points, subcontracting arrangements. Price When available budget is not sufficient to purchase items, offer contains

additional services 11.1 Contract Preparation Once the final selection is made and all the relevant approvals have been obtained, CRS procurement personnel together with the Agreement Management Officer and legal team, if applicable, prepares a contract for award to the selected bidder. A written contract is required to formalize a commitment by CRS to procure goods or services from the selected bidder. Please reference Procurement Contracts Policy POL-PUR-POS-001 for the criteria for when and what type of procurement contract should be used. All agreements pertaining to Overseas Operation Division must be processed according to the: Agreements Policy & Procedure No. POL-OOD-001 A contract usually includes:

a. a clear and complete description of the work; b. the price, basis of payment; and method of payment; c. the schedule of deliverables, activities, and delivery date(s); d. a reference to solicitation documents; e. both CRS and donor general and specific terms and conditions; CRS’ code of conduct; and f. other documents as necessary (e.g., written records of bid conferences, email/mail

correspondence, samples, etc.). When CRS is procuring goods to be delivered in a different country, it is important to include the applicable Incoterms® in the contract. The contract should also include information relating to CRS requirements on:

a. packing goods for shipment; b. export and import clearance requirements; c. transport from factory to port/airport of shipment and international transport; d. transport from port of arrival to final destination handling; and e. inspection and acceptance requirements.

11.2 Types of Contracts

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In a competitive solicitation process, it is good practice to select the appropriate contractual instrument when preparing the solicitation documents and to include a sample copy of a contract as an annex to the solicitation documents. Contact your Award Management Officer for assistance in determining the appropriate contract mechanism. Firm-fixed-priced Contracts A firm-fixed-price contract provides for a price that is not subject to any adjustment. This contract type places maximum risk and full responsibility for all costs and resulting profit or loss upon the winning bidder. It provides maximum incentive for the proposed bidder to control costs and perform effectively and imposes a minimum administrative burden upon the contracting parties. A firm-fixed-price contract is suitable for acquiring commercial items or for acquiring other supplies or services on the basis of reasonably definite functional or detailed specifications when CRS procurement personnel can establish fair and reasonable prices at the outset, such as when:

a. there is adequate price competition; b. there are reasonable price comparisons with prior purchases of the same or similar supplies or

services made on a competitive basis or supported by valid cost or pricing data; c. available cost or pricing information permits realistic estimates of the probable costs of

performance; d. performance uncertainties can be identified and reasonable estimates of their cost impact can

be made and the winning bidder is willing to accept a firm-fixed-price representing assumption of the risks involved; and

e. payments under firm-fixed-priced contracts are made based on delivery of the goods procured or specific deliverables required under procurement for services.

Cost-reimbursement Contracts Cost-reimbursement contracts provide for payment of incurred costs to the extent prescribed in the contract between CRS and the winning bidder. These types of contracts establish an estimate of total cost for the purpose of establishing a ceiling that the winning bidder may not exceed (except at its own risk) without the approval of CRS procurement person involved with the bid. Cost-reimbursement contracts are suitable for use only when uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use any type of fixed-price contract. Time-and-materials Contracts A time-and-materials contract provides for acquiring supplies or services on the basis of:

a. direct labor hours at specified fixed hourly rates that include wages, overhead, general and administrative expenses, and profit; and

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b. actual cost for materials (material costs include raw materials, parts, subassemblies, components, and manufacturing supplies, and may include collateral items such as inbound transportation and in-transit insurance). In computing material costs, the bidder must be instructed to consider reasonable overruns, spoilage, or defective work (unless otherwise provided in any contract provision relating to inspecting and correcting defective work).

A time-and-materials contract may be used only when it is not possible to accurately estimate the extent or duration of the work or to anticipate costs with any reasonable degree of confidence at the time CRS awards the contract. 11.3 Contracting Instruments Contracting instruments are the contractual format used when entering into an award with the selected vendor or winning bidder. CRS uses a number of contracting instruments outlined below. Purchase Orders A Purchase Order (PO) is a commercial document issued by CRS to a selected vendor, indicating types, quantities, and agreed upon prices for products or services. Acceptance of a PO by the selected vendor forms a contract between CRS and the selected vendor. No contract exists until the PO is issued by CRS and signed by the selected vendor, or if the vendor delivers the requested goods or performs the service after receipt of the PO. Issuance of a PO would be desirable for all purchases, regardless of their value. However, a PO will be required for any purchases of goods or services valued at $500 and above. Procurement transactions above the petty cash limit and below the threshold amounts for when a PO is required are performed as follows. The "request" can come in the form of a requisition. The "sourcing" can be conducted by phone or visit to supplier’s place of business preferably with suppliers on ASL. The "approval", utilizing a request for payment, to procure a good or service should be based on the CP's appendix section 15 Chart of Authorization of the procurement manual. The "acquisition" is performed through the use of cash, check, or wire transfer. The "delivery/acceptance" is processed by filling out a receipt note/GRN or if the budget holder signs the supplier invoice/delivery note. POs should:

a. specify the quantity of supplies or scope of services ordered; b. contain a specific date by which delivery of the goods or performance of the services is

required; and c. contain information on inspection and acceptance when goods are delivered.

CRS procurement personnel review CRS’ Procurement Contracts policy Procurement Contracts Policy POL-PUR-POS-001 to obtain guidance on whether to issue a purchase order or contract for goods or services being procured. Advance copies of the PO or equivalent notice should be given to the consignee(s) for material receipt purposes. Receiving reports should be prepared immediately upon receipt and acceptance of supplies by CRS staff.

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Blanket Purchase Agreements A blanket purchase agreement (BPA) is a simplified method of filling anticipated repetitive needs for supplies or services by establishing an agreement with a selected bidder or a number of bidders. BPAs are used to purchase such items as off-the-shelf office supplies. BPAs should be used by CRS when a wide variety of supplies or services are generally purchased, but the exact items, quantities, and delivery requirements are not known in advance and may vary considerably. BPAs can be limited to individual items or commodities, or permit the supplier to provide unlimited supplies or services. BPAs may be established with more than one supplier for supplies or services of the same type to provide maximum practicable competition. BPAs must be awarded based on the necessary quantities projected in the initial year the contract is signed. CRS policy requires that BPAs be issued for one year and be renewable once. The BPA should indicate the maximum and minimum quantity or cost of the services/goods to be purchased under the BPA. Prices offered in the BPA must be fixed to the term of the BPA. Indefinite Delivery Indefinite Quantity Contracts (IDIQ) Indefinite Quantity Contracts (IQCs) or indefinite delivery indefinite quality (IDIQ) contracts are similar to BPAs and are usually issued for services rather than goods. IQCs must be issued for a fixed period, for example of one year and may be renewable for one additional year. Work orders are issued to suppliers each time there is procurement of services. IQCs should include all necessary terms and conditions that the supplier is required to adhere to. These should include specific donor requirements. Some services that CRS procures through IQCs include: freight forwarding service; vehicle rental, maintenance and repair; maintenance and repair of generators, air conditioners, office equipment, the telephone exchange system, electrical installations and plumbing; professional or technical services, security service, etc. Consulting Agreements Consulting agreements can be issued to individual consultants or to companies. The consulting agreement should have a detailed scope of work for the services being procured, the deliverables expected by CRS and the timelines of the deliverables. Contract Modifications All modifications to the initial terms and conditions of the contract must be in writing and signed by the CRS authorized representatives and the successful bidder.

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Amendments should not substitute the initial contract with another contract which contains a different scope of work or prices. Modifications must be limited to a change in the number goods or scope of services or the level of effort - LOE of the services. When CRS receives a request from a supplier to modify a contract, CRS procurement personnel must analyze its impact on the schedule of completion, price, quantity and quality. A contract amendment may include:

a. an extension of time to complete the contract; b. a change to price; c. an addition of services to the SOW or request for additional goods; and d. administrative changes like change of name, legal status, address, etc.

Only an authorized CRS official should amend a contract. Unofficial changes, in the form of constructive changes or unauthorized commitments can be as detrimental to CRS’ procurement process as purchases originally made without appropriate delegated authority. Requests for amendments should include:

a. a revised scope of work; b. justification as to why the modification is necessary; c. a revised cost estimate accounting for increases and decreases in the products or services; d. the approval date of initial requisition; and e. a brief description of the amendment.

Amendments to contracts should not be made to request goods or services that are different from the original procurement from the supplier. Section 12: Non-Stock Based Receipts for Indirect Procurement/Expensed Articles 12.1 Receipt and Inspection of Goods All goods must be received and processed by CRS employees responsible for receiving. Goods purchased by CRS country programs/regions can be delivered either to the local CRS office, a regional office, a sub-recipient’s office. The receiving staff should compare the received goods and the delivery note/packing list to the contractual document. The delivery must be inspected to examine or test the goods to ensure that they conform to order requirements. Where quantities of goods are involved, inspection also means verifying that the correct number of items has been delivered. Variations in quantities authorized by the order or contract may

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be accepted. Quantities accepted must be documented. Receiving staff must confirm that the request for payment is based on quantities delivered and accepted. The receiving officer should examine the physical structure of the goods to make sure that the proper type and kind of goods have been delivered and that they conform to the specifications in the contract. They should check for signs of damage, such as dents and tears. Any damage must be documented. Where required, the officer should perform an operability check to ensure that the goods perform or operate properly. When inspecting goods that have a specific shelf life, the officer should check the preservation of the product to make sure it has not spoiled, rusted, or deteriorated. When specific packaging is required, the officer should check packaging and labeling to ensure that they comply with contract requirements. The adequacy of the packaging should also be checked. Any items that do not conform to appropriate standards should not be accepted. The goods received note - GRN must be retained by CRS and submitted to the procurement department and the finance department unless the CRS location is utilizing an ERP system. A copy must be provided to the supplier if any non-conforming item(s) are found. Special Requirements In addition to CRS staff involved in the process of receiving and inspection of goods, CRS should hire an external surveyor to observe and report on the quality and quantity of goods received for all consignments for which either the donor or the local government requires an independent survey or testing at delivery. During the delivery process, the receiving officer and/or the surveyor should compare the contents of the shipment to the contract and delivery note/packaging slip to make sure that the goods delivered match the goods ordered. After verifying the goods received, the receiving officer should list the number, type, and condition of the items that are received on the goods received note or complete the appropriate receipt information on the waybill and retain a copy. Any reservations or discrepancies must be noted on the delivery document and reported immediately to the procurement department and requisitioner. Discrepancies in Delivery Documents Each delivery must be accompanied by documents which identify the items purchased and the source of the items. The delivery documents facilitate import clearance, proper handling and delivery to CRS. There are specific documents required for each item delivered which must be indicated in the contract, if applicable. These usually include:

• a bill of lading or waybill; • certificate of value or commercial invoice; • certificate of origin and plant certificate; • quality control certificate – including contents/ingredients analysis;

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• electronic cargo tracking note; • ISO certificate; • user guide and/or other advice for safe/optimal handling, usage and disposition; • product registration/authorization for use in import country; and • certification of production, also written on each box and individual packaging.

The receiving officer should verify the documentation for completeness and accuracy against the contract requirements. Discrepancies must be reviewed to determine their impacts on CRS’ ability to clear the goods through customs, obtain title, store, and distribute the goods. Where there are significant discrepancies, the documents must be corrected and reissued prior to CRS receiving the goods. Discrepancies in the Quantity of Goods When receiving goods, the receiving officer must ensure that the quantity ordered is the same as the quantity received. Discrepancies must be dealt with in the following ways:

• Where the delivered items are fewer than the quantity ordered the receiving officer should record the quantity of items that were actually received. The difference between the received items and the ordered items should also be recorded.

• Where the delivered items are more than the quantity ordered, the receiving officer should record the quantity of goods delivered, the quantity ordered and the overage. If there is an overage, the procurement department should be notified so they can contact the supplier to resolve the issue.

Payment should be made for quantities that are received as ordered. Payments for partial receipts should be pro-rated if accepted by designated CRS officials. Excess receipts should be reported to procurement and the CRS approving official for guidance and handed on a case-by-case basis. Defects in Quality The technical quality of the goods must be inspected and any defects identified and recorded. Defects in quality must be dealt with in the following way: • CRS should record all damaged items. Depending on the nature and extent of the damage, CRS

may choose to accept the goods at a discounted price. • If the defect makes the goods unusable or dangerous, the items must be rejected by the CRS

receiving office. • The reasons for acceptance of goods with insignificant defects or the rejection of goods with

significant defects must be documented by the receiving officer and submitted to the CRS procurement office who will address the issue with the supplier.

• If a supplier is required to pick-up the rejected goods from CRS offices and the supplier is unable to pick them up immediately, the goods must be temporarily placed in a quarantine area.

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• Even if the packaging is damaged or defective, CRS may still decide to accept the goods and store them in a suitable location. The acceptance must be documented and the reasons for acceptance must be stated.

12.2 Receipt and Acceptance of Delivery of Services Services are usually delivered to the budget holder or technical requisitioner. The acceptance of services must be based on the consultant or service provider rendering the services in accordance with deliverables specified in the contract. The contract between CRS and the service provider or consultant should provide for actions to be taken when the services or deliverables do not meet the required standards. CRS may withhold payment from a service provider or consultant until corrective measures are taken to ensure that the services and deliverables meet the required standards. 12.3 Supplier Monitoring Once the contract has been awarded, CRS procurement personnel, the budget holder/stakeholder, or the requisitioner, monitors the supplier’s performance of contractual requirements. The level of monitoring depends on the nature, size and complexity of the goods or services. It is good practice for CRS procurement personnel or the person(s) administering the contract to place an occasional call to the supplier to follow up on delivery status of non-critical goods or services. However, for large, complex contracts, CRS procurement personnel or the person(s) administering the contract must request extensive reports, regular progress meetings, formal testing, and technical reviews and audits. CRS procurement personnel should review their “open orders” at least weekly. Any past due orders should be expedited to determine their status and the due date changed once the supplier has confirmed the new delivery date. Orders that have been received that still have a small residual balance should be closed if it is determined that no more deliveries by the supplier will be performed. When a supplier has indicated that certain items are going to be late or on backorder then communicate the new delivery date to the end-user/department. CRS procurement personnel or the person(s) administering the contract must maintain regular communication about contract performance with the supplier in order to ensure that the supplier complies with contract terms and conditions. It is best practice for communication procedures to be included in the contract with the supplier. Each party should also establish controls to ensure that they follow the procedures. CRS procurement personnel or the person(s) administering the contract and the supplier should also come up with an oral and written reporting system, which highlights progress and problems and measures them against expected performance and results. When procurement is for complex construction, contract performance and progress review meetings can be held between CRS procurement personnel, the person(s) administering the contract and the supplier at appropriate intervals to ensure that work is proceeding as required in the contract. These

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meetings could be held as frequently as every two weeks or as infrequently as every two months. Section 13: Payment of Suppliers Once a supplier has adequately delivered the goods or services procured by CRS, they must be paid in a timely manner, according to the terms of the contract. Payments must be processed according to the contract and upon certification of the budget holder if required in the contract. Financial securities should also be liquidated as necessary (e.g., release of bid bonds, performance bonds, and advance payment bonds once the reason for requesting them has become moot). Payment may be made to a supplier in one of the following ways:

a. Advance payment: An advance payment is a sum of money paid to the supplier upon signature of the contract, in anticipation of identified early expenses. Advance payments to suppliers should be avoided whenever possible. Advance payments may be necessary for such things as rent, tuition, insurance premiums, and expenses for work performed in particular countries. All reasons therefore need to be documented. Above certain thresholds, suppliers receiving advance payments must provide guarantees (e.g., bank guarantees). Advance payments must be made in accordance with CRS’ Advances to Vendors (PRO-FIN-REC-009.10) policy.

b. Partial/installment payment: A partial payment is based on the acceptance of a particular product or service. To process a partial payment, a document must be on file that confirms CRS’ partial acceptance. This confirmation usually is in the form of an invoice or delivery ticket detailing the goods or services and signed by a CRS receiving officer to accept the product or service.

c. Progress payment: A progress payment, made before final work or deliverables are accepted. This form of payment must be used for long-term service work that involves an end item, such as a report. If progress payments are authorized, they should normally be tied to a milestone in contract performance, such as the delivery and acceptance of a draft report.

d. Final payments: A final payment is a payment made in acknowledgement/approval of the completion of all contract performance. The Finance Department will process final payments based on the supplier’s invoice, the receipt of a receiving report or delivery, and the PO or contract.

e. Holdback payments (retainage): Holdback payments are used in works and complex consulting assignments to ensure completion of the contract and in some construction contracts to make sure that the general supplier has paid its lower tier vendors. The holdback payments are retained until the supplier has provided proof it has discharged itself of all its obligations under the contract. It is good practice to holdback 10 to 15 percent of each invoice sent by the supplier when this is part of a contract.

f. Supporting documentation for payments to suppliers must comply with the Finance Department’s Transaction Documentation Policy and the documentation checklists included in the policy (POL-FIN-DOC-008).

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13.1 Payments in Country Programs/Regions This section refers to purchases processed by overseas country program/regional offices and paid by their local finance departments. All payments must be authorized in accordance with the authorization chart of CRS’ Internal Controls Policy (POL-FIN-ICS-024). When accounting for procurement transactions, country programs must comply with the Financial Transaction Processing Procedure (PRO-FIN-DOC-008.01) issued by the Finance Department. Payment for Goods and Services Designated finance personnel are responsible for ensuring that proper documentation is on file to demonstrate that procured goods and services have been received and payment has been approved. The Finance Department will review each payment request package for completeness of information, necessary approvals and required supporting documentation. To avoid paying incorrect and perhaps fraudulent invoices, finance staff will look for a three-way match between the vendor’s invoice, the purchase order and the receiving report, for ‘goods’, by comparing the quantities, price per unit, terms, etc. on each of the documents. After the vendor’s invoice is validated by the three-way match, it will be processed for payment. For ‘service’ related payments finance will perform a two-way match between the vendor’s invoice, which must be approved by the budget holder/stakeholder receiving the services and the Purchase Order or formal contract. If a payment request package is missing required supporting documentation, details or approvals, the Finance Department will return or hold on the payment release until such deficiencies are addressed satisfactory. The Finance Department then issues payment to the supplier. The suppliers must be requested to acknowledge the receipt of payment, and the Finance Department will maintain this documentation on file. Click here for CRS’ country program business process flow. 13.2 Payments in Headquarters This section refers to purchases processed by the headquarters Finance Department. All payments must be authorized in accordance with the HQ Expenditure Authorization policy # POL-FIN-ICS-024.03. Section 14: Contract Closeout Contract closeout activities are straightforward, especially for small dollar value contracts and POs. However, in complex and high dollar value contracts involving progress payments and/or securities, CRS procurement personnel must ensure that the contract file is properly closed out. The close out process ensures that all contractual obligations have been met, and that residual obligations — such as warranties, guarantees and after-sales service and support — are clearly defined in terms of responsibility, liability, procedures and timeframes. Contract closeout occurs once the supplier has fulfilled all contractual obligations. It includes the following key steps:

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Table 14: Steps in the Closeout Process Step Action 1 Review and confirm appropriate action taken according to contract closeout checklists 2 Prepare final contract performance report (jointly by requisitioner and CRS procurement

person), including lessons learned 3 Prepare supplier assessment form and put in supplier records 4 Issue final acceptance on the basis of the requisitioner’s report 5 Make final financial settlements 6 Liquidate/return bonds and/or securities 7 Record any residual obligations (warranties, etc.) and advise requisitioner of procedures 8 Close out contract file

14.1 Lessons Learned and Document Retention Period It is a good practice for the requisitioner and CRS procurement person involved to complete a lessons learned report, commonly referred to as an after action review. This allows CRS to gather and use information to improve chances of success of future procurement actions. Lessons learned should cover, as a minimum, the following questions and topics:

a. Was the requirement adequately defined? b. Were the evaluation criteria appropriate? c. Was the evaluation method appropriate? d. Did suppliers make any suggestions? e. What problems were encountered? f. Recommendations to avoid similar situations (if applicable).

Click on link for after action review: After Action Review -AAR Guidance and Template It is critical that all documentation related to the P2P process be maintained for legal and audit purposes. Documentation retention should be for at least twelve (12) years, three (3) years on-site.

Section 15: CRS Specific Office Location Appendix CRS location where this procurement manual is being followed: ___________________________________________ Instructions: CRS has one procurement manual which supports our agency strategic priorities. Each CRS location is required as necessary to create a CRS location specific appendix here. Please provide information for your CRS location: i. Mission Statement (optional):

ii. Chart of authorization matrix for this CRS location:

iii. What is the Petty Cash disbursement limit at this location:

iv. Dollar threshold for competitive bidding involving requiring (3) supplier quotations/bids:

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v. Specify how bid committees will operate locally. How many CRS employees will be on bid

committees and the threshold amounts for when they should be used? {For more guidance on who should be included and what their role is please refer to the following sections: 2.4 Segregation of Duties; Section 7: Receiving and Opening of Bids; Section 8: Evaluation of Bids}

Instructions: for your CP/Region assign the responsibility for each “activity”, by position, with proper RACI code defined as such: R = Responsible; A = Accountable; C = Consulted; I = Informed

Positions Activity: Bid Committees

Procurement HoOPS Budget Holder/Stakeho

lders

Technical Advisor –as

needed

Country Rep.

Finance Manager

Other position?

• Identifying committee members

R

• Receiving bids • Opening and

reviewing bids

• Approving bid committee decisions

R

• Communicating awards to vendor

R

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vi. Approved Supplier Lists –ASL and Due Diligence Supplier Visits:

In your CP/ Region specify which position(s) below will be responsible for initiating and conducting CRS team visits to your local suppliers. Procurement is not allowed to lead the team but is allowed to be part of the CRS team visiting the supplier(s).

Instructions: for your CP/Region assign the responsibility for each “activity”, by position, with proper RACI code defined as such: R = Responsible; A = Accountable; C = Consulted; I = Informed

Positions Activity: Approved Supplier Lists (ASL)

Procurement HoOPS Budget Holder

Stakeholders

Technical Advisor –as needed

Country Rep.

Finance Manager

Other position?

• Identifying potential new suppliers

R

• Organizing due diligence visits

• Updating ASL R • Securing CR

approval of the updated list

• Initiating periodic review/clean up of the ASL

For more information related to ASL’s, including a link to the comprehensive policy, please see Section 3.4 in the P2P manual.

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References: Interagency Procurement Working Group. (2006). UN Procurement Practitioner’s Handbook. Retrieved from http://www.unicef.org/supply/files/UN_Practitioners_Handbook.pdf Department for International Development. (DFID) (n.d.). Standard Terms and Conditions – Service Contracts. Retrieved from https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/457696/DFID_Standard_Contract_Section_2_Standard_Terms_and_Conditions-Sept15.pdf Please click on PP link for DFID Procurement Training for CRS Staff European Commission. (2013). Guidelines on the Prevention and Management of Conflicts of Interest in EU Decentralized Agencies. Retrieved from https://www.cepol.europa.eu/sites/default/files/32-2014-GB.pdf The Global Fund. (n.d.). Governance and Core Documents. Retrieved from http://www.theglobalfund.org/en/documents/governance/ United States Government Office of Management and Budget. (2014). Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards. Retrieved from http://www.gpo.gov/fdsys/pkg/CFR-2015-title2-vol1/pdf/CFR-2015-title2-vol1-part200.pdf The World Bank. (2014). Procurement Guidelines. Retrieved from http://siteresources.worldbank.org/INTPROCUREMENT/Resources/Procurement_GLs_English_Final_Jan2011_revised_July1-2014.pdf The Federal Acquisition Regulation (FAR). Retrieved from https://www.acquisition.gov/?q=browsefar United States Agency for International Development (AIDAR). Retrieved from https://www.usaid.gov/ads/policy/300/aidar Automated Directive Services - ADS, USAID Direct Contracting. Retrieved from https://www.usaid.gov/sites/default/files/documents/1868/302.pdf

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Resources: note: resources reside on CRS Global SharePoint, which is a secured site. • Online Request for Goods and Services – RFGS • Conflict of Interest - Conflict of Interest link • Global Procurement P2P Business Process - Global Procurement P2P Business Process Flow • Country Program and Region P2P Business Process Flow - CP and Regional P2P Process link • Global Procurement and CP-Regional P2P Business Process Flow - Global Procurement and CP-

Regional P2P Business Process Flow • Business Process Flow for the contracting of “Services” - Supplier RFP and Contract

Administration P2P Business Process Flow • Local Purchase Approval and Bid Review Form Template - Local Purchase Approval Form link • List of commodities in country programs/Regions that are exempt from Local Purchase

Approval regardless of requisition value. List of commodities exempt from HQ review • List of commodities at headquarters that do not required going through the requisitioning

process. HQ - list of procurements not needing a requisition • Procurement Plan Templates - Procurement Plans link • ASL Policy POL-PUR-SUP-001 – ASL Policy link; ASL template(s) - ASL Templates link; Supplier

Due Diligence Questionnaire - Questionnaire link; ASL FAQ’s – ASL FAQ link; ASL Guidance - ASL Guidance link

• Health Products annex - Health Products Annex To Procurement Manual_Final • Global Fund Annex to Procurement Manual - Global Fund Annex to Procurement Manual Final • USG Regulations, Assistance and Acquisition annex - USG Regulations annex to the P2P Manual • Sole-Source Authorization Form - Sole-source Authorization Form link • Request for Proposal – RFP Template - CRS RFP Template link • Request for Quote – RFQ Goods Template (8 pages) RFQ Goods Template (8) pages • Detailed Request for Quote - RFQ Goods and Services Templates (16 pages) CRS Request for

Quote (RFQ) Public or Restricted Tendering Template RFQ for Services Template link • Long Term Agreement - LTA link • International Commercial Terms – The Incoterms® rules - INCOTERMS link • Bid Evaluation Plan Template - Bid Evaluation Plan Template • Bid Response and Price Analysis Comparison Template with Confidentiality statement - Bid

Price Analysis Comparison Form • CRS Negotiation Memorandum Template link - neg memo template • Emergency Recommendations and Best Practices Emergency Procurement and Best Practices • Emergency Local Purchase Waiver Request Template - ERRWR Template Link • Procurement Contracts Policy - Procurement Contracts Policy POL-PUR-POS-001 • Procurement Officer JD - Procurement Officer JD link • Procurement Policy link - Procurement Policy POL-PUR-POL-001 • CRS Supplier Code of Conduct - CRS Supplier Code of Conduct Draft • UNHCR Supplier Code of Conduct - UN Supplier Code of Conduct • After Action Review - After Action Review -AAR Guidance and Template • CRS PO Terms and Conditions link - CRS PO Terms and Conditions 080608 • EOI Template link - EOI - Expression of Interest Template • HQ HR link to consultant requisition and contract - HQ HR working with consultants SP site • To view HQ HR’s consultant policy : HQ HR Consultant Policy POL-HRD-EMP-0004