NBAs TRAINING ON PUBLIC PROCUREMENT PROCEDURES BASED ON LAW AND

REGULATIONS IN RWANDA

Gicumbi, 23rd May 2014

GICUMBI DISTRICT

Prepared and Presented by : Procurement officer: MFASHINGABO Ignace

Prepared and Presented by : Procurement officer: MFASHINGABO Ignace

INTRODUCTIONTo achieve their daily responsibilities, public To achieve their daily responsibilities, public procuring entities have to purchase goods, services procuring entities have to purchase goods, services and works with successful bidders through and works with successful bidders through competition ways.competition ways.

In this regard, the public procurement law, In this regard, the public procurement law, regulations and different rules were put in place to regulations and different rules were put in place to make the whole public procurement process perform make the whole public procurement process perform well.well.

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KEY DEFINITIONKEY DEFINITION• Public procurement-refers to any means of acquisition of goods, works or services

by the procuring entity from outside itself in return for a price;

• Procuring entity means any organ of Central Government authority, Local Government authority, public institution, commission, Government project, parastatal, agency or any government entity charged by the chief budget manager to manage public funds engaged in a procurement process and entering in contract with the successful bidder ;

• Bid or tender/proposal: document from a bidder describing his/her proposal ;

• Bid validity: Timeframe in which a bid is valid.120 days maximum from opening date of bids;

• Bidding document -Tender document (DAO/TD)/ RFP - means the document containing information required for preparation of bids, the award process and the tender execution;

• Bid Security (garantie de soumission 2%) - any guarantee issued by a bank or other authorized institution to guarantee the offer of a prospective bidder . Its validity is 30 days after bid validity period.

• Performance security (garantie de bonne exécution /5-10%)- any guarantee by a bank or any other authorized institution to guarantee the procuring entity that in case the contract obligations are not well performed, be it technically or at execution period as provided, the procuring entity should be granted the amount provided for by such a guarantee

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KEY DEFINITIONSKEY DEFINITIONS

• Advance payment security: The security given by a bank or any authorized financial institution when it was stated in the bidding document. It is paid after the contract is signed but before any execution of the contract. It can not exceed 20% of the price of the tender and shall be paid upon submission by the successful bidder to the procuring entity of an advance payment security equivalent to the advance itself;

• Addendum/corrigendum: written documents which add or correct information provided in bidding document before bid opening;

• Notification of the tender: letters which inform simultaneously the successful and the unsuccessful bidders of the provisional and final outcomes of the bid evaluation;

• Tender Committee : committee established by the procuring entity. It is in charge of bid opening, evaluation and recommendation for award of public procurement contract;

• Consultant Services: refers to activities of an intellectual or of intangible nature;

• Bidder: means any potential participant or participant in public procurement proceedings;

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KEY DEFINITION (Ctd)KEY DEFINITION (Ctd)• Constructor, Consultant, supplier: means any physical or legal person

under procurement contract with a procuring entity;• Services/Non consultancy services/physical services: any service other

than consultancy services in accordance with the provisions of Procurement Law;

• Day: refers to every weekday including holidays unless stated otherwise;• Procurement Unit: unit of procuring entity in charge of a public

procurement; • Successful bidder: bidder whose offer has been accepted after being

considered the most competitive both technically and financially and has been selected by the procuring entity in accordance with the provisions of this Law. It also refers to one who has been awarded a contract with a procuring entity through competitive method.

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NoNo InstrumentInstrument Important Issues Addressed by the Important Issues Addressed by the

Instrument Instrument 11 1.1. Law Law N° 12/2007 of 12/2007 of

27/3/2007 on Public 27/3/2007 on Public

ProcurementProcurement

2. Law n°05/2013 of 13/02/2013 modifying and completing the Law n° 12/2007 of 27/03/2007 on public procurement

3. Ministerial orderMinisterial orderN° 001/08/10/min of 15/01/2008001/08/10/min of 15/01/2008

establishing regulations onestablishing regulations on

public procurement andpublic procurement and

standard bidding documentsstandard bidding documents

4. Ministerial order4. Ministerial orderN° 001/14/10/TC of 19/02/2014001/14/10/TC of 19/02/2014

establishing regulations onestablishing regulations on

public procurement andpublic procurement and

standard bidding documents and standard bidding documents and

contractscontracts

- Organization of public procurement Organization of public procurement

organs;organs;

- Procurement methods;- Procurement methods;-Ways and organs for administrative Ways and organs for administrative

review;review;- Penalties for the violation of Penalties for the violation of

procurement rules;procurement rules;- Contract execution /management;Contract execution /management;

ORGANSORGANS RESPONSABILITIESRESPONSABILITIES

11 RPPA (Art. 20 Law no RPPA (Art. 20 Law no

12/2007 of 27/3/2007)12/2007 of 27/3/2007)• Organization and supervision of procurement matters;Organization and supervision of procurement matters;• Advisory role on procurement matters to procuring Advisory role on procurement matters to procuring

entities;entities;• Procurement capacity building;Procurement capacity building;• Prepare and issue standard documents;Prepare and issue standard documents;• exclusion of bidders;of bidders;• Technical support to procuring entities.Technical support to procuring entities.

22 Independent review Independent review

panels (Art. 21 Law panels (Art. 21 Law

no 12/2007 07 no 12/2007 07

27/3/2007)27/3/2007)

Receive complaints that have not been resolved by the Receive complaints that have not been resolved by the

procuring entity;procuring entity; Take and communicate decisions on the complaints. Take and communicate decisions on the complaints.

3.3. Procurement Procurement

units in procuring units in procuring

entities (Art. 22)entities (Art. 22)

To prepare procurement planning; To prepare bidding documents; To publish and distribute tender notice; To receive and safe keeping of bids; To request competent authorities to approve recommendations for the award of tender; To prepare notification of tender award to a successful bidder; To monitor contract execution in collaboration with the beneficiary department; To provide information and documents to Rwanda Public Procurement Authority; Any other responsibility provided by regulations on public procurement (art.15 law no 05/13 of13/02/2013)

4.4. Establishment of Establishment of

a Tender a Tender

Committee Committee (art. 16 law no 05/13 of13/02/2013)

To conduct bids opening;To conduct bids opening; To evaluate bids;To evaluate bids; To recommend tender award;To recommend tender award; To provide recommendations on all issues relating to public procurement;To provide recommendations on all issues relating to public procurement; To provide advices on bidding documents before their publication;To provide advices on bidding documents before their publication; To approve tenders to be awarded through other method than open To approve tenders to be awarded through other method than open

competitive one;competitive one; To approve any change to be carried out on the procurement contract.To approve any change to be carried out on the procurement contract.

FUNDEMENTAL PRINCIPLES IN PUBLIC FUNDEMENTAL PRINCIPLES IN PUBLIC PROCUREMENT (Art. 4,Law nº 12/2007 of PROCUREMENT (Art. 4,Law nº 12/2007 of

27/03/2007 on public procurement27/03/2007 on public procurement) )

1.Transparency

2. Competition

3. Economy

4. Efficiency

5. Fairness

6. Accountability

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TYPES OF TENDERS (Art. 2)TYPES OF TENDERS (Art. 2)

There are 3 types of tenders;

• Tenders of Goods or supplies (fournitures);

• Tenders of Works (travaux);

• Tenders of Services: Tenders of Consultancy services (services de consultance) or other services (physical services).

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PROCUREMENT METHODS(Art. 23-58, law PROCUREMENT METHODS(Art. 23-58, law n0 12/2007 of 27/03/2007)n0 12/2007 of 27/03/2007)

• Open competitive bidding (preferred method);• Two – stage tendering (soumission en deux étapes, art.32

law n0 05/2013 of 13/02/2013);

Other procurement methods:• Restricted tendering /shortlist (L’appel d’offres restreint);• Request for quotation /shopping (Sollicitation des prix

/demande de proformats);• Single sourcing /direct contracting (l’entente directe/gré à

gré);• Community participation (la participation

communautaire).

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PROCUREMENT METHODS (ctd)PROCUREMENT METHODS (ctd)Procurement method

Publication period

Conditions to be respected

International Competitive Bidding (Appel d’Offre International Ouvert) Art. 47 of law No 12/2007

45- 90 days in International newspaper

« An international open competitive bidding shall be based on the following requirements: -Size of the tender; -Technical capacity and expertise that may not be available in the country (art.30 law n0 05/2013 of 13/02/2013)-1.2 billion (works);- 600 millions (goods or other services);- 100 millions (consultancy services).

National competitive Bibbing ( Art. 23 Law No 12/2007)

30 days Above 1 Million Rwandan francs Above 2 Million Rwandan francs (Ministerial order 2014Ministerial order 2014

establishing regulations onestablishing regulations on

public procurement)public procurement)

Two-stage tendering (Art. 49-50) law No 12/2007 of 27/03/2007), Art 32, Law No 05/2013 of 13/02/2013

- - Used when it is not possible for the procuring entity to formulate detailed specifications for the goods or works in order to obtain the most satisfactory solution to its procurement needs;

- when tendering proceedings have been engaged in but no tenders were submitted or all tenders were rejected by the tender committee and when, in the judgment of the tender committee, engaging in new tendering proceedings would be unlikely to result in a procurement contract;

- A bidder not wishing to submit a final bid may withdraw from the tendering proceedings without seizing any bid security that he/she may have been required to provide. The final bids shall be evaluated and compared in order to ascertain the successful bidder».

PROCUREMENT METHODS (ctd)PROCUREMENT METHODS (ctd)Procurement method Publication period Conditions to be respected:

Restricted tendering (Art. 51 - 52, Law No 12/2007 of 27/03/2007)

14 days (national)21 days (international) Art. 59 Law no 12/2007 of 27/3/2007Art 33 Law no 05/2013 of 13/02/2013

«A procuring entity may use restricted tendering for a procurement if the goods or construction, are of highly complex or specialized nature, or are available only from a limited number of suppliers or contractors ». (Law no 05/2013 of 13/02/2013)

Request for Quotations (Art. 53 -54 Law No 12/2007 of 27/03/2007)Art 34 Law No 05/2013 of 13/02/2013

3 days (Art. 59) Law no 12/2007 of 27/03/2007)

The procurement entity shall request for quotations from as many bidders as practicable but from at least three (3), if possible. Each bidder from whom a quotation is requested shall be informed whether any elements other than the charges for the goods or works themselves, such as any applicable transportation and insurance charges, customs duties and taxes, are to be included in the price. The procurement contract shall be awarded to the bidder that submitted the lowest priced quotation for the described quality that also meets the delivery period of the procuring entity. (Art 34, Law n0 05/2013 of 13/02/2013)

PROCUREMENT METHODS (ctd)PROCUREMENT METHODS (ctd)Procurement method

Publication period

Conditions to be respected

Single sourcing (Art. 55-56 of Law No 12/2007 of 27/03/2007)

- «The procuring entity may engage in single-source procurement when: -The goods, works or services are available only from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights in respect of the goods, works or services, and no reasonable alternative or substitute exists; -There is an urgent need for the goods, works or services, and engaging in tendering proceedings or any other method of procurement would be impractical, provided that the circumstances giving rise to the urgency were neither foreseeable by the procuring entity nor the result of carelessness on its part; -Owing to a disaster, force majeure, there is an urgent need for the goods, works or services, making it impractical to use other methods of procurement because of the time required in using those methods; -There are additional activities that cannot be technically separated from initial tender. The value of such additional activities shall not exceed twenty per cent (20%) of the initial tender and shall be subject to an amendment to the contract - Single source procurement shall not be justified on the grounds that only one bidder has the capacity or the exclusive right to manufacture or deliver goods, works or services if functionally equivalent goods, works or services from other bidders would satisfy the needs of the procuring entity». (Art 35, Law n0 05/2013 of 13/02/2013)

PROCUREMENT METHODS (ctd)PROCUREMENT METHODS (ctd)

Procurement method

Publication period

Threshold amount (seuil de compétence)

Community participation (Art. 58 of Law No 12/2007 and art. 19-21 of M.O No 001/08/10/MIN)

- When the beneficiary community may participate in delivery of services;if it is established that it will contribute to the economy , create employment and enhance their involvement in the activities of which they are beneficiaries;Not more than 20 millions; ≥ 20 millions if the contract is for making terraces, anti erosion trenches or planting trees. In such case, the PE shall hire an expert to support community in the particular activity, in accordance with tendering procedures provided by law.

-

PROCUREMENT CYCLE FOR GOODS PROCUREMENT CYCLE FOR GOODS AND WORKS TENDERSAND WORKS TENDERS

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Identification of needs & determining priorities

Procurement plan (Art. 6)

Preparation of tender Doc (Art.26)

Opening (Art. 34)/Evaluation

(Art. 39)

Notification (Art. 43)

Contract signature (Art. 44)

Contract implementation

Acceptance & Final statement

Procuring Entity

PROCUREMENT CYCLE FOR GOODS AND WORKS TENDERSPROCUREMENT CYCLE FOR GOODS AND WORKS TENDERS

• Identification of needs;• Preparation of procurement plan;• Preparation of tender documents ;• TD Advertisement;• Possible addendum/corrigendum;• Bid submission, Bid change(before deadline provided in TD);• Bid opening;• Bid evaluation;• Provisional notification;• Contract negotiation (→ request for performance guarantee),• Contract signature;• Final notification;• Contract implementation;• Acceptance & Final statement / Contract termination.

Annual Procurement Plan (Art. 6)

It is important to prepare an annual procurement plan.

A budget without a plan is the same as:

• Walking in the dark without a lamp;

• Holding a meeting without an agenda;

• Driving a vehicle without knowing a destination, etc.

Procurement plan stages

• Identifying the needs;• Determining the priorities;• Determining the required budget;• Determining the different lots;• Determining the procurement methods;• Determining the deadlines for starting and

duration of every activity;• Preparation of an annual procurement plan in

accordance with the format provided by RPPA.

• To be transmitted to RPPA not later than the To be transmitted to RPPA not later than the end end of the 1of the 1stst month month of the annual budget of the annual budget (31(31stst July) July)

• To be posted on To be posted on the DG market the DG market , on the , on the PPSPPS, , ProcuringProcuring Entity website, Entity website, advertised in advertised in at least oneat least one newspaper newspaper of wide readershipof wide readership and displayed on the PE’s notice board and displayed on the PE’s notice board (M.O No 001/08/10/MIN of 16/01/2008).(M.O No 001/08/10/MIN of 16/01/2008).

The bidding document shall contain enough information to allow a fair competion among who may wish to submit bids (Art 19 Law No 05/2013 of 13/02/2013).

The objectifs of a tender document • To give the bidders the required instructions for the bidding

procedures; • To inform the bidders of the criteria of evaluation;• To define conditions of the contract negociations;• To specify the required experience and capacity;• To specify quality and quantify of the works to be executed or

the goods to be supplied and the services to be provided.

PREPARATION OF A TENDER DOCUMENT- 1PREPARATION OF A TENDER DOCUMENT- 1

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Structure of a tender documentStructure of a tender document Tender notice/invitation for bidders; Instructions to bidders (ITB); Supply requirement (spécifications techniques) –list of works,

goods and related services, the delivery and completion schedules, technical specifications and drawings describing works, goods and related services to be procured;

Bill of quantity and delivery calendar; plans for contracts of works; Bid forms (bid submission forms, the forms for performance

security, bid security, contract forms, and advance payment security).

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Contents of tender documentContents of tender document

1. Tender notice/Invitation for bidders It should be prepared in Kinyarwanda, or both English and

French for national tender, and both in English and French for international tenders;

The invitation for bidders must have a minimum of the following:

• Title of tender and tender number (reference number);• Name of procuring entity and source of funding;• Description of tender (goods to supply or works to execute,

indicating scope of work to be done) including expected time for delivery;

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Contents of tender document (ctd)Contents of tender document (ctd)• Where and when may the TD may be obtained, its cost,

bank and account number to pay TD cost;• Whether a site visit is obligatory or not, necessary or not.

The date of site visit, time and place of taking off;• Indicate if a bid security is needed, if so how much it will

be (should not exceed 2% of the estimated cost of tender);

• Deadline for bids submission (Place, date and hour);• Place and time of bids opening;• Number of copies to be submitted;• Bid validity Period;• Submission language.

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Contents of tender document (ctd)Contents of tender document (ctd)2. Instructions to bidders (ITB) ITB help bidders to prepare bids. Information to be provided

are:• The purpose of the tender;• Composition of the TD;• Place of execution and deadline of execution;• Documents constituting the bid submission;• Conditions for obtaining the tender document;• Bids validity period;

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Contents of tender document (ctd)Contents of tender document (ctd)• Site visit;• Language of bids;• Currency of bid/ amount of bids (whether taxes are

inclusive or not);• submission deadline of bids ;• Late bids (beyond deadline: to be returned unopened);

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3.Types of technical specification3.Types of technical specification Definition: Specification is a statement of the attributes of a product,

process or service. A well written specification should describe the need accurately. It help to compare technical offers.

E.g. Computer capacity , 25mm diameter, paper of A4 size.

Tender Tender advertisement in Newspaperadvertisement in Newspaper

• The Procuring entity shall bring the tender notice to the attention of any person wishing to bid

• Advertisement in at least one newspaper of nation-wide circulation and on a single - portal website on which are published public tenders (Art 21 Law no 05/2013 of 13/02/2013)

Site VisitSite Visit

• Indication of Place and time (date and hour) for departure;

• Site visit certificate (Who issue them, how?);

Any possible addendumAny possible addendumFrom:

• Any notice by Procuring entity to:

• Evaluation criteria;

• Bill of quantities;

• Administrative clauses, etc.

Bids opening Art 24, Bids opening Art 24, Law No 05/2013 of 13/02/2013)Law No 05/2013 of 13/02/2013)Preliminary stage: Reception and security of bids: ensure that there is secure procedures and facilities

for receipt and safeguarding of bids; Bid registration; Date, time and place; Availability of opening committee (3 TC members minimum). The PE may call upon

some members of its staff to complete the necessary quorum when 3 TC members are not available.

Opening session: One hour after the closing time of bid submission; Initial of original bids opened (mark the paraphs) and signature of the opening report

by opening committee present in opening ceremony; What should be read out?• 1º the name of the bidder and other specific identification information;

• 2º the total price of the bid including any modifications or

• discounts made before the deadline for submitting bids;

• 3º the bid security submitted, where applicable;

• 4º any other information deemed necessary by bidders to be read out and which does not compromise other bidders’ interests (Law n0 05/2013 of 13/02/2013)

N.B : For tenders for Consultancy services, opening sessions are done in two phases (the first one for technical proposals and the second for financial proposals);

No rejection during opening of bids (late bids will not be received). Preparation of opening report by respecting the standard bid opening form.

EVALUATION OF BIDS-1 (G & W)EVALUATION OF BIDS-1 (G & W)

• Done by at least 3/5 of officials nominated members of TC;

• Respect of the Evaluation criteria set in TD;• The evaluation report is signed by all members of the

evaluation committee;• Respect the standard evaluation form;

EVALUATION OF BIDS-3EVALUATION OF BIDS-3

• Evaluation report should have been submitted to the Chief Budget Manager in the period not exceeding 21 days after bid opening;

• Evaluation steps: administrative, Technical and financial for tender for works, supplies and other services. The successful bidder shall be the lowest responsive bidder;

Administrative evaluation: Bid form stamped and signed by authorized person (who is on

trading license if not by someone who has attorney of signature); A validity bid security (if required); Bid security /guarantee; Trade license;

A valid tax clearance certificate (RRA); valid social security fund certificate (RSSB); Payment slip for TD; Trading license (Registre de commerce); Site visit certificate (if required); Credit line (if required); bills of quantities.

Technical evaluation criteria: References (minimum required number of similar technical references

done); Qualified and experienced key personnel (signed CV of the key

personnel required in the TD, demonstrating the qualification and experience, academic certificates for proofs of qualification);

Minimum required equipment; Methodology ; Financial capacity (might be required).

Financial evaluation: Correction of arithmetic errors (Figures/Words and Unit

rate/total);

Comparison of prices (compare bids in single currency);N.B: For consultancy services tenders, the evaluation is conducted

in two phases (Technical evaluation and financial evaluation);

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REJECTION OF ALL BIDS REJECTION OF ALL BIDS art 27, law n0 5/2013 of 13/02/2013art 27, law n0 5/2013 of 13/02/2013

Cancellation of procurement proceedings (Art 28 Law no 05/2013

•Where the procurement proceedings have been overtaken by events and are no longer required;

•if prices offered are higher than the available budget;

Contract Management1Contract Management1The successes of the contract management depend

mainly on good preparation of the tender document, contract and the good procurement;

MISTAKES COMMITTED IN PUBLIC MISTAKES COMMITTED IN PUBLIC PROCUREMENT PROCEDURESPROCUREMENT PROCEDURES

• Tenders awarded without involvement of ITC;• More awarded tenders than those planned;• Tenders awarded without TD and/or without clear evaluation

criteria;• Tenders that do not respect prescribed period for advertisement

(insufficient time for bids preparation);• Tenders that have no opening and/ or evaluation report;• Evaluation not based on TD evaluation criteria;

MISTAKES COMMITTED IN PUBLIC MISTAKES COMMITTED IN PUBLIC PROCUREMENT PROCEDURESPROCUREMENT PROCEDURES

• Notification to successful and unsuccessful bidder but without respecting the time allowed for appeal;

• Payment of advances excess of 20% allowed by procurement law

• Executed tender that do not have contract proof;• Performance Securities provided expired before completion of

contracted works, services and / or goods;• Delays in completion of contracts;• Payment without applying the penalties for delayed contract

execution and taxes;

MISTAKES COMMITTED IN PUBLIC MISTAKES COMMITTED IN PUBLIC PROCUREMENT PROCEDURESPROCUREMENT PROCEDURES

• Payment made for works, goods and services not executed, delivered or prested;

• payments Delay and/ or uncontrolled payments;• Poor Filing system (tenders awarded without sufficient support

documents).

ChallengesChallenges

• Need of quality at lower cost;

• Friendship created between contractors and public officials involved in contract management during the contact implementation;

• Bad habit of considering those involved in tenders as rich by those who are not involved in tenders.

Filing of Procurement Documents Filing of Procurement Documents

(Law no 05/2013 of13/02/2013)(Law no 05/2013 of13/02/2013)

• Procuring Entity should make sure that all procurement documents are well filed

• The procuring entity shall keep documentation of the procurement proceedings for a minimum period of ten(10) years starting from the end of the procurement contract. The documentation shall be containing the following information:

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• Bidding document;

• Bids;

• Bids opening and evaluation reports;

• Tender award notification;

• A copy of the contract concluded between the procuring entity and the successful bidder;

• Certificate of completion;

• Any correspondence between the procuring entity and the bidder;

• Any other useful information, instructions and reports that are related to the tender.

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NoNo InstrumentInstrument Important Issues Addressed by the Important Issues Addressed by the

Instrument Instrument 11 Organic Law Organic Law N°

01/2012/OL of 02/05/2012 instituting the penal code (Art 624 – 634)

Art 625Art 625: : Spending more public funds than the amount budgetedArticle 628: Penalties for offences related to the violation of the Law on public tenders :Shall be liable to a term of imprisonment of six (6) months to two (2) years and a fine of five hundred thousand (500,000) to two million (2,000,000) Article 629: Awarding a tender to an unqualified bidder:Shall be liable to a term of imprisonment of six (6) months to two (2) years and a fine of five hundred thousand (500,000) to two million (2,000,000)

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NoNo InstrumentInstrument Important IssuesImportant Issues11 Organic Law Organic Law N°

01/2012/OL of 02/05/2012 instituting the penal code (Art 624 – 634)

Article 632: Awarding a tender without open competitive bidding Any person who awards a tender without open competitive bidding in disregard of the provisions of the Law of public procurements shall be liable to a term of imprisonment of six (6) months to two (2) years and a fine of one million (1,000,000) to five million (5,000,000) Rwandan francs or one of these penalties. A term imprisonment of three (3) years to five (5) years and a fine of one million (1,000,000) to five million (5,000,000) Rwandan francs for a superior

CONTACTSCONTACTS

PROCUREMENT OFFICER

1. MFASHINGABO Ignace

Tel:0788657297

Email: ngabo2011@gmail.com

2. UWACU Angelique

Tel:0789355454

Email: nunuwacu@yahoo.fr

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