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NETCARE PREFERENTIAL PROCUREMENT POLICY

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					                   NETCARE GROUP TENDERING POLICY


INDEX

1.       Purpose
2.       Scope
3.       Netcares’ Obligations
4.       Specifications and Standards
5.       Tendering Variations
6.       Selection of Suppliers
7.       Tendering Information and Lead Times
8.       Tendering Criteria and Evaluation
9.       Submission, Receipt and Opening of Tenders
10.      Tender Samples
11.      Contract Award
12.      Tender Negotiation
13.      Policy Maintenance

ANNEXURE

Annexure A                  Pair Wise Comparison Tool

DEFINITIONS

Black Supplier              A supplier classified as a Black supplier according
                            to the Netcare Preferential Procurement Policy.

Contracts                   Individual contracts/agreements or purchase
                            orders between Netcare and a supplier, contractor
                            or service provider.

Netcare                     Netcare Limited inclusive of all its’ subsidiaries and
                            associates

Supply                      The supply of goods and services

Tender Committee            Selected Netcare employees who are directly
                            affected by the goods or materials going to tender,
                            or whom can offer valuable input with regards to
                            the commodity. As a minimum the Tender
                            Committee will always have one procurement
                            disciplinary representative.

Tenderer                    A supplier who submits a tender, offer, proposal,
                            competitive bid or any other similar mechanism of
                            tendering notice to supply goods or services to
                            Netcare.
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                             Netcare Group Tendering Policy
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ABBREVIATIONS

CFO                        Chief Financial Officer
GPM                        Group Procurement Manager


1.     PURPOSE

 1.1     The Netcare Group Tendering Policy is intended to provide assurance
         that all tenders are issued and evaluated according to best practice
         and within good corporate governance.


2.     SCOPE

 2.1    This policy shall apply to all divisions within Netcare.
 2.2    Tenders issued on behalf of more than one Netcare Division are to be
        issued by the Group Procurement Department.
 2.3    The tendering process is to be followed in the following instances:
   2.3.1 The value of the business exceeds R100 000 per annum.
   2.3.2 The existing supplier fails to meet Netcares’ expectations.
   2.3.3 The nature of the commodity requires a tender to be issued.
   2.3.4 Netcare wishes to obtain market/supply information (Request for
          Information).


3.     NETCARES’ OBLIGATIONS

 3.1    When issuing a tender for the supply of goods and/or services,
        Netcare is required to make provision for the protection of
        confidential information. This may result in either or both parties
        being required to sign confidentiality agreements prior to being
        issued the tender document.
 3.2    Netcare may at any time elect to give preference to:
   3.2.1 Domestic over foreign offers
   3.2.2 Offers submitted by Small, Medium and Micro Enterprises (SMME’s)
          over larger businesses
   3.2.3 Offers submitted by Black suppliers.
 3.3    Where preferences are given, management is responsible for
        determining the extent of such preferences granted, but shall ensure
        that the overall objectives of the organisation are supported.
 3.4    Netcare must not provide any supplier with information that will give
        them unfair advantage or hinder competition.
 3.5    The offer of any tenderer who attempts to unduly or unethically
        influence the award of business must be rejected, and the CFO and


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         Internal Audit Department notified thereof. Such supplier may be
         treated as a “prohibited” supplier in the future.


4.     SPECIFICATIONS AND STANDARDS

 4.1     Where necessary, Netcare must include specifications in the enquiry
         documents.
 4.2     Specifications set out by Netcare should wherever possible describe
         the performance rather than design or descriptive characteristics and
         should refer to recognised national or international standards or
         codes where such reference is appropriate or useful.
 4.3     Specifications which mention trade names or particular processes of
         manufacture must not be used unless management can demonstrate
         that these are the only acceptable goods. However, where
         mentioning trade names, trade marks or origin is the only known way
         of accurately describing the goods required, the words “or
         equivalent” must be included in the document.
 4.4     Netcare should not seek or accept advice from a potential supplier
         that may lead to Netcare drawing up specifications which may
         prevent other suppliers from submitting tenders.
 4.5     In the event of specifications being prepared by external parties e.g.
         consultants, approval of such specification by Netcare is mandatory.


5.      TENDERING VARIATIONS

 5.1 The tendering procedures which are to be followed by Netcare are:
   5.1.1 open tenders
   5.1.2 limited tenders (also referred to as competitive bids)
   5.1.3 directly negotiated contracts.
 5.2 Open tendering allows an interested supplier to tender and results
      from a publicly announced invitation to tender.
 5.3 Limited tendering allows only a limited number of tenderers chosen at
      Netcares’ discretion to tender and the selection of suppliers will usually
      be made up from the list of Accredited Suppliers (Refer Netcare
      Supplier Accreditation Policy)
 5.4 Directly negotiated contracts should only be used under exceptional or
      special circumstances and entails choosing one (or possibly more than
      one) supplier and negotiating with them without using the tendering
      mechanism. The selection of such suppliers must be made from the list
      of Accredited Netcare Suppliers. The conditions under which Netcare
      may negotiate without the tendering procedure are:
   5.4.1 the products or services can only be supplied by a sole supplier and
         no reasonable alternative or substitute exists for example for
         reasons connected with patent or copyright, or in the absence of
         competition;


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   5.4.2 when events unforeseen by Netcare make it extremely urgent to
         obtain certain products or services and these products or services
         could not be obtained in time by means of open or limited tender
         procedures.
 5.5 A buyer may not negotiate without tendering to avoid competition or
      to discriminate among suppliers to give unwarranted protection to
      certain suppliers.


6.    SUPPLIER SELECTION

 6.1 In the event of Netcare electing to employ open tendering procedures,
      it must be ensured that such intentions are publicly announced and
      that such notice must include the information set out in point 7.1.
 6.2 In order to ensure effective competition where limited tendering
      procedures are used, Netcare will invite tenders from as many
      suppliers as efficient operation of Netcares’ procurement system
      allows.
 6.3 Where Netcare elects to use direct negotiations, Netcare must make
      the information in point 7.1 available as may be applicable.
 6.4 Netcare must select suppliers who will be invited to tender in the
      following order of preference:
   6.4.1 Netcare Accredited suppliers
   6.4.2 Netcare Listed suppliers
   6.4.3 non-accredited and non-listed suppliers.
 6.5 Non-accredited suppliers may be required to be accredited prior to
      commencement of supply in terms of Netcare’s Supplier Accreditation
      Policy (Refer Netcare Supplier Accreditation Policy).
 6.6 A group of suppliers may submit a joint tender. The group need not
      convert to a legal entity to submit a tender, although this may become
      a requirement once it is required to place the order if it is materially
      necessary for the performance of the contract.
 6.7 All members of the Tender Committee are required to declare if any,
      interest they may have in any suppliers invited to tender, or in the case
      of an open tender, any suppliers who have submitted tenders. The
      Tender Committee will report such declarations to the CFO whom will
      advise whether such member is to remain on the Tender Committee or
      not.


7.    TENDERING INFORMATION AND LEAD TIMES

 7.1 The following information must be made available to prospective
      tenderers:
   7.1.1 the Netcare Standard Terms and Conditions of Purchase
   7.1.2 the nature of goods/services intended for procurement
   7.1.3 the volume/quantity thereof
   7.1.4 the timing of required deliveries
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   7.1.5 the terms and conditions of contract that will apply
   7.1.6 the terms of payment
   7.1.7 the relevant warranties and guarantees
   7.1.8 the product “evergreen” policy
   7.1.9 the availability and pricing of spares and replacements
   7.1.10 instructions to the prospective tenderer indicating which parts of
          the contract may be contracted to third parties if so required
   7.1.11 the start and completion date for delivery of goods and/or services
   7.1.12 the address and closing date and time
   7.1.13 any economic and technical requirements, financial guarantees and
          other information required
 7.2 Netcare will prescribe time limits in its notice or in the enquiry
      documents which are reasonable for tenderers to reply within.
      Sufficient time must be given to suppliers to prepare and submit
      tenders before the tender closing date and time. In deciding on a time
      limit, Netcare must take several factors into account such as:
      complexity of the product or service, potential use of sub-contractors,
      and the time a tender may take in the mail.
 7.3 Netcare together with prospective suppliers may agree to any of the
      following methods for receipt of tender documents:
   7.3.1 Registered mail
   7.3.2 Physical collection at Netcare premises
   7.3.3 Issued by e-mail
   7.3.4 Issued by fax
   7.3.5 Issued via an on-line tender
 7.4 Netcare must reply promptly to any reasonable request for relevant
      information or clarification concerning an enquiry, on condition that
      such information does not give that supplier an advantage over its
      competitors. Where significant information is given to any supplier, the
      same information will be provided to all other prospective tenderers,
      providing enough time to include their response in their tenders.
 7.5 Any meetings held between Netcare and tenderers must include a
      minimum of two Tender Committee representatives at all times.
 7.6 It is preferable that prospective tenderers are invited to a briefing
      session to which all prospective tenderers are invited prior to the
      tender document being issued.


8.    TENDER CRITERIA AND EVALUATION

 8.1 Netcare shall ensure that it awards an order or contract to a supplier
     on the basis of it being the most advantageous tender in terms of the
     requirements of Netcare. In order to determine which is most
     advantageous a Pair Wise comparison should be completed taking the
     criteria set out in the tender document into account. (Refer Annexure
     A)
 8.2 Depending on the nature of the goods or services to be procured,
     Netcare may elect to state in the enquiry/tender documents the main
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     criteria that will be applied during the tender evaluation and award
     processes including the weightings allocated to the respective criteria
     as calculated by the Pair Wise Comparison. If this option is exercised,
     then these criteria should preferably be stated in order of descending
     importance.
 8.3 Tenders may not be evaluated prior to the Pair Wise Comparison
     criteria weightings being agreed and approved by the Tender
     Committee.
 8.4 When evaluating tenders and awarding points to tenderers, attendance
     of all Tender Committee members is required.
 8.5 Suppliers may submit alternative offers. In such instances, the main
     offer must be clearly marked “Main Offer” and the alternative offer
     must be clearly marked “Alternative Offer”. Netcare will only take
     alternative offers into consideration if such alternative offer meets
     Netcare’s minimum specification given in the enquiry and tender
     documents. Where Netcare will not consider alternatives, this must be
     stated in the enquiry and tender documents.


9.    SUBMISSION, RECEIPT AND OPENING OF TENDERS

 9.1 Tenders must be in writing, and can be submitted by means of the
     means listed in 7.3 unless stipulated otherwise in the tender document.
 9.2 Tenders must include all information that Netcare needs to evaluate
     the tender, especially the price proposed by the tenderer, and a
     statement that the tenderer agrees to all the terms, conditions and
     provisions of the invitation to tender or enquiry and tender documents
     supplied by Netcare.
 9.3 If Netcare gives a supplier the opportunity to correct an error in a
     tender after the tenders have been opened but before the contract is
     awarded, then this correction must not give the tenderer an unfair
     advantage over the other tenderers. Typical errors that Netcare may
     allow for correction are obvious calculation errors (where the base data
     remains the same), contact details or addresses etc. No amendments
     to pricing will be accepted and should a supplier have made a “gross
     error” in their pricing schedules, they are required to withdraw their
     offers and such offer will receive no further consideration by Netcare.
 9.4 Netcare will not under any circumstances accept any tenders that
     arrive after the closing date or time. Depending on the manner in
     which the tender was issued to Netcare, either the tenderer or the
     procurement functionary must complete a Tender Delivery Schedule
     which will record the date and time the tender was received. Late
     tenders will be returned unprocessed and preferably unopened. Late
     tenders are to be noted as such by the relevant procurement
     functionary.
 9.5 Netcare will receive and open tenders under conditions that guarantee
     the regularity of the opening. All pages containing price schedules and
     related information must be date stamped with the closing date of the
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       tender in the presence of at least two Tender Committee members.
       The aforementioned members must both countersign each page that
       has been date stamped.


10.    TENDER SAMPLES

 10.1 Netcare reserves the right to retain samples which the tenderer is
      required to furnish in compliance with the tender conditions.
 10.2 Netcare will not pay for samples submitted by the tenderer and may
      retain such for the purpose of determining quality and workmanship of
      the goods.
 10.3 Suppliers failing to submit samples when explicitly instructed to do so
      as per the tender document, may at the discretion of Netcare be
      disqualified from the tender.
 10.4 Netcare is not liable for samples supplied by tenderers on their own
      account. Return of such samples will be at the expense and risk of the
      supplier.


11.    CONTRACT AWARD

11.1   A tender will not be considered for contract award unless it conforms
       to the requirements asked for by the notice or enquiry and tender
       documents.
11.2 If Netcare receives a tender that is abnormally lower than all the other
       tenders, Netcare must first request the tenderer to prove that it can
       fulfil all the terms of the contract. Failing this, the tender will be
       rejected.
11.3 In certain instances, Netcare may decide not to award a contract at all.
       Normally Netcare will award the contract to a tenderer who proves to
       be fully capable of handling the contract, and whose tender for
       products or services is economically the most advantageous to
       Netcare.
11.4 Netcare must notify unsuccessful tenderers within 5 working days after
       the successful tenderer has been notified.
11.5 Suppliers may from time to time enquire as to the reasons for not
       being awarded a contract in response to the submission of their
       tender. It is therefore required that the Tender Committee keeps a full
       audit trial of decisions taken in awarding any tender. Thus the
       following must be explained to any supplier which queries the outcome
       of a tender:
11.5.1 an explanation of Netcares’ procurement procedures and practices
       (copies of this policy may be made available to suppliers in the original
       set of tender documents issued to suppliers).
11.5.2 reasons why a supplier was not selected to participate in particular
       enquiry or tender


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11.5.3 reasons why its tender was not selected, the characteristics and
       relative advantages of the successful tender, and the name of the
       successful tender.
This information is often sensitive and shall be dealt with in a manner that
does not compromise Netcare or gives the supplier an unfair advantage in the
future tenders.
 11.6 Suppliers who have been unsuccessful will not be given a second
      opportunity to submit new information in response to the reasons
      provided by Netcare for them being unsuccessful.
 11.7 Disclosure of a competitors’ pricing details to a supplier requesting
      clarification is a disciplinary offence.
 11.8 Netcare may withhold information contained in paragraph 10.5 under
      certain circumstances i.e.:
  11.8.1 if it will impede law enforcement
  11.8.2 if it will be contrary to the public interest
  11.8.3 if it will harm the legitimate interest of Netcare or other suppliers
          or;
  11.8.4 if it might hinder fair competition between suppliers.


12.   TENDER NEGOTIATION

 12.1 Netcare may elect to negotiate after tendering procedures have been
      followed in the following circumstances:
  12.1.1 no tenders are received in response to open or limited tender
          procedures
  12.1.2 Netcare has reason to believe that the submitted tenders are
          collusive (tenderers work together to keep tender prices high)
  12.1.3 Netcare has indicated in its procurement procedures or in the
          invitation to tender that Netcare will negotiate with tenderers after
          submission of tenders
  12.1.4 Netcare has evaluated all tenders received and there is not one
          obviously more advantageous tender
  12.1.5 Netcares’ price estimation is substantially lower than the lowest
          tender.
 12.2 The primary reasons for Netcare negotiating with suppliers are:
  12.2.1 to ensure the most advantageous contract is awarded to a supplier
  12.2.2 to identify the strengths and weaknesses in the tenders submitted
          in order to assist in making a choice.
 12.3 Netcare will not discriminate between suppliers during negotiations.
      The following guidelines will apply to every negotiation where tenders
      have been received:
  12.3.1 Netcare will reject tenders only if they do not meet the criteria set
          out in the notices and enquiry and tender documents
  12.3.2 all explanations of the criteria and technical or other requirements
          or changes to these will be communicated to all other tenderers
  12.3.3 all tenderers may be given the opportunity to submit new or revised
          submissions after negotiations have been entered into
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  12.3.4 at the end of the negotiations, all participants who remain in the
          negotiations may be given the opportunity to submit final tenders
          by a common closing date and time.
 12.4 In the case when contracts are awarded as a result of the negotiations,
      such contract must not differ substantially from what was requested in
      the original enquiry or tender documents. Where there is a substantial
      change of scope, the tendering procedures should be used in
      preference to negotiations.


13.   POLICY MAINTENANCE

 13.1 The GPM is responsible for the maintaining, amending, distributing and
      communicating of the above policy. It can be expected that this policy
      will be amended from time to time to accommodate improvements and
      suggestions.




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                                                                                                                                                           Annexure A
PAIR WISE COMPARISON
Enter e.g. :-"A3"                                                                               Note: No "Score" reflected
(Caps./ no                                                                                      without a "Description" on
spaces)                                                                                         a line.
                         NUMERICAL            EVALUATION                                          CODE           DESCRIPTION            SCORE    RANK    WEIGHTING
A   A2   A1   D1   E1    A1   A3   A2    A1                                                          A         Infrastructure            10          3      91%

    B    C2   D2   E1    F2   B3   B2    I2                                                          B         Empowerment                5          7      45%

         C    C1   E1    C1   C3   C2    I2                                                          C         Account Implementation     9          5      82%

              D    E1    D2   D3   D2    D1                                                          D         Account Management        11          1     100%

                    E    E1   E3   E2    E1                                                          E         Systems & Automation      11          1     100%

                         F    F3   F2    F1                                                          F         Service & Quality          8          6      73%

                              G    H3    I3                                                          G         Vision & Mission           0          9      0%

                                    H    I3                                                          H         Value Added                3          8      27%

                                         I                                                           I         Financial                 10          3      91%

                                              J                                                      J
                                                  K                                                  K
                                                      L                                              L
                                                          M                                          M
                                                              N                                      N
    Weight
    factors                                                       O                                  O
                                                                      P                              P
                   Minor difference in
          1        importance                                                Q                       Q
                   Medium difference
          2        in importance                                                   R                 R
                   Major difference in
          3        importance                                                           S            S
                                                                                                           T        T
                                                                                                                                                67



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                                                                          Netcare Group Tendering Policy
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