(Ministry of Finance & Economic Development -  July, 2005) 

 1.  Issuing Authority  

This directive is issued by the Minister of Finance and Economic Development (MoFED) pursuant to Article 55 (2) of the Determining Procedures of Public Procurement and Establishing its Supervisory Agency Proclamation No. 430/2005 and Article 19 of the definition of Powers and Duties of the Executive Organs of the Federal Democratic Republic of Ethiopia Proclamation No. 4/95 (as amended). 

PART I  GENERAL

2.  Short Title 

This directive may be cited as the '' Federal, Public Government Procurement Directive''. 

3.  Definition 

Unless the context shall otherwise require, words and terms in this directive shall have the respective meanings given to them in the determining procedures of Public Procurement and establishing its Supervisory Agency Proclamation no. 430/2005.  In addition: - 

1)     '' Specification '' shall mean a document indicating, the quality, type and standard with which the required goods and services should comply.

2)     '' Proclamation '' shall mean Determining Procedures of Public Procurement and Establishing its Supervisory Agency Proclamation No. 430/2005. 

4.   Scope of application

      This Directive shall apply to all Federal Public Procurements, to which the Proclamation is applicable. 

5.  Principles

1.      All Procurement Authorities and the execution thereof must achieve the following objectives. 

1. Maximise value for money from Procurement, i.e. economy, efficiency and effectiveness. However, the above should be not limited to individual decisions but should also include elaborate Procurement plan;

2. No candidate shall be discriminated because of nationality or other reasons, which are not related to the evaluation criteria except in accordance with the rule of preference provided for in the proclamation;

3. Any criteria applied in making procurement decisions and decision taken on each procurement must be made transparent to all concerned parties; 

4. The accountability arising from decisions and actions taken must be strict.

2.      Subject to the preference margin provided for in the Proclamation priority shall be given to domestically manufactured goods and domestic contractors where the quality and price of the goods or works are similar.

3.      Where the Procurement is financed out of the proceeds of the foreign loan or grant, the procurement will be made in accordance with the loan or grant agreement.

PART II

METHODS OF PROCUREMENT

6.  Approved Methods of Procurement 

    1) The following six methods of procurement are approved:-

a)         open  bidding

b)         two-stage  bidding

c)          request for proposals

d)         restricted bidding

e)         request for quotations; and

f)            direct procurement 

2) If pursuant to Article 25(2) of the Proclamation procuring entity uses a method of procurement other than open bidding, shall record a statement of the grounds and circumstances on which it relied to justify the use of that method. 

7.  Conditions for use of restricted bidding  

 The total contract value of Procurement made by restricted bidding, in accordance with Article 26 (2) of the proclamation shall not exceed the following:  

a)         for works Birr 1,000,000.00

b)         for goods and services Birr 250,000.00 

8.  Conditions for use of request for quotation 

1.                Procuring entities shall plan procurement in advance in order to achieve the benefits of bulk purchasing. However, if there is a pressing operational requirement for goods or services which for unforeseen reasons could not be included in the original Procurement Plan, and the values of the contract are likely to be within the limits below, the procuring entity shall request quotations, if possible from at least three candidates taken from the suppliers list and may procure the goods and services in accordance with the following procedures. 

a)     if the contract value is below Birr 5,000 the Head of Procuring Entity may approve the procurement without reference to the Tender Committee.

b)    if the contract value is between Birr 5,001-40,000,  the head of the  procuring entity may approve the recommendations of the Tender Committee;

2.                  The Procuring entity shall not divide its procurement in to separate contracts for the purpose of invoking this Article   

9.  Conditions for use of Direct  Procurement  

1)     Procuring entities may engage in Direct Procurement when the conditions laid down under Article 27 are fulfilled.

2)     Without prejudice to sub-article 1 of this Article Direct Procurement Method may be used only in one of the following conditions. 

a)     when in accordance with sub-article 1 (d) and (e) of Article 27, it is believed that advantage could be obtained, if additional goods, consultancy services and works of a similar kind and price are procured from the original supplier.  However, such order only be made in cases where the contract price of the additional goods, consultancy services and works doesn't exceed 25% of the valve of the original procurement and the additional order is made within the validity period of the original contract or within six months from the date such contract has terminated;

b)     when it is ascertained that the spare parts required for the equipments used by the procuring entity are supplied only by the original supplier.

c)     where it is technically justified that goods or services procured from a different supplier will not be compatible with existing equipment or services of the procuring entity. 

10.  Special conditions  

1)     Notwithstanding the provisions of this directive the procuring entity may carry out procurement that the value of which doesn't exceed Birr 100.00 (one hundred Birr) from any supplier, by means of direct procurement, if due to unforeseeable circumstances such procurements were not included in the procurement plan. However, the total contract price of such procurement within a fiscal year shall not exceed Birr 4,000.00 (four thousand Birr). 

2)     If justified that the goods or services cannot be obtained from registered suppliers or because of unforeseeable circumstances occurred during travel, the procuring entity may procure goods or services the value of which doesn't exceed Birr 500.00 (five hundred Birr) from any supplier.  However, the total value of such procurement within a fiscal year shall not exceed Birr 6,000.00 (six thousand Birr).

PART III

ESSENTIAL STEPS TAKEN IN APPLYING APPROVED

METHODS OF PROCUREMENT

11.  Open Bidding  

        When using open Bidding Procuring entities shall use the standard bidding documents prepared by the Agency and follow the steps listed hereunder.

11.1      Invitations to Bid 

a)        Procuring entities shall ensure that invitations to bid are publicized in accordance with Article 32 (1) of this directive for sufficient duration and location.  The invitation to bid must be publicized at list once in a newspaper that has wide circulation.

b)        Publicity of the invitation to bid shall at list include the following information;

1)      the name and address of the procuring entity publicizing the invitation to  bid;

2)      a statement that the procuring entity reserves the right to reject any or all bids;

3)      the nature, quantity and place of delivery of the goods to be supplied,  the nature and the site  of the construction to be effected, or the nature of the services and the location where they are to be rendered;

4)      a declaration, which may not  be altered, that suppliers or contractors may participate in the procurement proceedings regardless of nationality, or a declaration that participation is limited to a certain nationality;

5)      the means and location of obtaining the bid documents;

6)      the price  for the bid documents and the amount of the bid security;

7)      the currency and means of payment for the bid documents;

8)      the language or languages in which the bid documents are prepared;

9)      the place and deadline for the submission of the bids. 

11.2      Invitation for Pre-qualification of Bidders  

Invitation for Pre-qualification of candidate for the bid may vary depending on the nature of the procurement; however it must include the information listed under Article 11 (1) (b) of this directive. 

11.3      Bid Documents  

For all bids, procuring entities shall prepare bid documents that include the following:-

1)      instruction to bidders

2)      specifications

3)      bid proposal including the price schedule; and

4)      terms and conditions of contract. 

      11.4   Instructions to Bidders

Instructions to bidders may vary depending on the type of procurement contract.  However, every instruction shall include the following:- 

a)     in case of domestic bidders Certificate confirming that they are registered in the suppliers list as required.

b)     for domestic bidders a Tax Clearance Certificate  issued by the tax authority and appropriate renewed business license;

c)      in case of domestic bidders submitting bids for a contract value  exceeding Birr 100,000 must present Value Added Tax Registration Certificate;

d)     in case of foreign bidders, bidders must as appropriate submit shall submit business organization Registration Certificate or Trade License issued by the country of establishment;

e)     signed statement of undertaking that the bidder will observe Ethiopian laws against Fraud and Corruption (including giving and accepting bribe).

f)        statement indicating  that bidders  attempting  to influence the bid shall be disqualified from the bids, prohibited from participating in all  future Public Contracts and the bid security deposited  shall be forfeited;

g)     a statement indicating that the methodology of evaluating all bids, the criteria for that evaluation and the weight each criterion shall have;

h)      an indication that the bidders shall include in their offer the type of item, the name of the producer, country of origin, model number and year of manufacture etc.;

i)        if bidders are required to submit samples, the place where the samples are to be delivered  and if appropriate the time when and the place where the samples will be openly shown, as well as an indication that samples are to be returned to the unsuccessful  bidders or not;

j)        a statement  that the bidders shall not alter or amend and that they shall not withdraw their bid after the bid opening;

k)      an indication of bid and performance securities required and the validity periods of the same;

l)        the date and time of the closing deadline for bids and the opening of those bids;

m)   the validity date of the bid and the time and place of delivery.

n)      the requirement that bidders shall put their name, signatures and addresses in offers;

o)     an indication that the procuring entity has the right to decrease or increase the quantity of the goods or services up to 20% (twenty percent) when awarding the contract;

p)     an indication whether the bids are to be submitted in single or double  envelopes, the requirement that the original and copies of the bid document shall be uniform, the number of copies, that all documents have to be signed by authorized persons and the seal of the organization shall be affixed, the manner in which supporting documents (Certificates of Registration in the Suppliers List, Tax Clearance, Business license etc..) are to be submitted; the place where the tender box is kept;

q)     an indication that bidders can request the procuring entity to give clarifications or make amendments on the bid documents and that such request shall be made; for national competitive bidding before 10 days of the closing deadline for bids and for international competitive bidding before 21 days of the closing deadline for bids;

r)       if advance payment is to be made in accordance with Article 28 (1) of this directive, the amount of such payment;

s)      an indication that if bidders are aggrieved by the decisions rendered during the procurement process have the right of complaints in accordance with Article 52 and 53 of the Proclamation as well as Article 33 of this directive;

t)        an indication that the procuring entity reserves the right to reject any or all bids. 

    11.5 Specifications  

a)  An essential step in procurement is to draw up specification, which incorporate clear statement of the users requirements.  Such specifications are especially important for the procurement of high cost or complex goods or services.

The preparation of the specifications, which is also referred to as the functional specification shall be based on the user requirement and it shall specify the desired functional attributes relating to required technical capabilities, operating characteristics and performance standards. 

b)  The user requirement (functional specification) is important to obtain the following advantages among others:- 

1)  it helps to ensure that fitness for purpose and value for money are considered;

2)  it provides the basis for the details functional and technical specification in the invitation to bid and for subsequent evaluation of bids when they are received;

3)  it will be an integral part of the contract and will provide the benchmark  against which contract performance by the successful bidder is evaluated. 

c)  Specifications should be drawn by the department that has identified the need for the goods or services in question.  For the procurement of high cost and/or complex goods or services, procuring entities shall also seek expert advice and assistance in preparing the specification.

d)  Specifications shall not prescribe a particular product, brand or service provider.  The bid documentation shall normally include a statement to the effect that the specifications are not limited to a particular brand, manufacturer or service provider.  However, where the procurement is for spare parts for a particular item of proprietary plant or equipment, or where there is known to be only one manufacturer or provider of the goods or services in question the name of the manufacturer or service provider and the term ''or    similar '' may be incorporated in the specifications.

e)  when preparing specifications, procuring entities shall incorporate requirement of the Ethiopian Quality and Standard Authority relating to standardization for the particular category of goods or services in question.

f)    Specifications must form part of the bid documentation.  They shall be sufficiently detailed and comprehensive to provide a complete and exact basis for the formulation of bids by those suppliers wishing to participate in the bid.

g)  Where it is difficult or impossible to prepare detailed specifications, procuring entities may furnish, or cause to be furnished samples of the required goods or services.  In such cases, the following shall be observed:- 

1)  the sample shall not be restricted to one product or brand.  It shall be made clear to bidders that they may submit offers similar to the samples supplied;

2)  samples must be presented prior to bid opening.

3)  bidders may supply evidence of their sample where they cannot supply the sample item itself. This evidence may include photographs or a piece of the sample item;

4)  bidders shall not be paid compensation for samples lost or destroyed in the examination process because of their nature.  However, samples that are not lost or destroyed shall be returned to unsuccessful bidders.  If samples are not reclaimed by unsuccessful bidders within 6 months, they shall be forfeited to the government. 

11.6   Bid Proposals and Price Schedules  

 Procuring entities shall include in the bid documents bid proposal form for completion by the bidders.  Procuring entities may also include a price schedule in the bid documents. 

11.7     Terms and Conditions of Contracts  

1)         Procuring entities shall include in the bid documents the general and special conditions of contract which are an integral part of the Standard Bidding Documents and issue the same to all bidders.

2)         No modification shall be made to general conditions of contract, which is part of the Standard Bidding Documents.  However, modifications may be made to the draft contract, which embodies special conditions.

3)         Procuring entities and the supplier shall singe a contract, which includes General conditions of Contract and the agreed special conditions of contract.

4)         Unless a contract has been signed between the procuring entity and the supplier the mere issuance of letter of award doesn't constitute a contract.

5)         The contract to be signed between the procuring entity and the supplier shall contain a provision stipulating the following action to be taken, if the supplier failed to deliver the goods and services or to complete the works on the date specified in the contract:- 

a)     shall pay a penalty of 0.1% or 1/1000 of the value of the undelivered item for each day of delay;

b)     the procuring entity shall have the right to terminate the contract if the penalty to be calculated exceeds 10% of the contract price;

c)      if the delay in performing the contract affects its activities the procuring entity may terminate the contract giving advance notice, without any obligation to wait until the penalty reaches 10% of the value of the contract; 

               6) Notwithstanding the provisions of this article no written contract is required for procurements carried out in accordance with Article 45 (2) of the proclamation and Article 10 of this directive.

                   7)   For procurements made by means of Request for Quotations as the price  offered (proforma) submitted by the supplier and the purchase order of the procuring entity constitute a contract, hence  additional contract not  required. 

11.8      Modifications to bid documents  

Any alteration to the content of bid document shall at the same time be communicated to all candidates who purchased the bid documents in the form of an amendment. 

11.9      Bid Opening 

1)     Bids shall be opened in public at the time and place stated in the invitation to bid.  Bids shall be opened at the closing date of the bid.

The bid:-

a)     shall be opened in the presence of the bidders or their authorised representative.  However, the opening of the bid shall not be affected due to the absence of the bidders on their own will.

b)     members of the Bid Committee and if possible Internal Audit, shall attend the bid opening. 

2)     The Chairman of the Bid Committee shall open each bid and read out the name of the bidder, the bid price for the contract and any salient points.  The minutes of the bid opening shall be recorded.  Such minutes shall contain the names of the bidders, their bid price and any other salient points.  Members of the Bid Committee shall sign the minutes and the original bid document.  Bidders present during the bid opening shall sign the attendance sheet. 

11.10 Disqualifying Bidders 

1. The procuring entity may disqualify any bidder that commits the following offences:- 

a)     fails to observe; the laws of the country, especially the provisions of Determining Procedures of Public Procurement and Establishing its Supervisory Agency Proclamation; the Financial Administration Proclamation and Regulations or the requirements stated in the bid documents;

b)     fails to fulfill any obligations he has undertaken in previous bids;

c)      fails to deposit the required bid bond or performance bond;

d)     offers or gives gratitude to any official or employee with a view to securing favourable treatment or to win the bid, if proven beyond all reasonable doubt;

e)     commits any fraudulent act in respect of the bid document, is proven beyond all reasonable doubt. 

2.  To insure the implementation of the provisions of Article 7 (1), procuring entities must maintain evidence showing that the execution of each contract. 

11.11 Examination of Bids     

1)     Subject to number 3 below, the procuring entity may regard a bid as responsive only if it conforms to all requirements set forth in the bid solicitation documents.

2)     Notwithstanding the provisions of number 1 above, the procuring entity shall correct purely arithmetical errors that are discovered

during the examination of bids.  The procuring entity shall give prompt notice of any such correction to the supplier that submitted the bid.

3)     The procuring entity may regard a bid as responsive even if it contains minor deviations that do not materially alter or depart from the characteristics, terms, conditions and other requirements in the solicitation documents or it contains errors or oversights that can be corrected without touching the substance of the bid.  However, any deviation shall be quantified to the extent possible and taken account of in the evaluation and comparison of bids.

4)     The procuring entity shall not accept bidders that fail to meet the following:-  

a)     if the supplier that submitted the bid is disqualified because his bid doesn't  conform to the requirements of the procuring entity;

b)     if the supplier that submitted the bid doesn't accept corrections of an arithmetical error made pursuant to number 2 of this Article;

c)      if the supplier is not registered in the suppliers list;

d)     if the supplier fails to submit the appropriate trade license and tax clearance certificate. 

11.12Evaluation and Comparison of Bids  

1)     The procuring entity shall evaluate and compare the bids that have been accepted based on the specification and the evaluation criteria included in the bid document in order to ascertain the successful bid.

2)     The successful bidder shall be determined taking into consideration:- 

a)     in respect of goods, the cost of operating, maintaining, repairing,  time for delivery, the terms of payment and of guarantees;