Procedure for Procurement

What is public procurement?

Pay attention to the three points below.

Appropriate equipment need to be procured in proper

Fairness
procedures.
Increase the number of participants in price
Competitiveness competitions by making the procurement restriction-free
and easy-to-participate.
Accountability is needed on all the occurrence in the
Transparency
procurement process. Keep all evidence to show the
process.

Economic efficiency and speed are also required.

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 Types of procurement methods
What kind of procurement methods do we have?
Quotations will be collected from two or more suppliers and the
Shopping by
contracting party will be determined by comparing the details of
quotation
the quotations.
Clear statements will be made concerning the fact that the
Limited competitive shopping process involves price competition and the deadline for
shopping the submission of quotations. The accepted sealed quotations will
be opened all together.

Limited competitive Bidding price will be opened with concerned parties nominated
bidding by employer including competitors in the price competition in
attendance.
The procedure to determine a candidate contractor is made open
Competitive bidding
at the presence of participants in the price competition.

Direct contracting：【exceptional】
The direct contracting is a case where contract is concluded with a specific partner
without setting a price competition between multiple suppliers.

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 Types of procurement methods
What is the difference between “Limited competitive shopping” and
“Shopping by quotation”?
The three points below are the features of “Limited competitive shopping” when
compared with “Shopping by quotation”.

1. It is announced the supplier shall be selected by competition of

quoted price.

2. Closure time of quotation is defined.

3. Quotation shall be sealed and opened simultaneously.

In case of limited competitive shopping, if the supplier submitted the quotation without
sealed envelope or after the closure time, the quotation is not awarded in general.
In case of Shopping by quotation, the contract party can be selected not only by the
quoted price but also by the other factors such as time of delivery or after services, etc.

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 Types of procurement methods
Comparison table of procurement methods
Fairness Competitive Transparency Procedure
ness
Competitive bidding high high high difficult
Limited competitive
medium high high difficult
bidding
Limited competitive a little
medium high medium
shopping difficult
Shopping by
low low low easy
quotation
a little
Direct contracting none none low
difficult
☆ Methods framed in bold are those considered “price competitive.”
☆ Direct contracting should be avoided unless there is clear and definitive justification.

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 Procurement flow
Procurement will be proceeded with in the following chart.
Stage 1 Stage 3
Stage 2
Arrangement Delivery
Supplier selection
Writing Inspection,
Price competition, Negotiation
specifications Payment
with supplier, Making contract

②Procurement
①Request for approval, Price
Equipment, competition
etc.
Procurement unit
⑦Inspection ④Making
Project report contract
③Negotiation
⑧Payment with supplier

⑥On site
inspection
Supplier
⑤Delivery
(contractor)
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 Arrangement
Once equipment has decided, let’s start with collecting
information. （In most cases, ①～③ are prepared by the project.）

①Selection of equipment
Making Information sheet of
equipment.

②Survey on specifications and price

Collecting catalogues, Requesting
provisional quotation, Confirmation
on condition and time of delivery

③Writing specifications

Supplier selection
 Step 4: Arrangement
Let’s write specifications by using information sheet of equipment,
catalogues and provisional quotations!
Information sheet of equipment
【General information】 Voltage, Plug, Temperature, etc.
【Individual information】 Name of equipment, Brand designation, Purpose of use,
Specifications, Accessories, Reference brand, Quantity

Provisional quotation of reference brand,

Information on catalogues

What is specifications?
Define what a buyer wants to purchase. (Items, Quantity, Specifications, etc.)
The only standard that indicates functions of equipment required for project
activities.
An important factor when evaluating offers by suppliers.
Essential documents for procurement procedures.

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 Arrangement
Brand designation (designate manufacturer or model) is not
easily allowed.
However, brand designation is allowed when there is a reason as
follows, it is required detailed explanation.
1. purchase the patent equipment from the patent manufacturer.
2. can not achieve the objective if accessory, spare parts,
interlock etc. do not consist with the existent equipment
3. remarkable advantage in the after sales service
4. the difficulty is expected if the model is changed, because the
end-user familiarize himself with the designated model.

In case of Brand designation, “Brand designation sheet” shall be prepared and

attached to Approval.

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 Supplier selection / Contract
①Making Request for quotation/Bidding document
【The role of Request for quotation】
1. To inform suppliers of required specification of equipment, deadline for
submission of quotation, period of validity of quotation and the way of submission
of quotation（i.e. submit within sealed envelope）, etc. 【Necessary information on
equipment, condition of quotation】
2. To inform the suppliers of specific procedures of Competitive shopping and
Shopping by quotation. 【Explanation on procedures】

To proceed Competitive shopping or Shopping by quotation fairly, it is important to

Inform the same information on equipment and conditions to all the suppliers.

Check points for request for quotation

①Mention all items and conditions that may affect the quotation price.（See following slides.）
②Mention tax exemption system and way to present on the quotation.
③Mention the possibility and conditions of advance payment.

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 Supplier selection / Contract
①Making Request for quotation/Bidding document
These items shall be contained in the Request for quotation.
1. Name of project
2. Condition of quotation and delivery
・Currency for quotation
・Transportation fee, Insurance fee
・Installation fee, Trial run fee, Training fee
・Import tax, Value added tax, Sales tax
・Period of guarantee（1 year is normal.）
・Place for delivery, Required time of delivery
・Payment term (100% payment after receipt, Conditions for advance payment.)
3. Items to be mentioned in Quotation
（Addressee・Quotation amount・Period of guarantee・Lead time・Time of delivery・
Validity of Quotation・Payment condition, etc.)
4. Contact person and time for inquiries
5. Place and time for submission of Quotation

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 Supplier selection / Contract
①Making Request for quotation/Bidding document
Points to be checked on quotations.

1. Offer price
2. Validity of quotation（Is it valid until the date of contract?)
3. Time of delivery（Does it meet to our request?)
4. Place for delivery（Is the place same as designated place?→In case the
designated place is project site, it is important to know the inland transportation fee to
the site is included or not.)
5. Payment terms（Advance payment? Timing of payment?)
6. Period of guarantee（Does the period meet the request？）
7. Packing fee and transportation fee are included?
8. Necessary spare parts, consumables, manuals are included?

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 Supplier selection / Contract
②Selection of suppliers
How to select the suppliers to be requested for quotation?

① Two or more suppliers are required for Shopping by quotation, Three or

more suppliers are required for Limited competitive shopping, Five or more
suppliers are required for Bidding whenever possible.

② In case there is company registration system or company list, suppliers

shall be selected within the list, in case there is no company registration
system or company list, suppliers shall be selected by the past transaction
with the employer and financial situation, etc.

③ When the supplier is introduced by others, select the supplier after

checking financial situation.

Try to find and select a reliable supplier!

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 Supplier selection / Contract
② Selection of suppliers
In case there are several suppliers available Try not to select
specific company！
Company Company

Company
J A
Company
I
B

Company
Company
H Procurement unit C

Company Company

G D
Company Company
F E
5 companies are selected 5 companies are
next time. selected this time. 14
 Supplier selection / Contract
② Selection of suppliers
In case there are a few suppliers available

If there are only two companies in the particular field,

select both companies.

Always search for another companies.

Procurement Unit

Company Company
B A

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 Supplier selection / Contract
Questions and Answers
After distribution of the bidding documents, period for questions concerning the
bidding documents shall be set .

 Questions and Answers are always in written forms

 Do not have direct exchanges
 Answers are always notified to all competitors

Example of Q&A
No. Page Reference to Bidding documents
1 3, 13 8. Terms of payment
Attach. 1 Condition of Contract
(Clause 12. Terms of payment)
Question Answer
Regarding payment methods, as you stated Not acceptable.
in bidding documents, we kindly ask if it’s
possible for you to accept to issue a Letter
of Credit, confirmed and irrevocable, to be
payed 30 days after receiving all shipping
and documents.

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 Supplier selection / Contract
Evaluation of quotations
In case of limited competitive shopping, all quotations are opened simultaneously by
two or more staffs.
Example of evaluation Predetermined price is 12,000 USD

Comparison
Delivery Price
Company Date of offer of Result
Schedule specification (USD)
12 weeks
Designated Details are
company
November, 30 after signing
attached
- -
the contract
１
Biolon November, 29 12 weeks ○ 11,500 １
２
Delrus November, 30 10 weeks ○ 13,000 ３
３
Kurt & Kurt November, 30 15 weeks ○ 11,000 Disqualified

４
MedCoInternational November, 28 12 weeks ○ 12,500 ２
５
Unihelp November, 30 12 weeks × 12,000 Disqualified
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 Delivery / Inspection
③ Receiving invoice and delivery sheet～④ Approval for payment
order～⑤ Payment of contract amount
③ Receiving invoice and delivery sheet
Receive the equipment, invoice and delivery sheet after the inspection without any
problem.

④ Approval for payment order

Attach inspection record or delivery sheet with receipt stamp, invoice, copy of contract.

⑤ Payment of contract amount

Make a payment according to the contract.

Final payment＝Completion of the contract

Make a payment only after it is confirmed that the equipment had been delivered
without any problem. Once a payment is made, it seems as the contract has been
completed, even though there are problems such as the specification did not meet
requirement, lack in quantity, defective items.
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Thank you!

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