1. PROCUREMENT
Procurement is the acquisition of goods,
services or works from an outside external
source. It is favorable that the goods, services or
works are appropriate and that they are procured
at the best possible cost to meet the needs of the
purchaser in terms of quality and quantity, time,
and location. Corporations and public bodies
often define processes intended to promote fair
and open competition for their business while
minimizing exposure to fraud and collusion.
3. PROCUREMENT IN PUBLIC SECTOR
Public sector organizations use procurement for
contracts to achieve benefits such as increased
efficiency and cost savings (faster and cheaper) in
government procurement and improved
transparency (to reduce corruption) in procurement
services. E-procurement in the public sector has
seen rapid growth in recent years.
4. E-PROCUREMENT SYSTEM
An e-procurement system manages tenders through
a web site. This can be accessed anywhere
globally and has greatly improved the accessibility
of tenders. An example is the System for
Acquisition Management (SAM), which on July 30,
2013 combined information from the former Central
Contractor Registration and Online Representations
and Certifications Application (ORCA), in the United
States.
5. TYPES OF PROCUREMENT
Single Procurement
Stock Procurement
Vendor Management Inventory
Just In Time
Just In Sequence
Ship to Line
6. DIRECT VS INDIRECT PROCUREMENT
Direct procurement and indirect procurement
TYPES
Direct procurement Indirect procurement
Raw material and
production goods
Maintenance, repair,
and operating
supplies
Capital goods and
services
FEATURES
Quantity Large Low Low
Frequency High Relatively high Low
Value Industry specific Low High
Nature Operational Tactical Strategic
Examples
Crude oil in
petroleum industry
Lubricants, spare
parts
Crude oil storage
facilities
7. PROCUREMENT VS ACQUISITION
Defines procurement as the act of buying goods
and services for the government.
Defines acquisition as the conceptualization,
initiation, design, development, test, contracting,
production, deployment, Logistics Support (LS),
modification, and disposal of product and other
systems, supplies, or services (including
construction) to satisfy Department.
9. PUBLIC PROCUREMENT
Government procurement
Public procurement generally is an important sector
of the economy. In Europe, public procurement
accounts for 16.3% of the Community GDP.
Green public procurement
In Green public procurement (GPP), contracting
authorities and entities take environmental issues
into account when tendering for goods or services.
The goal is to reduce the impact of the procurement
on human health and the environment.
10. ALTERNATIVE PROCUREMENT PROCEDURES
There are several alternatives to tendering which are
available in formal procurement. One system which has
gained increasing momentum in the construction
industry and among developing economies is the
Selection in planning process which enables project
developers and equipment purchasers to make
significant changes to their requirements with relative
ease. The SIP process also enables vendors and
contractors to respond with greater accuracy and
competitiveness as a result of the generally longer lead
times they are afforded.
11. PROCUREMENT FRAUDS
Procurement fraud can be defined as dishonestly
obtaining an advantage, avoiding an obligation or
causing a loss to public property or various means
during procurement process by public servants,
contractors or any other person involved in the
procurement. An example is the kickback, whereby
a dishonest agent of the supplier pays a dishonest
agent of the purchaser to select the supplier's bid,
often at an inflated price.
