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Memo – Implementation of Procurement Manual 2017

Reference: Procurement Manual 2017

From: Sebastien Cazenave, Global Logistics and Supply Chain.

Date: December 28, 2016

Effective implementation date: January 1, 2017

Dear colleagues,

Please find attached the approved version of the Procurement manual version 2017. This manual and
annexes are accessible on OneCorps

The Procurement Manual 2017 is an improved version of the Procurement Manual 2016. It contains
precisions based on the feedback and recommendations you shared with us. We are grateful for those
valuable inputs and trust this new version accounts for specific situations and builds on processes you
have strengthened.

Your efforts during the past months have paid off and the every country have done tremendous
improvements to reach required compliance levels. Those efforts are critical to maintain our credibility
and sustain donors’ confidence in our organization.

You will find below the list of amendments from the Procurement Manual 2016 (released on June 30,
2016) to facilitate adjustment. We trust changes will be welcomed and improve effectiveness of the
existing processes.

- The Procurement Requisitions raised starting January 1, 2017 must comply with the Procurement
Manual 2017
- The Procurement Requisitions approved by signatories and acknowledged received by
Procurement department before January 1, 2017 can follow the Procurement Manual 2016
provided Purchase Orders / Contracts are signed by vendors before March 31, 2017. It is however
recommended they follow procurement manual 2017.

Note that the “QA-QC for Commodities process” has also been adjusted and should be easier to
implement. Annexes related to Deviation Protocol and Emergency Simplified Procedures are currently
under review. Those draft versions should be used as reference guidance until final versions are released.

Refresher procurement and warehousing trainings modules will be delivered during January 2017.

Thank you in advance for your hard work and dedication. Logistics focal point in each country program or
HQ office should ensure that this email, manual and annexes are shared with relevant personnel.

For questions, please refer to Regional Logistics Coordinator, Desk unit or contact
Global.Procurement@internationalmedicalcorps.org.

With best regards,

Sebastien Cazenave
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Procurement Manual 2017 Description of amendment

Reference
1.2 Scope and Applicability Procurement of the following services are not covered by the Procurement Manual 2017: - Services of consultants and
other services managed by Human Resources (HR) and legal advisory services. For services of consultants and other
services managed by Human Resources (HR), please refer to the Human Resources Department’s Recruitment Procedure
Guidelines on the International Recruitment page on OneCorps. For legal advisory services, please direct any questions to
the Legal Department. Awarding service contracts to individuals or companies with the objective to fulfill a procurement or
logistics activity (i.e. develop Construction technical survey, external quality control) falls under the scope of the
Procurement Manual.
3.2 IT Applications & Procurement staff must carefully manage, store and safeguard each procurement files documentation until and beyond
Procurement documentation completion of the procurement action. Original of procurement files should be handed over to Finance upon procurement
file approval and a copy retained at the Procurement Department. Delivery evidences, where applicable and quality control
documents should be added to file with finance and to procurement department copy as they become available. Individual
procurement files must be archived per project (or, in the rare event procurements are shared between projects, in a
shared-project folder). Procurement files with value starting $20,000 must be scanned and placed onto IMC Shared File
system for auditing
5.1 Planning for Supply Chain costs: A complete supply chain and related procurement plan needs costing for shipping, customs clearance,
Procurement/Contracting transport (from vendor to final beneficiary), and warehousing. Take into account road, water or air asset use. Will
weather affect deliveries at certain times of the year, will fuel costs increase, warehousing requirements, available
infrastructures and staffing? Account for staffing, multiple trips and transport back up, and transport needs by various
transport modes. Select most appropriate means of transport for meeting project requirements, consider donors’
requirements to be complied with (i.e. use of certain carriers), allow appropriate time for realistic delivery of the items.
5.1 Planning for Donors' Waiver / Derogation: Waiver or derogation is defined as Donor's authorization to procure an item without having
Procurement/Contracting to meet certain restrictions. In other words, an exemption is granted so that the restrictions no longer apply (i.e. under
USAID funding, For example, the restriction on motor vehicles is that they must be manufactured in the United States). To
procure a non-US manufactured motor vehicle you may need to get Donor authorization not to comply with that
requirement. That authorization is the waiver.
5.1.4 Donor Prior Approvals, Used supplies are different from used equipment (restricted with value >$5,000 for Federal donors). International Medical
Waivers, Restricted Commodities Corps doesn’t allow the procurement of used supplies (depreciated equipment with market value under $5,000 or any
and Geographic Codes - USAID\ 1. other used supplies). However in exceptional circumstances, with prior approval from respective HQ Operations Desk it
Prior Approval: may be allowed to procure equipment depreciated under $5,000 market value with Federal donors funding.
5.1.7 Artificial Splitting of Contracts/POs that are signed with the same Vendor for the same category of goods or services for the same project
Procurement Contracts within fifteen (15) calendar days for the same procurement are considered as a single procurement. Such procurement
Prohibition should follow applicable procedures for the total cumulative value of purchase.

5.2 Initiation of Procurement
Requisition
5.4 Selecting the Type of Contract
6.3.2 Small Purchases
(Negotiated) Procedures - Non-
Construction / Exceptions to use
RFQ (procurement under
$150,000):
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Early bidding process (prior to project approval): For some core procurements, it is good practice to initiate early bidding
process (bids should have extended validity) to place orders as soon as the project agreement is signed. While PR is
required to initiate procurement action, Project Manager/Budget Holder can task the Procurement team to acquire
quotations (email with list of supplies/services is sufficient). RFQ/ITT can be issued to vendors with mention that “Issuance
of this RFQ does not constitute a commitment on the part of the IMC, nor does it commit IMC to pay for costs incurred in
the preparation and submission of a bid. IMC reserves the right to reject any or all bids received”. Offers can be collected
(following procedure dictated by thresholds), bid reviewed and final selection completed, draft Purchase Order/Contract
and other relevant documentation prepared and submitted for review
Blanket Purchase Agreements may not be used in such a way as to prevent, restrict or distort competition. BPAs are also
known as Framework Agreements (FA), Long Term Agreements (LTA) or Preferred Vendor Agreement (PVA).
Blanket Purchase Agreement is a method to increase efficiency in the procurement process:
- Provide opportunities to negotiate improved discounts;
- Satisfy recurring requirements;
- Reduce administrative costs by eliminating repetitive procurement bidding efforts;
- Reduce procurement lead time which is especially important in emergency response.
Use of Blanket Purchase Agreement for procurement action is considered a competitive procurement provided that BPA
vendor has been selected through a competitive procurement.
An exception to the use of the written RFQ is made when collection of bids for goods/services is made online (up to open
tender threshold). In that case, delivery terms and conditions, prices and quantities selected online are considered as
placement of a RFQ and a bid from the vendor, at the same time. The Procurement Officer who is processing online items
quotation/selection is responsible for documenting the offer and related total cost as part of the procurement
documenting process and ensuring that selection corresponds to PR requirements. Requestor or TU member may be asked
to participate in the actual online purchase to make sure correct goods/services are procured.• Other specific situations
may qualify for exception (i.e. requesting offers from Medecins Sans Frontiers, following MSF online system instructions). It
is required to involve Global Logistics to determine exception and access online system. The reasons for the exception
must be documented.• For the rental/lease of real estate property, RFQ is required when using real estate agents. In other
circumstances, the use of RFQ is not mandatory. Sealed bidding is not required when collecting bids for rental of real
estate. On-site assessment of identified properties against PR specifications/criteria should be conducted by at least a two-
employee team (suggested team: HR/Admin/Finance, Security and Logistics or other senior staff as deemed necessary).

6.3.3 Open Tender - Purchases
above $150,000 - Non-
Construction/ Exceptions to
Sealed bidding :
6.3.3 Open Tender - Purchases
above $150,000 - Non-
Construction / Suitable open
tender publication options
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Exceptions to Sealed bidding:
Sealed bid process are typically used for procurement with value starting $20,000 but not always appropriate for certain
type of procurements. Price offer may be required from selected suppliers and may involve conducting discussion with
potential offerors.
• Real estate property lease procurement. A documented on-site assessment of identified properties against RFQ/PR
specifications done by a minimum 2-person team only is required.
• Procurement of hotel and other training/conferences venues and services. Negotiated procurements up to $150,000 do
not require sealed bidding.
• Procurement of consultancy services that fall under this procurement manual if services are below $150,000.
• International Procurement under negotiated procedures involving exclusively donor-prequalified International vendors,
such as Humanitarian Procurement Centers (HPCs) and/or UN supply divisions. However, if the procurement involves one
of these categories as well as another type of vendors, the sealed bid process must be used.
Local open tender
- Mandatory: Local newspaper with correct coverage (geographic, technical specialization, # readers)
- Recommended: IMC office noticeboard, Local donor embassy website/ noticeboard, IMC open tender web-page
International Open tender
- Mandatory: IMC open tender web-page
- Recommended: International Newspaper / Website(s) with correct coverage (geographic, technical specialization, #
readers)

6.3.4 Sole Source and Single
Source
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Sole source procurement: A sole source procurement is a non-competitive procurement where only one source is solicited
for a bid or proposal. Sole source procurements are discouraged, but may be used when one of the following
circumstances apply. All sole source procurements carried out in the following circumstances require a Sole Source
Justification Form described below.
1. Item available from one source. A sole source procurement is allowed where a needed item is available from only
one source or there is a proprietary/exclusive license agreement for a product or service. (Examples: supply by an officially
recognized monopoly or the only known vendor determined through market research / vehicle service in licensed local
garage to remain under warranty conditions / update of custom-made software used by International Medical Corps). A
Sole Source Justification Form must be completed.
2. Prices fixed by law or regulation. The government or regulatory bodies may require that a good is sold at the same
price everywhere. In these cases, competitive bidding is impossible and sole source procurement is allowed. (Example:
Government has fixed fuel prices and it is available from all sources at the same price.) A Sole Source Justification Form
must be completed.
3. Prior competitive bidding that is still applicable. Sole source procurement may be justified if offers for identical
products or services have been obtained competitively within previous price offer validity (maximum 90 days), and prices
and conditions from all vendors remain valid based on the bids documented in the prior competitive bidding process. Note:
Piggy-backing on recent solicitation results (where a vendor was selected following competitive bidding) is not allowed if
there is an increase of more than 10% per line item versus the prior procurement (as further discount may apply and hence
a new competitive bid process is required.) Also, prior bid results cannot be used if there is a new item to be procured that
was not included in the prior bid process. This would require new competitive bid process. A Sole Source Justification Form
must be completed.
4. Extension of current contract where changing vendor would harm International Medical Corps. When a contract
needs to be extended and changing the contractor would not provide continuity in the work/service or may void
guarantees for initial works or provided equipment, using the same contractor without a competitive bid process may be
justified. (Example: Extension of office lease with same landlord where move of office would cause unnecessary high cost
and interruption of lease.) A Sole Source Justification Form must be completed.
5. Repair/replacement of goods. Sole source may be justified where the procurement is required for the repair or
replacement of equipment, works or supplies that are required for the correct running of operations and if the repair is not
completed immediately there would be loss / spoilage of goods or interruption of activities or compromise safety and
security of staff / beneficiaries. (Example: Refrigerator used to keep medicines cool breaks down and needs repair
immediately.) A Sole Source Justification Form must be completed.
6. Written donor approval. Sole source may be allowed where (a) International Medical Corps requests to procure via
sole source in writing and it is authorized in writing by the awarding party / donor, (b) the awarding party / donor requests
a specific vendor in writing, or (c) a procurement is requested under an award from ECHO and International Medical Corps
uses a Humanitarian Procurement Center. The donor written approval must be provided.

6.3.6 Construction
6.3.9 Food Commodities
Step 2 (a): Price analysis is the
primary method used by
International Medical Corps in
evaluating proposed prices for
catalog or commercial off-the-
shelf items. Price analysis is the
process of examining and
evaluating a proposed price. 1.
Adequate price competition and
comparison of bids.
7.11 Procurement Bid Summary –
for Purchases starting from
$1,000
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Bonding Requirements for facility improvements, rehabilitation and construction:
International Medical Corps must include the following minimum bonding requirements for any Construction or Facility
Improvement contracts or subcontracts exceeding $150,000:
1. A bid guarantee from each bidder equivalent to 5% (five percent) of the bid price. The “bid guarantee” must consist of a
firm commitment such as a bid bond, certified check, or other negotiable instrument accompanying a bid as assurance that
the bidder will, upon acceptance of the bid, execute such contractual documents as may be required within the time
specified.
2. A performance bond on the part of the vendor for 100 percent of the contract price. A “performance bond” is one
executed in connection with a contract to secure fulfillment of all the vendor's obligations under such contract. Any
deviation from the above requirements must be authorized by the CFO/ VPF and VPIO.
3. It is recommended to obtain a payment bond on the part of the vendor for 100 percent of the contract price. A
“payment bond” is one executed in connection with a contract to assure payment as required by law of all persons
supplying labor and material in the execution of the work provided for in the contract.
To process the procurement of nutrition products for the prevention and treatment of malnutrition in all its forms such as
ready to use therapeutic food , ready to use supplementary food (RUTF/RUSF), lipid based nutrients and micronutrients
from USAID, ECHO, UNICEF and World Food Program approved vendors International Medical Corps will use negotiated
procedure irrespective of the Contract threshold value and will invite simultaneously, and in writing, USAID, ECHO, UNICEF,
WFP pre-qualified candidates of its own choice to ensure quality products, as in this case items nutritional value and
quality assurance is paramount for recovery of beneficiaries.
This is done through a comparison of quotes and documented in the Procurement Bid Summary or Tender Committee
Memo. Available selection criteria that can be used in RFQ/ITT include:
- Lowest Price Technically Acceptable (LPTA): International Medical Corps strives to use LPTA whenever possible as most
straightforward process from a compliance standpoint provided minimal bid technical specifications are met.
- Best Value: Requirements must be determined as clearly as possible and weighted evaluation criteria are assigned based
on those requirements and communicated to all prospective bidders. In best value awards, the primary driver is the
definability of the requirements:
• The more the requirements are defined, the more likely it is that price is the major determining factor.
• The less requirements are defined, product specifications and technical considerations play a larger role.
- Trade-Off Analysis: International Medical Corps may not award a contract to other than lowest price or most technically
capable proposal; justification must be provided with reference to this method of selection based on IMC’s understanding
of the perceived benefit.
For purchases starting at $20,000, the Tender Committee memo is required. If a sufficient comparative analysis has been
developed as part of the Tender Committee Memo and/or comparison sheets capture all mandatory PBS information, a
Procurement Bid Summary is not required.

8.1 Finalize Contract / Purchase
Orders
8.1 Finalize Contract / Blanket
Purchase Agreement
8.1.2 Payment Terms
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The PO is a simple form of a Contract between International Medical Corps and the Vendor. A PO should be issued for any
purchase over $1,000 up to $150,000. A copy of the PO, and notes on how to complete it, are attached at Annex 14A -
Purchase Order (PO).
Exceptions:
• Working under Blanket Purchase Agreement. In this case a Work Order replaces PR and a PO.
• Online purchasing (example: procurement of books through Amazon): procurement done via automated web sites.
PO/Contract is signed internally by IMC and not the Vendor. Vendor terms must be verified and will apply in this case
instead standard IMC MTCs.
• Cases where vendor requires International Medical Corps to sign vendor’ contract template or require substantial
changes to the standard Master Terms and Conditions or to the Contract mandatory terms: Prior review and approval of
proposed documents/amendments by International Medical Corps Legal department is required (in accordance with the
Contract Review Protocol).
Blanket Purchase Agreement based on competitive bidding is allowed for use in Grants and Cooperative Agreements, as
sole source. For USAID Contracts, the Federal Acquisition Regulation (FAR) requirements may require competitive bidding
even if a Blanket Purchase Agreement is in place (consult with GCM prior to commencing procurement).
8.1.2 Payment TermsInternational Medical Corps preferred payment terms are 30 days after delivery at the agreed point.
Payments to vendors are made upon satisfactory fulfillment of all obligations in the supply PO or Contract for goods and/or
services delivery. RFQ/ITT and Procurement Order documents should indicate proposed payment terms and who is
responsible for bank or legal charges, taxes and duties (as applicable). In the event that vendor is not able to accept
International Medical Corps payment terms, effort should be made to negotiate the most favorable terms prior to
placement of the Order, with aim to minimize financial exposure risk for the organization. Some vendors may request an
International Medical Corps bank guaranty letter before they approve these payment terms.Note: Frequent international
order payment terms for the organization are 30 days from the Invoice date. Exporters will issue Invoice when goods are
shipped. In such case, payment may be due before conducting a physical count and quality control. Whenever possible,
effort should be made to negotiate payment terms with the vendor and ask for payment 30 days after delivery. Advance
payments are not allowed. However, they may be considered by International Medical Corps in specific situations. When
an advanced payment is requested by the vendor, the country team must negotiate improved payment terms or explore
alternate procurement source. If no suitable alternative available, the advanced payment will be considered on case by
case basis and authorized by procurement approval authorities. Penalties for late payments may be applied by the vendor
when agreed payment deadlines are breached. International Medical Corps staff must avoid exposing the organization to
such penalties by processing payments in a timely manner in line with agreed payment terms. Payment requests must
allow sufficient time to finance to process payment. Compliance with agreed PO/Contract Terms and Conditions related to
payment terms is two-way process and is required from both International Medical Corps and contracted vendor.
Adjudication of all disputes must be processed in line with agreed Terms and Conditions in cases parties are unable to
reach agreement without arbitration.Payment processingInternational Medical Corps Finance department must process
vendor payments based on the payment terms stipulated within PO/Contract. Procurement file is closed when the final
payment evidence is on file supported with approved procurement documents and following delivery evidences (if/when
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applicable): - For the supply of goods: a signed Goods Received Note and documented Quality Control - For the supply of
services: a signed Service Received Note or Completion Certificate or stamp “Received” on the invoice.Progress payments
may be appropriate for contracts lasting longer than two to three months and for services with discrete or regular progress
intervals, for example:- Construction works contracts: Construction contracts may involve advance payments (mobilization
fees) and partial payments as stages of the job are completed. Installment payments and the final payment require a
Completion Report/Memo (quantity survey report prepared by suitably qualified personnel).The Completion
Report/Memo serves as confirmation of actual work progress completed at a specific stage (%). The payment schedule is
based on completed progress and must be reflected in the Contract. - Service contract: The payment schedule for service
contracts (e.g. annual maintenance, freight forwarder/clearing agent service) must be reflected in the contract. Monthly
progress payments against accumulated invoices for approved service delivery are the preferred method for payment.
Contracting for services may require complex payment terms/schedules. If necessary, advice and clarification related to
payment terms definitions may be obtained from the Global Procurement Unit, prior to the procurement
initiation.Payment type and options Payment type can be one of the following:- Total PO/Contract value payment-
Installment payments- Final Payment- Advance payment Payment options are based on the agreement reached between
the International Medical Corps and vendors. All payment terms must be clearly defined in the PO or Contract language.
The payment method options in order of preference are: - Electronic payment. - Cash/Check payment up to $3,000 with
the waiver
9.2 Vendor Catalogue, Vendor File Exception to Vendor’s Code of Conduct:
and Evaluation - Online purchase where no direct contact with a sales representative can be established. It is however recommended to
do possible efforts to identify a sales representative and sign the required documentation.
- Foreign Governments where acting in an official capacity and there are no competitors (i.e. utility services). This doesn’t
apply when the government is a purely economic actor and competing with other companies.
- Authorization for exceptions not listed above must be requested and authorized following the Deviation Protocol.

9.2 Vendor Catalogue, Vendor File In addition, for high value procurements, country management may decide to use a 3rd party due-diligence agency and
and Evaluation undertake additional vendor screening actions including deepened background checking.

8.2 Execute Contract
Exception to endorse Master Terms and Conditions, Vendor Code of Conduct and mandatory registration is online
purchase where direct dealing with sales representative is either not possible prior to order placing or would likely prolong
procurement action. Similar exemption applies for Governments when acting in an official capacity. Exception does not
apply for procurements requiring prequalification. Legal team should be contacted in any circumstance when a Vendor
does not agree with International Medical Corps Terms and Conditions, and a significant deviation or increased risk
compared to the standard Terms and Conditions is needed. Legal will advise what risks International Medical Corps can
accept and will approve the final PO or Contract wording prior to signature.

Procurement Manual 2017
Reference - Annexes
Annex 13C - ESP Protocol (V.2017-
Draft)
Annex 13B - Deviation Protocol
(V.2017-Draft)
Annex 13D - Procurement
Deviation Register (V.2017)
Annex 17C - QA-QC for
Commodities process (V.2016-2)
Annex 16B - Service Received
Note - QC (V.2016-2)
-
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Description of amendment
Draft version of the ESP protocol. This version is currently under review and should be used for guidance until final version
is released.
Draft version of the Deviation protocol. This version is currently under review and should be used for guidance until final
version is released.
Register where each procurement conducted under a deviation request or ESP should be logged. This is a draft version and
should be used for guidance until final version is released.
Updated methodology with simplified sampling method. Please refer to the annex.
Introduction of a new form "Service Received Note" to be used to confirm delivery of an item. Form should be signed by a
Logistics person (confirming a service has been delivered) and a technically sound person (service executed meets quality)
[END PROCUREMENT MANUAL MEMO]