PREAMBLE

The Federal Democratic Republic of Ethiopia considers it necessary to regulate and improve the
way in which the public procurement of goods, works and services is undertaken. In order to
improve the procurement system, the Government has introduced the Proclamation and Directive.
The purpose of the Manual is to state the ways in which the Proclamation and Directive shall
improve public procurement in the Federal Democratic Republic of Ethiopia. These are to:
1. ensure procurement is conducted in the most efficient manner possible;
2. encourage competition between persons and/or firms who are willing to supply/provide
goods and services and undertake works in the public sector;
3. ensure that all persons and firms, who are providing works, goods, and services, in the
public sector, are treated equally;
4. ensure that public sector procurement is implemented fairly;
5. improve business opportunities within the Federal Democratic Republic of Ethiopia; and
6. introduce the Proclamation, Directive, Standard Bidding Documents and the Manual
which shall apply to all public bodies involved in public procurement.
The Proclamation, Directive, and the Manual when used together should ensure that all
procurement activities are performed in an appropriate manner and that public bodies,
government officials, candidates, bidders, suppliers, contractors, consultants, persons or firms
involved in procurement shall be fully accountable for their actions. The Proclamation, Directive,
and the Manual stipulate the sanction in the event of non-compliance by any involved party.
Legislation can only provide the overall framework to be followed, and with the increasing
importance, value and complexity of procurement, effective guidelines and step-by-step Manual
are required to assist procurement staff and officers involved in the procurement process.
Therefore, there is a need to provide necessary interpretations, clarifications, instructions and
examples in order to make the Proclamation and Directive user friendly. The Procurement
Manual is expected to immensely help the procurement units in the relevant public bodies and
their officers to apply the Proclamation and Directive correctly and with full confidence. The
Manual is also accompanied by standard forms, guidance notes, check lists and flow charts for
clear understanding of the Proclamation and Directive. The clarifications, explanations and
examples given in the Manual are expected to clarify procurement issues and applications for
procurement officer in applying the Proclamation and Directive. Compliance with the Manual
along with the Proclamation and Directive is a mandatory requirement for all public bodies.

1.1.1 The Official Title of the Proclamation is: Ethiopian Federal Government Procurement
and Property Administration Proclamation No. 649/2009 that entered into force on the
date of publication in the Federal Negarit Gazeta No. 60 on 9th day of September 2009.
1.1.2 The Official Title of the Directive is: Federal Government Public Procurement
Directive issued by the Minister of Finance and Economic Development (hereinafter
called the Minister) that entered into force on 8th day of June 2010.
1.1.3 The Proclamation and Directive shall supersede all existing orders, instructions, and
directions on public procurement prior to the effective date.
1.1.4 The main purposes as to why the Government has introduced the Proclamation and
Directive:
1.1.4.1 to ensure that public procurement promotes value-for-money; and
1.1.4.2 to ensure that public procurement is carried out fairly, openly and without
discriminating against any person or firm.

1.2.1 The following definitions are provided in the Proclamation and the Directive:
1.2.1.1 “Goods” mean raw material, products and equipment and commodities in solid,
liquid or gaseous form, marketable software and live animals as well as installation,
transport, maintenance or similar obligations related to supply of the goods if their
value does not exceed that of the goods themselves; and “related services” includes
services such as transportation, commissioning, insurance, installation, training, and
initial maintenance:
1.2.1.2 “Services” mean any object of procurement other than works, goods and consultancy
services such as maintenance, security, janitorial, electricity, telecommunication, and
water supply services;
1.2.1.3 “Works” mean all work associated with the construction, reconstruction, upgrading,
demolition, repair, renovation of a building, road, or structure, as well as services
incidental to works, if the value of those services does not exceed that of works
themselves and includes build-own-operate, build-own-operate-transfer and buildoperate-
transfer contracts;
1.2.1.4 “Consultancy Service” means a service of an intellectual and advisory nature
provided by consultants using their professional skills to study, design and organize
specific projects, advise clients, conduct training and transfer knowledge;
1.2.1.5 “Procurement” means obtaining goods, works, consultancy or other services through
purchasing, hiring or obtaining by any other contractual means;
1.2.1.6 “Public body” means any public body, which is partly or wholly financed by Federal
Government budget, higher education institutions and public institutions of like
nature;
1.2.1.7 “Public fund” means any monetary resource appropriated to a public body from the
Federal Government treasury or aid grants and credits put at the disposal of the public
bodies by foreign donors through the Federal Government or internal revenue of the
public body;
1.2.1.8 “Public Procurement” means procurement by a public body using public funds;
1.2.1.9 “Supplier” means a natural or juridical person under contract with a public body to
supply goods, works or services;
1.2.1.10 “Candidate” means a natural or juridical person invited to take part in public
procurement or seeking to be so invited;
1.2.1.11 “Bidder” means a natural or juridical person submitting a bid;
1.2.1.12 “Bid” means a stage in the procurement process extending from advertisement of or
invitation to bid up to signing of contract;
1.2.1.13 “Bidding documents” mean the documents prepared by the public body as a basis
for preparation of bids, which contain a specification of the desired object of
procurement;
1.2.1.14 “Procurement Directive” means the Directive issued by the Minister of Finance and
Economic Development in accordance with the Proclamation;
1.2.1.15 “Minister or Ministry” means the Minister or the Ministry of Finance and Economic
Development respectively;
1.2.1.16 “Person” means natural or juridical person. (An entity other than a natural person
created by law and recognized as a legal entity having distinct identity, legal
personality and duties and rights).
1.2.1.17 “Specification” means a document describing the quality, type and standard with
which the required goods, services, works or consultancy services should comply.
1.2.2 The following additional definitions are defined only in the Manual as standard
widely used procurement definitions.
1.2.2.1 “Applicant” means a person who wishes to become pre-qualified in response to an
Invitation for Pre-qualification or to be considered for enlistment as a potential Bidder
for the purposes of the Restricted Bidding Method or to be short-listed in response to
a Request for Expressions of Interest. If successful in its submission of application the
“Applicant” will become either a “Bidder” or a “Consultant”. In this context, a person
in addition to a specific individual also means a firm, company, association or any
other organization.
1.2.2.2 “Approving authority” means the authority that makes decision on an award of
procurement contract under the Delegation(s) of Financial Powers or an
authority/officer authorized by the Head of a Public Body under such delegation to
take decision on award of procurement contract.
1.2.2.3 “Concession contract” means a contract with combined public and private financing
for the provision and operation of public utilities and other public services, e.g.
construction and commissioning of water treatment plant including distribution of
water supply. However, concession contracts may be made with full private
financing, the private company or organization builds and manages the infrastructure
facility and operates it at its own commercial risk and also accepts investment
obligations. Such contracts are fixed for terms of say 25 or 30 years to allow the
operator to recover expended capital. At the end of the contract, the asset may either
remain indefinitely with the private company or be transferred back to Government
ownership, sometimes at a predetermined price or fee.
1.2.2.4 There are several forms of concession contract, namely:
· Build Own Operate (BOO) for which a private Contractor builds, owns and
operates a new facility at its own risk. The Government or public authorities
usually provide revenue guarantees through long-term contracts for the purchase
of the product/services provided by the Contractor.
· Build Operate Transfer (BOT) for which a private Contractor builds and operates
a new facility and then transfers ownership to the Government or public authority
at the end of the concession period. The Government or public authorities usually
provide revenue guarantees through long-term contracts for the purchase of the
product / services provided by the Contractor. There is usually an option in the
original contract for the Contractor to purchase the facility.
· Build Own Operate Transfer (BOOT) for which a private Contractor builds, owns
and operates a new facility and then transfers ownership to the Government or
public authority at the end of the concession period. The Government or public
authorities, usually provide revenue guarantees through long-term contracts for
the purchase of the product/services provided by the Contractor and shall
purchase the facility at the end of the concession period or allow the Contractor to
continue to own and operate it, but not necessarily with the previous revenue
guarantees. In such cases, a separate contract may be made at the end of the first
concession period.
1.2.2.5 “Conflict of interest” means perceiving a potential for conflict of interest ,where
personal or business interests of any party in a public procurement transaction would
adversely affect the interests of a public body in achieving best “value for money”,
transparency, fairness and/or equitable treatment of Bidders. The following may have
potential for conflict of interest:
· Public body officials, who may have an interest, directly or indirectly, with a firm
or individual that is Bidding for a procurement requirement issued by that entity
shall declare any relevant relationship with that firm or individual and
consequently not participate in any proceeding concerned with that specific
procurement at any stage from setting specifications/qualifications until supply or
completion of contractual obligations.
· An individual or a firm, (or its associates or affiliates), which was involved in
preparation of specifications for a particular bid, shall not be eligible to participate
in providing the procurement requirements for that particular bid, as it is likely
that such earlier involvement will be perceived to, or will actually, result in a
biased or non-efficient outcome of the procurement transaction thus adversely
impacting on the interest of the public body.
· Neither Consultants (including their personnel and sub-Consultants) nor any of
their affiliates shall be hired for any assignment that, by its nature, may be in
conflict with another assignment of the Consultants. Consultants hired to prepare
engineering design for an infrastructure project shall not be engaged to prepare an
independent environmental assessment for the same project, and Consultants
assisting a client in the privatization of public assets shall neither purchase, nor
advice public bodies of, such assets. Similarly, Consultants hired to prepare
Terms of Reference (TOR) for an assignment shall not be hired for the
assignment in question.
1.2.2.6 “PPA” means the Public Procurement and Property Administration Agency
accountable to the Ministry of Finance and Economic Development (MOFED).
1.2.2.7 “Days” means calendar days, unless the text of either the Proclamation and Directive
or the Manual specifically refers to working days.
1.2.2.8 “Enlistment” means persons and/or firms who are registered by PPA as qualified
potential Bidders, maintained on a list and who are eligible to participate in bid for
procurement of goods and related services and/or procurement of works and physical
services under Restricted Bidding Method. The list and the qualifications of such
persons and/or firms are reviewed and updated on an annual basis.
1.2.2.9 “Ethics” means the moral principles and rules of conduct that shall be followed and
that are applicable to all personnel of a public body involved in public procurement.
However, these shall also be applicable for Applicants, Bidders, Suppliers,
Contractors and Consultants who are expected to observe the highest standard of
ethics during the implementation of procurement proceedings and the execution of
subsequent contracts.
1.2.2.10 “Framework contract” means a general agreement of procurement establishing unit
price and other terms and conditions of contract which serves as a basis for supplies to
be delivered under future specific contract.
1.2.2.11 “Government” means the Government of the Federal Democratic Republic of
Ethiopia (GFDRE).
1.2.2.12 “Head of a public body” means the Secretary of a public body, the Head of a
Government Department/Directorate; or the Chief Executive, by whatever designation
called, of an Autonomous/Semi-Autonomous body or Corporation or Local
Government agencies e.g. City Corporations, Municipalities.
1.2.2.13 “In writing” means communicated in written form and delivered against receipt.
1.2.2.14 “Pre-qualification” is a means for attracting potential bidders to participate, in which
potential bidders are invited by a public body to submit documentation that shows the
person/firm is capable of meeting the requirements of a specific future bid.
1.2.2.15 “Post-qualification” is a process undertaken by a public body at the end of the bid
evaluation stage to ascertain the capability of the least evaluated bidder to perform the
contract. Post qualification assessment may be done for prequalified bidders. The
purpose of the post qualification is to ascertain that the lowest evaluated bidder is still
capable to perform the contract.
1.2.2.16 “Procedure” means the mandatory procurement implementation requirements
framed and issued by the PPA that will ensure proper compliance with the
Proclamation and Directive by public bodies, Applicants, Bidders, Suppliers,
Contractors and Consultants.
1.2.2.17 “Public body” means public body, which is partly or wholly financed by the Federal
Government Budget, higher education institutions, and public institutions of like
nature which has the powers and duties to conclude a contract for the provision of
goods, works, and services.
1.2.2.18 “Proposals” are the technical and/or financial proposals submitted to the public body
by short listed consultants. The term proposal is used because, unlike most forms of
bids for goods, works and related or physical services, it normally details the manner
in which the bidder ‘proposes’ to undertake the intellectual and/or professional
services and tasks described in the RFP. A proposal can only be submitted in writing
in accordance with the instructions contained in the RFP.
1.2.2.19 “Public fund” means any monetary resource appropriated to a public body from the
Federal Government treasury or aid grants and credits put at the disposal of the public
bodies by foreign donors through the Federal Government or internal revenue of the
public body.
1.2.2.20 “Public procurement” means procurement by a public body using public fund.
Public Procurement and Property Administration Agency Public Procurement Manual
19
1.2.2.21 “Quotation” means the simplified form of obtaining priced offers from a selected
number of suitable Bidders in response to a direct request by a public body in order to
procure low-value, off-the-shelf, standardized goods and related services and/or
works and physical services.
1.2.2.22 “Intellectual and professional services” are those services which provide output of
advisory, design and know-how transfer nature rendered by the Consultants.
1.2.2.23 “Stand alone services” are those services which can be procured independently
without being incidental to goods, works or intellectual and professional services.
Such services include catering services, security services, courier services, etc. In
such cases a modified RFP document shall be used.
1.2.2.24 “Short-list” is a list of persons and/or firms who are selected to be invited to submit
proposals following the evaluation of applications submitted by the persons and/or
firms, in response to a Request for Expressions of Interest. Short-lists are used in case
the Requests for Proposals for intellectual and/or professional services.
1.2.2.25 “Birr” means the unit of currency of Ethiopia.

1.3.1 The Proclamation and Directive shall apply to all procurements undertaken by Public
bodies using public funds, except when a specific waiver is issued by the Minister in
the interest of national security or national defense, concerning the use of the
Proclamation and Directive. The Minister may, by a directive issue an exemption
from the Proclamation and Directive for defense or any other procurement which are
considered to be the subject of national security. It is desirable, however, that routine
civilian purchases by defense organizations are conducted in accordance with the
Proclamation and Directive.
Proclamation Article 3:
The Proclamation and the Directive shall apply to all Federal Government
procurement and property administration.
Notwithstanding the provisions of sub-article 3(1):
The Minister, in consultation with the heads of the relevant public bodies, may in the
interest of national security or national defense decide to use a different procedure of
procurement and property administration, in which case the Minister shall define by a
directive the method of procurement and property administration to be followed in
order to serve the interest of economy and efficiency.
The Proclamation does not apply to contracts a public body enters into with another
public body for the provision of goods, works, consultancy or other services at cost.
1.3.2 Any Public Body that uses public funds allocated to them by the Federal Government
through recurrent or capital budget shall use the Proclamation, Directive, SBDs and
the Manual for any procurement that makes use of such public funds.
1.3.3 Any person/organization may use the Proclamation and Directive and the Manual for
its procurement activities, provided it clearly states the fact of its adoption in its
relevant documentation.

1.4.1 If the provision of any agreement signed by the GFDRE with one or more countries
or international organization(s) comes into conflict with any of the Proclamation and
Directive, the provisions of that agreement shall prevail over the Proclamation and
Directive. Funds provided to the Government by bilateral or multilateral Development
Partners are subject to specific signed agreements. There may be several agreements
for each loan, credit or grant, each of which may cover a different aspect of the loan,
credit or grant.
In regard to procurement, the key document is the loan, credit or grant agreement
itself, as this defines the rules and regulations that shall be followed in respect of
procurement. The public body shall familiarize itself with the contents of such
agreements.
In the event that specific requirements of the development partner’s terms and
conditions for such loans, credit or grants contradict the Proclamation and Directive
and the Manual, then a public body shall follow the development partner’s
requirements in those areas where there is a contradiction.

Proclamation Article 6:
To the extent that this Proclamation conflicts with an obligation of the Federal
Government under or arising out of an agreement with one or more other states or
with an international organization, the provisions of that agreement shall prevail.
Where an agreement referred to above contains a preference or preferences in favor
of national and resident bidders, the public body shall ensure that the applicable
preference or preferences are clearly stated in the bidding documents.
In all other respects, public procurement shall be governed by the
Proclamation and Directive.
1.5.1 In the Ethiopian legal system, hierarchy of laws according to their precedence is:
1.5.1.1 The Constitution,
1.5.1.2 Proclamations,
1.5.1.3 Regulations, and
1.5.1.4 Directive
1.5.2 The Constitution of the Federal Democratic Republic of Ethiopia was ratified by the
Nations, Nationalities and Peoples of Ethiopia, through their elected Representatives,
on 8 December 1994, and came into force on 21 August 1995 by Proclamation No. 1,
1995 issued by the House of Peoples’ Representatives (the Parliament). The
Constitution is the Supreme Law of Ethiopia.
1.5.3 Proclamations are discussed by the Council of Ministers, deliberated upon and issued
by the House of Peoples’ Representatives, an example of which is the Ethiopian
Federal Government Procurement and Property Administration Proclamation No.
649/2009.
1.5.4 Regulations are discussed and issued by the Council of Ministers.
1.5.5 Directive is issued by the concerned Minister. An example is the Public Procurement
Directive issued by the Minister of Finance and Economic Development pursuant to
Article 78/2 of the Ethiopian Federal Government Procurement and Property
Administration Proclamation no 649/2009 and Article 19 of the definition of powers
and duties of the Executive Organs of the Federal Government of Ethiopia
Proclamation No 471/2005/6 (as amended).

Public procurement is governed by basic rules and guidelines that spell out what can be done or
not done on certain procurement processes. The following sections describe these rules.

2.1.1 The Proclamation and Directive, the Manual, User Guides and instructions including
standard documents (STDs, RFPs, RFQs, etc.) shall be made available to the public,
both in paper format (obtainable from the PPA) and on the PPA website and shall be
systematically maintained by the PPA.

2.2.1 Public bodies shall have to maintain records and documents regarding their public
procurement listed in article 23 of the Proclamation and other pertinent documents.
The time for which such records shall be kept corresponds to the time to be stipulated
in the financial Administration Regulations to be issued pursuant to article 73 of the
Financial Administration Proclamation of the Federal Government, Proclamation no
648/2001. As a minimum, each procurement record should include the following:
2.2.1.1 Procurement plan of the public body in accordance with article 8.1 of the Directive.
2.2.1.2 A copy of the bidding document including Invitation to Bid, Request for Proposals,
Request for Quotations, a copy of the published advertisement, if any; a copy of
bidders or short-listed consultants queries, addendum issued by the public body
together with supporting documents evidencing that amendments are communicated to
all prospective bidders/shortlists as per the ITB/ITC, normally it should be
communicated through their registered address.
2.2.1.3 The names and addresses of Bidders that submitted bids, proposals or quotations and
the name and address of the Bidder to whom the contract was awarded, including the
awarded contract price;
2.2.1.4 A copy of any Invitation for Pre-qualification, Request for Expressions of Interest or
other invitation documents;
2.2.1.5 Minutes of the bid opening; the minutes in addition to the deliberation and
proceedings of the bid opening a copy shall be attached of the information disclosed to
bidders or bidder’s representatives(s) and are registered at the time of bid opening; and
name and signature of bidders or their representatives who attended the bid opening.
The minimum information that should be disclosed and registered at the time of the
bid opening is stipulated in the ITB/ITC of the BD/RFP/;
2.2.1.6 A copy of all correspondences to and from bidders, short-listed consultants, suppliers,
contractors, consultants, beneficiaries and stakeholders, and others connected with
package/contract;
2.2.1.7 The evaluation criteria stipulated and applied and summary of the evaluation and
comparison of bids, proposals and quotation received;
2.2.1.8 The record of approval of the bid/proposal evaluation report and the contract
document;
2.2.1.9 Information concerning any decision to suspend or cancel the proceedings after they
have been initiated;
2.2.1.10 Information on the proceeding of any decision rendered where a complaint against a
procurement process is lodged;
2.2.1.1 The grounds for using procurement procedure other than open bidding;
2.2.1.2 Delivery/acceptance reports, completion report and measurement books for
procurement of goods and/or works and completion report for procurement of
services; and
2.2.2 All payment documentation including original copy of the bills and/or invoices for
procurement of goods, works and services.
2.2.3 The procedure below sets down the documents to be retained on a long-term basis and
the file containing these records shall be properly maintained and developed during
the contract execution. The records shall be properly filed, maintained and should be
easily accessible.
2.2.4 The record concerning any proceeding shall on request, once the proceedings have
resulted in a contract or have otherwise been terminated, be made available to
candidates who participated in the proceedings. However, except when ordered to do
so by a competent court or other body authorized by law and subject to the conditions
of such an order, the public body shall not disclose:
2.2.4.1 Information if its disclosure would:
· be contrary to the law of Ethiopia;
· impede law enforcement;
· not be in the public interest;
· prejudice the legitimate commercial interests of the parties; and
· inhibit fair competition.
2.2.4.2 Information relating to the examination and evaluation of bids, proposals, or
quotations and the actual contents of bids, proposals, or quotations.
2.2.5 Public bodies should disseminate to the general public information about contract
awards by posting it on the PPA’s website within 5 days of signing the contract after
award. Guidance Note will be issued by the PPA to the public bodies on the format to
be used for this purpose is attached in Appendix 2
2.2.6 A Guidance Note on procurement communications and record keeping by the public
bodies is attached at Appendix 2.

2.3.1 Public Procurement is open to all persons regardless of nationality and/or race or any
other criterion not having to do with their qualifications, international obligations or
decisions taken against them under Proclamation and Directive. This principle shall
not apply when there is a standing Government Order or an agreement signed by the
Government prohibiting the participation of a particular category of persons, for
example:
2.3.1.1 the use of funds for public procurement which has been provided by a bilateral
development partner and participation is restricted to Bidders/Consultants whose
nationalities are from certain countries unless a decision is made otherwise the loan or
grant agreement as determined by the legal/financing agreement signed between
Ethiopia and the financier;
2.3.1.2 the use of funds for public procurement which has been provided by a multilateral
development agency and participation is restricted to Bidders/Consultants from
member countries of that development agency only;
2.3.1.3 firms barred from participating in public procurement for a certain period because of
past poor performance of awarded contract(s);
2.3.1.4 any Bidder/Consultant barred because of corrupt, fraudulent, collusive or coercive
practices; and
2.3.1.5 The country with whom the Government has decided not to have trade relations.
2.3.2 The names, category of persons and/or firms or countries excluded from the
participation in public procurement, both in general and for specific bids, shall be
made public either by means of a Government Order or by the PPA. Information
concerning persons and/or firms who are barred from participation in public
procurement, for whatever reason, either generally or against specific bids, shall be
kept by the PPA and it is the responsibility of the PPA to inform public bodies about
such restrictions and the periods for which they shall apply.

2.4.1 All communications between parties of the procurement (Applicants, Bidders
Suppliers, Contractors, Consultants and public bodies) shall be in writing. The
purpose of this is to ensure all communications between the parties are legally binding
communications, indicated by the signing of the communication by the sender or an
authorized officer/nominee of the sender.
2.4.2 Verbal communications and information displayed on a website or transmitted by
electronic mail or facsimile shall be confirmed in writing either by the public body or
by the Applicant, Bidder, Supplier, Contractor or Consultant. The sender or an
authorized nominee of the sender shall sign all communications.
2.4.2.1 Any communication made verbally or e-mail shall not be considered as
communication in writing.

2.5.1 In order to participate in public procurement, candidates shall provide evidence to
demonstrate that they are suitably qualified and capable for award of contract. The
purpose of qualification is to ensure that:
2.5.1.1 Those persons or firms participating in public procurement are able to meet the legal
professional and ethical standards set out in the Proclamation, Directive and the
Manual; and
2.5.1.2 Suppliers, Contractors and Consultants are able to perform the contracts for which
they are Bidding or offering services.
2.5.2 The requirements for such qualification as set out in the Proclamation and Directive
are detailed in the following paragraphs.
2.5.2.1 Professional and Technical Capacity: Suppliers, Contractors and Consultants shall
show that they possess:
· the professional and technical qualifications and competence to undertake the
work/supply/service for which they are Bidding;
· satisfactory financial resources;
· suitable equipment and other physical facilities or proven access through
contractual arrangement to hire/lease of such equipment/facilities for the desired
period, where necessary;
· satisfactory production/manufacturing capacity, where necessary;
· after-sales service, where necessary;
· managerial capability, where necessary;
· prior experience of the work/supply/service for which they are Bidding;
· satisfactory reputation for diligent and non-problematic performance of contracts
(repeated arbitration or legal proceedings against the Bidder spoil its reputation);
and
· appropriate personnel required to perform the contract, both in terms of numbers
and skills.
2.5.2.2 Legal Capacity: Suppliers, Contractors and Consultants shall show that they are
legally entitled to enter into any subsequent contract that might arise from the
procurement proceedings. This means that persons and/or firms shall demonstrate to
the public body that there is no legal reason, e.g. an order of a judicial court that
prevents them from entering into a contract.
Example—a privately owned company was bankrupt and as a result both the person
owning the company, and the company itself, were banned by a court from entering
into any contract.
2.5.2.3 Financial Capability and Status: Suppliers, Contractors and Consultants shall show
that they are not:
· insolvent, e.g. the person or firm is not financially capable to perform the contract
for which they are Bidding;
· in receivership, e.g. the firm was in serious financial difficulties and a court had, at
the request of creditors, stopped the firm from managing itself and had placed an
independent accountant in charge of the company’s business operations;
· bankrupt or in the process of being wound up, e.g. the person or firm’s financial
situation is that they have more debts than income and can no longer function;
· suspended from undertaking their business for financial reasons; and
· subject to legal proceedings for any of the above reasons.
2.5.2.4 Registration in the suppliers list: Subject to the Article 33 of the Directive, suppliers
are required to be registered in the suppliers list;
2.5.2.5 Trade license: suppliers are required to have renewed trade license;
2.5.2.6 Bank Account: suppliers are required to have a bank account;
2.5.2.7 Taxation obligations: Suppliers, Contractors and Consultants who are residents of
Ethiopia are required to produce Tax Clearance Certificate to show that they have
fulfilled their obligations to pay taxes under the relevant national Proclamation and
Directive.
Based on the above general qualification criteria and the nature and magnitude of the
object of particular procurement, public bodies shall set out the specific qualifications
in the Pre-qualification Document, Bidding Documents or Request for Proposal
Document.
2.5.3 In order to verify that a potential Supplier, Contractor or Consultant meets the
requirements specified, the public body may require submission by the Bidder of
documentary evidence or other information from appropriate authority or organization
that shows the potential Supplier, Contractor or Consultant meets these requirements.
The following paragraphs detail the documentation that may be requested by the
public body from the Bidder.
2.5.3.1 Professional and Technical Capacity:
· provide documentary evidence to show they are enrolled in the relevant
professional or trade organizations registered in the Federal Democratic Republic
of Ethiopia or in their country of origin or to provide a declaration on oath or a
certificate concerning their competency in accordance with the conditions laid
down by the law of the Federal Democratic Republic of Ethiopia or of the country
of their origin. Such an oath or certificate would, normally be provided by a
professional institution related to the professional qualifications of the person or
firm;
· provide a description of the firm’s technical facilities, its available equipment, its
measures for ensuring quality e.g. ISO certification and its design, research and
development facilities;
· provide a list of the major deliveries effected in the past three/five years, with the
sums, dates and recipients, public or private, on a transaction basis, if a public
body so requested;
· provide a list of client references who may be contacted by the public body;
· provide samples, description and/or photographs of the product to be supplied, the
authenticity of which may be certified by a professional institution related to the
professional qualifications of the person or firm, if the public body so requests;
· submit appropriate statements from bankers of the firm’s financial resources;
· submit firm’s balance sheets or extracts from them, where publication of a balance
sheet is required under company law in the country in which the Supplier,
Contractor or Consultant is established;
· submit statement of the firm’s overall turnover and its turnover in respect of the
goods/works/services to which the contract relates for the previous three (3)
financial years; and
· provide details of the numbers of both technical and administrative personnel
employed by the firm.
2.5.3.2 Legal Capacity: The legal capacity shall be confirmed by a power of attorney to be
notarized by a Notary Public/ Commissioner for Oaths. This document shall state that
there are no existing orders of any judicial court that prevent either a person or firm or
employees of a firm from entering into and/or signing a contract with the public body.
2.5.3.3 Financial Status: It is for the public body to prove that any of the circumstances
detailed above actually exist. However, if the public body so requests, it is for the
Applicant or Bidder to prove that none of those circumstances apply. Proof can be
provided in the form of a document issued by an appropriate authority in the Federal
Democratic Republic of Ethiopia or in the country of the Bidder showing that none of
these cases apply.
2.5.3.4 Taxation Obligations: For proof of fulfillment of obligations relating to the payment
of taxes, the public body may ask the Bidder or Applicant who is a national of
Ethiopia for a certificate issued by the competent authority of Ethiopia. The tax
certificate shall state:
· tax registration number or tax payer’s identification number (TIN);
· VAT registration number;
· the year up to which income tax and VAT assessment has been completed; and
· confirmation that tax and VAT has been paid regularly.
For example, in a turnkey contract, where a Contractor is responsible for design,
construction, procurement and installation of equipment and commissioning, may
require additional qualification information. Similarly, a contract for the provision
of operational services, such as security or catering services may require
additional or different information to be provided.
In the case of goods or works procurement, where the bidding document has more
than one lot the qualification requirement should be specified for each lot.
Similarly, where large procurement of goods or more typically of works, could
attract the participation of Joint Venture, Consortium or Association, the minimum
percentage that should be fulfilled out of each/or some of the specified
qualification requirements may be set for the leading partner of the JVCA and the
other partner(s) respectively. The qualifications of sub-Contractors would not
count towards the Bidder’s qualification, except for major specialized sub-
Contractors, if so stated in the pre-qualification or Bidding Documents.
2.5.4 In case of pre-qualification, the key qualification requirements shall be stated in the
invitation for pre-qualification, and the pre-qualification document distributed to
applicants shall indicate all the qualification criteria. In the case of post-qualification,
the key qualification requirements shall be stated in the invitation to bid, and the
bidding document issued to prospective bidders shall indicate all qualification criteria.
Pre/Post qualification assessment will be done on the basis of the information
provided.
2.5.5 Bid evaluation shall be done in accordance with the bidding document issued to the
bidders and prequalification assessment on the basis of prequalification document
distributed to applicants.
2.5.5.1 The criteria for establishing an Applicant’s ability to perform the specific contract in
question shall be assessed by the public body as detailed in the following paragraphs.
Experience and past performance on similar contracts:
· on a minimum number of similar projects/programs that have been completed;
· on the value of similar completed projects/programs to be considered, both
individually and collectively;
· on the countries in which the Applicant shall have worked, with additional
emphasis being placed upon work in the region; and
· performance of goods including plant, equipment and machinery supplied to the
concerned public body or other public body within or outside the Federal
Democratic Republic of Ethiopia.
2.5.5.2 Capabilities with respect to personnel, equipment and construction or manufacturing
facilities:
· state the professional qualifications and experience requirements for key personnel
within the Applicant’s organization;
· define the types and minimum numbers of equipment that an Applicant would be
expected to possess in order to fulfill the contract or to demonstrate that it has
obtained a “contractual arrangement” for hire/lease access to such equipment
during the intended period of use to perform the contract;
· state the minimum production requirements considered necessary for the
performance of any contract involving manufacturers; and
· state if the entity intends to inspect the equipment/facilities as part of the
evaluation of the applications.
2.5.5.3 Commercial, financial and legal requirements:
· These are as stated above.
· The above paragraphs set out typical pre-qualification evaluation criteria;
however, these shall be varied depending upon the public body’s requirement.
· If none of the Applicants meet the pre-qualifying criteria, then all applications
may be rejected.
2.5.5.4 In these circumstances, e.g. rejection of all applications, the public body shall take
action in a manner similar to that described in Rejection of all bids, proposals and
quotations. Subject to the approval of the head of a public body or an officer
authorized by him/her, the public body shall take the following actions:
· if the circulation of the Invitation for Pre-qualification is considered to be
unsatisfactory, the entity shall re-advertise the Invitation more widely, perhaps
internationally, if the requirement is of a high value or complex nature; or
· if the invitation is considered to be in need of revision, the revised invitation may
be reissued to those persons or firms who had originally submitted applications; or
be re-advertised.
· if the lack of acceptable submissions is considered to be a combination of both the
above reasons, the revised invitation may be issued to previous Applicants along
with re-advertisement.
2.5.6 A public body can disqualify a Bidder during the evaluation process for various
reasons including submitting a document containing fraudulent practice or poor past
performance but cannot debar a bidder from future participation in Government
tenders. They can report to PPA and when PPA believes that a bidder deserves
punishment then it can suspend that bidder from participating in government bids for a
prescribed period of time.
2.5.7 A public body shall disqualify any Applicant or Bidder if, at any time, it finds that the
information submitted for qualification was either significantly inaccurate or
incomplete. Any reason for disqualification should be clearly mentioned in the prequalification
or bid evaluation report. If such conduct is found to be repeated, then the
Applicant or Bidder may be disqualified from this and subsequent procurement
proceeding. Debarring bidders however shall be the role of PPA.

2.6.1 The objectives of establishing lists of suppliers are:-
2.6.1.1 Maintain database list of suppliers /contractors/consultants;
2.6.1.2 To maintain information on the progress, status and development of domestic
suppliers/contractors/consultants;
2.6.1.3 To develop different methods by learning from experience gained from relations with
suppliers with the view of increasing value for money from procurement.
Directive Article 33
To participate in any public procurement being registered in the supplier list is a
prerequisite.
Notwithstanding the provision above, persons renting houses apart from those
engaged in real state business may participate in a bid for procurement of house
rental service without being registered in the suppliers list.
Branches of Federal Government public bodies located outside of Addis Ababa may
procure on competitive bases from suppliers not registered in the supplier's list, if
registered suppliers engaged in supplying the goods and services to be procured are
not available in their locality.
2.6.2 Any supplier desiring to obtain a Registration Certificate shall have to register
themselves using the form made available for this purpose in the website of the PPA
and submit the same together with the following:-
2.6.2.1 Valid trade license indicating the stream of business in which the supplier is engaged;
2.6.2.2 A certificate of professional qualification from the appropriate body, if a supplier is a
consultant;
2.6.2.3 A contractors’ certificate issued by the Ministry of Works and urban Development
indicating the level of such contractor;
2.6.2.4 A certificate issued by the Federal Transport Authority indicating the level of the
garage, if a supplier is engaged in the maintenance or repair of motor vehicles;
2.6.2.5 A certificate issued by the Drug Administration and control Authority, if the supplier
is engaged in the provision of drugs and medical equipments.
2.6.3 If it is proved that a bidder or supplier has committed one of the acts listed below with
an intention to distort or alter the bid evaluation result or during the contract
administration, he/it may be suspended from the supplier’s list for a period not less
than two years or for an indefinite period, so that he/it may not participate in any
public procurement for the period for which the suspension lasts:
2.6.3.1 Where it is proved that he/it has committed an act of corruption i.e. giving to an
employee in what ever position engaged in public procurement, anything of monitory
value in the form of bribe or inducement;
2.6.3.2 Where it is discovered that he/it has committed an act of fraud i.e. Providing falsified
or invalid documents or where he/it is found to have participated in a public
procurement while a suspension against him is in force or where it is discovered that
he/it has supplied goods, rendered services or delivered works of an inferior quality to
that required under a contract by employing deceitful practice to make it look like
genuine or it conforms to stated requirements;
2.6.3.3 Where it is proved that he/it has connived at an act of price fixing with certain bidders
to deprive the public body and the other bidders of the benefit of fair competition;
2.6.3.4 Where it is proved that a supplier has delivered goods, services, works or consultancy
services of a kind or quality that are not in conformity with the schedule of
requirements under a contract in connivance with employees or officials of the public
body;
2.6.3.5 Where it is proved that he has inflicted or has threatened to inflict physical or bodily
injury on/or used coercive action against a procurement staff or authority of a public
body;
2.6.3.6 Where it is discovered that he/it has committed another act entailing suspension from
the suppliers list within two years from the date on which the suspension previously
imposed upon him by the agency for certain misconduct in connection with the
execution of public procurement came to an end.
2.6.4 The following acts committed by a bidder or supplier shall entail suspension from the
suppliers list for a period of 6 months up to two years depending on the gravity of the
fault, so that the bidder or the supplier may not participate in any public procurement
for that period:
2.6.4.1 Where a supplier under a contract with a public body fails to complete the delivery of
goods, services, works or consultancy services under that contract, and on account of
such failure of the supplier, the public body suffers direct or consequential loss or
damage or such failure retards or disrupts the operation of the public body;
2.6.4.2 Whereupon receipt of written notification of award as a successful bidder, a bidder
fails or refuses to sign a contract with a public body and in exercising another option
to acquire the required objects of procurement from another supplier, the public body
sustains loss or such failure or refusal of the bidder retards or disrupts the operation of
the public body;
2.6.4.3 Where he/it omits another act entailing warning pursuant to Article 48.5.3 of the
Directive, within 3 years from the time when he/it received warning for the first such
omission.

2.7.1 The technical specifications define the characteristics required of a material, supply or
service such that they fulfill the use for which they are intended. They are laid out in
the contract documents without creating unjustified obstacles to competition. These
characteristics include environmental performance, design, conformity assessment,
performance safety, dimensions, quality assurance, and production methods. For
public works contracts they also cover test, inspection and acceptance conditions, as
well as construction techniques. When drawing up its technical specifications, a public
body should refer to national and international standards. The technical specification
shall be prepared in a non-restrictive manner so that a fair and open competition is
created between all potential Bidders. Technical specifications and descriptions of the
goods and related services and works and physical services shall be prepared in a
manner that provides a correct and complete description of the object to be procured.
2.7.2 They shall clearly describe a public body’s requirements in respect of:
2.7.2.1 name and/or description of the object of procurement to be supplied;
2.7.2.2 quality of the object of procurement to be supplied;
2.7.2.3 performance standards;
2.7.2.4 safety standards and dimensions;
2.7.2.5 symbols, terminology to be used in packaging, marking and labeling of the object;
2.7.2.6 processes and methods to be used in the production of the object of procurement; and
2.7.2.7 requirements for conformity assessment tests.
2.7.3 They shall, where appropriate, be:
2.7.3.1 expressed in terms of performance requirements, rather than design or descriptive
characteristics, e.g. if a generator is to be purchased, the performance requirements
could be for example:
· the electricity output to be generated per hour;
· the minimum capacity of engine acceptable; and
· the maximum noise level while in operation.
2.7.3.2 Based upon recognized international standards, where such standards exist or
otherwise, on recognized national standards or codes.
2.7.4 There shall be no reference to a particular trademark or trade name, patent, design or
type, specific country of origin, producer or service Supplier.
Technical specifications, which are prepared using the procedure detailed in the
preceding paragraphs, should enable fair and open competition among all Bidders.
Specifications that are linked directly to design or descriptive characteristics limit
competition, as only Bidders whose products match the stated design and/or
description would be able to bid.
For example, if a public body is purchasing a vehicle, it is not permitted to simply
issue a bid for a named vehicle, nor it is permitted to write a detailed technical
specification that is so directly linked to one manufacturer that other vehicle
manufacturers would be unable to bid because the specification was so tightly written.
No two vehicles are completely identical, but many vehicle specifications are
relatively close and Bidders can compete if specifications are generalized, e.g. rather
than saying a vehicle shall weigh 2,055 Kg, the specification should state that the
vehicle could weigh between 1,800 Kg and 2,100 Kg.
Similarly, in the case of purchase of computers the generalized specifications prepared
may state that the assembling bench should be ISO certified but under no
circumstances shall the name of any particular brand be stated. Parameters in the
technical specifications shall describe the minimum, maximum, or the acceptable
range for a specific line of requirement.
If a public body has insufficient technical expertise to either prepare a generalized
technical specifications or to make the specifications fully understandable to Bidders,
it is permitted to make reference to a particular branded product, but shall add the
words “or similar/equivalent to” into the specification.
Public bodies shall, where possible, prepare the specifications in close cooperation
with the user/beneficiary unit of the supply or works or services.
2.7.5 Examples of standards to be followed, but not restricted to, are those published by:
2.7.5.1 The International Standard Organization (ISO);
2.7.5.2 The American Standard Testing Methods (ASTM); and
2.7.5.3 National available standards set by the Quality and Standards Authority of Ethiopia
(QSAE).
2.7.6 Public bodies should use the standardized specifications for commonly used goods
(such as paper, office equipment, other consumables etc.). When requested by public
bodies, the PPA will provide either guidance for setting technical specification or
information on sources from where such guidance may be obtained.

2.8.1 A public body reserves the right to accept or reject any bid, and to annul the bidding
process and reject all bids at any time prior to contract award, without thereby
incurring any liability to Bidders. Contract award is the point at which a public body
issues the Letter of Award to a successful Bidder.
2.8.2 If a public body decides to reject all bids, quotations or proposals for reasons other
than failure of all responsive Bidders to post-qualify, the public body shall review the
causes justifying the rejection of all submissions, examples of which may be:
2.8.2.1 the price of the lowest evaluated bid substantially exceeds the prevailing market
prices;
2.8.2.2 there is evidence of lack of competition;
2.8.2.3 the Bidders are unable to meet the minimum qualifications and/or technical
specification; and
2.8.2.4 the Bidders are unable to offer the required delivery/completion time, provided the
stipulated delivery/completion time is reasonable and realistic.
2.8.3 After rejection of bids, the public body shall reassess the official estimate and/or
budget with that of prevailing market price and shall subsequently consider making
revisions to the conditions of contract, design and specifications, scope of contract or a
combination of these factors, before inviting new bids, quotations or proposals.
2.8.4 If lack of competition is considered to be one of the reasons for the rejection of all
bids, quotations or proposals, it may have been because either too few persons or
firms saw the advertisements or collusive and/or coercive practices has taken place.
Therefore, having reviewed the causes, when the public body reissues the Invitations
to Bid or Request for Expressions of Interest, it shall be advertised more widely and
perhaps, depending upon value, internationally. In the case of Requests for
Quotations, additional persons and/or firms may be issued with the RFQs. Besides,
necessary actions shall be undertaken against collusive and/or coercive practices,
where applicable.
2.8.5 Rejection of all bids, quotations or proposals may be made because they are all
considered to be non-responsive, e.g. they do not comply with the requirements
specified in the documents issued by the public body. New bids, quotations or
proposals may be invited from those or other persons or firms, using revised
documents, who were originally pre-qualified or short-listed or who had submitted
bids in response to the advertised invitation.
2.8.6 Upon receipt of requests from Applicants or Bidders, a public body shall notify them
of the reason(s) for the rejection of its submission. However, a public body is not
required to justify the reason(s) for the rejection of their application, bid, quotation or
proposal.
2.8.7 A public body shall incur no liability of any kind towards an Applicant or Bidder
arising from the rejection of all bids, quotations or proposals.
2.8.8 A public body shall notify all Applicants or Bidders of the rejection of all bids,
quotations or proposals of the decision being taken to reject all bids, quotations or
proposals.
2.8.9 If a public body decides to cancel the procurement proceedings prior to the deadline
for the submission of applications, bids, quotations or proposals, it shall return
unopened, to the Bidder any such documents already received.

2.9.1 The Government of the Federal Democratic Republic of Ethiopia represented by the
Public Procurement and Property Administration Agency (PPA) requires Public
Bodies, as well as bidders to observe the highest standards of ethics during the
procurement and the execution of contracts. In pursuance of this policy, the
Government:
2.9.1.1 Defines, for the purposes of this provision, the terms set forth below as follows:
(a) “Corrupt practice” is the offering, giving, receiving or soliciting, directly or
indirectly, of any thing of value to influence improperly the action of a public
official in the procurement process or in contract execution;
(b) “Fraudulent practice” is any act or omission, including misrepresentation, that
knowingly or recklessly misleads, or attempts to mislead, a party to obtain
financial or other benefit or to avoid an obligation;
(c) “Collusive practices” is a scheme or arrangement between two or more Bidders,
with or without the knowledge of the Public Body, designed to establish prices at
artificial, non-competitive levels; and
(d) “Coercive practices” is harming or threatening to harm, directly or indirectly,
persons or their property to influence their participation in a procurement process,
or affect the execution of a contract.
(e) Obstructive practice is:
· deliberately destroying, falsifying, altering or concealing of evidence material
to the investigation or making false statements to investigators in order to
materially impede the Federal Ethics and Anticorruption Commission, the
Federal Auditor General and the Public Body or their auditors investigation
into allegations of a corrupt, fraudulent, coercive or collusive practice; and/or
threatening, harassing or intimidating any party to prevent their from
disclosing their knowledge of matters relevant to the investigation or from
pursuing the investigation, or
· acts intended to materially impede the exercise of inspection and audit rights
provided for under Clause 2.9.4 below.
2.9.1.2 Will reject a recommendation for award if it determines that the Bidder recommended
for award has, directly or through an agent, engaged in corrupt, fraudulent, collusive,
coercive or obstructive practices in competing for the contract in question;
2.9.1.3 Will debar a bidder from participation in public procurement for a specified period of
time if it at any time determines the Bidder has engaged in corrupt, fraudulent,
collusive, coercive or obstructive practices in competing for, or in executing, a
contract. The List of Debarred Bidders is available on the PPA's Website
http//www.ppa.gov.et.
2.9.2 In pursuit of the policy defined in Sub-Clause 2.9.1, the Public Body may terminate a
contract for goods, works or services if it at any time determines that corrupt or
fraudulent practices were engaged in by representatives of the Public Body or of a
bidder during the procurement or the execution of that contract.
2.9.3 Where it is proved that the bidder has given or has offered to give inducement or bribe
to an official or procurement staff of the public body to influence the result of the bid
in his favor shall be disqualified from the bid, prohibited from participating in any
future public procurement and the bid security deposited by them shall be forfeited
2.9.4 The PPA will have the right to require to inspect the Supplier accounts and records
relating to the performance of the contract and to have them audited by auditors
appointed by the PPA.
2.9.5 The code of ethics in public procurement as issued in the Proclamation and Directive
is presented in Appendix 6.

A procurement plan spells out intended purchases, proposes the procurement method to be used,
and shows different phases of the procurement process to delivery of the goods, works or services
as necessary. It also provides a guideline for monitoring procurement implementing over the
period.

3.1.1 Any public body and other entities accountable to such public body shall be required
to prepare a procurement plan supported by action plan enabling them to execute in
due time, the procurement necessary to implement their work program.
3.1.2 This plan shall be updated on an annual basis and in a rational manner having regard
to expected flow of funds. The Procurement Plan shall be incorporated into the
Project Performance of the capital project. For procurement under the recurrent
budget a public body shall prepare an Annual Procurement Plan. Preparation of
Procurement Plan is mandatory for all public bodies. Any procurement object
irrespective of value and/or methods should be included in the Procurement Plan. At
the beginning of each financial year all public bodies shall prepare Procurement Plans
reflecting both updated annual plan for the capital budget and annual plan for the
recurrent budget. The head of a public body or an officer authorized by him/her shall
approve the Procurement Plan.
A public body shall publish on their Notice Boards and, where applicable in their
website, at the beginning of the financial year the estimated total procurement by
category of goods and related services and works and physical services and
intellectual and professional services which they intend to award during the
subsequent 12 months. This is known as the "Annual Procurement Plan" prepared
in accordance with the Directive and shall be in the format provided in Annex 1 of
the Directive.
Procurement planning and budgeting processes and sample Project Procurement
Plan are provided in Appendixes 3 and 4.
3.1.3 In identifying its procurement needs, any public body has to take the following point
into consideration:
(a) That the need can not be met by using unused resource or property available in the
public body.
(b) That the need can be met by a product or service available in the market.
(c) That the need does not involve items which shall be of no use to the public body
and cause the public body to incur unnecessary cost.
(d) That the identification of procurement needs makes provisions for additional need
that might arise in the future, especially in regard to the procurement of goods of
long term contract.
(e) That the procurement need is in line with standard items which are widely
available in the market unless the need requires otherwise.
(f) That the procurement need is environmentally friendly.
3.1.4 In determining its annual procurement needs arising from its various departments, a
Public Body has to adhere to the following procedures:
(a) Require end users in the public body to submit their annual procurement needs,
(b) Identify the need submitted by end users by type of procurement, quantity, quality
and source.
(c) Identify goods, works and or services to which the public body gives priority and
special attention.
(d) Ascertain that there are adequate suppliers for the needs
(e) Determine the cost estimate for each type of procurement by reference to survey
conducted by the public body or price information obtained from other sources.
(f) Ascertain that technical specification is prepared or will be prepared by end users.
3.1.5 Public bodies have to organize their procurement needs in packages based on
procurement needs data collected from end users and market price survey, and taking
into consideration the following points:
(a) Without prejudice to the provision of article 53 of the Proclamation, where a
situation arises in which a procurement comprises goods, services and works, the
public body shall classify such procurement on the basis of the value of the
component representing more than 50 % of the value of the procurement.
(b) Assort, as far as possible, similar and related needs.
(c) In respect of bulk purchase, ensure that there are adequate suppliers in the market
or classifying the procurement into lots based on category of supplies, which can
attracts competition.
(d) Ensure that the procurement is convenient for execution and there are no hurdles
obstructing the procurement.
Public Procurement and Property Administration Agency Public Procurement Manual
40
(e) Organize the procurement in such a way as to open up opportunity for as many
local producers as possible to participate in the procurement.

A procurement method is the technique that public body uses to acquire goods, works and
services. The procurement methods described in this chapter are applicable to the procurement of
goods, works and services (consultancy and non-consultancy). The method selected depends on a
number of factors including the type of goods or service being procured, the value of the good or
service being procured, the potential interest of foreign bidders and even the cost of the
procurement process itself. The Proclamation provides as follows:
The following sections explore the choice of procurement methods and the factors considered for
use of one method as opposed to the other.

The Proclamation and Directive and the Manual assumes that the public body is able
to exactly spell out the object of procurement and can specify it in detail in the
Bidding Documents and the technical specifications. Otherwise, procurement
proceedings shall not begin until such time as the public body has been assisted to
prepare a satisfactory technical specification against which bids shall be invited. The
following sections describe the choice of procurement methods.
4.1.1 Open Bidding Method
4.1.1.1 Under open biding method, all interested firms bidders are given adequate notification
of contract requirements and all eligible bidders are given an equal opportunity to
submit a tender. The public body must give sufficient public notification of bidding
opportunities to potential bidders to determine their interest and prepare bid
documents. The Open Bidding Method is the preferred method of procurement of
goods, works and services (Consultancy and Non Consultancy), unless the threshold
levels or circumstances relating to a specific requirement make it more appropriate for
one of the other procurement methods to be used.
Proclamation Article 33:
The following six methods of procurement shall be used in public procurement:
. Open Bidding
. Request for Proposals
. Two-Stage Bidding
. Restricted Bidding
. Request for Quotations; and
. Direct Procurement
4.1.1.2 A public body may use a procurement method other than Open Bidding Method only
in accordance with the requirements set out in Proclamation and Directive. These
methods cover Restricted Bidding Method, Direct Procurement Method, Two-Stage
Bidding Method and Request for Quotations Method. The selection of any
procurement method other than Open Bidding should be recorded in the Records of
procurement, stating the reasons and justification for the method selected, in
compliance with the conditions specified in the relevant Proclamation and Directive.
The procurement method applicable for a package shall be indicated in the
procurement plan. The head of a public body may request for permission from PPA
under exceptional circumstances, to use a procurement method other than Open
Bidding for reasons not covered by Proclamation and Directive. Such decisions shall
be justified on technical and/or economic grounds. A similar procedure to that set out
above shall be followed to record the decision, except that a specific reason other than
those specified in Proclamation and Directive shall be clearly provided (e.g. technical
and/or economic justification) and the decision shall be approved by the head of a
public body.
4.1.1.3 Directive provides threshold values which govern the use of procurement methods
other than Open Bidding Method. Threshold value refers to the total value of each
procurement transaction or package. If the procurement period is more than one
financial year, then necessary budget provision should be made for each financial
year, without splitting the package. Procurement Plan will show the procurement
package and its total value. In case of procurement using Framework Contract,
threshold values shall correspond to the estimated total contract value under that
Framework Contract.
4.1.2 Conditions for use of Restricted Bidding Method
The restricted bidding procedure is a two-stage procedure where bidders express their
interest following publication of a procurement notice, but only those invited by the
public body may submit bids after a screening process. Thus the restricted procedure
consists of two distinct stages - selection of suitable bidders and evaluation of bids. At
the first stage, the only criteria which may be used to select prospective bidders are
economic and financial standing or technical knowledge or capability of carrying out
a specific assignment. The restricted procedure works best where the public body is
clear at the start of the process as to what it wants to procure, in terms of pricing and
other award criteria.
4.1.2.1 A public body may undertake procurement by the Restricted Bidding Method:
· When goods and related services and works and physical services, because of
their specialized nature, are available only from a limited number of Suppliers or
Contractors. (e.g. aircraft, locomotives, specialized medical equipment,
contraceptives, telecommunications, silos, ports and harbors, etc).
· The cost of procurement does not exceed the threshold specified in respect of
restricted bidding in the Directive.
· Where a repeated advertisement of the invitation to bid fails to attract bidders in
respect of a procurement subject.
· Conditions for use of Restricted Bidding Method shall be considered as being
fulfilled if the estimated value of any contract of goods and related services and
works and physical services to be procured is within the threshold values
specified in the Directive and summarized in Appendix 1.
4.1.3 Conditions for use of Direct Procurement Method
4.1.3.1 Direct procurement happens when the public body, for some justified reasons,
procures goods, works or services from only one source. A public body may use
Direct Procurement Method for procuring goods and related services, works and
physical services and intellectual and professional services directly from one single
source without going through all the requirements of a full bidding process. However,
this method shall under no circumstances be used as a means of avoiding competition
or for favoring any one particular Bidder/Consultant or for creating any scope of
discrimination among Bidders/Consultants. The conditions for use of direct
procurement may be summarized as: i) small value contract, ii) availability of only
one single source, iii) extension of existing contract; iv) for compatibility reasons; v)
and emergency situations;
4.1.3.2 The head of a public body shall strictly control the Direct Procurement Method in
order to ensure that there is no abuse and that its use is only where conditions
specified in the Proclamation and Directive is satisfied. A decision to use Direct
Procurement Method shall be approved in writing by the head of a Public body or an
officer authorized by him/her.
The circumstances in which a public body is allowed to use direct procurement are
detailed below.
· When in absence of competitions for technical reasons the goods, works or
services can be supplied or provided by only one candidate and the quality and
technical competence of such candidate is so superior or unique that it can not be
Directive 23.3: Conditions for use of restricted bidding
The total contract value of Procurement made by restricted bidding, in accordance
with Article 49.2 of the Proclamation shall not exceed the following:
1. for procurement of works Birr 2,000,000.00;
2. for procurement of goods Birr 500,000.00;
3. for procurement of consultancy services Birr 300,000.00;
4. for procurement of services Birr 400,000.00.
matched by any other candidate operating in the same field of activity. Such direct
procurement shall be restricted and be undertaken only with the approval of the
head of a public body.
· For additional deliveries of goods supplied by the original supplier which are
required as:
o partial replacement of existing supplies, services or installations;
o as an extension of existing supplies, services or installations; or
o where a change of supplier would result in the procurement of equipment,
spare parts and/or services which would not be interchangeable with the
existing equipment, spare parts and/or services.
· Within limits defined in the Directive, when additional works, which have not
been included in the initial contract have, through unforeseeable circumstances,
become necessary since the separation of the additional works from the initial
contract would be difficult for technical or economic reasons.
· Within limits defined in the Directive, for new works which is a repeat of similar
works which conform to a basic project of which the initial contract has been
awarded on the basis of open or restricted bidding.
· Within limits defined in the Directive, for continuation of consultant services,
where the original contract has been satisfactorily performed and the continuation
of the original contract is likely to lead to gains in economy and efficiency.
· the head of the public body has determined that the need is one of pressing
emergency in which delay would create serious problems and therefore injurious
to the performance of that public body;
· where situations arise in which shopping becomes necessary to meet the special
procurement need of public bodies;
· For purchase of goods made under exceptionally advantageous conditions which
only arises in the very short term. This provision is intended to cover unusual
disposals by firms, which are not normally suppliers. It is not intended to cover
routine purchases from regular suppliers
· The additional procurement undertaken shall be approved by the same authority
that approved the original procurement proposal, always provided that the head of
a public body, or an officer authorized by him/her, had approved the use of Direct
Procurement Method. The additional procurement shall not be allowed for more
than one occasion for each contract. However, if under exceptional circumstances
of the nature of force majeure, further additional procurement is required, then the
public body shall seek direction from the PPA.
4.1.3.3 A public body may also use Direct Procurement Method for the purchase of readily
available standard low value goods and unforeseen urgent services, e.g. catering
services, ambulance services, transportation services, event management services,
small repair/maintenance services, plumbing services, carpentry services, masonry
services, painting services, etc., provided the contract value does not exceed the
amount specified in Appendix 1. The Direct Procurement Method shall be undertaken
in the manner prescribed in the Proclamation and Directive and the reasons for the
selection of this method shall be documented in the records of procurement.
4.1.4 Conditions for Use of Two-Stage Bidding Method
4.1.4.1 A two-stage bidding method is used when the procurement process is split into two
phases. The first phase identifies suitable candidates, who are then invited in the
second phase to submit their firm bids. A public body may use the Two-Stage
Bidding Method in accordance with the requirements set out in Proclamation Article,
57 and 58 and Article 19 of the Directive in the case of large or complex contracts of
goods and related services and/or works and physical services, such as turnkey
contracts for manufacturing process plants, e.g. the design, construction, installation
of equipment and commissioning of a new factory, industrial plants or the
procurement of major computer and communications systems or construction and
commissioning of a public institution. Under this method, the bidding have to follow
two-stages, First-Stage and Second- Stage.
4.1.4.2 The use of the word ‘complex’ in describing the nature of the items to be procured
under Two-Stage Bidding Method covers procurement objects for which it may not
be in the best interests of the public body to prepare complete technical specifications
in advance because of rapidly changing technology. This could also be in situations
when the public body may not be capable of preparing a full technical specification
because alternative technical approaches may be available, but not within the
Directive Article 25.7:
(a) Pursuant to the provision of article 51.2 of the Proclamation public bodies may
carry out directly from any supplier, procurement of goods or services not
included in their procurement plan, or goods or services necessary to solve
problems encountered during travel the value of which doesn’t exceed Birr 1,500
(one thousand five hundred Birr) however, the total value of such small
procurements within a fiscal year shall not exceed birr 30,000.00 (thirty thousand
Birr)
(b) Notwithstanding the provision of sub-article (a) above, diplomatic missions of the
Ethiopian Government may carry out procurements of emergency requirements
not included in their procurement plan and the value of which does not exceed
USD $300 (three hundred USD) in a single purchase order. However, the total
value of such small procurements within a fiscal year shall not exceed USD
$6000.00 (six thousand USD).
knowledge of the public body. In such circumstances, it is better for the public body
to learn from Bidders about the most appropriate, fit-for-purpose solution to meet its
procurement requirements.
4.1.5 Subject to the provisions of article 57 and 58 of the Proclamation, procurement made
by means of two stage bidding shall be carried out in accordance with the procedures
set forth for national or international competitive bidding, as the case may be, in
article 16 or 17 of this Directive respectively.
4.1.6 Notwithstanding the provision of article 4.1.5 above, the following bid procedures
shall apply in respect of two stage bidding:-
4.1.6.1 It shall be stated in the invitation to bid that the procurement shall be carried out by
means of two stage bidding,
4.1.6.2 Candidates shall not be required to furnish bid security during the first of the two
stages bidding,
4.1.6.3 Since the purpose of the first stage is to draw up detailed schedule of requirements
based on proposals from candidates, the bidding document prepared by the Public
Body for the first stage shall state the requirements of the Public Body in general
terms and incorporate the necessary description and questionnaires.
4.1.6.4 The technical proposal submitted by candidates during the first stage shall be opened
in the absence of the candidates in the manner stated in the invitation to bid.
4.1.6.5 The first stage evaluation shall focus on examining the proposals submitted by
candidates at the first stage to identify the schedule of requirements necessary and the
bidders qualifying for the second stage bidding. During the first stage evaluation, the
Public Body may also hold discussion with all, some or one of the candidates as
necessary. The discussion to be conducted accordingly shall aim at creating better
understanding of and develop the proposal/proposals submitted by the candidates.
4.1.6.6 The bidding document to be proposed for the second stage bidding shall as far as
possible comply with the procedure of competitive bidding set forth in article 16& 17
of this directive.
4.1.6.7 Invitation shall be sent to the candidates whose proposals have been accepted in the
first stage bidding to participate in the second stage bidding. Such bidders shall be
required to furnish bid security.
4.1.6.8 The Public Body shall send to such bidders or require them to collect in person the
bidding document prepared for the second stage bidding.
4.1.6.9 The invitation to bid sent to the candidates pursuant to article 4.1.6.7 above shall state
clearly the requirements they have to fulfill to obtain the bidding documents.
4.1.7 Conditions for Use of Request for Quotations Method
4.1.7.1 Sometimes referred to as shopping, request for quotations method is used to buy items
of low value. A public body may undertake procurement by means of a Request for
Quotations (RFQ) in accordance with the requirements set out in Proclamation and
Directive for the purchase of readily available, standard off the shelf goods or for
procurement of works or services for which there is an established market, so long as
the estimated value of such procurement shall not exceed the prescribed threshold
value as given in Article 24.2 of the Directive and Appendix 1.
4.1.7.2 The head of a public body shall strictly control the use of RFQ as a method of
procurement in order to ensure that there is no abuse and that its use by public bodies
is restricted to the items specified in the Proclamation and Directive. A decision to use
the Request for Quotation Method shall be approved in writing by the head of a
public body, or an officer authorized by him/her. In deciding and/or justifying the use
of the RFQ method in public procurement, the following shall be considered:
4.1.7.3 There is a risk of abuse in procurement under RFQ. The use of this method shall be
restricted to cases when the justification for it cannot be disputed. Public bodies may
not use RFQ as a means to either by-pass more competitive methods of bidding or
split large procurements into smaller ones solely to allow the use of RFQ, as stated in
the Proclamation and Directive.
Proclamation Article 57:
Public bodies may engage in procurement by means of two-stage bidding:
1. When it is not feasible for the public body to formulate detailed specifications for
the goods or works and in the case of services to identify their characteristics
and, in order to obtain the most satisfactory solution to its procurement need;
2. When the public body seeks to enter into a contract for the purpose of research,
experiment, study or development except where the contract includes the
production of goods in quantities sufficient to establish their commercial viability
or to recover research and development costs;
3. Where bid proceeding are initiated but no bids are submitted as a result of the
nature of the object of procurement not being clearly described or where all bids
are rejected due to failure on the part of the public body concerned to draw up a
clear and complete specification;
4. Because of the technical character of the required goods or works, or because
of the nature of the consultancy or other services it is necessary for the public
body to negotiate with the suppliers.
Public Procurement and Property Administration Agency Public Procurement Manual
48
4.1.7.4 RFQ is a method that should not require complex documentation or all the formalities
of a full Bidding process. It is, therefore, an appropriate method only for procuring
readily available, off-the-shelf goods or standard specification commodities which are
small in value and/or routine low value related services, physical services or stand
alone services, e.g., catering services, courier services, security services,
transportation services, printing services, etc. When the nature of the specifications is
complex or the type of procurement requires an elaborate, detailed evaluation system
(e.g., efficiencies, delivery times, etc.), that needs substantial documentation, open
Bidding shall be used and not the RFQ method.
4.1.7.5 The public body shall put in place an operational mechanism reflecting a clear
segregation of duties for the procurement officers executing the RFQ Method,
whereby the procurement officer who invites and receives quotations shall not open it.
The Bidder shall submit its offer in response to RFQ in a sealed envelop clearly
marked on the top of envelop as “Quotation for ____”. The quotations shall be
stamped for receipt indicating both the date and time of receipt. The quotations
received by the public body shall be submitted directly without opening to the
relevant authority on the appointed date for opening, examination and evaluation of
offers received in response to RFQ.
4.1.7.6 The Request for Quotations Method shall be undertaken in the manner described in
the Proclamation and Directive and the reasons for selection of procurement by the
Request for Quotations Method shall be documented in the records of procurement.
Directive Article 24.1:
Public bodies may apply request for quotation to procure goods, works or services
the need of which can not be foreseen, or which can not be included in the Public
Body’s bulk purchase of needed items, or which are needed for immediate use and
the estimated value of which is within the threshold established in article 24.2 of the
Directive.
General guidance on Specialized Procurements (spare parts, vehicles, textbooks,
health goods, and IT) is provided in Appendix 8.

National open bidding method refers to the procurement procedure where Invitation
to Bid is restricted to the Federal Democratic Republic of Ethiopia.
4.2.1 Advertisements
4.2.1.1 In order to attract a reasonable number of applicants and to alert all candidates who
may be interested in the bid, public bodies are required to advertise the bid. A public
body shall be responsible for advertising directly all, Invitations to Bid (ITB) for
goods and related services, works and non-consultancy services, Request for
Expressions of Interest ,intellectual and professional services whichever applicable
and Invitations for Pre-Qualification (IFPQ).
4.2.1.2 Invitations for Pre-qualification, Invitations to Bid and Request for Expressions of
Interest shall be advertised in at least one newspaper that has nationwide circulation.
In order to attract a large number of bidders, the bid advertisement may also be posted
on the website of the procuring public body. Public bodies shall send Invitation for
Pre-qualification (IFPQ) and Invitation to Bid (ITB) and Request for Expressions of
Interest for goods, works and services whose potential contract values is above the
threshold stated in article 6.5 of the Directive, for publication on the PPA website.
The public bodies shall advertise their procurement requirements in accordance with
the following procedures:
4.2.1.3 Advertising for specific Invitations for Pre-qualification, Invitations to Bid and
Request for Expressions of Interest shall be issued for goods & related services,
works & physical services and intellectual and professional services which have been
entered into the Annual Procurement Plan. Pre-qualification or bid or proposal
documents should be ready for issue or sale to interested Applicants and Bidders at
the time of the appearance of the advertisement.
4.2.1.4 In addition to one national newspaper which has a wide daily circulation in the
Federal Democratic Republic of Ethiopia, public bodies based outside Addis Ababa
may publish the advertisements in a maximum of two (2) widely circulated local or
regional daily newspapers.
The format to be used for Invitation to Bid (ITB) is attached in Appendix 8.
4.2.2 Invitation for Pre-qualification
4.2.2.1 A public body may initiate pre-qualification proceedings, prior to the issue of an
Invitation to Bid for the purpose of identifying those Applicants who are qualified to
deliver the required goods and related services and works and physical services.
Procurements requiring prequalification bids should satisfy at least one of the
following criteria:
· Where the procurement pertains to a work of design, manufacturing or
installation of a very high value or complex nature, or
· Where the procurement pertains to a turnkey contract of works, or the
acquisition of machinery or Information technology, or
· Where the procurement pertains to supply of goods or equipment of considerable
importance and includes installation, or
· Where the cost of drawing up bidding documents is so high that only prequalified
bidders should participate in the bid
4.2.2.2 Invitation for pre-qualification is a means to inform potential bidders the opportunity
for prequalification in anticipation of subsequent bidding among pre-qualified
applicants. The IFPQ shall provide adequate information to stimulate participation of
potential bidders. The contents of IFPQ may vary between contracts, but at minimum,
it shall provide the following information:
· The name and address of the public body publicizing the Invitation for prequalification;
· A brief description of the object of the procurement, including the desired time for
delivery or completion;
· The minimum qualification criteria to be satisfied by the Applicants;
· The means and conditions for obtaining the pre-qualification documents and the
place from where they may be obtained;
· The place and deadline for the submission of the applications for prequalification;
and
· The date of availability of the pre-qualification documents, if already known;
· The price of the pre-qualification document and the means of payment;
· The place and deadline for submission of applications for pre-qualification;
· Other matters that the public body deems necessary for Applicants to know;
· The invitation for pre-qualification shall be prepared in the language in which the
bid proceeding is to be conducted as provided in article 16.13 of the Directive.
4.2.2.3 Public bodies may allow Applicants participating in a prequalification bid to compete
in joint venture or partnership if it is considered advantageous for Applicants to form
a Joint venture, Consortium or Association in order to undertake a specific
assignment. A public body may make a statement in the Invitation for Prequalification
that the formation of for the concerned assignment may be appropriate,
provided that each firm or member of the JV shall be jointly and severally liable for
all contractual obligations. However, a public body cannot make the formation of a
JV a mandatory requirement.
4.2.2.4 In order to implement the required procurement in the most efficient manner, the prequalification
procedure should be carried out in parallel with the preparation of
Bidding Documents. In this way, the Bidding Documents should be ready as soon as
the evaluation of the pre-qualification applications has been completed. By
undertaking the two tasks together, the public body can take advantage of any
relevant information that is learned from the pre-qualification applications that can be
incorporated into the Bidding Documents. Bidding Documents for pre-qualification
shall be prepared in conformity with the standard bidding document concerning prequalification
issued by the PPA.
4.2.2.5 The time allowed for Applicants to prepare their pre-qualification submissions shall
be fixed in accordance with floating period of bids defined in Annex 3 of the
Directive. It is most important for both the newspaper and website advertisements to
be published at the same time. It is equally important for the pre-qualification
document to be ready for sale at the time of the appearance of the advertisements.
4.2.2.6 If due to the complexity of the procurement the Bidders request an extension for the
period of submission of their applications then the public body may extend the
submission deadline if it deems that the Applicants’ requests are justified.
4.2.3 Pre-Qualification Documents
4.2.3.1 Pre-qualification documents shall include as a minimum the following requirements:
· a description of the object of procurement, including a summary of the principal
terms and conditions of the contract that shall be entered into as a result of the
procurement proceeding, e.g. identification of the particular standard bidding
document to be used, description of the scope of work with estimates of key
quantities and required production rates, source of funds, eligibility and
qualification criteria, need for special equipment, probable time for inviting bid,
probable time for completion, nominated subcontractors by the Public body for
specialized components of the works, if any;
· a statement that the public body reserves the right to reject any or all bids;
· the currency and means of payment for the bid documents;
· 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;
· instructions for preparing and submitting pre-qualification applications;
· any evidence or other supplementary information required by the Proclamation
and Directive that shall be submitted by Applicants to demonstrate their
qualifications to undertake the concerned procurement;
· the manner in which pre-qualification applications shall be submitted by
Applicants, the place and the deadline for such submission, as stated in Invitation
for Pre-qualification.
4.2.3.2 Pre-qualification documents shall be made available to Applicants at a price not
exceeding the costs of reproduction and delivery to Applicants in the manner stated in
the Invitation for Pre-qualification. There shall not be any pre-conditions (e.g.
submission of documentary evidence) whatsoever for sale of pre-qualification
document to any Applicant. The sale of pre-qualification document shall be permitted
up to the day prior to the deadline for the submission of pre-qualification application.
4.2.3.3 A public body shall respond to any request by an Applicant for clarification on the
pre-qualification document that is received by the entity within a reasonable period of
time, prior to the deadline for the submission of applications. In this case, ten (10)
days prior to the deadline for the submission of applications in respect of national
competitive bidding and twenty one (21) days in respect of international competitive
bidding is considered to be a reasonable period of time by which all clarification
requests shall be received by public bodies. A public body shall have no obligation to
answer any clarification request received after that date. The response by the public
body shall be communicated as soon as practicable. However, depending upon the
nature and extent of the clarification, it may be necessary for the public body to
consider an extension to the deadline for the submission of pre-qualification
applications. The response to a clarification request should be copied to all Applicants
who have purchased the pre-qualification documents, without indicating the source
requesting the clarification.
4.2.3.4 A public body shall promptly notify all Applicants whether or not they have been prequalified.
Upon receipt of a request, the public body is also required to advise any
member of the general public of the names of all Applicants who have been prequalified.
Only Applicants who have been pre-qualified are entitled to participate
further in procurement i.e. purchase the Bidding Documents.
4.2.3.5 Upon receipt of a request from an unsuccessful Applicant, the public body shall notify
the Applicant of the grounds for its exclusion. However, the entity is not required to
provide any further information or explanation of those grounds.
4.2.3.6 A public body is entitled to require a pre-qualified Applicant to demonstrate its
qualifications again when submitting its bid by presenting the same information about
its qualifications though updated as appropriate. A public body shall disqualify any
Applicant that fails to demonstrate its qualifications, again when requested to do so
for post-qualification purposes.
4.2.3.7 Public bodies shall use the standard pre-qualification document issued by PPA when
undertaking a procurement using the pre-qualification process. The following steps
shall be noted for Pre-qualification purposes:
· The evaluation of pre-qualification applications shall be undertaken in accordance
with the Proclamation, Directive and the Manual.
· In this respect, reference shall be made to examination and evaluation of bids that
contains a more detailed explanation of the appointment, membership, duties, and
responsibilities and obligations of the Bid Evaluation Committee and its
members.
· The evaluation of pre-qualification applications may require the appointment of a
Technical Sub-committee (TSC) and/or at the discretion of the head of a public
body or an officer authorized by him/her, additional external technical experts,
with specific knowledge of the services required, from the user/beneficiary entity,
to assist the Bid Committee in the evaluation of the concerned pre-qualification
applications. In general, the tasks detailed below shall be undertaken in a similar
manner to that detailed in Proclamation and Directive, which concern the receipt
and evaluation of bids and Notification of award and signing of contract.
· The pre-qualification applications shall be received by the public body and kept in
safe custody. On the deadline for the submission of applications, the received
applications shall be submitted to the Chairperson of the Bid Committee formed
by the concerned public body. Any applications received after the deadline for
submission of pre-qualification application shall be returned unopened to the
Applicant.
· The Bid Committee shall evaluate the pre-qualification applications in accordance
with the evaluation criteria specified in Bidding Document, which outline the
information to be provided by the Applicant and shall detail how that information
shall be evaluated.
· Upon completion of the evaluation of the pre-qualification, the Bid Committee
shall prepare a Pre-qualification Evaluation Report that shall be submitted to the
head of a public body or an officer authorized by him/her or an approving
authority for approval. The report shall state the persons or firms who meet the
pre-qualification criteria. It should be noted that all those who have achieved the
required level are to be considered as pre-qualified for the intended bid. No
restriction on the number of qualified firms is permitted.
· If considered both desirable and practical, the Bid Committee may visit the
premises of Applicants to verify information contained in their applications. Such
visits can be particularly useful when evaluating applications in respect of high
value or complex works projects. The objective of any visit is not to inspect
financial accounts or similar aspects of the application which can be done through
desk review of documents /annual financial statements. It should focus upon a
general and visual inspection and verification of the Applicant’s facilities, its
current and previous project sites, and its plant and equipment.
· It is not permitted for the Bid Committee to introduce any new evaluation criteria
which were not stated in the pre-qualification document.
4.2.4 Invitation to Bid
4.2.4.1 The preparation of the Invitation to Bid and its publication is the responsibility of the
public body. As a minimum, the Invitation to Bid shall include:
· The name and address of the public body publicizing the Invitation to Bid;
· The type and to the extent possible the quantity and place of delivery of the goods
or services, or the nature and the site of the construction to be effected, or the type
of the consultancy service to be rendered and the place where such service is
rendered;
· The criteria to be satisfied by the candidates, who can participate in the bid;
· The place where the bidding documents can be obtained;
· The amount of the bidding security;
· The price of the bid document and the means of payment;
· The place and deadline of submission of bids, and the place, date and hour of the
bid opening;
· A statement that the public body reserves the right to reject any or all bids
· Other matters that the public body deems necessary for bidders to know;
· The invitation to bid shall be prepared in the language in which the bid
proceeding is to be conducted as provided in article 16.13 of the Directive
· The format and text to be used by public bodies for the Invitation to Bid (ITB) is
provided in Appendix 8. Public bodies should follow these formats. The current
list of documents available from PPA is attached in Appendix 8.
4.2.4.2 The minimum period for submission of bids shall be fixed in accordance with Annex
3 of the Directive. These periods shall apply, provided the Bidding Documents are
ready for sale by the date of the advertisement referred to in Advertisements. It is
important for both the newspaper and website advertisements to be published at the
same time. Otherwise, potential Bidders may be justified in seeking an extension to
the period for the submission of their bids, thus delaying procurement.
4.2.4.3 It is equally important for the Bidding Documents to be ready for issue or sale, as
appropriate, at the time of the appearance of the advertisements. Otherwise, again
potential Bidders may be justified in seeking an extension to the period for the
submission of their bids, thus delaying procurement.
4.2.5 Bidding Documents
4.2.5.1 The preparation of the bidding document is the responsibility of the public body and it
shall follow Standard Bidding Documents (SBDs) prepared and issued by the PPA. In
any case, the bidding document shall contain sufficient information to enable
competition to take place among bidders on the basis of complete, unbiased and
objective terms. It is important to note that the estimated cost of the object of
procurement should be reassessed and approved prior to finalization of the Bidding
Documents.
4.2.5.2 Although preparation of the Bidding Documents is the responsibility of the public
body, it shall be prepared in close collaboration with the beneficiary and end user,
particularly in respect of the preparation of the technical specification, as stated in the
Technical Specifications. Furthermore, in the event that a public body has any
concerns in regard to any aspect of the required Bidding Documents, it may refer its
concerns to the PPA for advice or guidance. The Bidding Documents shall furnish all
information necessary for a potential bidder to prepare a bid. The details and
complexity of the information required may vary with the nature of the proposed bid
package. In particular, Bidding Documents must include:
· instructions for the preparation and submission of bids;
· information about the final date for receipt of bids, the address to which bids must
be sent, the date, hour and place of the bid opening, as well as an announcement
that bidders or their representative(s) are allowed to attend the bid opening
ceremony;
· bid submission sheet and sample formats for bid security, performance security
and manufacturers’ authorization, where applicable;
· the number of copies to be submitted with the original bid;
· general and special conditions of contract;
· specification of requirements, including time limit for delivery or completion of
task, as appropriate;
· evidence to be provided by the bidder to demonstrate its qualifications as well as
its fiscal and legal standing;
· the period during which the bid shall remain in force;
· the criteria and the points given to each criterion for evaluation of bids and award
of contract;
· a reservation to the effect that the public body may reject all bids at any time prior
to the notification of award; and
· the price adjustment that may be made during contract implementation and the
conditions and the manner under which such price adjustments can be made to
special procurements prescribed by the Minister.
4.2.5.3 By way of further explanation of the above procedures, public bodies shall comply
with the following instructions when preparing Bidding Documents. Bidding
Documents shall be so worded that they permit and encourage open competition and
shall set out clearly and precisely:
· the work to be carried out;
· the location of the work;
· the goods to be supplied;
· the place of delivery or installation;
· the schedule for delivery and completion;
· the minimum performance requirements;
· the warranty and maintenance requirements; and
· any other relevant terms and conditions.
4.2.5.4 In addition, the Bidding Documents, where appropriate, shall define the tests,
standards and methods that shall be used to verify the compliance of the
goods/equipment to be delivered or works to be performed, with technical
specifications. Any drawings included in the Bidding Document shall be consistent
with the text of the technical specifications and an order of precedence between the
two shall be specified in the Bidding Document.
4.2.5.5 The Bidding Document shall specify any criteria, in addition to price, which shall be
taken into account in evaluating bids and how these shall be measured or otherwise
evaluated.
4.2.5.6 If bids based upon alternative designs, materials, completion schedules, payment
terms, etc., are permitted, the conditions for their acceptability and the method for
their evaluation shall be stated in the Bidding Document.
4.2.5.7 All prospective Bidders shall be provided the same information and be assured of
equal opportunities to obtain additional information promptly upon request.
4.2.5.8 Public bodies shall provide reasonable access to work/project sites for visits by
potential bidders. For works or complex supply contracts, particularly for those
requiring refurbishing existing works or equipment, a pre-bid meeting may be
arranged at which potential bidders may seek clarifications. Minutes of the pre-bid
meeting shall be provided to all prospective bidders, even those who do not attend the
meeting.
4.2.5.9 Any additional information and/or correction of errors in the Bidding Documents,
which are identified as a result of this meeting, shall be circulated to all bidders in the
form of an addendum to the Bidding Documents that shall have a date and an issue
number. The addendum must be circulated allowing sufficient time before the
deadline for the receipt of bids to enable bidders to take appropriate action. If
necessary, the deadline for bid submission shall be extended.
4.2.5.10 The invitation of the bid price shall include the following:
· a bid price shall be invited on the basis of the delivered price of the goods to the
destination or for the completion of works or installation, inclusive of all
associated services to be performed by the Bidder (e.g. transport, insurance,
training, specialized tools, manuals, etc.). The quoted price shall include all taxes
and customs duties and clearance charges, except VAT. However, the Bidder will
be required to indicate VAT in the priced schedule to enable the public body to
take account of such tax in its budget.
4.2.5.11 The Bidding Document shall state that:
· the bid price shall be fixed; or
· price adjustments shall be allowed in respect of works contracts, after 12 months
from the effective date of such contracts and in respect of procurement made
under a framework contract, after 3 months from effective date of such contract.
4.2.5.12 Where it is verified that, in respect of works contracts, the performance of the contract
requires more than 18 months prices may be adjusted by the use of a prescribed
formula stated in the Bidding Document.
4.2.5.13 Standard Pre-qualification documents and Standard Bidding Documents (SBDs)
issued by the PPA are mandatory for all public bodies to use for procurement of
goods, works, non-consultancy services, and consultancy services. Public bodies have
to reproduce the part of the standard bidding documents dealing with the instruction
to bidders and the general conditions of contracts in the bidding documents they
prepare without making any change there to, while making any adjustment to the
other parts of the standard bidding documents that they consider appropriate to the
type and nature of the procurement, provided those adjustments, under no
circumstances, contradict with the Proclamation, Directive and the Manual.
4.2.6 Provision of Bidding Documents
4.2.6.1 Bidding Documents shall be made available to bidders as soon as the relevant
advertisement appears in the press. When a public body makes a charge for a
document, it shall not exceed the cost of producing and delivering the document to
Bidders. The head of a public body or an officer authorized by him/her will determine
the price of the Bidding Document. Bidding Documents shall be advertised on a
public body’s website where possible. The advertisement is for information only and
potential bidders cannot use any documents downloaded from the entity’s website for
the purpose of bidding. All bidders shall bid using Bidding Documents purchased
directly from the public body.
4.2.6.2 No Bidding Document can be made available before the date of publication of the
Invitation to Bid. A public body cannot refuse to make Bidding Documents available
immediately to persons requesting them and willing to pay the corresponding price,
provided the advertisement has been published in the press. There shall not be any
pre-conditions (e.g. submission of documentary evidence) whatsoever for sale of
Bidding Document to any bidder. The sale of Bidding Document shall be permitted
up to the day prior to the deadline for the submission of bid. Bidding Documents, as
well as any modification to Bidding Documents shall be made available to bidders by:
· the office of the public body;
· mail or courier at the request of potential bidders against payment by the bidder of
the corresponding mailing charges in addition to the prices of the documents; and
· advertisement in the public body’s website (a downloaded document shall not be
used for submission of bid).
4.2.6.3 Public bodies who advertise Bidding Documents on their website shall ensure that:
· the advertisement for Bidding Document is not removed from the website, prior
to the closing date for the submission of bids; and
· the numbers and dates of issue of all modifications and clarifications to the
Bidding Document are also posted on the website.
4.2.6.4 The public body shall record all persons or firms to whom Bidding Documents have
been issued. Such records shall have a reference number and include full contact
details: mailing address, telephone and facsimile numbers and electronic mail address,
if applicable. A bid shall not be accepted from any person or firm that is not recorded
by the public body as having received and where relevant, purchased the Bidding
Document, together with all subsequent addenda to the document.
4.2.7 Modifications to Bidding Documents
4.2.7.1 At any time prior to the deadline for the submission of bids, a public body may, on its
own initiative or in response to an inquiry by a bidder, who has purchased the Bidding
Documents, modify the Bidding Documents by issuing an addendum. The addendum
then becomes integral part of the Bidding Document and shall be communicated
immediately to all bidders who have purchased the Bidding Documents, with a
request that they shall acknowledge receipt of the addendum. Every addendum shall
be given a serial number and a corresponding date of issue. All public bodies which
have advertised Bidding Documents on their website shall also advertise relevant
addenda on their website.
4.2.7.2 If a public body considers it is necessary to amend the Bidding Documents, it may
postpone the deadline for the submission of bids. In such case, they shall set a new
deadline by an appropriate number of days, depending upon the object of procurement
and the content of the addendum, to enable Bidders to take full account of the
addendum during the preparation of their bids.
4.2.8 Bid Validity and Bid Security
4.2.8.1 Bidders shall be required to submit bids that shall remain valid (i.e. open for
acceptance), for the period specified in the Bidding Document. The validity period
shall allow sufficient time for the public body to evaluate the bids, prepare and submit
the bid evaluation report and to obtain all necessary approvals for the notification of
award and signing of a contract with the successful bidder before the expiry of the bid
validity period. The bid validity period specified in the Bidding Documents shall
vary, depending upon the complexity of the bid. It shall normally be between 60
(sixty) days and 120 (one hundred and twenty) days. However, to suit the requirement
of a particular procurement shorter/longer periods may be authorized by the head of a
public body or an officer authorized by him/her.
4.2.8.2 A public body shall complete a bid evaluation within the initial period of bid validity,
so that an extension to the validity period shall not be required. However, if justified
by exceptional circumstances, a public body may request a bidder to extend the
validity period of its bid. Public bodies shall send a written request to bidders in
which they are requested to extend the validity period of their bids. The request shall
state the new date for the expiry of bids.
4.2.8.3 Bidders are not obliged to agree to such requests. However, if a bidder agrees to
extend its bid, such agreement shall be in writing and to the new date for the expiry of
bids that has been requested by the public body. Also, if a bidder has submitted a bid
security, as a requirement of the bidding terms and conditions, the bid security shall
be extended, along with bid validity as detailed in the Manual.
4.2.8.4 If a Bidder should decide not to extend its bid, then it may do so without forfeiting its
bid security. In such cases, the concerned bid shall receive no further consideration in
the evaluation proceedings and the bid security shall be returned, as soon as possible,
to the bidder or its bank, as appropriate.
4.2.8.5 Extension of bid validity shall not be requested without prior consent of the head of
the public body or his/her delegate. All extensions to bid validity periods shall be
approved by the head of the public body or his/her delegate.
4.2.8.6 Except for procurement of consultancy services, public bodies have to fix and clearly
indicate in the bidding document, the amount and mode of bid security to be required
of bidders when executing procurement by means of open, restricted or two stage
bidding. However, the public body may require bidders to furnish bid security for
consultancy service if, for any reason, such public body finds it necessary to do so.
The purpose of the bid security is to discourage irresponsible bidders who are not
seriously interested in the proposed bid.
The amount of bid security a Public Body may require shall be in the range of 0.5% to
2% of the total estimated contract price, which the public body has to fix and indicate
in the Invitation to Bid and the Bidding Document. However, the bid security to be
fixed by the public body shall not exceed 500,000.00 (five hundred thousand) Birr.
(refer to Article 16.16.2 of the Directive).
The validity period of bid security provided by bidders should extend for at least 28
days after the expiration of bid price validity. This is to enable a public body to have
time to make a claim against a bidder. In the event of an extension to the validity
period of the bid, the bid security shall be extended for at least twenty-eight (28) days
beyond the new expiry date of the bid. The public body shall advise the bidder of the
date by which the extension to the bid security shall be received.
In case of doubt, authenticity of bid security and its extension submitted by a bidder
can be verified by the Bid Committee by sending a written request, prior to
finalization of the Bid Evaluation Report, to the branch of the Bank issuing the bank
draft, pay order or irrevocable bank guarantee to seek confirmation of their issuance
of a bid security. The bidder whose bid security is not found to be authentic shall no
longer be considered for further evaluation, and in such cases, the public body shall
proceed to take measures as stated under Proclamation and Directive.
4.2.8.7 As provided in the Proclamation, the public body shall include in the Bidding
Documents a condition that bids must be accompanied by bid security in the form of
cash, cheque certified by a reputable bank, bank guarantee or letter of credit. The
amount of such security shall be sufficient to discourage irresponsible bids and shall
remain within limits stated in the Directive. Any bid security will be forfeited if a
bidder withdraws his bid within the validity period thereof or, in the case of a
successful bidder, if the bidder repudiates the contract or fails to furnish performance
security, if so required.
4.2.9 Submission and Receipt of Bids
4.2.9.1 All bids shall be in writing, signed and submitted in a sealed envelope. They shall be
delivered to the place(s) stated in the Bidding Document, prior to the deadline for the
submission of bids stated in the Bidding Document or amendments thereof. Bidders
are not permitted to submit bids by telex, facsimile or electronic mail. Any such
submission shall not be considered even, if it is subsequently submitted in accordance
with the requirements set out in the preceding paragraph. Bids can be delivered only
by hand or mail, including courier services.
4.2.9.2 All Bidding Documents shall contain instructions to bidders concerning the manner in
which bid envelopes shall be marked and submitted. Bids shall be properly marked by
bidders in order that they shall not be confused with other types of correspondence
which may also be hand-delivered or posted by mail or courier service.
4.2.9.3 It is important that bidders properly seal and mark the envelopes to ensure that they
are not only “intact and sealed” at the time of opening of the ‘bid box’, but also have
not been opened at any time prior to this because they were inadequately marked. The
bidder is solely and entirely responsible for pre-disclosure of bid information if the
envelopes are not properly sealed and marked. If such a case arises during the time of
opening, the Chairperson and Members of the Bid Committee shall decide if any
disclosure of information contained in the bid has tainted the integrity of the bid
process or not and accordingly accept or reject this bid.
4.2.9.4 All bids received shall be kept in a secured and safe place with the public body as its
custodian. For instance, locked bid boxes/cabinets are used in many cases. When the
bids are in large volume or envelopes are large and/or thick, it is usually directly
received by an assigned officer of the public body. Whatever is the case, the public
body shall ensure the safety and security of bids when they receive them.
4.2.9.5 The public body shall issue receipt for bid documents it receives from bidders in
acknowledgement of receipt. The officer receiving the bid shall issue a receipt stating
name and address of the bidder and the date and time of receipt of the bid. A receipt
shall also be given when a bid is sent through either courier service or by post.
4.2.9.6 Bids received after the deadline for the submission shall be returned to the bidder
unopened.
4.2.10 Opening of Bids
4.2.10.1 The time stated in the Bidding Document for the opening of bids, should be
immediately after the deadline for the submission of bids. A public body shall open in
public and only in one place all bids received on or before the deadline for the
submission of bids. The location and the place where the bids shall be opened should
be suitably equipped and reserved in advance for the purpose of the bid opening.
4.2.10.2 At least 3 employees from the procurement unit shall participate in the bid opening
process and to the extent possible, representatives from departments of the public
body benefiting from the procurement may attend the bid opening process.
4.2.10.3 As attendance of bidders or their authorized representative is optional, the start of the
bid opening shall not be delayed, even if every bidder is not represented. A
representative may be asked to produce authorization from a bidder to show that he is
authorized to attend the opening on bidders’ behalf.
4.2.10.4 All persons attending the bid opening shall sign the Attendance Register, duly counter
signed by members of the Bid Opening Team.
4.2.10.5 A Bid Opening Sheet, upon which to record the opening, shall be prepared to enable
the Bid Opening Team to record the information announced at the opening.
4.2.10.6 The following information, at the minimum, shall be read out from the original
version of each bid and recorded on the Bid Opening Sheet (BOS):
· name of the bidder;
· withdrawal or modifications, if any;
· the bid price for the contract and rebate offered by that bidder and the bidder’s
conditions for such rebate;
· the amount and kind of bid security, if required; and
· any other information enabling bidders to know their relative position in the bid
concerned.
4.2.10.7 Bid modifications or discounts, which are not read out at the bid opening or recorded
on the BOS, shall not be considered in the evaluation of the concerned bids. No bid
shall be rejected at bid opening except for late bids.
4.2.10.8 Upon completion of opening of the bids, all members of the Bid Opening Team and
the bidders or their representatives who attended the bid opening shall sign the BOS.
Copies of which shall be issued to the head of a public body or an officer authorized
by him/her and to the bidders, upon their request.
4.2.10.9 Any bid that was not opened at the bid opening shall not be considered and shall be
returned unopened.
4.2.11 Examination and Evaluation of Bids
4.2.11.1 Public bodies shall examine and evaluate bids strictly in accordance with the
provisions of the Proclamation and Directive and the requirements contained in the
Bidding Document.
4.2.11.2 The head of public body may establish ad hoc Bid Evaluation Committee for
procurements which are complex and require detailed technical evaluation.
4.2.11.3 Members of the ad hoc Bid Evaluation Committee shall be appointed by the head of
public body and the committee shall have five members including the Chairperson
and the secretary. Persons appointed, as members of the ad hoc Bid Evaluation
Committee shall be renowned for their ethical behavior, shall have never been subject
to disciplinary actions, and shall have the knowledge and experience required to carry
out procurement. Five members of the ad hoc Bid Evaluation Committee may, if
possible be assigned from different departments of the public body.
4.2.11.4 Once the ad hoc Bid Evaluation Committee has been appointed, its members can only
be removed from the Committee by the head of a public body or an officer authorized
by him/her or an approving authority for valid grounds, which may include, but are
not limited to:
· failure to disclose his/ her connection with a bidder, even if the member continues
to act in an impartial manner;
· regular failure to attend ad hoc Bid Evaluation Committee meetings; and
· any action that is in direct breach of Proclamation or Directive (Corrupt,
Fraudulent, Collusive or Coercive).
4.2.11.5 Ad hoc Bid Evaluation Committee members may be selected from:
· officers of the concerned unit of the public body e.g. Finance, Commercial and
Technical units;
· officers from the concerned public bodies or other Agencies under the concerned
public bodies;
· officers from the end-user/beneficiary entity; and
· technical/commercial/financial/legal experts from other public bodies, and/or
from universities and/or reputable professional bodies in the case of the two
outside members.
4.2.11.6 Members of the ad hoc Bid Evaluation Committee are required to:
· certify collectively in the Bid Evaluation Report, by jointly signing that “in
compliance with the Proclamation and Directive, the ad hoc Bid Evaluation
Committee certifies that the examination and evaluation has followed the
requirements of the Proclamation, Directive, the Manual and Bidding Document,
that all facts and information have been correctly reflected in the Evaluation
Report, and that no substantial or important information has been omitted”; and
· sign singularly, a declaration of impartiality individually in the following manner
after opening of the bids “I, [insert name of the ad hoc Bid Evaluation Committee
member and designation], do hereby declare and confirm that I have no business
or other links to any of the competing Bidders”. However, as any list of Bidders
shall not be known in advance, it may become necessary to replace members of
the ad hoc Bid Evaluation Committee, if bids are received from bidders with
whom members have business or other links.
4.2.11.7 The ad hoc Bid Evaluation Committee shall, to the extent practical and possible, work
continuously once they have begun an evaluation in order to complete evaluations as
per time frame specified in the Procurement Plan and the deadlines given in the
respective Bidding Documents. It is the responsibility of the ad hoc Bid Evaluation
Committee members upon accepting their roles on the ad hoc Bid Evaluation
Committee, to secure permission from their controlling officers to allocate enough
time for the bid evaluation task. The head of the public body may designate one of the
members as Member or Secretary of the ad hoc Bid Evaluation Committee.
4.2.11.8 The evaluation of bids for the same procurement object shall, under no circumstances,
pass through more than one ad hoc Bid Evaluation Committee.
4.2.11.9 The ad hoc Bid Evaluation Committee members themselves shall examine and
evaluate the bids, and prepare the evaluation report including recommendations for
award of contract, without delegating any responsibility to others.
4.2.11.10 The head of a public body or an officer authorized by him/her may also appoint other
experts if it is felt that a particular bid requires such assistance, provided that it
follows the timeline stipulated.
4.2.11.11 A public body may find a bid complete and qualify that bid for detailed evaluation
only if the bid document submitted by the bidder is opened during the bid opening
proceeding and complies with the prerequisites and essential requirements stated in
the Bidding Document.
4.2.11.12 A public body may ask bidders for clarification in writing of their bids in order to
assist the examination and evaluation of the bids. However, bid clarifications which
may lead to a change in the substance of the bid or in any of the key elements of the
bid (e.g. price, delivery schedule, etc.), shall neither be sought from bidders by the
public body, nor offered by the bidders nor the bidders are permitted to do so. All
clarification requests shall remind bidders of the need for confidentiality and that any
breach of confidentiality on the part of the bidder may result in their bid being
disqualified.
4.2.11.13 A public body shall correct purely arithmetical errors that are detected during the
preliminary evaluation of bid documents, and shall promptly notify any such
correction(s) to the concerned bidder(s). Such notification shall be undertaken in
writing. If the bidder does not agree to such corrections, the bidder shall be dropped
out of the bid proceeding.
4.2.11.14 A public body may accept a bid as complete notwithstanding that such bid contains
elements representing certain variance with the bidding document, in so far as such
elements do not alter the conditions of contract and other essential requirements
forming the fundamental aspect of the Bidding Document, or bears minor errors or
deviations which can be corrected without affecting the essence of the bid. However,
such deviations shall, as far as possible, be expressed in monetary terms to be taken
account of in the evaluation of bids.
4.2.11.15 A public body shall not award a contract when:
· the Bidder has failed to demonstrate its qualifications as required under Article
28.1 of the Proclamation.
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· the Bidder does not accept a correction of an arithmetical error made in
accordance with the Bidding Documents; and
· the bid is not substantially responsive, i.e. it does not sufficiently meet the
requirements of the qualifications, technical specifications or financial and
commercial terms and conditions set out in the Bidding Document.
4.2.11.16 A public body shall evaluate and compare bids that are responsive to the requirements
of Bidding Documents in order to identify the successful bidder, as described below.
There shall be no consideration within the bid evaluation of any information
contained in a bid submission that was not requested in the Bidding Document.
4.2.11.17 In order to identify the successful bidder, the public body shall conduct detailed
evaluation of bids it receives at the initial stage of the bid proceeding, on the basis of
the requirements set forth in the bidding document. The public body may not evaluate
bids against other criteria than those stated in the Bidding Document
4.2.11.18 The successful bid shall be:
(a) the bid that is found to be responsive to the technical requirements and with the
lowest evaluated price;
(b) if the public body has so stipulated in the Bidding Document, the bid offering
better economic advantage ascertained on the basis of factors affecting the
economic value of the bid which have been specified in the Bidding
Documents, which factors shall, to the extent practicable, be objective and
quantifiable, and shall be given a relative weight in the evaluation procedure or
be expressed in monetary terms wherever practicable.
4.2.11.19 In conducting detailed evaluation of bids, the unconditional discount offered by
bidders shall be considered.
4.2.11.20 If necessary, verification may be done in post qualification to ascertain whether a
bidder has the legal competence to transact with the public body, or possesses the
necessary financial and technical qualification stated in the Bidding Document.
4.2.11.21 Where two bidders get equal merit points in the evaluation, preference shall be given
to local products or services in accordance with article 25.3 of the Proclamation.
4.2.11.22 If there is a tie for the lowest evaluated price, it could be considered that bidders are
equal in all respects, a clear draw program in the presence of the bidders will be
carried done to determine the successful bidder.
4.2.11.23 Public bodies shall complete and disclose bid evaluation results to bidders concerned
before the expiration of price validity period offered by such bidders. However, if the
public body can not complete the evaluation within such period, it shall require the
bidders to extend their bid price validity period pursuant to article 16.15.4 of the
Directive.
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4.2.11.24 Where an invitation to bid attracts only one bidder, the public body may sign contract
with that bidder if the proposal submitted by such bidder is satisfactory to the public
body and the price offered by the bidder is comparable to or less than the market price
of the required object of procurement; it being necessary to make sure that the failure
of the bid to attract bidders is not due to the fact that the content of the Bidding
Document is restrictive of open competition.
4.2.12 Process to Be Confidential
4.2.12.1 After the opening of bids, information relating to the examination, clarification,
evaluation of bids and recommendations for award shall not be disclosed to either
Bidders or any other persons not officially concerned with the evaluation process until
the award of contract is announced. This requirement includes all public body
personnel and any other government officials who may be involved in the
procurement proceedings. The submitted bids shall always be kept under lock outside
working hours and shall not be removed from the office of the public body.
4.2.12.2 Following the opening of bids and until a contract has been signed, no bidder shall
communicate with the concerned public body in any manner, unless requested to
provide clarification to its bid as described or seek to influence, in any way, the public
body’s examination and evaluation of the bids.
4.2.12.3 Any effort by a bidder to influence a public body in its decisions concerning bid
evaluation or contract award may result in the rejection of the bidder’s bid and
possibly further action in accordance with Directive on Corrupt, Fraudulent, Collusive
or Coercive Practices.
4.2.13 Discussion with the bidders
4.2.13.1 A public body may hold discussion with bidders in a procurement proceeding only
where it encounters extraordinary situations. Such discussions are held for two
purposes:
(a) To exchange views with bidders on minute details of a procurement;
(b) To arrive at a decision through negotiation with bidders on the technical
requirements of a bid in procurement to be executed by means of two stage
bidding.
4.2.13.2 Except as provided in article above, a public body may not require nor allow bidders
to change their offer in regard to price and other essential elements of the bid, apart
from seeking bidders to give it clarification on certain points of their proposal for the
purpose of evaluation after bid opening.
4.2.14 Post-qualification
4.2.14.1 Prior to finalizing the Bid Evaluation Report including recommending contract award,
the public body may determine whether the current legal, financial, and technical
standing of the candidate selected as the successful bidder conforms to the
requirements stated in the Bidding Document. This process is known as ‘postqualification’.
4.2.14.2 The requirements for qualification of bidder are described in Proclamation and
Directive. In addition, references given by the Bidder about his previous working
experience may be verified, if necessary, to obtain the most up-to-date information
available concerning the bidder. As part of the post-qualification task, if considered
desirable and practical, the public body may visit the premises of the bidder to verify
information contained in its bid. Such visits can be particularly useful when
evaluating bids in respect of high value or complex works projects. The objective of
any visit is to verify the qualifications criteria stipulated in the Bidding Document. It
should also focus upon a general and visual inspection and verification of the bidder’s
facilities and its plant and equipment. There shall be no discussion concerning the bid
or its evaluation with the bidder during such visits and the overall confidentiality of
the evaluation process shall be strictly maintained by the public body.
4.2.14.3 In the event that the candidate selected as the successful bidder fails the postqualification
examination, the public body shall make a similar determination for the
bidder offering next lowest evaluated cost and so on from the remaining responsive
bids. However, such action shall only be taken if the actual evaluated cost of the bid is
acceptable to the public body. When the point is reached whereby the evaluated costs
of the remaining responsive bids are significantly higher than the official estimate or
prevailing market price, the public body may take action in accordance with rejection
of all bids, proposals and quotations and may proceed for re-bidding, using revised
Bidding Document, if necessary. Instructions for post-qualification should be
included in Bidding Documents.
4.2.15 Approval of Contract Award
4.2.15.1 The procurement unit or the ad hoc Bid Evaluation Committee formed to conduct
evaluation of bids in regard to certain procurement shall complete the evaluation and
submit the result together with its recommendation, to the Procurement Endorsing
Committee or other body having the authority to approve bid evaluation results,
within the bid validity period offered by the bidders.
4.2.15.2 The Procurement Endorsing Committee established in accordance with the
Proclamation and Directive shall examine the evaluation report in light of the
procurement rules and procedures as well as against the requirements of the Bidding
Document and give either of the following decisions:
(a) Approve the evaluation report as a whole and authorize the procurement to
Proceed accordingly;
(b) Reject the report and order re-evaluation.
4.2.15.3 Where the Procurement Endorsing Committee finds it necessary, it may require the
persons conducting the evaluation to account for the evaluation report.
4.2.15.4 Where the Procurement Endorsing Committee rejects the report it shall state the
reason for its decision and refer the case back to the evaluation team with instruction
for the team to follow in re-evaluating the bids in question. The evaluation team shall
conduct re-evaluation in accordance with the instruction of the Procurement
Endorsing Committee and report the result back to the committee.
4.2.15.5 Notwithstanding the provision of article above, the evaluation team or a member
thereof objecting to the decision of the committee and the corrective instruction given
by the committee has the right to record its/his dissenting opinion. However, the
procurement shall be executed in accordance with the decision of the committee
4.2.16 Announcing the successful bidder
4.2.16.1 Public bodies shall announce the result of a bid evaluation to all bidders alike at the
same time. The information to be disclosed to the unsuccessful bidders shall be the
reason why they did not succeed in their bid and the identity of the successful bidder.
4.2.16.2 A letter of award to be sent by the public body to a successful bidder shall not
constitute a contract between him and the public body. A contract shall be deemed to
have been concluded between the public body and the successful bidder only where a
contract containing detailed provisions governing the execution of the procurement in
issue is signed.
4.2.16.3 A letter of contract award to be sent to a successful bidder shall contain the following
information:
(a) That the public body has accepted his bid;
(b) The total contract price;
(c) The amount of the performance security the successful bidder is required to
furnish and the deadline for providing such security.
4.2.16.4 Where the successful bidder can not or is unwilling to sign a contract, the public body
may either declare the bidder submitting the second most preferred bid the successful
bidder or invite such bidder to sign a contract or advertise the bid afresh by assessing
the benefit of the two options.
4.2.16.5 The public body shall return to the bidders their bid security on the following
conditions:
(a) If the successful bidder has signed contract and furnished the required contract
security;
(b) If the bid validity period initially offered by a bidder not willing to extend
such period has expired or if a bidder is unsuccessful.
4.2.16.6 In respect of procurements the value of which corresponds to or is greater than that
specified in sub-article 6.5 of the Directive, Public body shall disclose the information
to the public by filling it in the form provided for this purpose and posting it on the
PPA’s website within 5 days of signing the contract after award
4.2.16.7 For other contracts, contract award announcements shall be published by the public
body on its Notice Board and where applicable on the website of the public body.
4.2.17 Signing of Contract
4.2.17.1 Public body has to sign with a supplier, a contract containing the general conditions
of contract forming an integral part of the bidding document and the special
conditions of contract to be agreed upon by and between it and the supplier.
4.2.17.2 Unless a contract is signed between the public body and the supplier, mere
notification of award doesn’t constitute a contract between the public body and the
supplier.
4.2.17.3 The contract to be signed between the public body and the supplier shall clearly state
the obligations of the two parties and incorporate provisions, inter alia, for the
following matters
4.2.17.4 Unless an exceptional situation arises, the duly authorized officer of the successful
bidder has to sign a contract with the public body within 15 days of notification of
award.
4.2.17.5 Before signing the contract the public body shall verify the authenticity of the
performance security submitted by a bidder, by sending a written request to the
branch of the bank issuing the bank draft, pay order or irrevocable bank guarantee. If
a performance security is not found to be authentic, the public body shall proceed to
take measures against the bidder as stated under Proclamation and Directive under
Corrupt, Fraudulent, Collusive or Coercive Practices.
4.2.17.6 If the successful Bidder fails to provide any required performance security or fails to
sign the contract as stated in the bidding documents, a public body shall proceed to
award the contract to the next lowest evaluated bidder, and so on by order of ranking.
However, such action shall only be taken if the evaluated cost of the bid is acceptable
to the public body. When the point is reached whereby all evaluated costs of the
remaining responsive bids are significantly higher than that of the official estimate or
budget provision or prevailing market price, the public body may take action in
accordance rejection of all bids, proposals and quotations. If all bids are rejected, the
public body may proceed for re-Bidding using revised Bidding Document, and giving
wide advertisement as per the Directive.
4.2.17.7 The Estimated Procurement Lead Times for guidance in preparing procurement plans
are provided in Appendix 9.
4.2.17.8 Guidance notes on Incoterms, and insurance terms used in procurement are provided
in Appendix 10.
4.2.17.9 A Flow Chart on process to be followed and activities to be undertaken for
procurement of goods & related services and works & physical services under Open
Bidding Method is attached at Appendix-11.

4.3.1 The restricted method of procurement limits those invited to bid to only a few
suppliers. The circumstances in which the Restricted Bidding Method may be used
are described in detail in Sub-Article 4.1.2—Conditions for the use of the
Restricted Bidding Method. However, apart from the differences described below,
procurement made by means of restricted bidding pursuant to article 49.1 of the
Proclamation shall be executed in accordance with national or international
competitive bidding procedures set forth in articles 16 and 17 of the Directive.
4.3.2 The rules to be followed for procurement of goods and related services, works and
services under Restricted Bidding Method shall be as follows:
4.3.2.1 Public bodies, which need to purchase goods, works or services of a specialized
nature and which know the limitations on the availability of suppliers to provide these
goods, works or services, may directly select a number of candidates from the updated
lists of enlisted/qualified potential suppliers maintained by the PPA, without going
through advertisement. To ensure effective competition at least five candidates shall
be selected in a fairly manner from the suppliers list if the value of the procurement
falls with in the threshold set forth in article 23.3 of the Directive for procurement by
restricted bidding, notwithstanding that the number of prospective bidders is large. As
all enlisted candidates are supposed to have achieved the minimum level of
qualification requirements, the public body may select candidates to be invited from
among those listed in a rotational manner so that all of them get equal opportunity in
submitting bids.
4.3.2.2 Under Restricted Bidding Method, bid security is mandatory. Pursuant to the
provision of article 5.4 of the Proclamation, if the public body is of the opinion that in
view of their limited number, requiring the candidates to furnish bid security
discourages them from participating in the bid. It may, in lieu of bid security, require
them to sign Bid Declaration Form attached as Annex 5 to the Directive and submit
such form with their bid documents. In regard to the maintenance of lists of qualified
potential Suppliers and/or Contractors, Article 33 of the Directive applies.
4.3.3 To carry out procurement by means of restricted bidding pursuant to article 49.3 of
the Proclamation, the following conditions must be satisfied in the order in which
they are listed:
4.3.3.1 Invitation to open bid for the procurement must have been published at least twice,
and the invitation must have attracted no bidder, or the bidder or bidders responding
to the second invitation to bid must have failed to meet the technical requirements set
forth by the public Body for that procurement
4.3.3.2 There must have been no factor associated with the invitation to bid, mode or amount
of bid security, Bidding Document or any other element of the procurement process,
restraining candidates from participating in the bid.
4.3.3.3 The public body must have believed that inviting suppliers engaged in the field
pertaining to the object of procurement to participate in the procurement by restricted
bidding attracts such suppliers to participate in the procurement.
(a) The public body must, as far as possible, have established through inquiry
that the suppliers engaged in the field have no ulterior reason for not
wanting to participate in open bid for the procurement, which is illegitimate
or prejudicial to the interest of the public body.
4.3.4 A Flow Chart on the process to be followed and the activities to be undertaken for
procurement of goods and related services and works and physical services under
Restricted Bidding Method is attached at Appendix 11.

4.4.1 The circumstances in which the Direct Procurement Method may be used are
described in detail in the Sub-Article 4.1.3 - Conditions for use of Direct Procurement
Method and articles 51 and 52 of the Proclamation. When a public body undertakes
Direct Procurement Method, it shall prepare a description of its needs and any special
requirements concerning quality, quantity, terms and times of delivery. The public
body shall, in the first place, ask for a quotation from a single bidder directly and
afterwards shall be free to negotiate with the selected sole bidder. There is no
requirement for Direct Procurement to be advertised, nor is there a need for a bid
security.
4.4.2 The preparation of Bidding Documents and the evaluation of the sole bidder shall
follow the same procedure as in Open Bidding Method and the evaluation report
submitted to the approving authority shall clearly mention the justification of the
selection of Direct Procurement Method.
4.4.3 Following the approval of the Bid Evaluation Report, all direct procurement
undertaken shall be confirmed by a contract entered into by the public body and the
bidder. The award and signature of contract shall be undertaken in the same manner
as for Open Bidding Method detailed in Article 4.2 - Open Bidding Method.
4.4.4 Except in case of procurement by collection from open market and small
procurements provided for in articles 51.1 (g) and 51.2 of the Proclamation
respectively, a public body shall send requisition to a supplier describing the type and
quantity of objects it is intending to acquire and obtain pro-forma for such goods or
objects from that supplier. The requisition to be sent in this manner shall include
detailed schedule of requirements as appropriate and such other information that
enables the supplier to submit complete proposal to the intended procurement.
4.4.5 A Flow Chart on the process to be followed and the activities to be undertaken for
procurement of goods, works and unforeseen urgent services under Direct
Procurement Method is attached at Appendix-11.

4.5.1 The circumstances in which the Two-Stage Procurement Method may be used are
described in detail in the Sub-Article 4.1.4 - Conditions for use of Direct Procurement
Method and articles 57 and 58 of the Proclamation. A public body may use Two-
Stage Bidding Method for the procurement of large or complex contracts. In the First-
Stage, a public body shall invite through advertisement unpriced technical proposals
on the basis of Bidding Documents which shall state the requirements of the public
body in general terms and incorporate the necessary description and questionnaires
and outline a conceptual design and/or specific performance requirements. A
conceptual design would focus mainly upon the presentation of a functional design
that provides potential bidders with basic technical information, e.g. stipulated
performance specifications, outline technical specifications, visual, operational and
economic details of the required procurement object.
4.5.2 In addition to indicating the contractual terms and conditions of supply, the Bidding
Documents shall state the criteria that shall be used to determine whether or not a bid
submission is responsive. These shall include:
4.5.2.1 The relative managerial and technical competence of the bidder; and
4.5.2.2 The effectiveness and future adaptability of the proposal submitted by the bidder in
meeting the procurement needs of the concerned public body.
4.5.3 In response to the invitation, bidders shall submit bids describing the technical
performance, quality and other characteristics of the goods and related services and
works and physical services which they consider best suited to meet the public body’s
needs and shall also comment upon the contractual terms and conditions of supply.
The public body shall evaluate all bids received and in view of the nature of
procurement object, this work may require the appointment of a Technical Subcommittee
(TSC) and/or at the discretion of the head of a public body or an officer
authorized by him/her, additional external technical experts, with specific knowledge
of the object of procurement and services required, from the user/beneficiary entity, to
assist the public body in the evaluation of the concerned bids. The public body shall
review the bids in order to identify those bids that are responsive to the terms and
conditions of the Bidding Documents. Bids that are found to be non responsive shall
receive no further consideration.
4.5.4 The public body shall review the proposal from each bidder without necessarily
inviting the bidders for discussion. The public body will then prepare the final
specifications and Bidding Documents based on the best proposals to be comprised of
the acceptable proposals obtained from all responsive bids.
4.5.5 The Bid Evaluation Committee shall prepare Minutes of the meeting, outlining the
acceptable specifications and bid documentations necessary for the second stage
bidding.
4.5.6 At the end of the First-Stage, the Bid Evaluation Report concerning that stage,
including recommendations and non-responsiveness of bids and minutes of the
meeting shall be submitted to the head of a public body or an officer authorized by
him/her for review. The preparation and submission of the Bid Evaluation Report
shall follow the Directive and rules as specified for Open Bidding Method.
4.5.7 In the Second-Stage, the public body shall revise the Bidding Documents and set out
the detailed evaluation criteria for the Second-Stage bids. The public body shall,
where applicable, estimate the full cost of the procurement object during its useful
lifetime considering:
4.5.7.1 the capital cost of the goods/equipment;
4.5.7.2 the estimated operating costs; and
4.5.7.3 estimated maintenance costs.
4.5.8 All responsive bidders from the First-Stage shall be invited to submit their priced
‘best and final’ bids, including bid security, in accordance with the requirements of
the Second-Stage Bidding Documents and the individual Minutes of bid adjustments
issued to each bidder.
4.5.9 The procedure for undertaking the Second-Stage of the bid shall be the same as for
the Open Bidding Method, as detailed in articles 16 and 17 of the Directive.

4.6.1 The circumstances in which the Request for Quotations Procurement Method may be
used are described in detail in the Sub-Article 4.1.7 - Conditions for use of Request
for Quotations Procurement Method and articles 55 and 56 of the Proclamation and
article 24 of the Directive. As stated in Conditions for use of Request for Quotations
Method, a public body may undertake procurement by means of a Request for
Quotations (RFQ) for the purchase of readily available, standard, off-the-shelf goods
and related services and low value simple works or physical services, provided the
estimated value of the contract does not exceed the amount stated in Appendix 1.
4.6.2 The public body shall request quotations from as many Bidders as practicable and
shall obtain and compare at least three (3) quotations to establish the competitiveness
of the quoted prices. Comparison of two (2) quotations is justified only when there is
satisfactory evidence that there are only two sources of supply. To minimize the risk
of obtaining only one or two quotations, public bodies are encouraged to initially
request at least five (5) bidders to submit quotations. The public bodies shall also in
the text of their RFQ document instruct potential bidders to confirm whether or not
they will be submitting a quotation. This will provide information on the number of
bidders who are willing to provide a quotation.
4.6.3 The public body shall carefully select the bidders invited to quote for goods that the
goods offered are suitable, reputable, of good quality and are well established in
Ethiopia or abroad. Similarly for works, that the bidder is reputable and can provide
works to the quality required. There is no requirement for RFQs to be advertised.
4.6.4 The RFQ method of procurement is not only restricted to persons or firms resident in
Ethiopia but also to the suppliers residing abroad as the case may be.
4.6.5 The public body shall ensure the same bidders are not always invited to quote. This is
necessary to diversify the source of supply and to treat all potential bidders equally, as
long as they provide good performance and economic price. This is particularly
important in the purchase of goods by the RFQ method, as the types of goods likely to
be purchased in this way shall probably be available from a number of persons or
firms.
4.6.6 The RFQ shall contain clear statements concerning the public body’s requirements in
respect of the goods and related services and low value simple works or physical
services, such as quality, quantity/volume of goods, size of physical services, duration
of services, terms and time of delivery/completion, price validity period, payment
conditions, including other special requirements, e.g. installation requirements as
appropriate. The public body shall request quotations in writing by letter, fax etc. The
request indicates the date by which the quotations shall be submitted.
4.6.7 Bidders shall be instructed to submit prices on a basis similar to those used in Open
Bidding Method. In extremely urgent cases, quotations for low value simple works or
physical services may be requested in the form of:
4.6.7.1 unit rate prices, provided work quantities are available with a reasonable degree of
accuracy;
4.6.7.2 ‘cost plus fee’ arrangements, when quantities cannot be reasonably determined in
advance; or
4.6.7.3 a lump sum based upon cost estimates determined by the public body
4.6.8 The method of evaluation to be used shall be stated in all RFQs.
4.6.9 Bidders shall be given sufficient time in which to submit their quotations which shall
be presented in writing, as reflected in the Proclamation and Directive. Copies of all
quotations shall be kept for record purposes. Public bodies shall use the Standard
RFQ document issued by the PPA for procurement under Request for Quotations
Method.
4.6.10 No bid or performance securities are required when the RFQ method of procurement
is used.
4.6.11 The closing date for the submission of quotations may generally be within one (1) day
to one (1) week from the date of issue of the RFQ, depending upon the urgency and
size of the requirement.
4.6.12 If the public body has not received at least three (3) quotations within the given time,
it shall verify with the other bidders to whom it submitted a Request for Quotations
whether or not they intend to submit a quotation and if so, how soon. Unless there is
extreme urgency or there are already three (3) or more quotations available, the public
body may give one day to one week, for other bidders to submit quotations. After this
extended period, the public body may proceed with the comparison of the quotations
received.
4.6.13 A purchase order/work order shall be placed with the bidder whose quotation meets
the requirements of the RFQ issued by the public body and who quotes the lowest
evaluated cost.
4.6.14 In view of the type and value of goods and related service and low value simple
works or physical services which are purchased using the RFQ method of
procurement, the criteria considered in the evaluation of quotations are normally a
simple determination as to whether quotations meet the requirements specified in the
RFQ, following which the lowest priced quotation meeting those requirements is
selected.
4.6.15 In special circumstances, the public body may recommend an award to a Bidder who
has not submitted the lowest priced quotation. For example, a slightly higher price
may be justified for faster delivery or immediate availability in cases of extreme
urgency, when late delivery may result in heavy consequences for the public body. In
such cases, the intention to favor early delivery should be indicated in the issued RFQ
and the recommendation fully justified by the public body in its Bid Evaluation
Report submitted to the head of a public body or an officer authorized by him/her.
4.6.16 The Bidder shall confirm receipt of the purchase order/work order in writing to the
public body. The record of procurement shall include the list of bidders invited and
the list and value of the quotations received and Bid Evaluation Report showing
clearly that the award is based on sound economic criteria.
4.6.17 A Flow Chart on the process to be followed and activities to be undertaken for the
procurement of goods and related services and low value simple works or physical
services under Request for Quotations Method is attached at Appendix 11.

4.7.1 Open International Competitive Bidding (ICB):
When, due to lack of capacity within Ethiopia, there is either no or only limited
competition for the provision of specific goods and related services and works and
physical services, a public body shall undertake special efforts to improve the level of
competition by seeking bids from foreign bidders to accomplish their procurement
requirements. The use of ICB is also subject to the threshold level set out in article
17.2 of the Directive (for works above Birr 50, 000, 000, for goods above Birr
10,000,000, for consultancy services above Birr 2,500,000 and for other services
above Birr 7,000,000).The procedure to be followed by public bodies shall be similar
to Open Bidding Method as described in the Proclamation and Directive, together
with the specific instructions specified below. Where appropriate, Pre-qualification
shall first be undertaken, followed by Bidding. The additional requirements for
International Competitive Bidding are as follows:
4.7.1.1 The bid advertisement and the bidding documents shall be prepared in English,
4.7.1.2 The bid advertisement shall be published in a news paper that has wide circulation
and accessible to foreign bidders, the bid advertisement shall be posted on the PPA’s
website if the value of the procurement is above the threshold stated in article 6.5) of
the Directive. In order to attract a large number of bidders, the bid advertisement may
also be posted on the website of the procuring public body and embassies of various
countries may be notified of the bid.
4.7.1.3 Bidders must be given adequate time to prepare bid documents in response to the
invitation to bid in accordance with article 16.9 of the Directive.
4.7.1.4 The schedule of requirements to be prepared shall comply with national standard and
be internationally acceptable.
4.7.1.5 Bid prices offered by foreign bidders shall be quoted and bid securities required of
such bidders shall be furnished in a freely convertible currency used for payment in
international commercial transactions.
4.7.1.6 Where a foreign bidder uses local inputs to satisfy the required object of procurement
under the contract, the portion of the total contract price representing such local
expenditure shall be expressed in birr in the price schedule of the bidder.
4.7.1.7 Contracts concluded for procurements to be made by means of international
competitive bidding may incorporate standard terms and conditions applicable in
international commercial transactions to the extent that such terms and conditions are
not in conflict with the Proclamation, Directive and other documents governing public
procurement
4.7.1.8 Unless the contract provides otherwise, disputes arising from the performance of the
contract shall be adjudicated in accordance with Ethiopian Law.
4.7.2 Other International Procurement Procedures
4.7.2.1 Where the participation of foreign companies is believed to be necessary to carry out
adequately competitive and effective procurement, public bodies may, without
prejudice to certain aspects of National & International Competitive bidding
procedures set forth in the Proclamation and Directive which are appropriate to the
particular method of procurement in question, may execute International Procurement
by means of two stage bidding, request for proposals, restricted bidding, request for
quotation or direct procurement pursuant to article 59.4 of the Proclamation.
4.7.2.2 In carrying out International Procurement by means other than International
competitive bidding pursuant to article above, the conditions and financial thresholds
prescribed for each method of procurement shall be complied with.

4.8.1 Pursuant to Article 25 of the Proclamation, with the exception of request for quotation
and single source procurements, preference shall be granted in any procurement to
locally produced goods, to small and micro enterprises established under the relevant
Proclamation and to local construction and consultancy companies.
4.8.2 The margin of preference to be so granted and applied when comparing prices during
evaluation of bids shall be as follows:
4.8.2.1 For procurement of drugs or pharmaceutical products or medical equipments 25%,
4.8.2.2 For procurement of other products 15%,
4.8.2.3 For construction and consultancy services 7.5%
4.8.3 The preference to be granted to drugs, medical equipments or other products as per
article (a) and (b) above shall be effective where it is certified by a competent auditor
that no less than 35% of the total value of such products is added in Ethiopia.
For the purpose of this sub-sub article, value added in Ethiopia shall be calculated by
deducting from the total value of the product in question, the cost , exclusive of
indirect taxes, of imported raw materials and other supplies used in the production of
such product as well as services rendered abroad in connection with the production of
that product.
4.8.4 The following conditions must be satisfied for local companies engaged in
Construction or Consultancy Services to qualify for preference:
4.8.4.1 The company has to be incorporated in Ethiopia;
4.8.4.2 More than fifty per cent of the company’s capital stock has to be held by Ethiopian
natural or juridical persons;
4.8.4.3 More than fifty per cent of members of the board of the company have to be
Ethiopian nationals;
4.8.4.4 At least fifty per cent of the key staff of the company has to be Ethiopian Nationals.
4.8.5 For small and micro enterprises established under the relevant law:
4.8.5.1 Preference shall be given by a margin of 3% when such enterprises compete with
local suppliers in national competitive bidding.
4.8.5.2 When small and micro enterprises participate in international competitive bidding,
only the preference granted to local companies as per article 4.8.2 shall apply.
4.8.6 If the Public Body decides to grant a margin of preference to goods manufactured in
the Federal democratic Republic of Ethiopia or to local companies engaged in
Construction or Consultancy Services for the purpose of bid comparison responsive
bids shall be classified by applying the following procedures:
4.8.6.1 Group A: Bids offering locally produced goods meeting the criteria of article 4.8.3
above or bids offered by local construction or consultancy companies meeting the
criteria of article 4.8.4 above ; and
4.8.6.2 Group B: all other bids.
4.8.6.3 For the purpose of further evaluation and comparison of Bids only, an amount equal
to percentage of the evaluated bid prices determined in accordance with article 4.8.2
above shall be added to all bids classified in Group B.

5.1.1 A Request for Proposals (RFP) shall be used by public bodies for procurement of
consultancy services. Consultancy services mean a service of an intellectual and
advisory nature provided by consultants using their professional skills to study,
design, and organize specific projects, advice clients, conduct training and transfer
knowledge.
5.1.2 Public bodies shall use the standard documents prepared and issued by the PPA for
the Request for Expressions of Interest and the Request for Proposal (RFP).

5.2.1 Where a public body opts to procure consultancy service by means of request for
proposal and the estimated value of such procurement is above 3000,000 birr, it shall
issue invitation for expression of interest in accordance with article 22 of the
Directive and in line with the Annual Procurement Plan. The request is expressed in
order to prepare a shortlist of Consultants to which, at a later date, the RFP will be
issued. The Request for Expressions of Interest shall be published at least once in a
news paper that has nationwide circulation to ensure participation of as many
consultants as possible.
5.2.2 The invitation for Expression of Interest shall be carried out in accordance with the
provisions of article 16.2 and 16.4 (a&b) of the Directive, and shall state that the
invitation is only for expression of interest.
5.2.3 The invitation for expression of interest shall state the type of the required
consultancy service, the expected output, the time for completion of the assignment,
the qualification required of the consultant, work experience and any other relevant
information as well as the list of documents to be submitted and the manner, time and
place of submitting such documents.
5.2.4 From among the consultants responding to the invitation of the public body for
expression of interest, not less than three but not more than seven consultants, as far
as possible, demonstrating better suitability for the required consultancy service shall
be chosen on the basis of evaluation of their profiles, and such consultants shall be
invited to submit their proposals in accordance with the provision of article 21 of the
Directive.
5.2.5 The Request for Expressions of Interest notice shall follow the form provided by the
PPA.

5.3.1 Upon receipt of the Expressions of Interest, the public body shall select a short-list
composed of consultants who are considered to be best suited to undertake the
assignment. The assessment of consultant’s suitability shall be based upon the
following information indicated in the Request for Expressions of Interest:
5.3.1.1 brochures submitted by the consultants summarizing their facilities and areas of
expertise;
5.3.1.2 descriptions of similar assignments;
5.3.1.3 experience in similar operating conditions;
5.3.1.4 availability of appropriate experience and professional qualifications among
Applicant’s staff and resources to carry out the assignment; and
5.3.1.5 administrative strength and financial capability.
5.3.2 Following the assessment, a short list should be prepared composed of not less than
three (3) and not more than seven (7) consultants, who have met the requirement of
Request for Expressions of Interest and who in the opinion of the public body indicate
sufficient and adequate capabilities to perform the assignment under consideration.
5.3.3 However, if after assessment the number of short listed consultants is less than three
(3), the public body shall review the assignment to verify that the Expressions of
Interest is correct and meets the requirement of the public body and it was properly
advertised, as per the Directive. If it was found to be correct, then a shortlist with less
than four consultants may be considered for issuance of the RFP, subject to the
approval of the head of a public body.
5.3.4 Alternatively, having reviewed the assignment and associated Expressions of Interest,
a public body may make amendment to the assignment and then re-advertise but
ensuring a wider publicity. If after re-advertising the number of re-assessed and short
listed consultants is still less than three (3), the short list should be considered as final
and the RFP shall be issued to the fewer number of short listed consultants. Public
bodies are, however, not encouraged to practice re-advertisement as a routine matter,
but instead should always make efforts to finalize the short list in the first round of
advertising.
5.3.5 The evaluation of Expressions of Interest should be undertaken in accordance with the
Proclamation, Directive and the Manual. The evaluation of Expressions of Interest
may require the appointment of a Technical Sub-Committee (TSC) and, at the
discretion of the head of a public body or an officer authorized by him/her, additional
external technical experts from the user/beneficiary entity with specific knowledge of
the services required. The public body shall evaluate the Expressions of Interest and
establish a short-list that will be approved by the head of a public body or an officer
authorized by him/her.
5.3.6 The short-list shall be established on the basis of information received from the
Expressions of Interest and other past performance information available to the public
body and user/beneficiary entities.
5.3.7 If it is intended by the public body that the RFP shall be issued on an international
basis, then the short-list shall include not more than 2 firms from the same country
and at least 1 firm from a developing country, unless qualified firms from developing
countries cannot be found.
5.3.8 Following the approval of the Expressions of Interest's Evaluation Report by the head
of a public body or an officer authorized by him/her, all consultants participating in
the Request for Expressions of Interest shall be informed whether or not they have
been short-listed by the public body.
5.3.9 The names of the short-listed consultants shall be communicated to any interested
individual or firm, in a similar manner to that of Pre-qualification.

5.4.1 A public body shall prepare an RFP using the applicable standard RFP document
issued by the PPA and in accordance with the procedure applicable to national
competitive bidding prescribed in the Directive. The RFP shall include, as a minimum
the following information:
5.4.1.1 the name and address of the public body;
5.4.1.2 a description of the assignment required, normally by means of Terms of Reference
(TOR);
5.4.1.3 the sub-method for selection of the successful Consultant and a requirement that
Consultants’ proposals be submitted using the two-envelope system e.g. Technical
Proposal and Financial Proposal except for Single Source Selection sub-method
where the Technical and Financial Proposals may be submitted together. The submethods
QCBS, SFB and LCS require the Consultant to present its proposal in two
(2) sealed inner envelopes which are then placed together into one single outer
envelope that is sealed and marked as described in the RFP. One inner envelope shall
contain the Consultant’s technical proposal without any reference to price and the
second inner envelope shall contain the Consultant’s financial proposal. The
Consultant shall appropriately mark each envelope. It shall be made clear to the
Consultant in the text of the RFP that failure to follow the instructions on sealing and
marking of the envelope may result in pre-disclosure of price for which the
Consultant shall be solely and entirely liable. This may also constitute grounds for
declaring the proposal non-responsive.
5.4.1.4 a reminder that Consultants for present consultancy assignments, which may involve
potential future conflicts of interest, shall exclude themselves from participating in the
procurement of goods and related services and works and physical services which
may follow as a result of or in connection with the consultancy assignment;
5.4.1.5 a reminder that a Consultant who has carried out an earlier related assignment,
whereby a potential conflict of interest may be considered to exist, then the
Consultant shall also exclude itself from participation in the subsequent assignments;
· the criteria for evaluating and allocating corresponding points to the technical
proposals, the relative weight to be given to the technical and financial proposals
and the manner in which they shall be applied in the evaluation of proposals;
· the place and deadline for the submission of proposals; and
· the contract format to be used in which the respective obligations of both the
Consultant and the public body shall be stated.
5.4.2 In preparing RFPs, the public bodies shall also take note of the following issues. The
RFP shall include:
5.4.2.1 Letter of Notification (LON);
5.4.2.2 Instructions to Consultants (ITC);
5.4.2.3 Proposal Data Sheet (BDS);
5.4.2.4 General Conditions of Contract (GCC);
5.4.2.5 Special Conditions of Contract (SCC);
5.4.2.6 Proposal and Contract Forms; and
5.4.2.7 Terms of Reference (TOR);
5.4.3 The public body shall use only the applicable standard RFPs on a case-by-case basis.
There shall be no changes in the text of the RFP and any concern regarding specific
issues shall be addressed in the Data Sheet and in the Special Conditions of Contract,
where all specific project/assignment requirements shall be detailed.
5.4.4 The LON shall state the intention of the public body to enter into a contract for the
provision of consulting services, the source of funds, the details of the
user/beneficiary entity and the date, time and address for submission of proposals.
The public body shall list in the LON all the documents to be included in the RFP.
5.4.5 The RFP shall contain all necessary information to help Consultants prepare
responsive proposals and to make the selection procedure as fair and as transparent as
possible by providing information on the proposal submission process and by
informing Consultants of the evaluation criteria, their respective points and the
minimum technical points required for a Consultant to qualify in the evaluation of its
technical proposal, and to be considered in the subsequent evaluation of financial
proposals.

5.5.1 In cases where the short-list contains both national and international Consultants, a
public body may choose to award additional technical merit points in the evaluation
criteria for the use of national Consultants as key staff.
5.5.2 Except in the case of selection under a Fixed Budget, the ITC shall not indicate the
budget or official estimate for that particular consultancy, as cost shall be a factor in
the overall evaluation, but it shall indicate the expected level of input of key
professionals in terms of man months. Consultants, however, shall be free to prepare
their own estimates of man months necessary to carry out the assignment in
accordance with the terms of reference.
5.5.3 The ITC shall specify the proposal validity period that shall normally be between
sixty (60) and one hundred and twenty (120) days depending on the complexity of the
assignment. However to suit the requirement of a particular procurement
shorter/longer periods may be authorized by the head of a public body or an officer
authorized by him/her. The TOR shall provide the following information in order to
assist Consultants in the preparation of their proposals:
5.5.3.1 background information to the Consultant;
5.5.3.2 objectives and scope of the assignment;
5.5.3.3 details of existing relevant studies and basic data;
5.5.3.4 the availability and location of that data;
5.5.3.5 services and surveys necessary to carry out the assignment and the expected outputs
(for example reports, data, maps and surveys);
5.5.3.6 details of the number of staff to be trained, the training timetable and topics, if already
known, shall be specifically outlined where transfer of knowledge or training is an
objective to enable Consultants to estimate the required resources;
5.5.3.7 the facilities and support to be provided to the Consultant by the public body and user
or beneficiary entity during the assignment.
5.5.4 The TOR should not be too detailed or inflexible. Consultants shall be able to propose
their own methodology and staffing and shall be encouraged to comment on the TOR
in their proposals. The respective responsibilities of the public body/user or
beneficiary entity and the Consultant shall be clearly defined in the TOR. The scope
of the services described in the TOR shall be consistent with the available budget.
5.5.5 The preparation of an accurate cost estimate is therefore essential, if accurate
financial resources are to be allocated to the assignment by the public body. In
preparing the estimate, the public body shall breakdown the assignment into its
composite tasks and prices each task for professional fees and corresponding
reimbursables. Thereafter a contingency of 15% may be included to provide for both
physical and financial contingencies.
5.5.6 The cost estimate prepared by the Consultant shall be based upon the public body’s
assessment of the resources needed to carry out the assignment: staff man months,
logistical support and physical inputs (e.g. vehicles, laboratory equipment, office
equipment, such as computers, photocopiers, etc.).
5.5.7 Costs shall be generally divided into two broad categories:
5.5.7.1 Fee or remuneration (according to the type of contract used); and
5.5.7.2 Reimbursables, which are amounts payable against documentary evidence of
expenses, e.g. air tickets, per diems (daily allowance for accommodation and food),
visa costs, medical expenses, transportation costs, office rental costs, purchase of
vehicles, office equipments, office furniture, etc.
5.5.8 The cost of staff time shall be estimated on a realistic basis in accordance with the
level of expertise required. The items given for reimbursables expenditure are
examples only and shall vary according to the TOR and in particular, the facilities to
be provided to the Consultant by a public body/user or beneficiary entity. For
example, if a public body/user or beneficiary entity can provide office equipment
and/or vehicle, then there shall be no need for a Consultant to include those items in
its estimate of costs.
5.5.9 The only actual fixed cost quoted by a Consultant in its proposal is the fee rate or
remuneration to be charged for its personnel to undertake the assignment.
5.5.10 For certain specific scope of services, (e.g., for pre-shipment inspection, procurement
services through agents, training of students in institutes/universities, advertising
activities in privatization or twinning), the public body may require to incorporate
some adjustments in the formats/ tables of the Standard RFP issued by the PPA.
5.5.11 Consultants shall be given sufficient time in which to prepare their proposals. The
minimum bid period shall be as defined in Annex of the Directive.
5.5.12 The RFP shall indicate the time periods whereby the public body can entertain any
request by a Consultant for clarification as well as the timing of the issue of the
corresponding response. Considering the nature of clarification it may be necessary to
extend the deadline for submission of proposal. Such clarification shall also be issued
to all short listed person/firms.
5.5.13 The RFP shall state the date, place and time by which the proposals shall be received.
It shall also state the procedure to be followed in notifying Consultants, whose
proposals have been accepted for financial evaluation, including the date, place and
time for the opening of the financial envelopes.
5.5.14 The RFP shall state that the evaluation of the proposal shall be carried out in two
stages. First of all, the quality of the proposal shall be evaluated by an examination of
the technical proposal. Upon completion of the technical evaluation, the technical
evaluation report shall be submitted for approval to the head of a public body or an
officer authorized by him/her, indicating the ranking and corresponding technical
points for each submitted proposal. Evaluators of technical proposals shall not have
access to the financial proposals until the technical evaluation has been approved.
Financial proposals of technically responsive proposals shall be opened in presence of
Consultants or their representatives.

5.6.1 The most important consideration in the selection of a successful Consultant in the
procurement of intellectual and professional services shall be given to the quality of a
Consultant’s technical proposal. The cost of the services shall be considered
judiciously because, in the procurement of intellectual and professional services,
quality is the primary concern.
5.6.2 Depending on the nature and complexity of assignments, different selection methods
may be selected. The evaluation and selection of consultants shall be carried out in
accordance with the following methods:
5.6.2.1 Quality and Cost Based Selection (QCBS);
5.6.2.2 Quality Based Selection (QBS)
5.6.2.3 Selection under Fixed Budget (FBS);
5.6.2.4 Selection of Consultants Qualifications (CQS);
5.6.2.5 Selection Based on Least Cost
5.6.3 The following two selection methods should be the preferred options for selection of
Consultants by the public bodies and may be used under the following conditions:
5.6.3.1 Quality and Cost Based Selection (QCBS) is the preferred sub-method that shall be
used in most cases. QCBS uses a competitive process among short-listed consultants
that takes into account the following in selecting the successful firm:
· the quality of the proposal; and
· the cost of the services.
5.6.3.2 Selection under a Fixed Budget (FBS) is appropriate only when:
· the assignment is relatively simple and can be precisely defined; and
· the budget is fixed.
· tasks that represent a natural continuation of previous work carried out by the
concerned firm
· assignments when a rapid selection is essential (e.g. in an emergency situation);
· low-value assignments below the threshold value specified in Appendix 1;
· assignments when only one firm is qualified or has exceptionally good experience
for the assignment or
· assignments arising out of a catastrophic event where it is not plausible to attempt
a competition
5.6.4 The steps for the preparation of the RFP and the selection of the Consultants for each
of the sub-methods shall be in accordance with details provided in the following
paragraphs.

5.7.1 The RFP shall be prepared using the standard RFP document issued by the PPA. The
evaluation criteria, (i.e. technical qualifications), required for the satisfactory
completion of the assignment shall be clearly stated in the RFP, together with the
points for each evaluation criterion that shall be applied in the evaluation of the
proposal.
5.7.2 Since cost is a criterion in the evaluation of the proposal, the RFP shall not state the
budget or official estimate for the assignment that has been allocated by either the
public body/user or beneficiary entity. However, it shall indicate the expected level of
inputs of key professional staff (staff time expressed in person-months/weeks/days)
that is considered necessary to undertake the assignment. The Consultant shall, then,
be able to prepare its own cost estimate to carry out the assignment
5.7.3 In evaluating and comparing technical proposals submitted by consultants in a bid for
Procurement of consultancy service, public bodies shall use the following criteria:
(a) The experience of the consultant relevant to the service required;
(b) The methodology the consultant proposes to apply in conducting the study or
research;
(c) The knowledge the consultancy service to be rendered by the consultant
transfers to the public body;
(d) The level of participation of Ethiopian consultants in the important components
of the consultancy service to be rendered by foreign consultants.
5.7.4 Prices offered by local consultants shall, for the purpose of evaluation, include local
taxes. Prices offered by foreign and local consultants may also include translation,
travel, stationery and other incidental expenses.
5.7.5 In addition to the method of selection described above, the procedure prescribed in
article16 of the Directive shall apply for a procurement of consultancy service made
by means of International competitive bidding.
5.7.6 Technical Score
5.7.6.1 The following percentage points shall be given for each criterion listed in article 5.7.3
above depending on the type of the required consultancy service:
Evaluation Criteria (Indicative) Points
(a) Consultant's specific experience 05 to 10%
(b) The method applied in doing the study or research 20 to 50%
(c) The ability to transfer knowledge 05 to 10%
(d) Competence of key professionals engaged in the
consultancy service
30 to 60%
(e) Participation of Ethiopian Nationals 05 to 10%
Total Points should be: 100%
5.7.6.2 In the RFP the points assigned to a particular criterion show the maximum number of
points that can be allocated to it when evaluating each proposal.
5.7.6.3 For the purposes of evaluation, each criterion shall have fixed points within the range.
Then the total number of points achieved (out of the total of 100 points) shall be
weighted to become scores. The steps to be carried out in achieving this are shown in
the following example:
Example:
If a technical proposal achieved 90 points and the weighting applied to this was 80%,
then by applying the weighting the technical score for this proposal (Ts) would be 90
x 80% = 72. All the other proposals would be weighted and scored in the same
manner.
5.7.6.4 The points given to experience can be relatively low, since this factor has already
been taken into account when short-listing the Consultant. In the case of complex
assignments (e.g. multidisciplinary, feasibility or management studies), more points
should be given to the methodology and Work Plan. Similarly, higher points may be
preferable for key staff in assignments where personnel input is of paramount
importance. Transfer of knowledge may be important in some assignments and in
such cases; it should be given higher points to reflect its importance.
5.7.6.5 The RFP shall inform Consultants that a minimum number of technical points have to
be achieved in order to accept their proposals for the next stage of the evaluation (i.e.
the evaluation of financial proposals). A minimum number of 70 points are required
for a technical proposal to be considered responsive. Consultants getting less than
70% in the evaluation shall be rejected and the envelopes containing the financial
proposals of those consultants scoring 70% and above shall be opened.
5.7.6.6 The envelopes containing the financial proposals of those consultants who failed to
achieve the points required to qualify for financial evaluation shall be returned to
them unopened.
5.7.7 Financial Score
5.7.7.1 The RFP shall state the manner in which the financial proposal shall be evaluated.
5.7.7.2 In the financial evaluation, the highest point shall be given to the lowest priced bid,
and conversely, the lowest point shall be given to the highest priced bid; among
technically qualified bids. The points given to other bidders shall be determined
depending on their price offers.
The proposal with the lowest evaluated price shall be given a financial score of 100
and other proposals given scores that are inversely proportional to their prices.
Example:
If the lowest cost financial proposal is say ETB 100,000 then the financial points
would be 100 (maximum). Financial scores would then be:
(lowest financial cost / proposal financial cost) x 100 x weighting% = score
Example
Proposals Cost Points Weight Score
Lowest financial proposal ETB 100,000 100 20% 20
Next highest financial
proposal
ETB 120,000 83.3 20% 16.66
Next highest financial
proposal
ETB 150,000 66.6 20% 13.32
5.7.7.3 From the total merit points to be given for proposals submitted by consultants in a bid
for procurement of consultancy service, the share of technical proposal shall be 80%
and the remaining 20% shall be the share of financial proposal.
5.7.7.4 The consultant scoring the highest point in the total sum of the technical and financial
evaluation shall be selected as the successful bidder.

Quality Based Selection (QBS) may be appropriate for complex or highly specialized
assignments, or those which invite innovations. The selection is based solely on the
quality of the proposal without consideration of the cost.
5.8.1 QBS should be used for the following types of assignments:
5.8.1.1 complex or highly specialized assignments where it is difficult to define precise TOR
and the required input from the consultants, and for which the client expects the
consultants to demonstrate innovation in their proposals (for example, country
economic or sector studies, multi-sector feasibility studies, design of a hazardous
waste remediation plant or of an urban master plan, financial sector reforms);
5.8.1.2 assignments that have a long term impact and in which the objective is to have the
best experts available (for example, feasibility and structural engineering design of
such major infrastructure as large dams, policy studies of national significance,
management studies of large government agencies); and
5.8.1.3 assignments that can be carried out in very different ways, and therefore proposals
may not be directly comparable (for example, management advice, or policy studies
in which the value of the services depends on the quality of the analysis).
5.8.2 The Request for Proposals (RFP) should not indicate the estimated budget, but may
provide the estimated number of key staff and time, specifying that this information is
given as an indication only, and that consultants are free to propose their own
estimates.
5.8.3 The envelopes containing the technical proposals shall be opened in the presence of
the consultants
5.8.4 The consultant scoring the highest point in the evaluation of the technical proposals
shall be selected as the successful bidder.
5.8.5 Notwithstanding the provision of article above, if the price offered by the selected
consultant is beyond the public bodies ability to pay, the public body may enter into a
contract with the consultant scoring the second highest point in the technical proposal
to procure the required service, provided that the price offered by such consultant is
affordable to the public body.
5.8.6 Upon signature of the contract with the selected consultant, the envelopes containing
the financial proposals of the unsuccessful consultant shall be returned to such
consultant unopened.

5.9.1 This method is appropriate only when the assignment is simple and can be precisely
defined and when the budget is fixed.
5.9.2 The rules to be followed for the SFB sub-method shall be the same as for the QCBS
sub-method, with the following exceptions:
5.9.2.1 The RFP shall indicate the available budget and ask the Consultants to provide, in
separate envelopes, their best technical and financial proposals within the budget.
5.9.2.2 For this method of selection, the TOR shall be as complete as possible to make sure
that the budget is sufficient for the Consultants to perform the expected tasks.
5.9.2.3 The RFP shall state that, following public opening of the financial proposals, all
proposals that exceed the indicated budget shall be rejected.
5.9.2.4 The envelopes of the technical proposals shall be opened in the presence of the
bidders in accordance with article 16.18.3 (a) of the Directive.
5.9.3 The financial envelopes of the consultants, who have technically qualified, shall be
opened in their presence and the price offered by each consultant shall be read out.
5.9.4 Consultants offering price in excess of the budget available for the procurement shall
be disqualified.
5.9.4.1 The consultant offering the price within the budget limit allocated to the procurement
and scoring the highest point in the total sum of the technical & financial evaluations
shall be selected as the successful consultant. If necessary, negotiation may be held
with the selected consultant on certain issues excluding price.

5.10.1 This method may be used for small assignments of which the cost and time required
for preparing and evaluating competitive proposals is not justified.
5.10.2 This method may only be used where the value of the consultancy services does not
exceed Birr 50,000.
5.10.3 Consultants shall be selected on the basis of their qualifications and experiences for
the assignment. They may be selected following a Request for Expressions of Interest
advertisement through comparison of qualifications and experiences of the candidates
who have expressed interest in the assignment or have been approached directly by
the public body.
5.10.4 Individuals shall have demonstrated in their Expressions of Interest that they meet the
required qualifications and experiences and fully capable of carrying out the
assignment. Their capability shall be judged on the basis of academic background,
experience in the field of assignment and as appropriate, knowledge of the local
conditions, as well as language and culture.
5.10.5 Following the completion of the evaluation of the Consultants’ qualifications, the
short listed Consultants may be invited for interview. The selected Consultant is then
invited to negotiate fees / remunerations, reimbursable, the inputs available from the
public body and subsequently to sign the contract. However, in order to select the
suitable candidate within a reasonable budget, the public body may prepare a list of
alternate candidates in order of priority.

5.11.1 This method is appropriate for procurement of a consultancy service which is
standard, simple and doesn’t call for special qualification of a consultant.
5.11.2 In evaluating consultants by applying this method, public bodies shall set the
minimum point of technical evaluation which they shall indicate in the request for
proposal to be issued for consultants who are selected from the suppliers list.
5.11.3 The envelopes of technical proposals shall be opened in the presence of the
consultants and the evaluation shall be carried out there after.
5.11.4 Consultants failing to score the minimum point set for technical qualification shall be
disqualified.
5.11.5 The envelopes containing the financial evaluation of consultants not satisfying the
minimum point set for technical qualification shall be returned to them unopened.
5.11.6 The financial envelopes of the consultants who have technically qualified shall be
opened in their presence and the price offered by each bidder shall be read out.
5.11.7 The consultant offering the lowest evaluated price shall be selected as the successful
consultant from among the consultants who have technically qualified by satisfying
the minimum point
5.11.8 A Flow Chart on process to be followed and activities to be undertaken under QCBS,
QBS, FBS, and CQS methods are attached at Appendix 11.

5.12.1 Public bodies shall examine and evaluate proposals strictly in accordance with the
provisions of the Proclamation and Directive and the requirements contained in the
Request for proposals document. The public body shall also ensure that it follows the
requirements of Procurement Plan. The head of public body may appoint the ad hoc
Proposal Evaluation Committee, its Chairperson and members and the rules to be
followed during the evaluation and approval process.
5.12.2 The head of the public body may establish a technical committee to assist and advise
the ad hoc Proposal Evaluation Committee in the technical evaluation of bids.
5.12.3 In all cases the head of a public body shall approve the recommendation for award.
The ad hoc Proposal Evaluation Committee members themselves shall examine and
evaluate the proposals, and prepare the evaluation report including recommendations
for award of contract, without delegating any responsibility to others.
5.12.4 Proposals shall be received by the deadline specified in the RFP. The assigned officer
of the public body shall return late proposals unopened to the respective Consultants.
Upon receipt of proposals, the public body shall record their receipt and the proposal
envelope shall either be placed in the bid box or kept in a secured and safe place with
the Chairman and or the secretary of the ad hoc Proposal Evaluation Committee as its
custodian. This process shall be handled in a similar manner used in the Open
Bidding Method.
5.12.5 Following the deadline for the submission of proposals, the received proposals shall
be taken from the bid box or safe custody and opened by the ad hoc Proposal
Evaluation Committee. The technical proposal envelopes shall be taken by the ad hoc
Proposal Evaluation Committee, while the financial proposals shall be deposited
unopened with the Chairman and or the secretary of the ad hoc Proposal Evaluation
Committee and shall be safeguarded until the technical evaluation proceedings
completed. The envelope marked as financial proposal shall be initialed by all ad hoc
Proposal Evaluation Committee members in such a way to protect the contents of the
envelope from unnoticeable premature opening (e.g. shall be signed on the joints of
the envelopes).
5.12.6 In the event that a Consultant does not follow very carefully the instructions for
sealing and marking envelopes contained in the RFP and the ad hoc Proposal
Evaluation Committee shall, through this error, learn in advance the price of a
particular proposal, then the Consultant shall be solely and entirely liable for that
disclosure, which shall constitute grounds for rejecting the proposal.
5.12.7 A public body may accept a single proposal for evaluation if only one is submitted on
the due date and time, provided that all short listed Consultants have been requested
to submit proposal allowing the specified time. If the proposal is found to be
technically responsive with the RFP document, the public body shall evaluate the
proposal as detailed in the proposal documents.
5.12.8 Under QCBS (Quality and Cost Based Selection), SFB (Selection under Fixed
Budget); CBS (Selection Based on Consultants Qualifications), the First Stage of the
evaluation shall involve only an examination and evaluation of the technical
proposals. The evaluation of technical proposals shall be carried out by the ad hoc
Proposal Evaluation Committee exactly as described in the RFP.
5.12.9 Each member of the ad hoc Proposal Evaluation Committee shall evaluate separately
each proposal. Then, the score of each proposal should be the average of the scores
given by the member of the ad hoc Proposal Evaluation Committee for the respective
proposal. In the case of major differences in score assigned by the individual
evaluators, the Chairperson shall look into the differences and ask the concerned
individual evaluators to justify their score and reach a more acceptable spread of
scores, following which the score shall be awarded to the concerned proposal(s).
5.12.10 A Proposal Evaluation Report shall be prepared clearly indicating the technical score
attributed to each proposal, in order to identify Consultants who have achieved the
required minimum technical score and who now shall be considered in the combined
technical and financial evaluation. The technical evaluation report shall be submitted
to the head of a public body or an officer authorized by him/her in the same manner as
in the procedure for Open Bidding Method and examination and evaluation of bids.
5.12.11 In the event that only one proposal achieves the quality threshold, then with the
approval of the head of a public body or an officer authorized by him/her or an
approving authority the proposal will be considered for the next stage of the
evaluation, i.e. the combined technical and financial evaluation.
5.12.12 Upon completion of the technical evaluation and the approval of the Technical
Proposal Evaluation Report by the head of a public body or an officer authorized by
him/her or an approving authority, the Consultants who have submitted a proposal
exceeding the quality threshold specified in the RFP shall be invited to a public
opening of their financial proposals. At this public opening, the Bid Evaluation
Committee shall announce the technical score of each proposal which have achieved
the quality threshold, together with its respective price. The financial proposal shall
be checked to verify if it is arithmetically correct and any errors in calculation shall be
notified to the Consultant in the same manner as in Open Bidding Method.
5.12.13 If a task prescribed in the TOR is mentioned in the Consultant’s technical proposal
but is not priced in its financial proposal then an equivalent price shall be worked out
for this task which is the maximum price for the task quoted by any one responsive
Consultant. This equivalent price will be added to the Consultant’s financial offer for
evaluation purposes only. If this particular Consultant is finally awarded then the
actual price to be paid by the public body to the Consultant shall be negotiated and
shall not exceed the equivalent price (e.g. maximum price quoted by any one
responsive Consultant) considered for evaluation.
5.12.14 The items included by Consultants as reimbursable shall be reviewed both for
arithmetical correctness and content. If it is considered that an item has been included
that is not required from the Consultant, as the public body or the user/beneficiary
entity shall provide it, it shall be deleted from the proposal and not considered in the
price evaluation.
5.12.14.1 In case of QCBS the financial proposals shall then be evaluated as described:
5.12.15 The successful Consultant shall be the Consultant whose combined technical and
financial proposal is the most advantageous to the public body, based upon the results
of the combined technical and financial evaluation, i.e. Consultant attains the highest
combined technical and financial score. The Consultant, whose proposal has the
highest number of points, shall be recommended by the ad hoc Proposal Evaluation
Committee to be invited for negotiations in case of QCBS. In the case of Selection
under Fixed Budget, the firm that submitted the highest ranked technical proposal
(evaluated price) within the budget should be selected. In the case of the Least Cost
Selection, the lowest financial proposal (evaluated price) among those achieved the
required minimum technical score shall be selected. In all cases the selected firm is
invited for negotiations. In case of Single Source Selection, firm selected on a single
source basis is invited to negotiate its proposal.
5.12.15.1 The formula of combined evaluation is stated in the standard RFPs.
5.12.16 The ad hoc Proposal Evaluation Committee shall submit the Proposal Evaluation
Report, together with its recommendations for award of contract directly, to the head
of a public body or an officer authorized by him/ as laid down in the Proclamation.
This shall be submitted within the time limit set in the Proclamation, so that an award
of contract can be notified before the expiry of the validity of the proposals, without
seeking an extension of validity by the public body. The public body shall notify the
successful Consultant that its proposal has been accepted and shall set a date for the
commencement of contract negotiations to enforce contract within the prescribed
date.

5.13.1 A public body may negotiate with the successful Consultant only on the following
components of its proposal:
5.13.1.1 content of the consultancy work;
5.13.1.2 methodology applied to accomplish the work;
5.13.1.3 work plan;
5.13.1.4 the quality of the human power to be engaged by the consultant;
5.13.1.5 the material to be used by the consultant in the performance of the service
5.13.1.6 training inputs (if training is a major component);
5.13.1.7 the content of the report to be submitted by the consultant as well as the manner of
submitting such report; and
5.13.1.8 other issues that may arose from the performance of the service.
5.13.2 It is strictly forbidden for a public body to either seek or permit changes in the rates
quoted for staff remuneration proposed by the Consultant in all methods where the
Consultants’ price uses a factor in the evaluation.
5.13.3 Negotiations shall include discussions of the TOR, the approach and methodology,
organization and staffing, work plan and the public body’s inputs. Special attention
shall be paid to defining clearly the inputs and facilities offered by the public body.
The negotiations shall not significantly alter the original TOR otherwise the integrity
of the negotiations, the content and findings of the technical evaluation report, may be
questioned.
5.14.1. The essential requirements of the RFP and the quality of the work to be delivered by
the consultant are not negotiable. Major reductions in work inputs shall not be made
just to meet the budget. The final TOR and the agreed methodology shall be
incorporated into the “Description of Services”, which shall form part of the contract.
5.13.4 The selected consultant shall not be allowed to substitute key staff, unless both parties
agree that delay in the finalization of the selection process has made such changes
necessary or that such changes are critical to meet the objectives of the assignment. If
public bodies include a realistic proposal validity period in the RFP and carry out an
efficient and prompt evaluation, the risk of consultants needing to make changes to
key personnel shall be minimized.
5.13.5 If this is not the case and if it is established that the key staff were offered in the
proposal without confirming their availability, the firm may be disqualified and the
negotiations may be opened with the next ranked firm. The key staff proposed for
substitution shall be approved by the head of a public body and shall have
qualifications equal to or better than the key staff initially proposed.
5.13.6 Under QCBS, SFB and LCS proposed unit rates for staff-months shall not be
negotiated, since these have already been a factor of selection in the cost of the
proposal. A limited scope of negotiations could include the number of air tickets
foreseen, exceptionally high per diem rates, replacing a Consultant, providing offices
space, vehicles and telecommunications with those that can be provided by the public
body.
5.13.7 The Consultant receiving an award of contract shall be required to submit any
performance security. A public body may require a consultant to furnish professional
indemnity insurance in respect of consultancy service such consultant renders to the
public body under a contract, where the public body finds it appropriate to make
provision for any damage it may sustain as a result of possible default on the part of
the consultant.
5.13.8 If the negotiations fail to result in an acceptable contract, the public body shall
terminate the negotiations and invite the next ranked Consultant for negotiations after
due consultation with the head of a public body or an officer authorized by him/her or
an approving authority, prior to taking this step. The Consultant shall be informed of
the reasons for the termination of the negotiations. Once negotiations are commenced
with the next ranked Consultant/consulting firm, the public body shall not reopen the
earlier negotiations. After negotiations are successfully completed, the public body
shall promptly notify other consultants on the short-list that they were unsuccessful in
their proposals. At this point the financial envelopes of non-technically responsive
Consultants should be returned to them unopened.
5.13.9 In the event that a second negotiation should fail, the public body shall negotiate with
the next ranked responsive Consultant and so on, until a successful contract has been
concluded, subject to the right of the public body to reject all proposals in accordance
with rejection of all bids, proposals and quotations and to reissue the RFP using new
documents, if necessary.
5.13.10 All public bodies issuing award of contract above the threshold value specified in
Appendix-1 shall intimate the PPA for publication of the award in the PPA website.

5.14.1 When evaluating proposals for non-consulting services, such as cleaning services,
security or guarding services, car hire, etc, the evaluation shall be undertaken against
criteria that are stated in the Bidding Document. For such bids there may be three
criteria, weighted as follows: -
5.14.1.1 Technical attributes—these attributes will distinguish between essential and desirable
attributes - 50-60%.
5.14.1.2 Tendering price - 30-40%; and
5.14.1.3 Other aspects, such as delivery time, terms of payment, capacity to render the
services, facilities of the contractor - 10-20%.

5.15.1 Lump Sum Contract - Lump sum contracts are used mainly for assignments in
which the content and the duration of the services and the required output of the
consultants are clearly defined. They are widely used for simple planning and
feasibility studies, environmental studies, detailed design of standard or common
structures, preparation of data processing systems, and so forth. Payments are linked
to outputs (deliverables), such as reports, drawings, and bills of quantities, bidding
documents, and software programs. Lump sum contracts are easy to administer
because payments are due on clearly specified outputs.
5.15.2 Time-Based Contract - This type of contract is appropriate when it is difficult to
define the scope and the length of services, either because the services are related to
activities by others for which the completion period may vary, or because the input of
the consultants required to attain the objectives of the assignment is difficult to assess.
This type of contract is widely used for complex studies, supervision of construction,
advisory services, and most training assignments. Payments are based on agreed
hourly, daily, weekly, or monthly rates for staff (who are normally named in the
contract) and on reimbursable items using actual expenses and/or agreed unit prices.
The rates for staff include salary, social costs, overhead, fee (or profit), and, where
appropriate, special allowances. This type of contract shall include a maximum
amount of total payments to be made to the consultants. This ceiling amount should
include a contingency allowance for unforeseen work and duration, and provision for
price adjustments, where appropriate. Time-based contracts need to be closely
monitored and administered by the client to ensure that the assignment is progressing
satisfactorily, and payments claimed by the consultants are appropriate.
5.15.3 Retainer and/or Contingency (Success) Fee Contract - Retainer and contingency
fee contracts are widely used when consultants (banks or financial firms) are
preparing companies for sales or mergers of firms, notably in privatization operations.
The remuneration of the Consultant includes a retainer and a success fee, the latter
being normally expressed as a percentage of the sale price of the assets.
5.15.4 Percentage Contract - These contracts are commonly used for architectural services.
They may be also used for procurement and inspection agents. Percentage contracts
directly relate the fees paid to the Consultant to the estimated or actual project
construction cost, or the cost of the goods procured or inspected. The contracts are
negotiated on the basis of market norms for the services and/or estimated staff-month
costs for the services, or competitively bid. It should be borne in mind that in the case
of architectural or engineering services, percentage contracts implicitly lack incentive
for economic design and are hence discouraged. Therefore, the use of such a contract
for architectural services is recommended only if it is based on a fixed target cost and
covers precisely defined services (for example, not works supervision).
5.14.2. Indefinite Delivery Contract (Price Agreement) - These contracts are used when
the public body need to have "on call" specialized services to provide advice on a
particular activity, the extent and timing of which cannot be defined in advance.
These are commonly used to retain "advisers" for implementation of complex projects
(for example, dam panel), expert adjudicators for dispute resolution panels,
institutional reforms, procurement advice, technical troubleshooting, and so forth,
normally for a period of a year or more. The Borrower and the firm agree on the unit
rates to be paid for the experts, and payments are made based on the time actually
used.

6.1.1 Any Bidder who claims to have suffered or who may suffer, loss or damage due to a
breach of a duty imposed on a public body by the Proclamation and Directive may
complain accordingly. The purpose of these complaint provisions is to ensure that a
public body performs the procurement related duties in accordance with the
Proclamation and Directive in a fair and transparent manner. It also demands that
public body personnel shall discharge their responsibilities duly as public officers of
the Government. It also provides bidders the opportunity to challenge erroneous
documents or undue process by the public body, thus ensuring a fair and effective
operation of the public procurement system.

Complaint review procedures with regard to proceedings of public procurement
are detailed in Manual on Public Procurement Complaint Procedure.
6.2.1 Who May Submit a Complaint?
6.2.1.1 A candidate or a bidder who claims to be aggrieved or is likely to be aggrieved on
account of a Public Body inviting a bid not complying with the provisions of the
Proclamation or Directive in conducting a bid proceeding may submit, in the first
instance, a complaint in accordance with the procedures set forth herein to the head of
the Public Body or to the Secretariat of the Board to have the bid proceeding reviewed
or investigated, if not satisfied with the Public Body's decision or if its decision is not
issued within 10 days after submission of complaint.
Accordingly, eligible to submit a complaint are bidders in the procurement
procedure as well as candidates who have a legal interest in being awarded the
contract or who suffered or may suffer damages resulting from the alleged
infringements of their rights.
In other words, the Proclamation and Directive ensure protection of rights not
only of the bidders that participated in the public procurement procedure, but also
natural or juridical persons that would be interested in taking part in the
procurement procedure and being awarded the contract, but due to some actions or
failure to take an action by the public body they have been prevented from
application for a contract in the public procurement procedure.
Examples of candidate/bidder/supplier eligible to submit a complaint:
· Candidate that could not participate in public procurement procedure because
of discriminatory requirements concerning capacity to perform the contract
or discriminatory description of the subject-matter of the contract;
· Candidate unfairly excluded from participation in the procurement
procedure;
The three different types of participants in the complaint procedure are as follows:
(a) Active party to the procedure, which is the entity at whose request the complaint
procedure is launched (bidder eligible to submit a complaint);
(b) Passive party, against which a complaint procedure is conducted (public body);
(c) Interested party, who is entitled to participate in the procedure to protect its
rights or legal interests (any candidate which has a legal interest in being awarded
the contract)
6.2.2 When Complaint May Not be Lodged?
6.2.2.1 Complaint may not be lodged in respect of the following matters:
(a) The selection of procurement method carried out in accordance with the
conditions established in the proclamation;
(b) The selection of bidders for procurement to be made by means of restricted
tendering or request for quotation or on the evaluation criteria set forth in the
bidding document beforehand;
(c) The preference given to Domestic Providers pursuant to Article 25 of the
Proclamation and article 16.20.1 of the Directive;
(d) Decisions given to reject bids, bid documents or price quotation pursuant to
Article 30 of the Proclamation;
(e) No complaint presented to the head of a public body after 5 working days have
elapsed from the date on which the public body disclosed the result of a bid
evaluation, or no complaint presented to the Board after 5 working days have
elapsed from the date on which the public body responded to the complaint
shall be accepted;
(f) No complaint shall be accepted after a contract was signed, provided that such
contract was signed after seven working days from the result of the bid
evaluation being disclosed as provided in sub article 46.3 of the Proclamation
and article 45.1 (a) of the Directive.
6.2.3 What can be Subject to the Complaint Procedure?
6.2.3.1 Subject of the complaint procedure may be all decisions, actions or failure to take an
action by the public body which was obliged to take the action according to the
Proclamation or Directive, provided that it constitutes infringement of the public
procurement procedures required by Proclamation or Directive or infringement of
rights of bidders or candidates.
It means in practice that subject to the review procedure may be not only incorrect
decision or action of the public body, but also the lack of action when the public body
is obliged to take this action. It means also that the review procedure may concern the
actions and decisions taken during the contract award procedure as well as before
launching the procedure, provided that they violate rights of bidders or candidates as a
result of breaching of any of the rules determined in the Proclamation or Directive.
The subject of the complaint procedure should be understood as broadly as possible in
order to prevent any possible violation of rights of interested parties and violation of
basic principles of public procurement such as transparency, equal treatment, nondiscrimination,
and competition rules.
Examples of actions which could be subject to the complaint procedure are the
following:
· Division of the contract into lots after publication if Invitation to Bid in order to
avoid the obligation to apply the proper public procurement procedure;
· Incorrect or discriminatory description of the subject- matter of the procurement
procedure;
· Discriminatory requirements concerning candidates interested in participation in
the procedure;
· Decisions concerning exclusion from the procedure or rejection of the bid; and
· Contract award decisions.
6.2.4 Contents of Complaint
6.2.4.1 A complaint should include the following information:
(a) Information on the bidder or candidate (the first and last name, company name
or title, address of habitual residence, registered office, telephone and facsimile
number);
(b) Information on the representative or agent with a power of attorney;
(c) The name, company name and registered office of the public body;
(d) The number and date of the Invitation to Bid and information concerning the
contract award notice;
(e) The number and date of the contract award decision, the cancellation decision
or other decisions made by the public body;
(f) Other information concerning actions, failures to act or procedures of the public
body which are the subject of the complaint procedure, information concerning
the subject-matter of procurement, and the procurement reference number, a
description of the state of facts;
(g) A description of the infringements and an explanation;
(h) The proposed evidence;
(i) The claim for remedy;
(j) The claim for the compensation of procedural costs; and
(k) The signature of the authorized person and seal.
6.2.4.2 If a complaint does not contain minimum required information specified above the
public body should ask the bidder or candidate to supplement a complaint and it
should set up the time limit for it. If the bidder or candidate does not supplement
required information his complaint will be dismissed as irregular, unless its content
allows further procedure and the complaint contains the claim for remedy.
6.2.4.3 Bidders or candidates who do not have their registered office in the territory of the
Federal Democratic Republic of Ethiopia should designate an agent with a power of
attorney or an agent for the service of documents within the territory of the Federal
Democratic Republic of Ethiopia or provide for a different way of service of
documents, which shall not result in the stalling of the procedure.
6.2.5 Evidence
6.2.5.1 During the complaint procedure, parties have to present all facts on which they base
their request, their decisions, actions or lack of actions. All facts they claim should be
supported by presentation of proper evidence.
6.2.5.2 The role of public body in the complaint procedure is to present and prove all facts
and circumstances, on the basis of which it took or omitted to take decisions
concerning individual rights of participants of public procurement procedure which
are subject of complaint procedure.
6.2.5.3 On the other hand the complainant should prove or indicate reasonable facts justifying
submission of complaint and all infringements of the procurement procedure or
violations of the Proclamation or Directive referred in the complaint he/she is aware
of.
6.2.6 Method of Submission of Complaint
6.2.6.1 A complaint against any act or omission by the public body should be, in the first
instance, addressed to and lodged with the public body. Bidder or candidate may
lodge it in writing, in person or send it by registered mail.
6.2.7 Timing of Complaint Procedure
6.2.7.1 The date of submission of the complaint is:
(a) The date of submission of registered letter at the post office when a complaint
is lodged by using post, or
(b) The date of receipt of a complaint by the public body, if a complaint is
delivered in person. In such a case public body should issue to the complainant
receipt confirmation with indication of the time of receipt by the public body.
When the public body refuses to issue a confirmation, the complaint shall be
deemed as lodged in good time, unless the public body proves otherwise.
The overall complaint procedure shall have the following timing:

ACTION TIME
FRAME
PRECONDITION
Submission of
complaint to the public
body
5 working
days1
· From the date when candidate became
aware of or should have been aware of the
reason giving rise to the complaint.
· From the date when public body disclosed
the result of a bid evaluation.
The public body's
written decision on the
complaint
10 working
days2
From the date of submission of the
complaint by the complainant.
Submission of
complaint to the Board
5 working
days3
From the date of notification in writing of
the decision of the head of the Public Body
on that complaint if the complainant is not
satisfied by the decision.
The Board's written
decision on the
complaint
15 working
days4
From the date of receiving complaint by the
complainant.
6.2.8 Consequences of Submission of Complaint
6.2.8.1 The most significant consequence of lodging a complaint is the suspension of the
procurement proceedings5.
1 Proclamation, Sub-article (2) of Article 74;
2 Proclamation, Sub-article (3) of Article 74;
3 Proclamation, Sub-article (4) of Article 74;
4 Proclamation, Sub-article (4) of Article 75;
6.2.8.2 In accordance with Article 16.27.7 of the Directive public bodies are prohibited from
signing a contract before the expiry of a period of seven working days from the date
bidders are notified of the result of their bid or of any complaint against the bid
proceeding. This term is counted from the date of the receipt of a notification of
award. Complaints submitted against an award decision prevent signing of a contract
for all groups or lots of the subject-matter of procurement.
6.2.8.3 A public body's procurement unit shall suspend a bid proceeding if it ascertains that a
complaint is presented to the head of the public body in regard to a bid proceeding
within five (5) working days from the date bidder or candidate became aware of or
should have been aware of the reason giving rise to the grievance until the head of the
public body gives decision on the complaint.
6.2.8.4 Any decision made by a public body in regard to a procurement proceeding and the
reasons on which the decision was based shall be kept as part of the record of that
procurement proceeding.
6.2.8.5 It should be pointed out that the time period before which it is not possible to sign and
perform contract does not start at the date of lodging a complaint but earlier, at the
day of the receipt of an individual notification concerning the award of contract.
Suspension lasts until the expiry of the standstill period discussed above or until the
end of the complaint procedure if a complaint has been lodged. Such provisions allow
bidders or candidates concerned to lodge a complaint and defend their rights at the
stage when irregularities could still be rectified or removed. It prevents situations
when candidate would lose the possibility to be awarded the contract.
6.2.9 Conciliation and Mutual Agreement
6.2.9.1 One of the provisions provided by the Proclamation is that the complainant and the
public body shall endeavor to resolve the dispute amicably (conciliation) by mutual
agreement6.
6.2.9.2 Parties of the complaint procedure may reach mutual agreement during the complaint
procedure conducted in the first instance, before review by the Board. In that case,
settlement shall be approved by the head of the public body and provided that it is not
contrary to the provisions of the Proclamation and the rules of public morality or legal
interests of third parties (settlement).
6.2.10 A public body shall handle all procurement proceedings fully in accordance with the
Proclamation, Directive and the Manual. If they fail to do so, any person or firm or
bidder may submit a complaint concerning any action on the part of a public body that
is considered not to comply with the Proclamation, Directive or the Manual.
5 Proclamation, Sub-article (3) of Article 74`; Directive, Article 46;
6 Proclamation, Sub-article (3) of Article 74;
However, some common examples of circumstances in which a formal complaint
may be lodged against a public body are outlined below and are by no means
exhaustive:
6.2.10.1 Invitations for Pre-qualification:
(a) Inadequate time allowed through advertisement by the public body for
Invitation for Pre-qualification;
(b) Invitation for Pre-qualification documents were not ready when the
advertisement was published by the public body or not available when
requested by a potential Applicant;
(c) Failure to respond promptly to a request for clarification from a potential
Applicant;
(d) Failure by the public body to follow the qualification criteria stated in the
Invitation for Pre-qualification;
(e) Biased/unfair qualification criteria; and
(f) Perceived unfair denial of pre-qualification.
6.2.10.2 Open Bidding Method:
(a) Advertisement not properly with incomplete information;
(b) Inadequate time allowed through advertisement by the public body for
Invitation to Bid (Bidding period inadequate);
(c) Invitation to Bid documents were not ready when the advertisement was
published by the public body or not available when requested by a potential
bidder;
(d) Failure to respond promptly to a request for clarification from a potential
bidder;
(e) Technical specification that can be met by only one or a small number of
manufacturers, especially if such specification is made to limit other potential
bidders from participation.
(f) Failure to hold an advertised pre-bid meeting or to properly notify potential
bidders of a change in the date/location/time, etc. that resulted in some potential
bidders failing to attend the meeting;
(g) Failure to hold the bid opening as stated in the Invitation to Bids and/or
improper conduct at the bid opening;
(h) Mishandling of bids received from bidders resulting in the early opening of one
or more bids that produces either a loss of confidentiality of the bid or an actual
failure to open a bid at a public opening;
(i) Failure to open all bids which were received prior to the deadline for the
submission of bids;
(j) Failure by the public body to comply with the bid evaluation criteria stated in
the Invitation to Bids;
(k) Any attempt by the public body to ‘negotiate’ with the successful bidder.
(l) Biased evaluation criteria; and
(m) Perceived unfair or erroneous award of contract.
6.2.10.3 Restricted Bidding Method:
(a) All the points mentioned in the Open Bidding Method as may be relevant for
Restricted Bidding Method.
6.2.10.4 Direct Procurement Method:
(a) All the points mentioned in the Open Bidding Method as may be relevant for
Direct Procurement Method.
6.2.10.5 Two-stage Bidding Method:
(a) All the points mentioned in the Open Bidding Method as may be relevant for
Two-Stage Bidding Method, with the following additional example:
(b) A breach of confidentiality by the public body at the time of discussions with
each Bidder during the evaluation of the first-stage bid
6.2.10.6 Request for Quotations Method:
(a) All the points mentioned in the Open Bidding Method as may be relevant for
the Requests for Quotations Method.
(b) Request for Expressions of Interest:
(c) Inadequate time allowed through advertisement by the public body for Request
for Expressions of Interest;
Public Procurement and Property Administration Agency Public Procurement Manual
106
(d) Request for Expressions of Interest documents not ready when advertisement
published by the public body or not available when requested by a potential
Applicant; and
(e) Failure to respond promptly to a request for clarification from a potential
Applicant.
(f) Requests for Proposals:
(g) Inadequate time allowed by the public body for the preparation and submission
of proposals;
(h) Failure on the part of the public body to maintain confidentiality following the
opening of the envelopes containing the technical proposals;
(i) Opening of the financial proposals in error at the same time as the opening of
the technical proposals;
(j) Failure to evaluate the proposals in accordance with the evaluation criteria set
out in the RFP;
(k) Attempt by the public body to force a Consultant to revise fee rates during the
negotiation of the contract; and Perceived unfair award of contract.

7.1.1 The mandate of the Agency's for procurement audit is derived from the Ethiopian
Federal Government Procurement and Property Administration Proclamation No.
649/2009 and established under the article 15.9 (Functions of the Agency) and article
5.19 of the Directive.
5.14.3. In accordance with the Proclamation article 15.9, PPA may conduct audit to ensure
that procurement and property administration activities of public bodies are in
accordance with the Proclamation, directive, and other documents governing public
procurement and property administration.
7.1.1.1 In accordance with the Directive Article 5.19 the head of public body has to make
arrangements necessary for procurement audit or inspection to be conducted by the
PPA in respect of the execution of procurements by the public body, including the
following:-
7.1.1.2 Make available in due time, documents necessary for procurement audit,
7.1.1.3 Cause the provision of office space and facilities for employees assigned to conduct
the procurement audit.
7.1.1.4 Assign a staff to give explanation on the conduct of procurements made by the public
body.
7.1.2 The PPA has issued detailed Manual for the performance of the procurement audit.

8.1.1 Effective management of contracts is essential to ensure that the objectives of the
procurement process are achieved and that all contractual obligations and activities
are completed efficiently by both parties to the contract. The Procurement Unit must
ensure that routine monitoring of all current contracts is maintained so that swift
remedial measures can be taken when problems arise, or preventative action taken
when problems are foreseen.
8.1.2 There are many post-contract issues that need to be dealt with, monitored and
resolved before the contract reaches its conclusion including:
8.1.2.1 Contract Effectiveness;
8.1.2.2 Delivery and Inspections of Goods;
8.1.2.3 Insurance Claims;
8.1.2.4 Payments to the Consultant, Supplier or Contractor;
8.1.2.5 Performance Monitoring for Services and Works;
8.1.2.6 Contractual Disputes;
8.1.2.7 Delays in Performance;
8.1.2.8 Claims for Damages;
8.1.2.9 Initial and Final Takeover of construction works;
8.1.2.10 Installation and Commissioning of Equipment;
8.1.2.11 Acceptance of Deliverables;
8.1.2.12 Release of Performance Securities and Retentions;
8.1.2.13 Contract Closure

8.2.1 Although the Contract Form may have been signed by both parties, the legal
effectiveness of the Contract may be dependent on one or more of the following
conditions:
8.2.1.1 Receipt by the public body of the Performance Security;
8.2.1.2 Receipt by the public body of an Advance Payment Security;
8.2.1.3 Receipt by the Supplier/Contractor of the Advance Payment; or
8.2.1.4 Receipt by the Supplier/Contractor of an acceptable Letter of Credit.
8.2.2 Action:
8.2.2.1 If the Supplier or Contractor fails to provide the Performance Security, and fails to
respond to a written reminder, seek the advice of the Procurement Unit for a decision
as to whether the contract may be cancelled and awarded to another bidder;
8.2.2.2 Ensure that any Advance Payment specified in the contract is paid immediately when
the Advance Payment Security is received from the Supplier or Contractor;
8.2.2.3 Ensure that any Letter of Credit required is issued promptly.

8.3.1 Contract supervision and administration for goods will be the primary responsibility
of the Procurement Unit.
8.3.2 Supervision and administration is straightforward in most procurement of goods but
monitoring delivery schedules, processing of documents and the inspection of goods
are essential to ensure that the correct goods are delivered on time.
8.3.3 The Procurement Unit will:
8.3.3.1 Monitor the delivery schedules of all purchases to ensure that they are dispatched,
delivered or collected on time.
8.3.3.2 Receive reports on pre-shipment inspection of goods and contact the Supplier in
writing requesting rectification of any discrepancies or deficiencies.
8.3.3.3 Contact the Supplier or shipper to identify the causes of any delay in delivery;
8.3.3.4 Initiate and supervise any process for claims against insurance or the supplier.
8.3.3.5 Report to the head of the public body any failure by the Supplier in his contractual
obligations.
8.3.4 The Stores Department will:
8.3.4.1 Co-ordinate the receipt and inspection of goods;
8.3.4.2 Issue the goods after delivery and formal acceptance to the User Department.

8.4.1 Pre-shipment inspection of goods is required for imports into Ethiopia though not for
all kinds of imports. It is also essential for expensive imported goods and items likely
to suffer damage or deterioration during transit if not packed in accordance with the
specifications in the contract. When pre-shipment inspection of goods is specified in
the contract, this will normally be undertaken by a nominated international third-party
agent for imported goods or by a nominated inspector for local goods.
8.4.2 The inspector (who must be experienced and skilled) will carry out the following tests
— on a random sampling basis where appropriate—to ensure that the goods and
packing are in strict conformity with the requirements.

8.5.1 Obtain and verify Suppliers’ Certificates of Analysis or Compliance to verify physical
characteristics and chemical details, type, batch numbers and shelf life as appropriate.
8.5.2 Where appropriate, check that the consignment has a shelf life not less than that
specified in the contract from arrival in Ethiopia, and that all necessary instructions
and manuals are enclosed and are printed in the required language.
8.5.3 Check that all packages are serially numbered and complete and that labeling and
marking is exactly as specified in the contract.
8.5.4 Check that dimensions of the packing are as specified in the contract and that pallet
markings and handling descriptions are clearly displayed to ensure proper handling in
transit and at the delivery destination.
8.5.5 Check that all individual items, internal packing and external packages are exactly as
specified in the contract.
8.5.6 Check that the primary packing is not damaged, opened or tampered with and that the
shipping mark requirements are correct.
8.5.7 Check the packing against appropriate transportation and commodity regulations, and
ensure that it is adequate for the safe shipment of goods by the contracted mode of
transport.
8.5.8 Check the stability of cartons/pallets and that all waterproofing of the packing is
sufficient if the consignment is to be transported by open truck, or left exposed during
transit.
8.5.9 Prepare a detailed report against each of the above items and arrange for those present
at the inspection to sign the report in agreement of the findings.
8.5.10 Take photographs wherever possible and relevant and attach these to the report.
8.5.11 Submit the report immediately to the public body.
8.5.12 Any discrepancies found in the course of the inspection must be reported
immediately.

8.6.1 Port and customs clearance of goods and physical collection at the Port of Entry may
be necessary in some circumstances depending on the INCOTERMS used.

8.7.1 Carefully examine the packages to check they are all present according to the
Shipping Documents or Airway Bill and to look for signs of any physical damage.
8.7.2 Look also for signs of tampering with any of the packages e.g. cases with broken
seals, loose or open tops.
8.7.3 Have the packages re-weighed if there is any suspicion that items have been removed,
and compare the result with the shipping documents.
8.7.4 Note any deficiency either in quantity or in condition on the receipt given in exchange
for the goods (a claused receipt).
8.7.5 If there are shortages, in addition to a claused receipt, a short-landed or discrepancy
certificate should also be obtained to assist claims against the Supplier or insurance
companies.

8.8.1 The Stores Department is normally responsible for the receipt of goods except under
works contracts where construction materials are delivered direct to the site.

8.9.1 On delivery by a Supplier or carrier, the Storekeeper will:
8.9.1.1 Receive the goods into temporary storage.
8.9.1.2 Examine the apparent condition of the goods and packing.
8.9.1.3 Issue an interim receipt, noting the apparent condition, pending the meeting of an
Inspections and Receiving Committee.
8.9.1.4 Receive and register the invoices pending processing (through the Procurement Unit)
to the Accounts Department for payment following the report of the Inspections
Committee.
8.9.1.5 Arrange notification to the Inspections and Receiving Committee and to the Supplier
of the date and time of the formal inspection of the delivery.

8.10.1 The Inspections and Receiving Committee shall meet within two days following the
arrival of the goods, and in the presence of the Supplier’s representative if he chooses,
will:
8.10.1.1 Examine the documentation and packaging for compliance with the contract.
8.10.1.2 Ask the Supplier to open the packages (or arrange opening of the packages at the
Supplier’s expense).
8.10.1.3 Examine and analyze the goods for conformity with the contract specifications and/or
the samples provided.
8.10.1.4 Reject all goods that are damaged or do not conform to the required specifications or
samples.
8.10.1.5 Prepare an Inspection Report with an original and three copies, recording the delivery,
and descriptions, specifications and quantities of the goods examined, and the reasons
for accepting or rejecting the goods.
8.10.1.6 Release accepted goods to the Stores which will take the items on charge by issue of a
Goods Received Note and entry into the Stores Ledger
8.10.2 Any rejected goods should be removed by the Supplier within one week. If the goods
are not removed, and it is specified in the contract, the Supplier may be charged a
penalty for delay. If the rejected goods are not removed after a reasonable period, the
public body may apply to a Court for authority to sell the rejected goods.
8.10.3 The Inspections and Receiving Committee will follow similar procedures to examine
equipment that is delivered to a site and already installed by the Supplier.

8.11.1 The Stores Department is responsible for maintenance of records of all goods and
movable assets held under the custody of individuals, Units, Departments and
Entities. Assets will be taken on charge in the records of the concerned Stores and
subject to regular review and audit.
8.11.2 The Storekeeper will:
8.11.2.1 Issue or release items to the User Department which initiated the procurement using a
Stores issue Voucher for the dispensation of goods from the Stores.
8.11.2.2 Record the issue from the Stores Ledger and the receipt in the Custody Ledger for the
individual, Unit, Department or Program of the public body.

8.12.1 For simple payments against invoices, the Procurement Unit will:
8.12.1.1 Complete a Payment Voucher ensuring the deduction of any advance payments
already made and any contractual penalties incurred by the Supplier.
8.12.1.2 Attach the:
8.12.1.3 original invoice from the Supplier;
8.12.1.4 the shipping documents or airway bill, or a delivery note;
8.12.1.5 original of the Inspection Report;
8.12.1.6 original Goods Receipt Note;
8.12.1.7 results of any laboratory analysis;
8.12.1.8 calculation of any penalties for rejected goods not removed by the Supplier and
liquidated damages if allowable under the contract;
8.12.1.9 copies of relevant information from the contract document, records of approval and
financial authorizations.
8.12.1.10 Record the payment in the Contract Register.
8.12.1.11 Forward the Payment Voucher to the Accounts Department for processing.
8.12.1.12 On expiry of any guarantee period release the retention balance to the Supplier.
8.12.2 A withholding tax of 2% shall be deducted from payments to be made if the amount
exceeds Birr 10,000 for goods and Birr 500 for services including consultancy.

8.13.1 Payments by Letter of Credit (LC) will depend on the contract agreement between the
Supplier and the public body for the terms and wording of the LC. The Procurement
Unit will provide to the Accounts Department all supporting information and
documents as required.
8.13.2 A letter of credit is a document typically issued by a bank or financial institution,
which authorizes the recipient of the letter (the "customer" of the bank) to draw
amounts of money up to a specified total, consistent with any terms and conditions set
forth in the letter. This usually occurs where the bank's customer seeks to assure a
seller (the "beneficiary") that it will receive payment for any goods it sells to the
customer.
For example, the bank might extend the letter of credit conditioned upon the
beneficiary's providing documentation that the goods purchased with the line of credit
have been shipped to the customer. The customer may use the letter of credit to assure
the beneficiary that, if it satisfies the conditions set forth in the letter, it will be paid
for any goods it sells and ships to the customer.
In simple terms, a letter of credit could be said to document a bank customer's line of
credit, and any terms associated with its use of that line of credit. Letters of credit are
most commonly used in association with long-distance and international commercial
transactions.
8.13.2.1 Step-by-step process:
· Buyer and seller agree to conduct business. The seller wants a letter of credit to
guarantee payment.
· Buyer applies to his bank for a letter of credit in favor of the seller.
· Buyer's bank approves the credit risk of the buyer, issues and forwards the credit
to its correspondent bank (advising or confirming). The correspondent bank is
usually located in the same geographical location as the seller (beneficiary).
· Advising bank will authenticate the credit and forward the original credit to the
seller (beneficiary).
· Seller (beneficiary) ships the goods, then verifies and develops the documentary
requirements to support the letter of credit. Documentary requirements may vary
greatly depending on the perceived risk involved in dealing with a particular
company.
· Seller presents the required documents to the advising or confirming bank to be
processed for payment.
· Advising or confirming bank examines the documents for compliance with the
terms and conditions of the letter of credit.
· If the documents are correct, the advising or confirming bank will claim
the funds by:
o Debiting the account of the issuing bank.
o Waiting until the issuing bank remits, after receiving the documents.
o Reimburse on another bank as required in the credit.
· Advising or confirming bank will forward the documents to the issuing bank.
· Issuing bank will examine the documents for compliance. If they are in order, the
issuing bank will debit the buyer's account.
· Issuing bank then forwards the documents to the buyer.

8.14.1 Contract supervision and administration of works contracts is often complex due to
factors which could not be foreseen at the start of the work. The use of Supervising
Engineers or Project Managers also means that daily control and supervision of the
contract is not practical for the public body. Entities must therefore ensure that they
are kept informed of progress and problems which arise through routine reports.
8.14.2 In the same vein, no public body may hire the services of works contractors that do
not possess certification from the Ministry of Works and Urban Development.

8.15.1 Day to day supervision of a works contract is carried out by the Supervising Engineer
or Project Manager who acts for the public body to supervise and administer the
contract. For large contracts this may involve a team of engineers, inspectors, quantity
surveyors etc.
8.15.1.1 The Supervising Engineer/Project Manager usually acts at the first level in settlement
of disputes and he should ensure that the public body and the Ministry of Works and
Urban Development, are informed of any disputes and their resolution. Any serious
disputes which may require an amendment or addendum to the original contract must
be reported immediately to the public body and the Ministry of Works and Urban
Development,
8.15.1.2 Claims by Contractors for additional work or costs which are not covered under the
terms of the existing contract and total contract value, must be referred to the
Procurement Unit.
8.15.1.3 Claims for extension of time, with or without additional costs, or for additional
payment to the contractor must be resolved quickly, subject to the approval of the
Procurement Unit.

8.16.1 Payment for works contracts will normally be made against Payment Certificates
approved by the supervising engineer and Completion Reports of the Inspection and
Acceptance Committee.
8.16.2 For all works contracts, materials delivered to the site but not yet used will be
excluded from the measurement approved and the value of Payment Certificates.
8.16.3 Supervision and approval of the takeover of buildings and construction works is the
responsibility of the Ministry of Works and Urban Development whose issuance of a
Certificate of Completion is required before payments due to the Contractor may be
made by the public body.
8.16.4 The Supervising Engineer will ensure that:
8.16.4.1 the Ministry of Works and Urban Development is represented on the Inspection and
Acceptance Committee for final takeover of the Works and that the MOW
representative signs the Certificate of Completion;
8.16.4.2 any required retention specified under the contract is deducted from the value of the
Certificate before payment;
8.16.4.3 agreed deductions in respect of the repayment schedule for any advance payment are
deducted from the value of the Certificate before payment;
8.16.4.4 on issue of an interim takeover certificate by the Inspection and Acceptance
Committee, part of any retention monies held may be paid to the contractor if
specified in the contract;
8.16.4.5 on issue of a final takeover certificate by the Inspection and Acceptance Committee
issues, the balance of any retention monies is paid to the contractor.

The Ministry of Works and Urban Development has a responsibility of supervising
the quality, time and cost of construction works. The public body can seek and obtain
technical assistance while procuring construction services. The ministry has the
following responsibilities:
8.17.1 Complete a Payment Voucher ensuring the deduction of repayments for any advance
payment, retention sums and penalties incurred by the Contractor.
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117
8.17.2 Attach:
8.17.2.1 the Payment Certificate;
8.17.2.2 the report of the Inspection and Acceptance Committee for interim or final takeover
(if appropriate);
8.17.2.3 calculations of any retentions, liquidated damages or other penalties applicable under
the contract;
8.17.2.4 copies of relevant information from the contract document, records of approval and
financial authorizations.
8.17.2.5 Forward the Payment Voucher and supporting documents to the Procurement Unit.

8.18.1 Record the payment in the Contracts Register.
8.18.2 Forward the Payment Voucher and supporting documents to the Accounts
Department for payment processing.

8.19.1 Contract supervision and administration for simple routine services such as office
cleaning, provision of transport or contract maintenance, will be undertaken by the
User Department and the Procurement Unit as appropriate.
8.19.2 For consultancy services, the contract will usually nominate a Project Manager to
coordinate supervision and administration.
8.19.3 The contract may specify payments on the basis of inputs (time), deliverables,
retainers, unit rates or commission fees, and administrative and supervision activities
must therefore be based on the specific terms of each contract.
8.19.4 The Procurement Unit (or Project Manager) will:
8.19.4.1 Monitor the activity and performance in accordance with the contract to ensure that
levels of service are maintained and that deliverables are submitted or completed on
time. For consultancy services, the contract may specify key reports to be submitted,
or timesheets and routine reports to be submitted on a monthly or quarterly basis.
8.19.4.2 Ensure that all contractual obligations of the public body are performed promptly and
efficiently.
8.19.4.3 Ensure that all deliverables (and especially reports) are reviewed immediately and
responded to in writing where necessary.
8.19.4.4 Contact the service provider to identify the causes of any failings in performance or
failure to meet targets.
8.19.4.5 Issue a formal letter to the service provider detailing the complaint if the explanation
given is unsatisfactory or if performance is not improved within a reasonable period
of time.
8.19.4.6 Report to the Procurement Unit any continued breach by the service provider of his
contractual obligations.

8.20.1 Payment for service contracts will be made according to the specific terms of each
contract against invoiced claims by the service provider.
8.20.2 The Procurement Unit (or Project Manager) will ensure that:
8.20.2.1 the invoice claim is justified by the evidence of timesheets, submission and
acceptance of deliverables, or other criteria as specified in the contract;
8.20.2.2 agreed deductions in respect of the repayment schedule for any advance payment are
deducted from the value of the invoice before payment;
8.20.2.3 any retention sum specified in the contract is deducted from the value of the invoice
before payment.

8.21.1 Complete the Payment Voucher ensuring the deduction of repayments for any
advance payment, retentions or penalties specified in the contract.
8.21.2 Attach:
8.21.2.1 the invoice;
8.21.2.2 calculations of any retentions, liquidated damages or other penalties applicable under
the contract;
8.21.2.3 copies of relevant information from the contract document, records of approval and
financial authorizations.
8.21.2.4 Forward the Payment Voucher and supporting documents to the Procurement Unit.

8.22.1 Record the payment in the Contracts Register.
8.22.2 Forward the Payment Voucher and supporting documents to the Accounts
Department for payment processing.

8.23.1 The public body has a responsibility to make payments promptly in accordance with
the contract. Payment delays not only create a bad impression of the public body and
of Government, but are also ultimately passed on to Government in higher prices as
suppliers build in the cost of payment delays in their prices.
8.23.2 The periods in which payments have to be made, and the penalties for delayed
payment will be those specified in the signed contract.
8.23.3 The Procurement Unit or Project Manager must ensure that:
8.23.3.1 the payment terms and penalties specified in the contract are known to all managers
and staff involved in the processing of payments;
8.23.3.2 all invoices and certificates which are not in dispute are paid within the agreed
payment period.

8.24.1 The Consultant, Supplier or Contractor’s performance against the contract must be
monitored on a routine basis.
8.24.2 The Procurement Unit or Project Manager will:
8.24.2.1 notify the Supplier or Contractor immediately in writing of any failings in
performance and seek an agreed solution;
8.24.2.2 In the case of a consultant this takes the form of comments on consultancy reports
8.24.2.3 update the contract file and Contract Register regularly to reflect the monitoring of
performance;
8.24.2.4 ensure that the head of the public body is informed of any serious failings in
performance.

8.25.1 The Contract may impose certain conditions on the public body which, if not
complied with, may affect the Supplier or Contractor’s performance including:
8.25.1.1 Payment of stage payments within the contracted time limits;
8.25.1.2 Assistance with import licenses etc;
8.25.1.3 Approval of drawings or reports within the set time periods;
8.25.1.4 Provision of storage or working facilities and access permits;
8.25.1.5 Conditions relating to the supplier’s provision of staff services (e.g. letters of
invitation for visas, provision of office space, etc.);
8.25.1.6 Ensure that all such obligations of the public body are planned and performed without
undue delay.

8.26.1 Delivery of goods, construction of works and the performance of services should be
completed by the Supplier or Contractor in accordance with the time schedule
prescribed in the Schedule of Requirements. Where this is not the case:
8.26.1.1 In accordance with the contract conditions, the Supplier, Contractor, or its
subcontractor, must notify the public body in writing of the conditions delaying
performance, including full details of the delay, the likely duration and the cause(s).
8.26.1.2 The public body will immediately assess the situation, and may at its discretion
extend the Supplier or Contractor's time for performance, with or without liquidated
damages as specified in the Contract.
8.26.1.3 If the time for performance is extended, both parties shall ratify such extension by a
formal addendum to the Contract subject to approval by the Procurement Unit.
8.26.2 A delay by the Supplier or Contractor in the performance of his obligations may
render him liable to liquidated damages if specified in the contract document, except
where:
8.26.2.1 the delay is as a result of Force Majeure;
8.26.2.2 there is no provision for liquidated damages in the contract;
8.26.2.3 an extension of time is agreed between the two parties without the application of
liquidated damages.
8.26.3 The Procurement Unit or Project Manager will:
8.26.3.1 Refer to the relevant clauses in the General or Special Conditions of Contract for the
procedure to be followed to apply, calculate and claim liquidated damages.
8.26.3.2 Update the Procurement Dossier and Contract Register to reflect any delays in the
supplier’s performance.
8.26.3.3 Notify the end-user department immediately of all such delays.

8.27.1 Most minor disputes may be resolved by sensible discussion and agreement between
the responsible officer and the Supplier or Contractor to rectify the cause of
complaint.
8.27.2 Any formal written complaints received from a Supplier or Contractor should be fully
investigated and referred to the head of the public body to authorize correspondence
or formal negotiations with the Supplier or Contractor.
8.27.3 Action:
8.27.3.1 Examine the Contract carefully to be aware of all contract conditions relating to the
resolution of Disputes.
8.27.3.2 Determine if the public body is at fault or partly at fault, and if so, take appropriate
action to rectify the problem.
8.27.3.3 Invite the Supplier or Contractor to a formal meeting, to discuss the issues and try to
agree a compromise acceptable to both parties. Ensure that accurate written Minutes
are kept of any such meeting. If an agreement is reached which changes any of the
conditions of the Contract, approval of the head of the public body is required before
the agreement can be implemented.
8.27.3.4 Only those public bodies which are allowed by law to proceed to arbitration can do so
by specifying in the contract. All other public bodies are allowed to use conciliation
as it may be specified in the contract otherwise the parties may seek redress through
the courts if no initial agreement is reached and negotiation by the head of the public
body or his/delegate fails.
8.27.4 On contracts funded by a donor, ensure that the donor is kept informed of disputes
and seek advice, and a formal “no objection” where required, before any contract
addendum is signed.

8.28.1 The parties to the contract normally have the right to terminate the contract, but to
protect the public body; advice of the PPA may be sought if the public body is
considering such action. For donor funded procurements, donor “no objection” must
be sought before any action to terminate a contract is initiated.
8.28.2 Contracts should not normally be terminated without examining all possible
alternatives, unless the termination is agreed by all parties to the contract.
8.28.3 Examine the Contract carefully to be aware of all contract conditions and penalties
relating to the Termination of Contract.

8.29.1 Contract amendment may become necessary as a result of the application of price
variations specified in the contract, the resolution of disputes, additional or reduced
requirements by the public body, agreements to extend the time schedule, or from
accepted increases or decreases in prices. The contract may allow the public body to
modify contract values by a pre-determined percentage when this is in the public
interest and essential for the work of the public body.
8.29.2 All other amendments to costs, quantities, time periods, and other terms and
conditions of the contract must be approved by the head of the public body and
confirmed in a formal contract amendment or addendum.
8.29.3 The Procurement Unit/Project Manager will:
8.29.3.1 identify and agree with the Supplier or Contractor the specific clauses in the contract
which need to be changed, and the new values or terms and conditions which are to
apply;
8.29.3.2 prepare a draft contract amendment document for approval by the Procurement unit
together with a report justifying the reasons for the amendment.
8.29.4 Following approval by the head of public body:
8.29.4.1 record any change in contract value in the Commitment Register and in the Contract
Register;
8.29.4.2 record any other contractual changes in the Contract Register;
8.29.4.3 obtain from the supplier/contractor any necessary addition to the performance
security;
8.29.4.4 arrange for signature of the contract amendment in four copies;
8.29.4.5 distribute copies in the same way as the original contract.