Moha Final Paper 1st Draft

ACKNOWLEDGEMENT..................................................................................................
3
ABSTRACT................................................................................................................... 4
1. INTRODUCTION....................................................................................................... 5
1.1 Background of the study...................................................................................... 5
1.4 Research questions............................................................................................ 10
1.3. Objectives of the study...................................................................................... 10
1.3.1. General objective........................................................................................... 10
1.3.2. Specific objectives.......................................................................................... 10
1.5 Significance of the study.................................................................................... 11
1.6 Limitations of the Study..................................................................................... 11
1.7 Scope of the study.............................................................................................. 12
CHAPTER TWO....................................................................................................... 13
2. LITERATURE REVIEW..................................................................................... 13
Methods of Procurement................................................................................. 13
Except as otherwise provided in this...............................................................13
Public Private Partnership.........................................................................14
PROCEDURE OF OPEN TENDERING..................................................................14
Type and Scope of Contract.......................................................................20
Selection of Bidders.................................................................................... 20
Preparing and Issuing a Bidding Document............................................21
Bid Preparation and Submission...............................................................22
Bidding Period and Bid Receipt.................................................................22
Bid Opening.................................................................................................. 23
Bid Evaluation.............................................................................................. 23
Invitation to Bid Notices............................................................................. 24
Invitation to Bid Letters............................................................................. 25
Bid Data Sheet............................................................................................. 25
Evaluation and Qualification Criteria.......................................................26
Additional Evaluation Factors....................................................................27
Qualification Criteria................................................................................... 27
Example Financial Capability Criteria......................................................28
Financial Situation............................................................................................. 28
Example Supply Capacity Criteria.............................................................28
Bidding Forms.............................................................................................. 29
Country Eligibility........................................................................................ 29
Statement of Requirements.......................................................................30
Delivery and Completion Schedule...........................................................31
Technical Specifications and Compliance Sheet.....................................31
Drawings....................................................................................................... 33
General Conditions of Contract.................................................................34
Special Conditions of Contract..................................................................34
Notes on the Letter of Acceptance...........................................................34
Letters to Unsuccessful Bidders...............................................................35
Bid Preparation and Submission...............................................................35
Bidding Period and Bid Receipt.................................................................35
Bid Opening.................................................................................................. 36
CHAPTER THREE.............................................................................................. 37
3. RESEARCH METHODOLOGY AND ORGANIZATIONAL PROFILE..............37
3.1 Methodology............................................................................................. 37
3.1.1 Research Design................................................................................... 37
3.1.3 Sources of data..................................................................................... 37
Primary Source of Data.................................................................................. 37
Secondary Source of Data............................................................................. 37
3.1.4 Target Population and Sample Size...................................................38
3.1.5 Sampling Technique............................................................................. 38
3.1.6 METHOD OF ANALYSIS AND INTERPRETATION.................................38
3.1.7 Data Collection Instruments...............................................................38
3.2.0 Organization of the study...................................................................38
REFERENCES............................................................................................................ 50
ACKNOWLEDGEMENT
I first and foremost express my love to Almighty ALLAH for his blessings on me every day
during and after the work, next my previous advisor dear Mihretu Kebed and my current advisor
dear Mekonin Mengistu for their support to me.
And also to my lovely brother Ahmed Jemal for his support I really appreciate it.
Lastly, I never forget my class mates for their friend ship, really thank you.
ABSTRACT
This research report was carried out on the topic, Evaluation of open bidding practice in case of
Gurage Zone, Welkite FM organization. The main objective for this study was to examine how
competitive tendering could be used as an effective tool to achieve value for money in public
sector procurement at Gurage Zone, Welkite FM organization. The researcher administered
twenty (20) questionnaires to some selected departments in the organization, specifically the
procurement unit, the stores department, the accounting department and then the engineering
department. The researcher used purposive sampling as a technique to gather ample information
for this work. By purposive sampling, the researcher targeted those departments within the
organization whose daily activities have direct bearing on procurement. Information gathered
were analyzed critically and presented in the form of tables which is readily understandable. It
was found out from the analyses that the Gurage Zone, Welkite FM organization uses the
competitive tendering methods in awarding most of their contracts thereby procuring goods,
works and services at affordable and competitive prices. However the major problem identified
was that, the processes involved are seen to be complex more especially for some contractors and
those employees who have little knowledge in procurement when it comes to works and also the
problem of political interference .The researcher finally recommended that series of workshops
and seminars should be organized for both procurement officers especially new ones who have
little knowledge in practical procurement when it comes to works and potential contractors so
that they will have more insight into what goes into the preparations or processing of tender
documents and lastly the Public Procurement Authority (PPA) should institute measures to
monitor the adherence to the public
CHAPTER ONE
1. INTRODUCTION
1.1 Background of the study
Procurement is the act of acquiring, buying goods, services or works from an
external source, often via a tendering or bid process. It is favorable that the
goods, services or works are appropriate and that they are procured at the
best possible cost to meet the needs of the acquirer in terms of quality and
quantity, time, and location. Corporations and public bodies often define
processes intended to promote fair and open competition for their business
while minimizing exposure to fraud and collusion.
Almost all purchasing decisions include factors such as delivery and
handling, marginal benefit, and price fluctuations. Procurement generally
involves making buying decisions under conditions of scarcity. If good data is
available, it is good practice to make use of economic analysis methods such
as cost-benefit analysis or cost-utility analyses.
An important distinction should be made between analyses without risk and
those with risk. Where risk is involved, either in the costs or the benefits, the
concept of expected value may be employed.
Direct procurement and indirect procurement
TYPES
Direct
Indirect
procureme
procurement
nt
Raw
material
and
production
goods
Quanti
F
ty
Freque
A
T
ncy
Value
Maintenance,
repair,
and
operating
supplies
Exampl
S
es
and
service
s
Low
Low
High
Relatively high
Low
Low
High
Industry
specific
Operational
Tactical
R
E
goods
Large
U
Nature
Capital
Crude oil in
petroleum
industry
Strategi
c
Crude
Lubricants, spare
oil
parts
storage
facilities
Based on the consumption purposes of the acquired goods and services,

procurement activities are often split into two distinct categories. The first
category being direct, production-related procurement and the second being
indirect, non-production-related procurement.
Direct procurement occurs in manufacturing settings only. It encompasses all

items that are part of finished products, such as raw material, components
and parts. Direct procurement, which is the focus in supply chain
management, directly affects the production process of manufacturing firms.
In contrast, Indirect procurement activities concern operating resources
that a company purchases to enable its operations. It comprises a wide
variety of goods and services, from standardized low value items like office
supplies and machine lubricants to complex and costly products and
services; like heavy equipment and consulting services.
Value for money in public procurement is achieved through pursuing the
lowest whole of life cost, clearly defining relevant benefits and delivering
on time. Preventing waste and fostering competition, transparency and
accountability during the tendering process are key conditions to achieving
value for money.
In some circumstances, public procurement is all the more complex because
procurement specifications are difficult to define, competition is restricted by
market factors or the bundling and transfer of procurement risks (e.g. publicprivate partnerships).
As weve all witnessed, strong competition between suppliers generally
pushes down prices and provides variety in the types of solutions that can be
matched to the identified needs of contract authorities. Transparency and
accountability must be balanced with other good governance imperatives,
such as administrative efficiency.
However, supporting value for money requires attention throughout the
entire procurement cycle. During the pre-tendering phase, for example,
understanding is required of the needs of contract authorities, the lessons
learned from previous procurements, as well as a solid grasp of the market.
During the post-award phase, effective contract management is essential to
ensuring that contractors deliver on time, within budget and according to the
needs and specifications identified by the contracting authority.
If public procurement is to be successful in achieving value for money,
contracting authorities should: factor in the whole of life cost when making
award decisions; avoid any unnecessary costs and delays for themselves and
suppliers; monitor the supply arrangements and revisit them if they stop to
provide the expected benefits; and ensure continuous improvement in the
efficiency of internal processes and systems.
Ensuring value for money is one of the ultimate aims/objectives of the Public
Procurement Authority (PPA) as well as all public sector organizations since
there is definitely going to be accountability. As a result of this Carpineti et al
(2006) lamented on the fact that with efficient procurement practices, both
the public and the private sectors play a key role in modern economies as
they ensure reduction of wasteful activities. Achieving such efficacy is an
ambitious task as procurement faces numerous challenges, especially due to
the work structure, the legal framework and the political environment
procurers face.
Indeed in recent years public and even private procurement players have set
up several initiatives and networks aimed at sharing best procurement
practices. Some examples may include the International Federation of
Purchasing and materials management (IFPMM), the International purchasing
and supply Education and Research Association (IPSERA), the Public
Procurement Network (PPN), and the EU Public Procurement Learning lab (EU
Lab, 2003-2005) (carpineti et al ,2006) as well as that of the Federal Republic
of Ethiopia called the Public Procurement Authority (PPA 2009).These
initiatives were taken to ensure that the best procurement procedures
(competitive tendering) are preferred too.
In Ethiopia however the Public procurement Act 649 (2009) is explain which
the various tendering methods and procedures are highlighted. (Section 35
-47)
The
researcher
will
base
his
arguments
on
the
best
tendering
methods/practices (competitive tendering) which are tools for ensuring value

for money in public sector procurements.
Procedures and conditions for competitive tendering are clearly itemized in
section 35 of Act649.
Also known as the open tendering, equal opportunity is given to qualified
suppliers to bid for contracts. (Lyson and Farrington.2006).
They come in the form of national competitive tendering (NCT), international
competitive tendering (ICT), and two stage tendering and restricted
tendering (public procurement Act 649.section 35, 36, 38,44and45). These
are the various competitive methods of procurement available at the all the
public sector organizations when it comes to the acquisition of goods, works
and services of which Ethiopia is not an exception, as well as the Gurage
Zone, Weli=kite F. organization. It is very obvious these days that even most
private sector organizations make good use of the above mentioned
methods to achieve value for money.
Currently most District fund for their projects using the Internal Generated
Funds (IGF), the District Assembly common funds, and other donor agencies.
It is well noted that the organization system of tendering and award of
contracts are based on the terms and conditions outlined in the public
procurement Act 649. However if these conditions are compromised and
contracts are being tendered for and awarded anyhow, (to whom you know.)
Then the purpose for which the Act was enacted will be in vain.
Thus there wouldnt be competitive contractual deals and once this happens
it will pave way for contractors to misappropriate our limited resources
9
thereby providing shoddy works/projects which will intend need to be

renovated or re-awarded when they are abandoned by these selfish
contractors. Hence value for money cannot be achieved but rather causes
financial lost to the state and the organization.
1.2 Statement of the problem
An effective means of ensuring value for money in the award of contract is
by allowing all able or qualified contractors or suppliers to bid or tender for
contracts (competitive tendering) per section 35-44 of Act 649. It can be
deduced from the above statement that the competitive tendering method
will provide a range of variety of contractors with variety of goods, works and
services within which an organization can select the best available option, all
things being equal.
However, the opposite is envisaged in most public sector organizations these
days as contracts are being awarded to some incompetent contractors who
through dubious means find their ways into the procurement net and
misappropriate state funds allocated to them in the name of contact deals.
And sometimes public organization procure lager size goods and service
without following the law and directives of the county. The research work
therefore seeks to examine competitive tendering as an effective tool in
ensuring value for money in public sector procurement specifically at the
Gurage Zone Welkite city administration Wolkite F.M .
More so the interference of some political figures in the whole tendering
process itself up to the award stage so to say makes the process vulnerable
since the best tendering procedures are compromised.
There for this research study will focus on the following basic study questions
10
1.4 Research questions

What kinds method was implemented in order to ensure value for money
during procure larger size organizational goods and service?
How often the procurement unit follow the public procurement proclamation
and directives?
What role does the organization procurement unit play in the tendering and
the award of contracts?
How does the open tendering method help in achieving value for money?
What are the problems encountered in the tendering processes?
1.3. Objectives of the study.

1.3.1. General objective.
This research study will be conducted by the general objective of examining
how competitive tendering could be used as an effective tool to achieve
value for money in public sector procurement at the Gurage Zone Welkite F.M
Organization.
1.3.2. Specific objectives.

The specific objectives seek to:
- Ascertain the tendering methods used by the Gurage Zone Welkite F.M
Organization when it comes to the award of contracts/projects.
- Examine the role of the procurement unit in the tendering procedures and
the award of contract.
- Examine if the tendering procedures adopted by the organization ensure
value for money.
11
- Give recommendations and suggestions towards improving tendering

procedures in the Gurage Zone Welkite F.M Organization
1.5 Significance of the study.

This research work is of much importance to the organization under study
when it comes to the procurement of goods, works and services using state
funds and also to all public sector organizations as well as other private
companies which seek value for money in their day to day purchases since it
was serve as a reference note.
Additionally, it was serve as a guide for further studies for students who are
pursuing the same program.
And lastly it was serve as a guide to the Public Procurement Authority (PPA)
when they want to organize workshops, seminars etc for public sector
organizations on how to improve upon their procurement functions.
1.6 Limitations of the Study

As human as the researcher many were the difficulties in trying to compile
adequate materials for this work.
The first of its kind was inadequate funds to transport the writer to the study
area to gather raw data for processing as well as other relevant information
on the topic. Still on funds, the cost of printing out questionnaires and the
transportation cost would involve in administering them bothered with the
limited time within which to do so and finally, the cost involved in the final
print out and binding of this work also pose a great challenge to the
researcher.
The next problem apart from the limited funds were the difficulties the
researcher wont through in trying to locate reference books at the library and
the few ones available too will under pressure since other colleagues also
need to use them.
12
Last but not the least was combing academic work with the writing of this
research work will very tiresome, difficult and stressful.
1.7 Scope of the study

The study focused on Evaluation of open tendering practice in case of
Gurage Zon, Welkite F.M. This study was restrict on Gurage Zone,Wolkite F.M
organizetin procurement unit, finance officer and users department. The aim
of the study will generally, to Evaluate the practice of open tendering as a
tool for value for money in case of Gurage Zone, Welkite F.M.
But however the case may be aim of the strongest conviction that most
public sectors encounter similar problems and for that matter analysis and
recommendations was make in the end may go a long way to help.
13
CHAPTER TWO
2. LITERATURE REVIEW
Under Federal Democratic Republic of Ethiopia Public Procurement and
Property Disposal Service, the Proclamation and Directives on Public
Procurement detail the full procurement processes, rules and procedures and
the procurement methods to be followed by Procuring Entities. Accordingly,
there is standard bidding document (SBD) at national level developed by the
federal democratic republic of Ethiopia. This SBD for the Procurement of
Goods is suitable for use under Open International Tendering, either with or
without pre-qualification. It is also suitable for use under
Restricted Tendering and hence show all the tendering practice undertaken in
Ethiopia. In addition, an alternative SBD is available for Open and Restricted
National Tendering. Hence, to see the overall practice, lets begin with the
Type and scope of contract.
Methods of Procurement
The following methods shall be used in public procurement:
a) Open Bidding;
b) Request for Proposals;
c) Two stage Tendering;
d) Restricted Tendering;
e) Request for Quotation;
14
f) Direct Procurement.
Except as otherwise provided in this
Proclamation, public bodies shall use open bidding as the preferred
procedure of procurement.
Public bodies may use a method other than open bidding only where
conditions for use of such other method stipulated under this
Proclamation are satisfied.
Public bodies shall not split procurement requirements for a given
quantity of goods, works or services with the intention of avoiding the
preferred procurement procedure stated under this Proclamation or in
the procurement directive.
Public Private Partnership
The Minister may issue directive prescribing the rules governing the
formation of Public Private Partnership and the modes of implementation of
such partnership.
PROCEDURE OF OPEN TENDERING
Advertisements
1) Invitation to bid shall be advertised in at least one times in a national
news paper of general circulation which is published in the language the
bidding document is prepared.
2) Where the public body finds it necessary, it may, in addition to the
medium mentioned in sub article (1) of this Article, advertise the bid on a
national radio and television.
3) The time allowed for preparation of bids shall not be less than the
minimum number of days stated in the procurement directives.
15
Invitation to Bid
Apart from containing the following particulars, the invitation to bid shall be
prepared in accordance with the standard bidding document to be developed
by the Agency:
a) The name and address of the public body;
b) A brief description of the goods, works or services to be procured;
c) The means and conditions for obtaining the bidding documents and the
place from which they may be obtained;
d) The place and deadline for the submission of bids; and
e) The place and time for opening of bids, along with an announcement that
bidders or their representatives are allowed to attend at the opening of bids.
Bidding Documents
The bidding documents shall contain sufficient information to enable
competition among the bidders to take place on the basis of complete,
neutral and objective terms. In particular, bidding documents must include:
a) Instructions for the preparation and submission of bids;
b) Information about the final date for receipt of bids, the address to which
bids must be sent, the date, hour and place of opening, as well as an
announcement that bidders or their representatives are allowed to attend
the opening ceremony;
c) bid submission forms and, where applicable, forms of bid security to be
provided;
d) The number of copies to be submitted with the original bid;
e) The general and specific conditions of the contract;
16
f) Specification of requirements, including time limit for delivery or

completion of the task, as appropriate;
g) Evidence to be provided by the bidder to demonstrate its qualifications as
well as its fiscal and legal standing;
h) The period during which the bid remains in force;
(i) The criteria and the points given to each criterion for evaluation of bids
and award of the contract;
(j) A reservation to the effect that the public body may reject all bids at any
time prior to the notification of award; and
(k)
The
price
adjustments
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.
Provision of Bidding Documents
1) Bid documents shall be made available to candidates at a price not
exceeding the cost of reproduction and delivery of such documents to
candidates.
2) The bidding document shall be delivered to candidates on working days
between the date of publication of the invitation to bid and the closing date
of the bid and in the manner specified in the invitation to bid.
3) Where it deems it to be appropriate the public body may make the bidding
document available to candidates free of charge.
Modifications to Bidding Documents
1) At any time prior to the deadline for submission of bids, the public body
may, on its own initiative or in response to an inquiry by a candidate having
17
purchased the bidding documents, modify the bidding documents by issuing

an addendum, which becomes an integral part of the bidding documents.
2) Any addendum shall be communicated promptly to all candidates having
purchased the bid documents at the same time.
3) If the public body considers it necessary to amend the bidding documents
and if it determines that there is no enough time to incorporate the
modification, it may postpone the closing date by a number of days,
depending on the procurement object, which is sufficient to enable the
bidders to take the addendum into account in preparing their bids.
Bid Security
1) Public bodies shall include in the bidding documents a condition that bids
must be accompanied by a bid security. The amount of such bid security
shall be sufficient to discourage irresponsible bidders.
2) Notwithstanding the provision of sub-article
(1) of this Article, procurement in respect of which bid security is required
and the amount of bid security thereof, is to be prescribed by the directive to
be issued by the Minister.
3/ A 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
18
repudiates the contract or fails to furnish performance security, if so

required.
Submission and Receipt of Bids
1/ Bids shall be submitted in writing, signed and in a sealed envelope, to the
place and before the deadline stated in the invitation to bid.
2/ The public body shall give a receipt to the bidder indicating the time and
date on which the bid document was submitted, where it becomes
impossible to put the bid document in a bid box due to its large size.
3/ Without prejudice to the provisions of sub article
(2) of this Article, a bid document received after the deadline for submission
shall be returned unopened to the bidder.
Opening of Bids
1/ At the time stipulated in the bidding document for opening of bids, which
should follow immediately after the deadline for submission of bids, the
public body shall open all bids received before the deadline.
2/ The name of the bidder and the total amount of each bid, discounts
offered and any such information as the public body deems necessary to let
the bidders know their relative rank shall be read out aloud and recorded and
a copy of the record shall be made available to any bidder on request.
3/. Notwithstanding the provisions of sub article (2) of this Article, the
envelope containing the price offered by the bidder shall be read after the
evaluation of the technical proposal where technical and financial proposals
are submitted in two separate envelops.
Examination and Evaluation of Bids
19
1) The public body may ask bidders for clarification of their bids in order to
assist in the examination and evaluation of bids; however, no change in the
substance of the bid, including changes in price, shall be sought, offered or
permitted.
2) Notwithstanding sub-article (1) of this Article, the public body shall correct
arithmetical errors that are discovered during the examination of bids. The
public body shall give prompt notice of any such correction to the bidder that
submitted the bid.
3) Without precipice to sub-article (4) of this Article, the public body may
regard a bid as responsive only if it conforms to salient requirements set
forth in the bidding documents.
4) The public body may regard a bid as responsive even if it contains minor
deviations that do not materially alter or depart from the characteristics,
terms, conditions and other requirement set forth in bidding documents or if
it contains errors or oversights that are capable of being corrected without
touching on the substance of the bid. Any such deviations shall be
quantified, to the extent possible, and appropriately taken account of in the
evaluation and comparison of bids.
5) Any public body shall not award a contract when:
a) The bidder has failed to demonstrate, in the manner provided in Article
28(1) of this Proclamation, that it is qualified;
b) The bidder does not accept a correction of an arithmetical error made
pursuant to sub-article (2) of this Article;
c) The bid is not responsive.
6) In the process of selecting the successful bidder, the public body shall only
consider substantially responsive bids for further evaluation and comparison,
as defined in sub article
20
(8) Of this Article in accordance with the criteria set forth in the bidding
documents. No criterion shall be used that has not been set forth in the
bidding documents.
7) No bidder may be required to change the price offered in his bid or
otherwise modify his proposal or to assume obligation to do so except as set
forth in the bidding document.
8) 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 documents, 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;
c) Where it is ascertained in post evaluation of bids that the legal, financial
and technical standing of the candidate selected as the successful bidder in
accordance with paragraph (a) or (b) of this sub-article conforms to the
requirements stated in the bidding document.
9) The public body shall prepare an evaluation report, containing a summary
of the examination and evaluation of bids.
21
Type and Scope of Contract

This SBD is suitable for any scope of intended contract including simple
supply and deliver contracts and those for supply, delivery, installation and
commissioning.
Alternative
specialized
SBDs
are
available
for
the
procurement of text books, health sector goods and IT systems.

Selection of Bidders
The method for selection of Bidders will depend on the procurement method
being used and whether or not a pre-qualification has been conducted.
Where Open Tendering is used without prequalification, the PE must publish
an Invitation to Bid notice, so that bidding is open to all interested bidders. A
standard format, with guidance notes on its completion, is provided later in
this User Guide. The Invitation to Bid Notice must be approved by the Tender
Committee before publication.
The notice must be published in at least one national newspaper of general
circulation. Where tendering is international, the notice must also be
published, in a newspaper using the same language as the notice and of
sufficient circulation to attract foreign competition. Notices should also be
published on the internet, wherever possible. PEs should also ensure that
bidding documents are finalized and approved before publishing the
Invitation to Bid notice, to avoid any delays in the process.
Where Open Tendering is used with pre-qualification, the bidders invited will
be those selected during the pre-qualification process. There is therefore no
need to publish an Invitation to Bid notice, but the bidding document should
be accompanied by an Invitation to Bid letter. A sample letter, and
guidance notes on completing it, are included later in this User Guide. The
letter should be approved by the Tender Committee, at the same time as the
bidding document.
22
Where Restricted Tendering is used, the bidders invited will be those included
on the shortlist. There is normally no need to publish an Invitation to Bid
notice, but the bidding document should be accompanied by an invitation to
bid letter. However, where restricted tendering is used on the grounds that
there are a limited number of bidders able to supply the goods, a notice
must be published at least 15 days before the issue of the bidding document.
This notice will offer any additional bidders the opportunity to express their
interest in being added to the shortlist. A sample letter and guidance notes
on completing an invitation to bid letter are included later in this User Guide.
The letter should be approved by the Tender Committee, at the same time as
the bidding document. The shortlist must include sufficient bidders to ensure
effective competition and should be approved by the Tender Committee at
the same time as the bidding documents.
Preparing and Issuing a Bidding Document
The Procurement Unit is responsible for the preparation and issue of the
Bidding Document, but must obtain approval of the document from the
Tender Committee, before issuing the document or publishing any Invitation
to Bid Notice. The Procurement Unit must use the appropriate SBD, as this is
a mandatory requirement for contracts to be funded by the Government of
the Federal Democratic Republic of Ethiopia. In deciding the deadline for Bid
Submission, the Procurement Unit shall allow Bidders sufficient time for
obtaining and studying the Bidding Document, preparing complete and
responsive bids and submitting the bids. Procuring Entities are required to
comply with the minimum bidding periods given in the Regulations.
Where a Bid Notice has been published, the PE must issue Bidding
Documents promptly to all Bidders who request them and pay any required
fees. A record must be kept of the Bidders to whom Bidding Documents have
been issued. Receipts must be issued for all fees paid. Where the Bidding
Document is issued to pre-qualified or short-listed bidders, the documents
23
must be issued to all bidders at the same time and must be issued early
enough to ensure compliance with the minimum bidding period given in the
Directives. A record must be kept of the issue of all bidding documents.
The Procuring Entity and Bidder should keep in mind that:
The Procuring Entity is responsible for the preparation and issuing of
the Bidding Document.
The Procuring Entity shall use the SBD issued by the Public
Procurement Agency, as this is a mandatory requirement for contracts
funded by Public Funds.
The Procuring Entity should prepare Bidding Documents using the
published version of the SBD without suppressing or adding text to the
sections of the document to be used without modification.
The Procuring Entity shall allow Bidders sufficient time for studying the
Bidding Document, preparing complete and responsive bids and
submitting the bids.
Bid Preparation and Submission
The Bidder is responsible for the preparation and submission of its Bid.
During this stage, the Procuring Entity shall:
Promptly respond to requests for clarifications from Bidders and
amend, as needed, the Bidding Documents.
Amend the Bidding Documents only with the appropriate approvals in
accordance with the Procuring Entitys procedures and the Public
Procurement Proclamation.
Bidding Period and Bid Receipt
24
During the bidding period, the Procuring Entity shall:
1. Hold any pre bid meeting and issue minutes promptly;
2. Promptly respond to requests for clarifications from Bidders;
3. Issue amendments to the Bidding Documents if necessary;
4. Receive and record sealed bids from Bidders or make a Bid Box available
up to the deadline for bid submission;
5. Close bidding at the precise date and time of the deadline and ensure that
no late bids are received;
6. Keep all bids received secure until the time for bid opening.
Bid Opening
The Tender Committee of the Procuring Entity is responsible for the Bid
Opening, which is a critical event in the bidding process. The Tender
Committee must remember that inappropriate procedures at Bid Opening are
usually irreversible and may require cancellation of the Bidding Process with
the consequent delays and waste of time and resources.
Bid Evaluation
The Tender Committee, assisted by a Technical Committee if required, is
responsible for the evaluation of all bids received. The Tender Committee
must remember that mistakes committed at bid evaluation may later prompt
complaints from Bidders, requiring reevaluation of the bids, with the
consequent delays and waste of time and resources. The Tender Committee
shall:
Maintain the bid evaluation process strictly confidential
25
Reject any attempts or pressures to distort the outcome of the evaluation,

including fraud and corruption
Strictly apply only and all of the evaluation and qualification criteria
specified in the Bidding Documents to determine the lowest evaluated bid
and to make a recommendation for award of contract.
Upon completion of the Bid Evaluation, the Tender Committee shall be
requested to make a Contract Award recommendation to the head of the
Procuring Entity. It is important to note that the Contract Award decision by
the head of the Procuring Entity is not a contract, it is a decision to award
contract to the bidder who submitted the lowest evaluated bid.
Bid Acceptance and Contract Award and Placement

Bid acceptance and award and placement of a contract can be confusing for
both parties if there is not a precise and specified procedure for award of
contracts. The procedure specified in the
Proclamation and Directives provides a sequence of events based on the
need to recognize Bidders rights to appeal against the conduct of the
evaluation and the need for a contract to be placed as soon as is practical
after a decision to award has been approved. The following procedure is
required under the Proclamation and Directives:
The head of the Procuring Entity makes a contract award decision,

based on the recommendation of the Tender Committee.
The Procuring Entity notifies all Bidders of the result of the evaluation.
After a period of five working days, if no complaint has been received

by the Procuring
26
Entity, the PE awards the contract by issuing a Letter of Acceptance to the

successful bidder.
The contract will be confirmed by issue of a full conformed Contract

Document.
PEs should note that the Letter of Acceptance and the Contract Document
should not contain any provisions or conditions which vary from those in the
Bidding
Document,
or
the
Bidders
Bid,
including
any
subsequent
clarifications. Any such modifications should be agreed by the Bidder in

writing before a contract award decision is made. The Contract Document
comprises those papers contained at Section 9 of the Bidding Document and
it is at the stage of contract award that these can be completed.
Invitation to Bid Notices
Invitation to Bid Notices must be published under the Open Tendering
method, unless a prequalification has been conducted. They are designed to
provide information that enables potential bidders to decide whether to
participate in a bidding process. Apart from the essential items listed in the
draft below, the Invitation to Bid Notice should also indicate any important
bid evaluation criteria
(for example, the application of a margin of preference in bid evaluation) or
qualification requirement (a minimum level of turnover or experience).
The Invitation to Bid Notice is for publication purposes only and is not a part
of the Bidding Documents. A brief description of the type of Goods and
Related Services should be provided, including quantities, location of project,
and other information necessary to enable potential bidders to decide
whether to respond to the invitation
Invitation to Bid Letters
27
Invitation to Bid letters are issued to short-listed bidders under Restricted

Tendering or where bidders have been pre-qualified. They are used to invite
specific Bidders who are felt to have the prerequisite skills, capacity or
qualifications to fulfill a requirement. The letter should be signed and the
seal of the
Procuring Entity should be affixed. A brief description of the type of Goods
and Related Services should be provided, including quantities, location of
project, and other information necessary to enable potential bidders to
decide whether to respond to the invitation. If Bidding Documents require
bidders to have specific experience or capabilities, such restrictions should
be included in this paragraph.
It should be noted that the Invitation to Bid Letter should be addressed to all
Bidders that have either pre-qualified or have been selected for restricted
tendering so that each Letter indicates the names of all Bidders that have
been invited to bid. Additional information such as details of any proposed
pre bid meeting should also be included in the invitation to bid letter.
Bid Data Sheet
The Bid Data Sheet (BDS) contains information and provisions that are
specific to a particular bidding process. The Procuring Entity must specify in
the BDS only the information that the ITB request be specified in the BDS. All
information shall be provided; no clause shall be left blank. To facilitate the
preparation of the BDS, its clauses are numbered with the same numbers as
the corresponding ITB clause. This Guide provides information to the
Procuring Entity on how to enter all required information, and includes a BDS
format that summarizes all information to be provided.
Evaluation and Qualification Criteria
The purpose of the Evaluation and Qualification Criteria (EQC) is to specify
the criteria that the Procuring Entity will use to evaluate the bids and post28
qualify the lowest-evaluated bidder. The Procuring Entity must prepare the
EQC and include it as a part of the Bidding Documents. The EQC is not a
Contract document and, therefore, it is not a part of the Contract. The
purpose of the Evaluation and Qualification Criteria (EQC) is to inform
Bidders of the criteria that the Procuring
Entity will use to evaluate the bids and post-qualify the bidder submitting the
lowest evaluated bid.
This is to ensure that the evaluation is fair and treats all Bidders in the same
manner. It also should assist Bidders to prepare responsive bids which meet
the PEs needs and are competitive. The
Procuring Entity must prepare the EQC and include it as a part of the Bidding
Documents.
The EQC is not a Contract document and, therefore, it is not a part of the
Contract. Hence, is to be added in four main areas:
Additional evaluation factors to be included in the evaluated price;
The evaluation of multiple contracts, where bidders are permitted to

bid for separate lots or packages;
The application of a margin of preference; and Post-qualification

criteria.
Additional Evaluation Factors

In addition to the bid price, the financial evaluation will sometimes take into
account other factors.
The cost of inland transportation, insurance, and other costs within the
Federal Democratic
29
Republic of Ethiopia incidental to delivery of the goods to their final

destination. [NB this factor should not be used if the price for these services
has already been requested a
Qualification Criteria
The Procuring Entity should indicate in this part whether or not postqualification criteria will be applied to the bidder submitting the lowest
evaluated bid and the criteria which will be applied.
Where a pre-qualification has been conducted or post-qualification is not
considered necessary, this should be stated here, with the words No postqualification criteria will be applied. Where post qualification is applied, the
criteria should be evaluated on a pass or fail basis only. Criteria will normally
fall into three categories of financial capability, experience and supply
capacity, but others may be included if appropriate.
Financial capability criteria are used to determine whether a Bidder has the
financial capacity to successfully perform the Contract. They should not be
used in relation to the financial evaluation in any way.
Experience criteria are required to ensure that the Bidder has sufficient
experience to perform the contract properly, but should not be excessive or
restrict competition unnecessarily.
Supply capacity criteria are used to ensure the Bidder is capable of supplying
the type, size, and quantity of the Goods required within the delivery periods
required. Typical examples are given below, but the actual criteria included
must be relevant to the goods being procured. The Procuring Entity must
state
the
documents
required
from
Bidders,
qualifications.
Example Financial Capability Criteria
30
as
evidence
of
their
Financial Situation
The Bidder shall provide audited statements of accounts for the last 3 years,
demonstrating:
a liquidity rat
an indebtedness ratio
a profitability ratio
Availability of Financial Resources
The Bidder shall provide bank references, demonstrating the availability of

sufficient funds and/or credit to successfully perform the contract. Litigation
The Bidder shall provide details of all claims, arbitration, or other litigation,
pending or already resolved, for the past 5 years. All pending litigation shall
in total not represent more than [insert percentage] percent of the Bidder's
net worth.
Example Experience Criteria
The Bidder shall provide details of the successful completion contracts of a
value greater than for similar Goods and Related Services in the Federal
Democratic Republic of Ethiopia/the region during
a period of three years ending on the bid submission deadline. The Bidder
shall provide evidence that it has at least [insert number] years experience
of providing the Goods and Related Services required.
Example Supply Capacity Criteria

The Bidder shall demonstrate that it has available production capacity to
successfully perform the assignment. The proposed contract shall not
represent more than [insert percentage] percent of the Bidders annual
turnover. The Bidder shall demonstrate that it has facilities or representation
31
in and is able to provide full maintenance and servicing facilities to support

the goods.
Bidding Forms
The Procuring Entity must include all bidding forms that the Bidder must
complete and include in its bid in the Bidding Document. As specified in
Section 4 of the Bidding Document, these forms are the Bid Submission
Form, the Price Schedules, the Bid Security Form and the Manufacturers
Authorization. As the Bidder (or a financial institution or manufacturer) is
required to complete these
Forms, guidance notes are included on the forms (in bold between square
brackets) in the SBD.
These guidance notes should not be deleted by the Procuring Entity prior to
the issue of the Bidding Document.
Country Eligibility
All countries are eligible except countries subject to the following provisions.
A country shall not be eligible if:
As a matter of law or official regulation, the Government of the Federal

Democratic Republic of Ethiopia prohibits commercial relations with
that country, provided that the Government is satisfied that such
exclusion does not preclude effective competition for the provision of
the goods required; or
By an act of compliance with a decision of the United Nations Security

Council taken under
Chapter VII of the Charter of the United Nations, the Government of the
Federal Democratic
32
Republic of Ethiopia prohibits any import of goods from that country or any
payments to persons or entities in that country.
The list of eligible countries may differ, where the procurement is funded by
a donor or where other restrictions are imposed by Government policy. In
such cases, the Procuring Entity should amend the text accordingly, inserting
either a list of eligible countries or a list of ineligible countries. The list of
countries should be checked directly with the Government or donor.
Statement of Requirements
The Statement of Requirements (SR) shall provide sufficient information as to
enable bidders to efficiently and accurately prepare bids that are realistic
and competitive. The Statement of Requirements (SR) is a Contract
document and, therefore, it is a part of the Contract. The Procuring Entity
must prepare the SR and include it as a part of the Bidding Documents. The
SR should be complete, precise, and clear. An incomplete, imprecise, or
unclear SR may prompt bidders to require clarifications from the Procuring
Entity or to submit conditional bids or bids that may be based on different
understandings of the Procuring Entitys requirements. Depending on the
nature of the clarifications, the Procuring Entity may need to amend the
Bidding Documents and eventually to extend the bid-submission deadline.
Conditional bids may have to be rejected. Bids that are not comparable could
not be evaluated.
The Procuring Entity shall assign experienced staff to draft the SR in a
manner permitting the widest possible competition, while at the same time
clearly specifying the required standards of workmanship, the characteristics
of materials and performance of the Goods, and the delivery and completion
of the Goods and Related Services. Only by following this approach will the
Procuring Entity ensure that the objectives of economy, efficiency, and
fairness in procurement can be realized as envisaged under open tendering
procedures. The Statement of Requirements consists of four parts:
33
List of Goods and Related Services
Delivery and Completion Schedules
Technical Specification and Compliance Sheet
Drawings
Delivery and Completion Schedule

The purpose of the Delivery and Completion Schedule (DCS) is to specify the
delivery dates and places for each of the Goods and the delivery places and
completion dates for each of the Related Services as listed in the List of
Goods and Related Services. The DCS, as part of the Statement of
Requirements, constitutes a Contract document and, therefore, will form part
of the Contract. The Procuring Entity must prepare the DCS and include it as
a part of the Statement of Requirements. In preparing the DCS, the Procuring
Entity should take into account the following:
The delivery and completion dates should be realistic. Unrealistically

short delivery or completion expectations may result in restricted
competition or may prompt complaints from prospective bidders.
The date or period for delivery should be carefully specified, taking

into account that the delivery terms stipulated must be consistent
Technical Specifications and Compliance Sheet

The purpose of the Technical Specifications and Compliance Sheet (TSCS) is
twofold. Firstly it is used to define (in column b) the technical characteristics
of the Goods and Related Services required by the Procuring Entity. Secondly
it provides the facility for the Bidder to compare the specification of the
goods offered (in column c) with those required. This facilitates later
34
technical evaluation and focuses Bidders on compliance to the specification

required.
The TSCS, as a part of the Statement of Requirements, constitute a Contract
document and will, therefore, form part of the Contract. The Procuring Entity
must prepare the TSCS and include them as a part of the Bidding
Documents, as applicable to each Contract. In preparing the TSCS, the
Procuring Entity should take into account the following:
Well-prepared TSCS will facilitate the examination, evaluation, and
comparison of the bids by the Procuring Entity, as the TSCS constitute the
benchmarks against which the Procuring Entity will verify the technical
responsiveness of bids and subsequently evaluate the bids.
The TSCS should require that all goods and materials to be incorporated in
the goods be new, unused, and of the most recent or current models, and
that they incorporate all recent improvements in design and materials,
unless provided for otherwise in the contract.
The TSCS should make use of best practices. Samples of specifications
from successful similar procurements in the same country or sector may
provide a sound basis for drafting the TS.
The use of metric units is encouraged.
Standardizing
technical
specifications
under
General
Technical
Specifications may be advantageous, depending on the complexity of the

goods and the repetitiveness of the type of procurement. Technical
Specifications should be broad enough to avoid restrictions on workmanship,
materials, and equipment commonly involved in manufacturing similar kinds
of goods, even if these may not necessarily apply to a particular
procurement. Particular technical requirements for a particular procurement
would be in each case specified through deletions or addenda to the
Technical Specifications.
35
The specification of standards for equipment, materials, and workmanship

shall not be restrictive. Recognized international standards should be
specified as much as possible.
Reference to brand names, catalogue numbers, or other details that limit any
materials or items to a specific manufacturer should be avoided as far as
possible.
Where unavoidable, such item description should always be followed by the
words or substantially equivalent. When other particular standards or
codes of practice are referred to in the TSCS, whether from the Borrowers or
from other eligible countries, a statement should follow other authoritative
standards that ensure at least technical Specifications shall be fully
descriptive of the requirements in respect of, but not limited to, the
following:
Standards of materials and workmanship required for the production

and manufacturing of the Goods.
Detailed tests required (type and number).
Other additional work and/or Related Services required to achieve full

delivery/completion.
Detailed activities to be performed by the Supplier, and participation

of the Procuring Entity thereon.
List of detailed functional guarantees covered by the Warranty and the

specification of the liquidated damages to be applied in the event that
such guarantees are not met.
The TSCS shall specify all essential technical and performance characteristics
and
requirements,
including
guaranteed
or
acceptable
maximum
or
minimum values, as appropriate. Whenever necessary, the Procuring Entity

36
shall include an additional ad-hoc bidding form (to be an Attachment to the

Bid Submission Sheet), where the Bidder shall provide detailed information
on
such
technical
performance
characteristics
in
respect
to
the
corresponding acceptable or guaranteed values.

When the Procuring Entity requests that the Bidder provides in its bid a part
or all of the Technical Specifications, technical schedules, or other technical
information, the Procuring Entity shall specifyin detail the nature and extent
of the required information and the manner in which it has to be presented
by the Bidder in its bid.
Drawings
The purpose of drawings is to specify locations, dimensions, materials to be
used, stages of manufacturing, and other characteristics of the Goods and
Related Services. The Procuring Entity should prepare appropriate drawings,
as needed, and include them in the Bidding Documents. Such drawings, as
part of the Statement of Requirements, are Contract Documents and, will
therefore, form part of the Contract. Similarly, the Procuring Entity may
request the Supplier to provide drawings either with its bid or for approval.
General Conditions of Contract

The GCC contain standard provisions that have been designed to remain
unchanged and to be used without modifying their text. The GCC clearly
identify the provisions that may normally need to be specified for a particular
bidding process and require that such specification be introduced through
the SCC. The GCC are Contract documents and, will therefore form part of
the Contract.
Special Conditions of Contract
37
The Special Conditions of Contract (SCC) contain provisions that the GCC
require be specified for a particular bidding process. The Procuring Entity
should include at the time of issuing the Bidding Documents all information
or specification that the GCC indicate shall be provided in the SCC. No
SCC Clause should be left blank. To facilitate the preparation of the SCC, its
clauses are numbered with same numbers as the corresponding GCC
clauses. This Guide helps the Procuring Entity on how to input all information
required. It includes a SCC format that summarizes all information to be
provided. The SCC are Contract will form part of the Contract.
Notes on the Letter of Acceptance
The Letter of Acceptance does not form part of the Bidding Document.
However, it is the document normally used to accept a bid, and therefore to
form a contract, so it is essential that it is used correctly by Procuring
Entities. A Letter of Acceptance must not be issued prior to obtaining all
required approvals, including from the Tender Committee and head of the
Procuring Entity and ensuring that sufficient funds have been committed for
the contract. A sample wording for a Letter of Acceptance is included below.
The letter should be signed and the seal of the Procuring Entity should be
affixed.
Letters to Unsuccessful Bidders
Procuring Entities are required to inform unsuccessful Bidders that their bids
have been unsuccessful and to inform them of the successful Bidder and
provide brief reasons why their bid has failed.
Unsuccessful Bidders must be informed of the successful Bidder at least five
working days prior to contract award. A sample wording for a letter to an
unsuccessful Bidder is included below. The letter should be signed and the
seal of the Procuring Entity should be affixed.
38
Bid Preparation and Submission

During this stage, the Procuring Entity shall:
Promptly respond to requests for clarifications from Bidders and amend, as
needed, the Bidding Documents.
Amend the Bidding Documents only with the appropriate approvals in
accordance
with
the
Procuring
Entitys
procedures
and
the
Public
Procurement Proclamation.
Bidding Period and Bid Receipt
During the bidding period, the Procuring Entity shall:
Hold any pre bid meeting and issue minutes promptly;
Promptly respond to requests for clarifications from Bidders;
Issue amendments to the Bidding Documents if necessary;
Receive and record sealed bids from Bidders or make a Bid Box available
up to the deadline for bid submission;
Close bidding at the precise date and time of the deadline and ensure
that no late bids are received;
Keep all bids received secure until the time for bid opening.
Bid Opening
The Tender Committee of the Procuring Entity is responsible for the Bid
Opening, which is a critical event in the bidding process. The Tender
Committee must remember that inappropriate procedures at Bid Opening are
39
usually irreversible and may require cancellation of the Bidding Process with
the consequent delays and waste of time and resources.
CHAPTER THREE
3. RESEARCH METHODOLOGY AND ORGANIZATIONAL PROFILE
3.1 Methodology.
The methodology part, was focused on research design, sources of data,
target population and sample size, sampling techniques, data collection
instruments, reliability and validity, data analysis procedures and finally the
conclusion. It also describes in details the methods the researcher employ for
the collection of data and the various ways use in analyzing the data as well
as the sample size will use.
40
3.1.1 Research Design

The Research type was be descriptive, which was try to describe the open
tendering practice of Gurage Zone Welkite F,m organization to ensure value
for money.
The researcher used questionnaires, personal observations and informal
interviews to confirm facts and figures gather from field survey as well as the
deployment of evaluations and assessments since the researcher will need to
find out all the facts pertaining to the study in order to make healthier
judgments and gave the appropriate recommendations at the end of this
study
3.1.3 Sources of data
Both the primary and the secondary sources was used by the researcher in
obtaining facts which will relevant to this work.
Primary Source of Data
Data from the primary source was enable the researcher to acquire firsthand
information and materials on the topic under study. The primary data will
gather from Gurage zone,Welkite F.M procurement unit, Finance officer and
user departments, through the use of questionnaires, personal observation.
Secondary Source of Data
The secondary source expansively refers to the available data already
gathered by other on the area or issue under study. These will information
tapped
from
the
organization
procurement
records,
advertisement
newspaper, bid documents and recites which helped to analyze, interpreted

and infer the finding of the study. This was enable the researcher to gather
adequate information on the research topic.
3.1.4 Target Population and Sample Size.
For the purpose of this work, the researcher was target the staff of the
Gurage Zone, Welkite F.M organization in that the researcher was to find out
41
the type of tendering method used in awarding contracts and how it has
helped to achieve value for money in their purchases.
Specifically, some will select departments within the organization whose
major activities could have direct influence on the topic under discussion was
consider. This was including the procurement unit, the accounting unit, and
the stores unit, bringing to twenty 20, so the sample size of the study will be
bringing 20.
The researcher was use purposive sampling in gathering relevant information
for this work.
3.1.5 Sampling Technique
In obtaining data from the staff of the select units within the above
mentioned organization, the researcher decided to use the purposive
sampling techniques. This sampling method used for this work because the
researcher identifies those departments to be more convenient in providing
accurate and adequate facts and figures which could best answer the
questionnaires administered for the successful compilation of the whole
research work.
3.1.6 METHOD OF ANALYSIS AND INTERPRETATION
Having the goal this study in mind the row data processed by table that identifying
and classifying each answer which statistic by the researcher. The data will analyze
and interpret the finding by descriptive statistics method with table and percentage.
3.1.7 Data Collection Instruments

The data collection instruments for this work were questionnaires, personal
observation and an informal interview.
3.2.0 Organization of the study
The writer in this part dealt with how his write would have structurally and
successfully will arrange from one chapter to the other. The first of which is
the introduction will make up of the background of the study, the statement
of the problem, the aims and the objectives of the study, again the research
42
questions, methods and techniques were used (research methodology),

significance of the study, limitation, the scope of the study and of course the
organization of the study itself and the research methodology and go further
to discuss how raw data and information together with the population will
use for this research treated.
Chapter tows the literature review and in this portion the writer brought to
bear some comprehensive piece of others in relation to the topic.
Chapter three, it
provided a detailed analysis of data which will collect and
the responses to the questionnaires will send out for the purpose of this
study.
Chapter four deal with the main findings of the study and will gives summary
of the findings of the research work, suggestions and recommendation
various ways of improving upon tendering processes at the Gurage Zone
Welkite F.M Organization to be able to achieve value for money in their
request to procure using funds. It will also give generalization which able to
improve the same tendering method for other public sectors.
43
CHAPTER FOUR
DATA ANALYSIS
4. Introduction.
This chapter, present in totality the main findings and analysis of data gathered from the field. It
consequently gives a vivid account on the scope: Competitive Tendering, an Effective Tool in
Ensuring Value for Money in Public Sector Procurement. In addition, this chapter present depend
on the finding it shows important recommendations which have most important benefits to
Welkite F.M organization and also other public sectors.
Responses which were gathered from finance officer and procurement department
4.1 Descriptive analysis
4.1.1 Gender of Respondents
This question aimed at finding out the number of the respondents who were male and those who
were female in the sampled size. The responses are however shown in table 4.1.
Table 4.1 below indicates that out of twenty (20) respondents interviewed, sixteen (16) of them
were males representing 80% whiles four (4) were females representing 20% of the total
population interviewed. The responses after analyses clearly show that majority of the
respondents are males probably because of the nature of work.
Table 4.1 Responses on Gender of Respondents
Responses
Frequency
Percent
Male
16
80.0
Female
20.0
Total
20
100.0
44
Source: Field Survey, 2016

4.1.2 Ages of Respondents
This question was asked to seek for the ages of the respondents. The responses are analyzed in
table 4.2 below.
Table 4.2 below indicates that, eight (8) respondents were between the ages of 25-35
representing 40% of the Population interviewed, seven 7 (35%) respondents were between the
ages of 36-45 whereas 5 of the respondents were between the ages of 46-55 (25%) respectively.
The analyses show that majority of the respondents interviewed are old as compared to the
young ones.
Table 4.2 Responses on Ages of Respondents
Responses
Frequency
Percent
25-35
25
36-45
35
46-55
40
Total
20
100.0

4.1.3 Names of Departments
The main aim of this question was to help identify the particular departments of these
respondents since the researcher wanted accurate facts and figures for this work. From table 4.3
below, it was revealed that out of the total respondents interviewed six (6) of them were from the
procurement unit representing 30%, five (5) from the accounting unit/ section with a percentage
of 25, 25% from the stores unit with a total respondents of five (5) whiles the remaining four (4)
respondents work with the engineering department with the least percentage of 20.It was
deduced that the researcher actually worked with the right departments with respect to the topic
under discussion.
45
Table 4.3 Responses on Names of Departments

Responses
Frequency
Percent
Procurement
30
Accounting
25
Stores
25
Engineering
20
Total
20
100.0

4.1.4 Respondents working experience
With this the researcher wanted to find out the working experience of the employees interviewed
since the number of working experience can tell have far employees know what goes on in the
organization in relation to the topic under study. Table 4.4 below shows that four (4) of
respondents had worked between 0-3years representing 20% of the population interviewed, again
four(4) of the respondents have 4-6years working experience representing 20%, seven(7)
respondents also have 7-9years working experience representing 35% and the last but not the
least five(5) of the respondents have worked for 10 years and above with a percentage of 25. It
can be seen that majority of the respondents have spent more years working at the assembly
Table 4.4 Responses on respondents working experience
Responses
Frequency
Percent
0-3yrs
20
46
4-6yrs
20
7-9yrs
35
10yrs or more
25
Total
20
100.0

4.1.5 The rate of independency of the procurement unit.
It was established again from the analysis that eighteen (18) persons representing 90% of the
employees interviewed indicated that the Organizations purchasing or procurement department
stands on its own whiles two (2) persons representing 10% answered that the procurement
department is under accounting department. This question was aimed at finding out whether the
procurement unit operates on its own or is cushioned under another department within the
organization. As analyzed in table 4.5 below, it was realized that the procurement unit operates
on its own according to the majority response from the questionnaires.
Table 4.5: Responses on whether the procurement Department operates on its own or not.
Responses
Frequency
Percent
Yes
18
90
No
10
Total
20
100.0
47
4.1.6 Type of tendering procedures/methods used.

This section presents the response to the question which determines the type of tendering method
used in the award of contracts as shown in the table 4.6 below.
Table 4.6 below shows that fifteen (15) respondents representing 75% agreed that competitive
tendering is use in awarding contract, three(3) respondents representing 15% answered that the
assembly uses single sourcing in awarding contract, whiles two(2) respondents representing
10%.answered that the assembly use sole sourcing in awarding contract. It was realized that the
assembly uses competitive tendering in awarding most of their contracts.
Table 4.6. Responses on type of tendering procedures/methods used in awarding contracts?
Responses
Frequency
Percent
Competitive tendering
15
75
Single sourcing
15
Sole sourcing
10
Total
20
100.0

4.1.7Type of competitive tendering used.
The researcher wanted to find out the type of competitive tendering method used at the
Assembly. The views are however shown in table 4.7 below.
Table 4.7 below depicts that eighteen (18) respondents interviewed representing 90% answered
that the assembly uses open tendering in awarding its contract, no respondents said that the
assembly use two stage tendering in awarding of contract representing 0%, whiles one (1)
respondents also answered that the assembly use restricted tendering in awarding of contract
representing 5%, whiles one (1) respondent answered that the assembly use single sourcing in
awarding of its contracts. The question was meant to find out the type of competitive tendering
48
used by the organization. It can be deduced from the responses that the organization mostly use
the opening tendering method in awarding contracts which is the best since it will help them to
acquire goods, works and services at competitive price.
Table 4.7. Responses on the type of competitive tendering used by the Organization
Responses
Frequency
Percent
Open tendering (national/ international)
18
90
Two stage tendering
Restricted tendering
Single sourcing
Total
20
100.0
4.1.8 Means of acquiring tender documents

Table 4.8: below indicates that nineteen (19) respondents agreed that tender documents are
obtained from the buying organization representing 95% whiles one(1) respondent representing
5% said that tender document are obtained from the net. The analyses show that the organization
does things manually.
49
Table 4.8. Responses on how tender documents are obtained by suppliers.

Responses
Frequency
Percent
From the organization
19
95
From net
Total
20
100.0

4.1.9 Number of times the organization makes use of competitive tendering.
This question was meant to ascertain how often the organization makes use of competitive
tendering as analyzed below in table 4.9.
Table 4.9: below indicates that eighteen (18 ) respondents agreed and answered that the assembly
uses competitive tendering more often, representing 90% whiles two(2 ) respondents
representing 10% said that the assembly uses competitive tendering once a while. Again it can be
deduced that the Assembly often make use of the competitive tendering method. This however
helped the researcher to achieve the objective of the study.
Table 4.9 Responses on how often competitive tendering method is used by the Assembly in
awarding contracts.
Responses
Frequency
Percent
More often
18
90
Once a while
10
50
Total
20
100.0

4.1.10 Permanent suppliers of the Assembly
This present the response to the question which determines whether the organization have
permanent suppliers or not. The responses are shown in table 4.10. below.
Table 4.10: below shows that seventeen (17) respondents representing 85% answered that the
assembly does not have permanent suppliers, however one (1 ) of them representing 5% said that
the assembly have permanent suppliers, whiles two( 2 )respondents with a percentage of 10
answered that they are not aware whether the assembly have permanent suppliers or not. The
majority of the respondents who answered the questions indicated that the organization do not
have permanent suppliers. It can therefore be deduced that the organization often opens tenders
and therefore see it not necessary to keep permanent suppliers.
Table 4.10 Responses on whether the assembly has permanent suppliers.
Responses
Frequency
Percent
Yes
No
17
85
Not aware
10
Total
20
100.0

4.1.11 Knowledge on Value for money.
This question was to find out whether respondents have heard of value for money before.
51
From table 4.11. below, sixteen( 16) respondents with a total percentage of 80 answered that they
have heard of the term value for money whiles four( 4) respondents representing 20% answered
that they have not heard of the term value for money before. The responses indicated that most of
the staff who was interviewed has at least heard of the term value for money.
Table 4.11 Responses on whether respondents have heard of value for money.
Responses
Frequency
Percent
Yes
16
80
No
20
Total
20
100.0

4.1.12 Opinion on value for money
This question was to seek for the respondents knowledge level on the term value for money.
Their views are however presented in table 4.12 below.
Table 4.12: below indicates that fifteen (15) of respondents who responded to the questionnaires
answered that the term value for money simply means getting maximum satisfaction on money
spent constituting 75% whiles three( 3) of the respondents representing 15% answered that the
term value for money means receiving supplies on time and last but not the least two(2 )of the
respondents gave a no idea as an answer representing 10% .It was deduced that at least majority
of the sampled population have an idea of what value for money means.
Table 4.12 Respondents opinion on the term value for money
Responses
Frequency
Percent
To get maximum satisfaction on money spent.
15
75
To receive supplies on time.
15
52
No idea.
10
Total
20
100.0

4.1.13 Assessing the impact of competitive tendering as a method of achieving value for
money.
Table 4.13: below clearly depicts that all the respondents ticked yes as an answer representing
100%. None of the respondents answered no representing 0% indicating that the Organization is
not wasting resources since it is getting value from its purchases.
Table 4.13 Responses on the impact of competitive tendering as a method of achieving value
for money
Responses
Frequency
Percent
Yes
20
100
No
Total
20
100.0

4.1.14 Some challenges faced by the Organization in the quest to implement the correct
tendering methods.
The researcher wanted to find out some of the challenges the organization faces in the attempt to
use the correct tendering methods. The analyses are shown in table 4.14 below.
53
Table 4.14: below indicates that nine ( 9 )of the respondents representing 45% answered that the
organization sometimes is faced with the problem of political interference whiles eleven(11 )of
them, representing 55% answered that, the complex nature of procurement/tendering procedures
are some of the challenges the assembly faces.
Table 4.14 Responses on some of the challenges faced by the organization in the quest to
implement the correct tendering procedures
Responses
Frequency
Percent
Political interference.
45
Complex nature of processing tender documents.
11
55
Total
20
100.0

4.1.15 How challenges can be solved.
Table 4.15: below indicates that nine ( 9) respondents again representing 45% answered that
competitive tendering challenges can be solved through the adherence to the Public procurement
Act 649 of the government; whiles the remaining eleven (11) again representing 55% said the
second challenge can be solved when more workshops are organized for officers concerned and
contractors. This question was asked to seek the opinions of the respondents on how the above
mentioned challenges can be solved. Based on the responses it was deduced that more
workshops need to be organized for both staff and contractors and also the organization need to
adhere strictly to the procurement Act,649.
Table 4.15 Respondents opinion on how the Organization could solve these challenges?
Responses
Frequency Percent
Adherence to the procurement Act 649
54
45
Organization of workshops on the preparations and processing of tenders for

11
both officers and contractors.
55
Total
100.0
20
SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS

5. Introduction
This chapter comprises a summary of the findings from the study, the general conclusions drawn
by the researcher and recommendations made by the researcher.
5.1 Summary of findings
The entire research focused on Evaluation of open bidding practice in case of Gurage zone
welkite FM organization was the study area. The findings were based on the questionnaires sent
out, which presented the researcher with the information on what goes on in the Gurage Zone,
Welkite FM organization will be of great benefit to both management and staff.
It was discovered during the research that the organization uses competitive tendering method in
awarding contracts to deserving contractors indicating that equal opportunity is given to all
interested and deserving suppliers to put in tenders. Hence the organization standing a better
chance of selecting the qualified supplier and also getting competitive pricing.
55
Again, as to which type of competitive tendering, it was detected that the organization open
tenders which is a step in the right direction as it is geared towards encouraging competition
among bidders.
More so it was revealed that the organization does not have permanent suppliers which confirm
the point that they use open tendering.
In addition, it was found out that tender documents are most often obtained from the
organizations premises. Thus tender documents are processed manually.
According to the findings it was also realized that the organization is able to get value for the
money it spends as the competitive tendering methods are used.
Lastly it was again realized that although the competitive tendering method helps the
organization to achieve value for money, they are still faced with the problem of political
interference and complex nature of the whole tendering process.
5.2 Conclusion of the Study
In conclusion this research work has been carried out to find out some of the tendering
procedures used in most public sector organizations when it comes to bidding and the final award
of contracts to deserving bidders/contractors of which the Gurage Zone, Welkite FM
organizations capital, is not an exception.
Again it was to ascertain if the type of tendering procedures used in the procurement of goods,
works and services at the Organization has helped to achieve value for money for the
organization and the state as a whole since it involves the use of state funds of which it was
identified that the Organization uses the competitive tendering methods.
More so it was also noticed from the analysis of the statistical data obtained from the
questionnaires administered and an interview with the user department members of the
respondents that most public institutions are faced with quite a number of challenges in their
attempt to use the correct tendering procedures, the processes involved are seen to be complex
more especially for the contractors and those employees who have little knowledge in
procurement as in the case of the above mentioned organization.
Finally, it can be concluded that the Assembly still carry out most of their duties manually which
of course does not facilitate progress.
5.3 Recommendations
In general, the researcher deems it necessary to make the following recommendations as
resolutions to the challenges identified in during the course of the study.
The Procurement unit should be given the opportunity to work collaboratively with the
engineering department so that they will also have knowledge on what goes on when it
56
comes to the procurement of works and also should be given the due recognition since
this will enable the other departments realize the importance of the procurement
department.
The series of workshops and seminars should be organized for both procurement officers
especially new ones who have little knowledge in practical procurement and potential
contractors so that they will have more insight into what goes into the preparations or
processing of tender documents.
The Public Procurement Authority (PPA) should also institute measures to monitor the
adherence to the public procurement Act 649 which was enacted in 2009 in public
institutions.
The organization should get computers especially for the procurement units so that tender
documents can be prepared or processed electronically to reduce the tendencies of
committing human errors, work faster to enhance progress and to become technologically
inclined.
To end it the all, the researcher still wants to encourage the management of Welkite FM
organization to continue using the correct methods in awarding contract in spite of the
challenges they face.
57
REFERENCES
The Ethiopian Federal Government Procurement and Property
Administration
Proclamation Proclamation No. 649/2009
Ministry of Revenue www.mor.gov.et

Ethiopian Customs Authority www.mor.gov.et/ecaweb/index.html
Ministry of Finance and Economic Development, Addis Ababa 1996
ABC of Taxes in Ethiopia (1942 1996)
Heidelberg Germany, 2008, Training Modules for Small and Medium
Enterprises (SMEs), www.bdsforum.
net/training-modules
Federal Government of Ethiopia Ministry of Finance and Economic
Development, PUBLIC FINANCE
MANAGEMENT ASSESSMENT AMHARA REGIONAL GOVERNMENT, October
17, 2010 (Final)
58

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ACKNOWLEDGEMENT..................................................................................................

Except as otherwise provided in this...............................................................13

Public Private Partnership.........................................................................14

PROCEDURE OF OPEN TENDERING..................................................................14

Type and Scope of Contract.......................................................................20

Preparing and Issuing a Bidding Document............................................21

Bid Preparation and Submission...............................................................22

Bidding Period and Bid Receipt.................................................................22

Invitation to Bid Notices............................................................................. 24

Invitation to Bid Letters............................................................................. 25

Bid Data Sheet............................................................................................. 25

Evaluation and Qualification Criteria.......................................................26

Additional Evaluation Factors....................................................................27

Example Financial Capability Criteria......................................................28

Example Supply Capacity Criteria.............................................................28

Delivery and Completion Schedule...........................................................31

Technical Specifications and Compliance Sheet.....................................31

General Conditions of Contract.................................................................34

Special Conditions of Contract..................................................................34

Notes on the Letter of Acceptance...........................................................34

Letters to Unsuccessful Bidders...............................................................35

Bid Preparation and Submission...............................................................35

Bidding Period and Bid Receipt.................................................................35

Based on the consumption purposes of the acquired goods and services,

Direct procurement occurs in manufacturing settings only. It encompasses all

methods/practices (competitive tendering) which are tools for ensuring value

thereby providing shoddy works/projects which will intend need to be

1.4 Research questions

1.3. Objectives of the study.

1.3.2. Specific objectives.

- Give recommendations and suggestions towards improving tendering

1.5 Significance of the study.

1.6 Limitations of the Study

1.7 Scope of the study

Public Private Partnership

f) Specification of requirements, including time limit for delivery or

purchased the bidding documents, modify the bidding documents by issuing

repudiates the contract or fails to furnish performance security, if so

Type and Scope of Contract

procurement of text books, health sector goods and IT systems.

Reject any attempts or pressures to distort the outcome of the evaluation,

Bid Acceptance and Contract Award and Placement

The head of the Procuring Entity makes a contract award decision,

After a period of five working days, if no complaint has been received

Entity, the PE awards the contract by issuing a Letter of Acceptance to the

The contract will be confirmed by issue of a full conformed Contract

clarifications. Any such modifications should be agreed by the Bidder in

Invitation to Bid letters are issued to short-listed bidders under Restricted

Additional evaluation factors to be included in the evaluated price;

The evaluation of multiple contracts, where bidders are permitted to

The application of a margin of preference; and Post-qualification

Additional Evaluation Factors

Republic of Ethiopia incidental to delivery of the goods to their final

Availability of Financial Resources

The Bidder shall provide bank references, demonstrating the availability of

Example Supply Capacity Criteria

in and is able to provide full maintenance and servicing facilities to support

A country shall not be eligible if:

As a matter of law or official regulation, the Government of the Federal

By an act of compliance with a decision of the United Nations Security

List of Goods and Related Services

Delivery and Completion Schedules

Technical Specification and Compliance Sheet

Delivery and Completion Schedule