REF: AW4

SUPPLIER PREQUALIFICATION PROCEDURE

PROCUREMENT PROCEDURE MANUAL

REVISION NO: 001 DATE: 03/04/06 Page 1 of 5 APPROVED: HEAD OF GROUP PROCUREMENT

1.0 1.1 2.0 2.1

PURPOSE The purpose of these instructions is to outline how the procurement department evaluates suppliers to be included in the list of approved suppliers and when tendering for goods or services. SCOPE This procedure covers supplier pre-qualification which is carried out as part of the due diligence process to evaluate suppliers that have submitted an Expression of Interest before they are included in EABLs list of approved suppliers. REFERENCES Procurement Procedures Manual Stores Manual Approved Suppliers List Materials Specifications Manual Occupational Health and Safety Policy Environmental Policy Diageo Code of Conduct DEFINITIONS Item: Contact: H-GP LPO: PM: PR: RFQ: SSE: SSC: Supplier Material/Product/Service required by EABL The address at which a supplier can be reached Head of Group Procurement Local Purchase Order Category Procurement Manager Purchase requisition Request for quotation Supplier Service and Escalation Shared services centre Organization that provides a product or service to EABL

3.0

4.0

REF: AW4

SUPPLIER PREQUALIFICATION PROCEDURE

PROCUREMENT PROCEDURE MANUAL

REVISION NO: 001 DATE: 03/04/06 Page 2 of 5 APPROVED: HEAD OF GROUP PROCUREMENT

5.1.0 5.1.1

Supplier pre-qualification Overview

Supplier Identification process

Applicant completes prequalification questionnare

Prequalification questionnare

Applicants Prequalification questionnaire

Procurement Controller reviews questionnaire

Assess further ?

No

Regret

Yes

Site vist

Site visit report

REF: AW4

SUPPLIER PREQUALIFICATION PROCEDURE

PROCUREMENT PROCEDURE MANUAL

REVISION NO: 001 DATE: 03/04/06 Page 3 of 5 APPROVED: HEAD OF GROUP PROCUREMENT

PM considers Site appropriate ? Yes

No

Regret

Supplier creation form

SSC adds supplier to Maximo on HGPs approval

Maximo

Contract or Send LPO to supplier

5.1.2

An SSE / Procurement Controller invites the applicant to collect a prequalification questionnaire. The questionnaire requests for information on: the applicants details; details of products and/or services the applicant is seeking to provide; applicants organisation structure and ownership; applicants quality management policy and any quality certifications held e.g. ISO certification; whether the applicant is an agent, broker, stockist, or manufacturer of the product; contracts undertaken by the applicant over the last two years; environmental, ethics and occupational health and safety policies; and audited financial statements for the last three years - mandatory. A sample prequalification questionnaire is provided in the appendices. The Procurement Controller responsible analyses the questionnaire completed by the applicant to determine suitability of the supplier. At this stage the analysis is focused on the applicants financial position, track record and past experience and commonality as

5.1.3

REF: AW4

SUPPLIER PREQUALIFICATION PROCEDURE

PROCUREMENT PROCEDURE MANUAL

REVISION NO: 001 DATE: 03/04/06 Page 4 of 5 APPROVED: HEAD OF GROUP PROCUREMENT

regards quality, environment, health and safety standards compliance. The Procurement Controller should apply judgement based on the value and criticality of the items the applicant would like to provide. A report detailing the analysis results is made. 5.1.4 If based on analysis of the questionnaire the Procurement Controller finds the applicant suitable, he should seek the PMs approval to carry out a site visit. Otherwise, the Procurement Controller arranges for a letter of regret to be sent to the applicant. Site visits need to be carried out by a representative of the purchasing department (Procurement Controller, or SSE), representative of the Quality assurance department (in the case of production materials) and a representative of the user department. During the site visit the survey team evaluates the: location of the suppliers business premises; whether the applicant is duly registered and licensed; competence of management and applicants technical skills; source of the suppliers goods; condition of the suppliers premises and production process including storage facilities and health and safety provisions; state of machines in use and assessment of their production capacity; ethical and environmental conditions; and existence of standard quality compliance programs If the applicant seeks to provide production materials the PM may require a sample of the product to be tested by Quality Assurance Management. The survey team prepares a report on the visit detailing their findings and recommending if the applicants should be registered as a supplier. All members of the survey team are required to sign off the report. The team submits the survey report to the PM and H-GP for review. The H-GP makes the final decision on whether to adopt the supplier. The Procurement Controllers should file all the documents (pre-selection questionnaire, site visit report) used to support adoption of the suppliers. After the H-GPs approval the applicant will be asked to submit a bid.

5.1.5

5.1.6 5.1.7

5.1.8 5.1.9

REF: AW4

SUPPLIER PREQUALIFICATION PROCEDURE

PROCUREMENT PROCEDURE MANUAL

REVISION NO: 001 DATE: 03/04/06 Page 5 of 5 APPROVED: HEAD OF GROUP PROCUREMENT

5.1.10 A supplier who is pre-qualified to provide a particular item, category of products, or services will not be used to provide any other item, goods or services. 5.1.11 If there is need to use a supplier to supply a category for which the supplier was not originally pre-qualified, such a supplier will be pre-qualified afresh. 5.1.12 While it is desirable to subject all suppliers to this prequalification procedure, it may not be practical to apply the procedure to some suppliers. This will mainly be suppliers who are the only providers of the item, local authority service organisations, international governmental and government bodies / Departments. When selecting such suppliers, the PM responsible for the goods to be procured will have to recommend exemption of the supplier from prequalification. The category PM will document reasons for the exemption and the documentation will be approved by the H-GP.