source+selection+procedures+(formal+or+informal)

The vendor/supplier selection process may be as simple as using cash in a store and leaving with the product to carry home (legally and subject to applicable VAT and customs constraints) or as formal as publicized advertising of the requirement (1) followed by a detailed, transparent evaluation of proposals for issuance of an award decision. In strictly private sector, commercial purchasing, the process is usually simple and relies upon the commercial marketplace for advertising and customer “goodwill” (reputation) or as a final resort the judiciary (court system) for enforcement. It still requires, however, a reasonably predictable and reliable process for making selection (to retain vendor and shareholder trust) and an infrastructure of enforceable laws for assuring payment and post award support such as warranty. **// Some Definitions //**

// Requests for information (RFIs) // can ask for product data, availability and general pricing. //Sources sought announcements// and requests for //Expressions of Interest (EOIs)// ask for qualified vendors interested in submitting proposals. Types of //Tenders// asking for a response in the form of a quote or proposal from prospective vendors include: //Invitations for Bid (IFB)// asking for products that meet specific technical and delivery needs so that an order can be placed on the basis of price alone; //Request for Quotes (RFQs//) informally or formally asking for prices and terms of delivery sometimes including product information – without obligation to award; and //Request for Proposals (RFPs//) that are usually a formal tender request whereby the buyer (usually public sector) is committing to a purchase. The World Bank has provided bidding documents to its “client agencies” for the purchase of goods that can be found on their website by [|clicking here].

Generally, the lower the price (e.g. <€100k) the simpler the selection process for both private and public customers…provided there are no other special requirements that place special importance on selection of a vendor such as capacity building and socio-economic goals for public agencies or long-term framework agreements for both public and private sector users. From a legal perspective, elements of an enforceable selection require that there be a valid offer (e.g. of payment) and acceptance (e.g. to deliver) between competent parties (e.g. two legal business entities) for a commercially available (e.g. in the general marketplace) product (2). Simplified purchasing or [|“shopping” as the World Bank] uses the term provides a structured approach that can be used by both public and private sectors.
 * // Elements of the selection process //**

Differences between selection procedures in the __ public and private sectors __ are significant owing to public accountability, socio-economic objectives and government oversight. A list of websites providing purchase and procurement guidelines that address selection processes can be accessed by __ clicking here __. In addition to those listed, a straightforward explanation by the County of Dublin Vocational Educational Committee of a formal selection process is [|available to the public] at []. .  Otherwise, a balanced approach to the selection process for a small commercial cross-border purchase (~€100k) would be:
 * // What procedures are appropriate? //**
 * to obtain three product quotes by e-mail request or published catalogue,
 * confirm product availability (time & place of delivery),
 * confirm vendor responsibility (business integrity & capability) using a credit bureau or third party service provider,
 * decide upon currency and
 * place the order DDU [1] (or DDP if practical) using a standard purchase order format [2] that includes:
 * Names of Parties (with nationality)
 * Date & Contact information
 * Terms of Payment (e.g.CIP, amount, date after shipment, delivery, acceptance) (3)
 * Description of Product using [|HS codes] and
 * Place & times of delivery

To assist with this process, the following guidelines follow existing World Bank standards for application of shopping methods. Informal source selection is appropriate: Because there is an increased risk of __ abuse and corruption in purchasing __ using informal methods, its application should be used only when the savings in cost and time is clear, and the proper selection evident. Informal purchase selection methods are not intended only as an expedient to by-pass more competitive methods or fraction large procurements into smaller purchases solely to allow the use of shopping. When specifications are complex or the type of procurement requires an elaborate, detailed evaluation system (i.e., past experience, special manufacturing skills, complex delivery schedules, etc.,) that needs substantial documentation, a formal bidding process is appropriate. Most public and private purchase guidelines, including the WB, recognise the usefulness of having at least three responsive (to the user’s product needs) bids from qualified bidders (vendors). Comparison of two quotations is justified only when there is evidence that there are only two reliable sources of supply (national or foreign as the case may be). Only one qualified source may require written justification of the price. It is possible that not all the suppliers invited will respond to the invitation for bids/request for quotations. To minimize the risk of getting only one or two quotations, customers should request bids from more than three prospective vendors. Buyers should exercise due diligence to insure vendors are reputable, well established, and regular, established suppliers of the products being purchased.
 * To purchase small amounts or low value off-the-shelf products with standard specification commodity codes when competition has been established in the market place by the sale of substantial quantities of the product to the general public, and
 * In emergency situations such as relief and repair type operations including re-establishment of utilities, communications, shelter, transport, business operations and vital supplies which may result from unforeseen disaster. loss or conflict. These situations may justify only a price comparison to establish reasonableness.

Bids are requested letter, fax, telex, or e-mail, (with proof of receipt and record keeping). The request includes the description and quantity of the goods, as well as the required delivery time and place for the goods or services, including any installation requirements, as appropriate. The requests should be issued to prospective vendors at the same time and they should indicate when quotations are needed. Prices for goods supplied from within the customer’s country (including previously imported items) are normally requested to be quoted EXW (ex works, ex factory, ex warehouse ex show room or off-the-shelf, as applicable), including all custom duties and sale and other taxes already paid or payable on the raw materials and components. For goods from outside the country of delivery (i.e., not previously imported), prices are normally requested CIF or CIP. The award decision should then be recorded along with its rationale and kept for audit, as needed. Public and Commercial Users of this Guide may want to review information on the procurement systems of countries having received a contract procurement assessment review by the World Bank. These CPARs are available for examination at []
 * The vendors should be requested to submit their quotations in writing by fax, telex, letter, or e-mail. Bid and performance bonds (securities) are not generally used in commercial or public small purchasing although country requirements may differ in this area. There is no requirement for strict time and date for submission of bids and for a public opening, but bids should normally be received by the expected date of submission of quotes which would be within one or two weeks of the initial request. Unless there is extreme urgency or there are already three or more quotations available, the customer may give a reasonable amount of additional time, say three more days, to get additional quotations. At this point the customer may proceed with comparison of the bids received and make an award.
 * Evaluation (comparison) of bids is conducted by adding other costs that could not have been foreseen by the vendor such as the estimated cost of inland transportation and insurance, if any, to the final destination. For purposes of comparison, prices are converted into local currency at the exchange rate on the day of invitation of the quotes or the day of comparison. The lowest priced offer is selected. Purchasers may exercise discretion in selecting a quotation that is not the lowest priced, as far as there is a good justification. For example, a slightly higher price may be justified for faster delivery or immediate availability in cases of extreme urgency, when late delivery may result in heavy consequences for the purchaser. In such cases, the intention should be indicated in the request for quote.

The primary objectives of purchase selection procedure is to ensure:
 * // Summary //**

The needs of the user have been met
 * Best value for money is achieved.
 * Maximum advantage is taken of the Customer’s purchasing power.
 * Transparency and Accountability.
 * Equality of access to qualified suppliers by providing an open basis for the selection of suppliers.
 * Compliance with government regulation and harmonization with international standards, regulations and directives.
 * Adherence to the highest ethical standards.
 * Avoidance of restrictive purchase practices, and
 * Prompt payment

The WB agencies, MDBs, government and independent organizations set forth under __ Purchasing Guidelines & Forums __ maintain procurement websites providing guidance on procurement policies and systems that while reflecting their own special requirements are in general agreement regarding the need for objective, open, transparent and non-restrictive selection criteria and tendering procedures: [|Acquisition Central (a U.S. purchasing information site)] [|__Asian Development Bank__](AsDB),[|__African Development Bank__](AfDB),[|__Black Sea Trade and Development Bank__](BSTDB),[|__Caribbean Development Bank__](CDB),[|__Council of Europe Development Bank__](CEDB),[|__European Bank for Reconstruction and Development__](EBRD),[|__European Investment Bank__](EIB), [|European Union] [|__Inter-American Development Bank__] (IaDB),[|__International Bank for Reconstruction and Development (IBRD) Guidelines for Borrowers__] ; and [|__Islamic Development Bank (IsDB)__]
 * // Other Links and References //**

[|The World Bank Procurement Policy & Guidelines]

[|World Trade Organisation (WTO)] – Government Procurement gateway

[|UN Procurement Manual] ,

(1) In publicized or “advertised” purchasing/procurement, the customer’s needs are posted on the buyer’s website, trade journals, chamber of commerce websites, and/or public media. The customer’s objective is to obtain maximum practicable competition in order to confirm price reasonableness (usually with three or more price quotes), obtain timely delivery, evaluate vendor credibility (business integrity) and insure product quality. These objectives are reachable for “off-the-shelf” products in the commercial marketplace without extensive advertising – sometimes jus a visit to the vendors or some e-mails.

(2) There are other less precise requirements for an order to be enforceable such as “sufficient consideration” to provide the seller reasonable monetary value, “meeting of the minds” to assure proper understanding between parties and reasonable expectation of performance to prevent impossible product specifications.

(3) [|Incoterm] for Delivered Duty Uncleared/Unpaid as opposed to “Paid”. A vendor offering commercial products in substantial quantity to the general public in cross-border trade will normally know the customs duties on their products.

(4) A listing of components for the commercial PO has been provided by the International Purchasing and Supply Chain Management Institute’s “[|Purchasor's Checklist for necessary Terms and Conditions in an Agreement]” available at []

(5) **CIP "Carriage and Insurance paid to..."** The seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any additional costs occurring after the goods have been delivered. However, in CIP the seller also has to procure insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller delivers the goods to the carrier nominated by him but the seller must in addition pay the cost of carriage necessary to bring the goods to the named destination. This means that the buyer bears all risks and any other costs occurring after the goods have been so delivered.'Carrier" can mean any person who, in a contract of carriage, undertakes to perform or to procure the performance of transport, by rail, road, air, sea, inland waterway or by a combination of such modes.
 * CPT “Carriage paid to..."**