NATIONAL AVIATION COLLEGE

MA Program in Logistics and Supply chain

Management

Course: Sourcing and contract Administration

Group Assignment; Question [1, 2, 3, 4]

Compiled by:
1. Haymanot Waltenigus Id No.Glsr/134/15
2. Tsige Mamo Id No.Glsr/133/15
3. Hawan shigute Id No.Glsr/187/15
4. Meron Samuel Id No.Glsr/122/15

Submitted to: Dr Temesgen Belayneh, (PhD)

March, 22/2023

Addis Ababa, Ethiopia

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Assignment, question No 1: Critically examine the legal frame works

and procedures of the Ethiopian government procurement system
Legal frame works

Legal System (i.e. Common/Civil Law; Socialist; Shari’a; other) Civil Law.
Form of government (i.e. federal or centralized)
Ethiopia has a federal structure of government comprising of the Federal Government and nine

(9) Autonomous states vested with powers of self-administration under the 1995 Constitution. Know a
day Ethiopian Autonomous states are around thirteen
The Constitution contain none provision directly bearing on public sector Procurement.
World Trade Organization (WTO) Agreement on Government Procurement.
Ethiopia is not a signatory to the World Trade Organization Agreement. Since 1997 it has been Granted
observer status in WTO.
Basic contract law contain any provision directly bearing on public sector

Procurement? The provisions of “Title XIX – Administrative Contracts” under the Civil Code of
Ethiopia (Proclamation No. 165 of 1960) have applicability to procurement by public bodies1, without
Limiting the special provisions made for public procurement under the Financial Administration

Proclamation No. 57/1996” and the “Council of Ministers Financial Regulations No. 17/1997” (See
Answer to Item 6 below).
Separate body of law, which regulates public sector procurement? (If so, Identify and specify
whether it is a law, ordinance, presidential or ministerial decree, etc.)
The “Federal Government of Ethiopia the Financial Administration Proclamation No. 57/1996”
(Hereinafter referred to as “the Financial Proclamation”), which took effect from 19 December
1996 deals inter alias with “procurement and contracts” by public bodies and public
disbursements. This Financial Proclamation constitutes the Procurement Law issued pursuant to
Article 55(1) of the Constitution of the Federal Republic of Ethiopia. Articles 68 and 69 of the

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Financial Proclamation authorize the issuance of “Regulations” and “Directives” by the Council
of Ministers and the Ministry of Finance respectively. Pursuant to the above-said Financial
Proclamation, the “Council of Ministers Financial Regulations No. 17/1997” (hereinafter referred
to as “the Regulations”) effective 1 July 1997 - have been issued, which contains more detailed
provisions on “Procurement contracts” and deals with procurement principle, “supplier’s
“Retention of Records”.

The “Ministry of Finance Directives – Procurement and Contracts” (hereinafter referred to as

“The MOF- Directives”) is presently being finalized. The Bank has provided to the Government
its comments on the draft MOF-Directives dated 9 June 1997 though they have not been
incorporated so far in the text. A “Procurement Manual” (revised 24 March 1999) was prepared
to provide guidance to public bodies in the organization and undertaking of procurement of goods
and services and the Bank has provided comments on the draft Procurement Manual. Though
already useful, the Manual is incomplete and should be improved.

Other bodies of law regulating associated aspects of procurement contain provisions, which
are directly related to problems identified within the local system (e.g. labor, tax, customs,
insurance, national standards, banking, foreign exchange laws or controls, etc.)? (If so,
describe) Under the Commercial Registration and Business Licensing Proclamation No. 67/1997,
a businessperson before starting a commercial activity shall make an application to the Ministry of
Trade and Industry or such other appropriate authority for the issuance of a license to undertake
the commercial activity.

Under the Ethiopian Foreign Exchange Control Regulations, the business person who is registered
to undertake a commercial activity, who desires to import goods and services, should make an
application to the Exchange Control Department of the National Bank of Ethiopia (NBE) for the
issuance of an import license and for the purchase of foreign currencies needed for the import. The
importer will furnish to the Exchange Control Department of NBE, the details of the proposed
purchase price to be paid with copies of at least two price quotations received for the import. The

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Market Intelligence Department of NBE checks whether the price for the proposed import is fair
and then authorizes the participation of such applicant in the foreign exchange auction, while at
the same time issuing business firm an import license. In some cases, where NBE considers that
the price is not fair, it asks the importer to search for alternative sources and gives the addresses of
firms who can supply the alternatives. However in the case of a public body or parastatal, an import
license is not required; and they would apply to the National Bank of Ethiopia (NBE) for an import
permit and for the requisite amount of foreign currency through the MOF with the statement that
they have enough budget to cover the foreign currency required. Following issuance of the import
license/permit by NBE, the importer, whether private or public organization, participates in the
weekly public auction held by NBE for sale of foreign exchange and purchases his requirements
of foreign exchange. Under Ethiopian Customs Regulations read with the “Reestablishment and
Modernization of Customs Authority proclamation No. 60/1997”, import duties are payable on
goods imported, unless exemptions to government or non-government organizations to import duty
free all capital goods machinery, equipment and initial spare parts have been authorized by the
Ethiopian.

Investment Authority under Proclamation No. 37/1996 and/or special exemptions granted by t
Federal Government based on international agreements etc. The required documentation for
clearance of imported goods from the Customs Authority are (i) the import license or permit, called
the Bank permit, (ii) the bill of lading, (iii) the packing list, and (iv) other necessary documents as
may be asked by the Customs Authority. All the items that enter Ethiopia through the authorized
transit routes either from Djibouti or from Bure, a customs checkpoint at the Eritrean border, are
cleared expeditiously. Although the public bodies and the parastatals claimed that it takes about
three to four months to clear the items from the Customs Authority, the Manager Leghar Customs
claimed that as per their study 80 percent of the cases are cleared in 5 days or below, while the
remaining 20 percent took more time due to incomplete documentation. Under the Ethiopian
Authority for Standardization Establishment Proclamation No. 328/1987 read with the Standards

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Marks and Fees Council of Ministers Regulations No. 13/1990, all the standards to be used in
Ethiopia were compulsory standards to be prescribed by the Ethiopian Standards Authority (ESA).
However such standards need not be Ethiopian standards. With a view to set the matter very clear,
a new proclamation, called the Reestablishment Proclamation has been approved and is now under
printing. Under this proclamation, the areas where standards are applicable are broken down into
two parts, namely compulsory standards and optional standards.

Compulsory standards will address health and safety concerns and will cover few items. In areas
where optional standards are prescribed, the end user or the importer can choose his own standards
and not be obligated to follow Ethiopian Standards, Because of this provision, public bodies,
parastatals and private organization can choose their own applicable standards in those areas,
which could be international standard or a national standard of another country. Be this as it may,
due to incorrect understanding of the legal requirements as to standards, all the public bodies and
parastatals reviewed, have required in regard to procurement not financed by external funding
agencies, the use of Ethiopian Standards in their bidding documents and have allowed the use of
international standards only where national standards are not available. This situation will stand
corrected in the near future after the release of the new Proclamation.

Different laws govern the procurement of goods, works and consultant services; The Financial
Proclamation and the Financial Regulations are applicable to procurement of goods, works and
consulting services. While the provisions of the MOF-Directives are applicable to procurement of
goods (except for vehicles) in its entirety, its applicability to procurement for works, construction
and procurement of consultancy services are restricted for reasons detailed below.

In the regard to procurement of vehicles, they will have to be made through the Road
Transport Authority (RTA), who have special prescriptions.

In regard to “certain areas as defined by Proclamation 4/1995, the Ministry of Works and Urban
Development (MOWUD), now Ministry of Infrastructure (MOI), is responsible for providing
guidance to public bodies in consultation with MOFED. In regard to procurement of consultancy

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services by public bodies, the Ministry of Economic Development and Cooperation (MEDAC),
now absorbed by MOFED, had the responsibility for preparing the list of approved consultants and
for preparing the directives relating to selection and appointment of consultants by public bodies.
No action however was carried out by MEDAC until the date of the report.

Assignment, Question No 2: What does quality assurance mean? How

can we be Appling quality assurance in sourcing expound the role of the
information system/technology for the supply chain souring and as
applicability to ensure quality assurance?
What does quality assurance mean?

Quality Assurance (QA) is a management method that is defined as “all those planned and
systematic actions needed to provide adequate confidence that a product, service or result will
satisfy given requirements for quality and be fit for use”. A Quality Assurance programme is
defined as “the sum total of the activities aimed at achieving that required standard” (ISO, 1994).
Any monitoring programme or assessment must aim to produce information that is accurate,
reliable and adequate for the intended purpose. This means that a clear idea of the type and
specifications of the information sought must be known before the project starts, i.e. there must be
a data quality objective. Data quality objectives are qualitative and quantitative specifications that
are used to design the system that will limit the uncertainty to an acceptable level within the
constraints allowed. These objectives are often set by the end users of the data (usually those
funding the project) in conjunction with the technical experts concerned. Quality Assurance for a
recreational water monitoring programme will, apart from helping to ensure that the results
obtained are correct, increase the confidence of funding bodies and the public. Quality Assurance
extends to all aspects of data collection from sanitary surveys to laboratory procedures. Unless the

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data can be checked they should not be included in any assessment; unconfirmed observations
have little value and can result in misclassification.

How can we be Appling quality assurance in sourcing expound the role of the information
system/technology for the supply chain souring and as applicability to ensure quality
assurance?
Quality assurance plays an integral role in digital transformation, though businesses often tend to
undervalue its importance. Many organizations allow software quality to lag behind other
objectives, but that lack of attention comes at a steep price. In 2020, the cost of poor software
quality in the US was approximately trillion. The fast-paced companies that realize the risks
involved have stopped treating testing as just a subsequent step in software development. They
incorporate quality assurance and testing activities right from the beginning when the requirements
are being discussed. In this article, we want to look at why quality assurance is important in
software development, discover QA team roles and responsibilities, and the benefits of testing
activities based on one of our projects emergency button app development. An expert QA engineer
on the project - Nataliia Kubai - will share her insights with us. Quality Assurance (QA) focuses on
processes that make sure software during its development meets the necessary business requirements
and quality standards.

Software testing is an integral part of software quality assurance. Testing involves tactical activities
to validate the function of a digital product and detect issues. With the help of numerous
techniques, software tools, and platforms, QA engineers can orchestrate and automate testing with
the goal of getting a completely reliable software solution.

According to the report by Global Market Insights, Software Testing Market size exceeded USD
40 billion in 2020 and is estimated to grow at over 7% CAGR from 2021 to 2027. The growth of
the industry is fueled by the following factors:

 Increasing adoption of AI and ML in automation testing

 Growing demand for DevOps services

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 Dominance of agile development environment

 Rise in the consumption of mobile applications

 Increasing digitalization in developing economies

The importance of quality assurance in the digital transformation process: To stay relevant in a

fastmoving marketplace, businesses are eventually pushed to embrace a digital transformation.

Though the process is time-consuming and costly, the effort invested is critical to securing
customer retention in the long run.

However, when organizations invest so heavily in digital solutions, they may wonder if the benefits
really outweigh the costs. And that is the case only if the quality assurance and testing processes
are in place.

When a business undergoes a digital transformation, it encounters challenges at multiple fronts

such as software, devices, and system interactions. The main challenge is to embrace
transformation without sacrificing product/solution quality and coordination of connected systems
while also delivering a smooth user experience.

During this transition, QA and testing services are essential to encounter any flaws as quickly as
possible, in the earliest stages of the software development cycle to prevent damage on a bigger
scale later on.

We can outline the following benefits of QA:

QA teams ensure the software meets customers’ requirements and expectations more fully.
Involving the QA team at the beginning and on every other step of the development cycle allows
testers to question the business logic, detect any contradictions in the requirements, make sure the
software product has a solid foundation, and that the development is going in the right direction.
QA and testing services ensure your business gets a final product that is perfectly aligned with
your business vision and requirements.

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With QA and software testing in place, businesses can easily scale their digital products. If
you want your business to grow, regularly update your software, expand its functionality, but not
lose its position as a high-quality product, you can’t ignore testing. While adding new features, the
product's integrity is at risk. With agile testing, you can count on continuous improvement of your
product and also save time on creating new tests each time your digital solution gets changed.

QA processes help to save costs by detecting and fixing bugs sooner rather than later.
Adopting testing when the first issues arise may turn out more complex and damaging than you
thought. Finding QA experts at the last moment and spending lots of costs on urgent debugging
will be a waste of time and resources which could be spent on your product’s growth.

QA shifts focus from debugging to bug prevention. Having a consistent strategy for maintaining
a high quality of the software paired with agile methodology practices will result in saving more
time for testing UX design and looking for improvement possibilities. A QA engineer makes sure
that using the software for end users is easy and highly intuitive.

Software QA and testing services during the digital product development:

The increase of consumer interest in digital services such as e-learning, online banking, online
shopping, and others, is what fuels the software testing market demand. These digital services are
highly dynamic so there is a great need for businesses to constantly update their products and use
efficient, cost-effective procedures to spot different flaws.

QA and testing services reinforce the reputation of a brand by providing a high-quality product to
customers. By detecting bugs and fixing them in time during the software development process,
businesses ensure the continuous improvement of their services and steady growth. To maintain
the necessary quality standards that meet customers’ expectations and requirements, QA and
testing teams use different methods and tools to:

 Create the QA/testing environment required for the software testing success. A testing
environment is a setup of software and hardware for the teams to execute test cases.

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 Design test cases that include the test steps, conditions, and expected results. They ensure
software testing is done in line with the set requirements.

 Perform manual and automated tests during the overall software development life cycle
and maintenance to ensure that product is cleaned up from top to bottom.

 Keep the test documentation at hand with the necessary test cases and set the order in
which different functionalities of the app have to be tested.

 Manage multiple apps, services, and platforms to ensure the smooth development of
complex systems.

Investing in QA and testing is highly beneficial for any digital project. To have a better
understanding of the matter, we've asked a QA engineer at Apiko to tell us more about the purpose
and importance of quality assurance, team responsibilities, and a testing process on one of our
software development projects. So, let's read on.

Seven Steps to Ensure Quality across the Supply Chain

The one safeguard in ensuring that defect-free products make it into the hands of consumers and
companies is a concerted focus on quality management across the supply chain. Not only can
quality control bolster the supply chain, but, according to the aforementioned survey, it can add an
average of $156 million to bottom-line revenues. What, then, are the impediments to good quality,
and how can companies achieve excellence across their supply chains?

Quality Challenges

With the pandemic continuing to disrupt supply chains, manufacturers are scrambling to find
suppliers with enough raw materials, while going through their usual rigorous quality reviews of
those suppliers. This shortage of adequate supplies and suppliers is in many cases the root cause
of quality issues today.

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Added to this, the long tail of the supply chain makes it next to impossible to identify and isolate
a product issue. And differing regulatory requirements within specific regions or countries, as well
as inconsistent operating procedures and policies across suppliers, can make it difficult to maintain
and enforce a consistent level of quality.

Despite these challenges, today’s consumers and businesses demand an unprecedented abundance
of goods on store shelves, cars in dealership parking lots, and medications in pharmacy windows,
whenever and wherever they need them.

Unfortunately, the optimization of supplier relations is still a developing quality-management

strategy, and it can be difficult to find the talent and resources required for both manufacturers and
suppliers to address the problem strategically.

Adopting a Quality Management Practice

In order to address the growing complexity of supply chains and put quality front and center,
manufacturers should take the following seven key steps:

 Establish a PPAP. For manufacturers relying on parts across the supply chain, it’s
important to evaluate the components and subsystems received from each individual
supplier, and to establish clear design specifications for better compliance with those
standards. An effective Production Part Approval Process (PPAP) enables you to manage
changes to products and processes and more easily evaluate future suppliers.

 Set up a receiving and inspection process. It’s critical to integrate the process of receiving
materials from suppliers and to set up inspection schedules based on supplier performance
tendencies. At minimum, a skip-lot sampling process should be implemented. These
processes will track and evaluate the quality of goods in real time, reduce defects in finished
products, and ensure consistent inspections.

 Implement SCAR. Nonconforming materials, missed or delayed deliveries, customer

complaints and other infractions can require Supplier Corrective Action Requests

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(SCARs). This involves conducting a root-cause analysis, corrective planning and risk
analysis. The goal is to ensure visibility of anything that’s out of specification.

 Qualify suppliers and materials. Managing the Approved Supplier List requires that you
deliver real-time measurements of supplier and material performance. The review and
approval workflow should provide transparency and control over the qualification process.

 Collect supplier ratings. You should have centralized visibility into supplier performance
through quantitative and qualitative rating information in all aspects of a supplier
relationship.

 Take an enterprise-wide approach. Expand the role of supplier quality management from
just the quality team to everyone who has a relationship with your suppliers. Your
procurement team can be a strong ally in ensuring proper supplier quality.

 Involve suppliers. Make suppliers part of your quality system. Your quality issues need to
be your suppliers’ problem as soon as they arise. Suppliers should be involved in your
quality-management system (QMS) and workflows as accountable members of the process
and developers of the solution. In order to do this, systems must be seamlessly integrated
to bridge the technology gap and enable constant communication across systems.

Unfortunately, many of these processes and protocols are done manually, which can cause errors,
eat up time and consume resources. The key to becoming a supply chain leader and gaining these
benefits is finding unique ways to employ modern technologies and strategies to maximize supply
chain performance, rather than wasting time trying to optimize outdated systems and processes.
According to an MHI Industry Report, companies that draw on available tech tools will be able to
transform their supply chains.

Supply chain complexity continues to grow, along with the high price of product defects and
recalls. Implementing a quality-management approach across the supply chain not only minimizes
the number of quality issues, but ensures that manufacturers and their suppliers all understand what

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is expected of them, so they can uphold the highest standards of quality. From the concept of a
product to its final destination, quality is a journey that everyone is on together.

Assignment question No 3: What do you mean by procurement audit?

What are the processed of procurement audit? Finally state
framework of procurement audit.
What do you mean by procurement audit? The history of public procurement auditing in
Ethiopia does not go far from a decade. According to Brooks’ and Demissie (2009), during the
Derg regime, the functions of public procurement were handled by the Ministry of Finance.

Procurements were made centrally with the tendering committee having the responsibility to made
decisions on procurements. The legislative framework governing the procurement system in the
country was very poor that only a procurement manual was issued in 1981.

Though public procurement shares 60 percent of the total public spending, it hasn’t been given due
attention so farin the country (Dubale, 2014). Until recent years, over-sighting of public
procurement has been the responsibility of a smaller unit (Department) within the Ministry of
Finance and Economic Development. In recent years, however, it has been combined with the
Property Administration Department and renamed as Public Procurement and Property
Administration Agency (PPA).

In 2009 Federal Democratic Republic of Ethiopia has reestablished the Public Procurement and
Property Administration Agency, directly responsible to the ministry of Finance and Economic
Development (MOFED), in Proclamation No. The Ethiopian Public Procurement and Property
Administration Agency, further, has four main departments among which is the Complaints
Review and Resolution Department. The Agency has a committee to receive complaints from
candidates or bidders. According to CPAR report (2010), it is difficult for the committee to act
independently as far as it is dependent on MoFED. First, members of the Committee are selected

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by government in such a way that the Ministry of Finance and Economic Development will be the
chair and Public Procurement and Property Administration Agency, Public Enterprises, Public
Bodies, the Ethiopian Chamber of Commerce and Sector Associations (ECCSA) all serving as
members of the Committee. Apart from the Proclamation, there is also the Federal Government
Public Procurement Directive issued by the Minister of Finance and Economic Development that
entered into force on 8th day of June 2010, which defines responsibilities of heads of public bodies
in making arrangements necessary for procurement audit or inspection to be conducted.

What are the processed of procurement audit?

According to FPPPAA audit manual 2010, to be effective, the procurement audit processed for
public bodies should ensure that all public bodies partly of wholly financed by the Federal
Government budget should be subject to the procurement audit by the Agency to ensure value for
money in the use of public funds for procurement and promote better transparency and
accountability. Public procurement Auditing Standards that lay down the basic standards that
auditors are expected to meet in conducting their audits, put stress on the importance of
independence and professional competence of staff; exercising. Code of Ethics for public
procurement Auditors (FPPPAA,2010), which is a comprehensive statement of the values and
principles guiding the daily works of auditors, should be viewed as a necessary complement
reinforcing the public procurement Auditing Standards in the discharge of auditing function. Any
deviation or delinquency in the professional conduct or any improper conduct in their personal life
places the integrity of auditors and the quality/validity of their audit work in an unfavorable setting,
and may raise doubts about the reliability, effectiveness and competence of the FPPPAA audit,
itself.

Finally state framework of procurement audit.

Mugenda and Mugenda (2003) define a conceptual framework as a concise description of the
phenomenon understudy accompanied by a graphical or a visual depiction of the major variables
of the study. Reichel and Ramey (1987) also define conceptual framework as a set of wide ideas

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and principles taken from relevant fields of inquiry and used to structure a subsequent
presentation. It is research tools, intends to assist a study to develop awareness and understanding
of the situation under examination and to communicate with the situation. The main objective of
the study is to examine the factors affecting the public procurement auditing to become effective
and enhanced rolein promoting greater transparency, accountability and good governance in the
public administration of federal government of Ethiopia. The independent variables identified are;
legal and regulatory framework, auditor’s competence, audit independence and Record
Management system in the auditing function and depend invariable is effective public procurement
audit.

Legal Framework

Auditor’s competence Effective public

Procurement Audit
Auditor Independence

Record management

Source: Tariku burka, 2020

Figure 1: conceptual for effective public Procurement auditing

Assignment question No 4: Conduct comparative analysis between the

institution and public procurement (you are supposed to see the
comparison from multiple perspective) examine again the meaning and
scope of service procurement
The procurement practices in federal organizations of Ethiopia lack integrity and accountability
due to non-transparent processes. Public procurement requires a high level of integrity to the
procurement team and leaders as it demands the attitude of individuals and leaders in addition to

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knowledge and skills. In federal organizations, team spirit and honest discussions on weaknesses
of the procurement system are very weak, and corrective actions are rarely considered to
discourage non-competitive practices. Consistency of words and actions, honest discussions of
problems and opportunities, etc. in procurement related tasks is essentially buffers team

Public procurement refers to the purchase by governments and state-owned enterprises of goods,
services and works. As public procurement accounts for a substantial portion of the taxpayers’
money, governments are expected to carry it out efficiently and with high standards of conduct in
order to ensure high quality of service delivery and safeguard the public interest.

The CPAR has reviewed the Ethiopian procurement system against the generally accepted
international principles of sound procurement fiduciary management, meeting the criteria of
transparency, economy and efficiency necessary for an optimal use of scarce public funds. These
criteria are: (i) existence of a comprehensive and transparent legal framework, including a clear,
well defined organizational structure to ensure the application of procurement laws with adequate
monitoring; (ii) the use of modernized procurement procedures and practices; (iii) a proficient and
evenly distributed procurement staff; (iv) existence of an independent control mechanism,
including a functioning system to treat bidders' complaints and carry out independent audits, and
(v) anti-corruption measures with effective sanctions. Using these benchmarks, the team has found
that these criteria are only partially satisfied in Ethiopia, and that improvements are necessary.

Procurement = Strategic Sourcing + Purchasing

The Procurement function includes:
1. Strategic Sourcing
 Strategic Category Management
 Strategic Sourcing
 Supplier Relationship Management
2. Purchasing
 RFx processes

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 Contract Management
 PO issuance
Scope of procurement focuses on

 Identify opportunities
 Manage internal operations
 Achieve objectives
 Evaluation and selection of suppliers
 Increasing use of sourcing teams
 Review of specifications or statement of work
 Review the requirements for the material or service being provided
 May be able to suggest alternative standardized materials that can save the
organization money
 Periodic review of requisitions can allow greater leveraging of requirements 
Acting as the primary contact with supplier

Integrating Procurement Capacity with overall Public Financial Management

Has the Bank been able to integrate advisory work in procurement within a framework of public
financial management and efficient public expenditure?
(Effectiveness).
Assisting Global Good Practices in Public Procurement
To what extent has the Bank been able to coordinate/harmonize its procurement processes with
other MDBs/IFIs/other partners in development in accordance with the global aid effectiveness
agenda? (Effectiveness)
v. To what extent has the Bank been able to move toward the use of country systems, as envisaged
in the aid effectiveness agenda? (Effectiveness)
The analytic framework refers, as noted above, to broad evaluation criteria:

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 Effectiveness. The evaluation will assess, first, the effectiveness (in terms of achievement
of results) of the Bank’s developmental support to countries for improving their
procurement systems and the extent to which the Bank’s lending vehicles or advisory
services have been able to make a lasting impact on countries’ procurement functions and
performance.

 Relevance. The evaluation will examine the relevance of the Bank’s current procurement
policy, from the point of view of meeting its own objectives; 29 supporting new
institutional lending directions and delivery mechanisms, and differentiating between
clients according to their needs and capacities.
 Efficiency. IEG will provide evidence on the process efficiency of procurement, for
Example, in terms of time spent on the procurement cycle, or stages and levels of clearance.
This would be based on data on contracts and regional procurement databases maintained
by management that include tracking information on procurement process, triangulated
with information from interviews and field visits.
A key methodological challenge will be the measurement of effectiveness of Bank interventions for
country development. This will be undertaken through the triangulation of information on the
following areas: (i) using time series of diagnostic work on the state of procurement in individual
countries; (ii) supplementing core diagnostic work with analyses of country progress in
procurement described in loan documents; and (iii) seeking inputs from task team leaders and
procurement experts in specific areas. Current diagnostic tools such as the CPARs and MAPS
exercises will be utilized to the extent available, under (i) above. Examine again the meaning
and scope of service procurement

What is Services Procurement?

Services Procurement is the process for requisitioning people-based services at an enterprise-level

with an agreed-upon scope and deliverables. In short, it is the strategic outsourcing of Labour to
an individual or organization for a specific purpose.

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Workers obtained under a services procurement solution are found outside of an organization’s
permanent workforce. They include project-based workers such as consulting services and these
service providers are managed through a Master Services Agreement (MSA), with one or more
Statements of Work (SOW) used to monitor and deliver agreed-upon Service Level Agreements.
Those are a lot of acronyms, we know.

What are the benefits of managing Services Procurement through an MSP/VMS?

Cost savings

Cost savings can be captured through supplier and contract management negotiations, competitive
bidding through RFPs, process efficiencies, greater supply chain management, and greater
budgetary controls. These are the areas where real value can be delivered, as project-based work
can be one of the most significant spend categories for human capital within an organization. It’s
critical those services are purchased as cost effectively as possible.

Enhanced quality

Having subject matter experts manage the bidding allows for quality improvements. This happens
through tracking supplier performance and optimisation, a more robust RFP process, detailed
spend analysis, and the ability to report on deliverables.

Improved workload management

Managing services procurement through an MSP/VMS enables procurement to become more

strategic to the business. This is achieved by freeing up time they would spend trying to manage
multiple projects and services throughout various business lines.

Increased compliance

Centralizing services procurement gives you greater control and visibility over this category of
spend. It can also mitigate security risks, increase compliance to any milestones in place, and
ensure suppliers comply with all company policies. Worker misclassification is one of the biggest

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risks companies’ face, which can be more difficult to track and manage without centralization.
This can result in severe monetary penalties.

Best practices

MSP and VMS organizations can offer industry best practices collected from managing other
clients’ services procurement spend. Knowledge sharing and offering lessons learned allows
businesses to get the most out of their purchasing processes, negotiating best buys, and offering an
edge over the competition.

Scope of service procurement

The way we think about the scope of procurement is always with the end in mind: what are the
result(s) or output(s) that the business or stakeholder desire that enable them to be more successful.

The tasks and activities a Procurement person or department may execute are a means to that end:
supplier evaluation, supplier selection, RFx, contract negotiation, spend analysis, etc.

If you execute well and deliver the results, the most interesting (and fun) part Procurement is
actually transforming the scope from delivering traditional, tactical activities into delivering
thought leadership, strategic planning, and true business partnership.

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