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Best Practices of IT Procurement

Version: 1.0 Date: 8 Aug 2007


e-Government Program (yesser) 3

Table of Contents

1. Executive Summary .......................................................................................................... 5 2. Introduction ....................................................................................................................... 6 2.1. Purpose ............................................................................................................................ 6 2.2. Document Structure .......................................................................................................... 6 2.3. How to Read this Document ............................................................................................. 7 3. Background and Context .................................................................................................. 8 4. The Stages in Procurement .............................................................................................. 9 5. Planning the Procurement .............................................................................................. 10 5.1. Defining the Outcome ..................................................................................................... 11 5.2. Defining Specifications ................................................................................................... 11 5.3. Researching the Market .................................................................................................. 13 5.4. Identifying Risks ............................................................................................................. 14 5.5. Deciding on Timelines .................................................................................................... 15 5.6. Internal Assessment ....................................................................................................... 15 5.7. Acquisition Scenarios ..................................................................................................... 15 5.8. Identifying Alternative Opportunities ............................................................................... 17 6. Selecting a Procurement Method ................................................................................... 18 6.1. Public Tendering (مناقصة عاّمة) ............................................................................................ 18 6.2. Special (Select) Tendering (مناقصة خاّصة) .......................................................................... 18 6.3. Direct Contracting (التعاقد أو الشراء المباشر) ............................................................................... 19 6.4. Comparison and Considerations ..................................................................................... 20 7. Preparing the Procurement Artifacts ............................................................................. 21 7.1. Developing the Procurement Plan .................................................................................. 21 7.2. Preparing the Request Document ................................................................................... 22 7.3. Establishing the Responses Evaluation (Tendering) Committee ..................................... 26 8. Publishing the Procurement Request Document.......................................................... 27 8.1. Announcing the Procurement ......................................................................................... 27 8.2. Responding to the Bidders’ Questions ............................................................................ 28 8.3. Receiving the Bids .......................................................................................................... 29 9. Evaluating the Bids ......................................................................................................... 30 9.1. Bids Evaluation ............................................................................................................... 30 9.2. Bids Evaluation Report ................................................................................................... 33 10. Closing the Procurement ................................................................................................ 35 10.1. Negotiating the Contract ................................................................................................. 35 10.2. Announcing the Awarding of the Contract ....................................................................... 36 10.3. Canceling the Procurement ............................................................................................ 36 10.4. Handling Complaints....................................................................................................... 37 10.5. Reporting ........................................................................................................................ 37 11. Special Considerations ................................................................................................... 38 12. Appendix I – References ................................................................................................. 40 13. Appendix II – Glossary of Terms .................................................................................... 41



List of Tables

Table 1 - Sample functional and non-function specifications listing .......................................... 12 Table 2 - Sample Good and Bad practices in specifications development ................................ 12 Table 3 - Pros and Cons of the different procurement methods ................................................ 20 Table 4 -Request document verification checklist ..................................................................... 25 Table 5 - Suggested technical evaluation criteria ..................................................................... 31 Table 6 - Glossary of Terms ..................................................................................................... 41

List of Figures

Figure 1 - The stages in procurement ......................................................................................... 9 Figure 2 - Procurement planning steps ..................................................................................... 10 Figure 3 - Sample evaluation and negotiations approach ......................................................... 33



1. Executive Summary Procurement refers to the overall process of acquiring a product or service. Depending on the organization, it may include some or all of the following actions: identifying a need, specifying the requirements to fulfill the need, identifying potential suppliers, soliciting bids and proposals, evaluating bids and proposals, awarding contracts or purchase orders, tracking progress and ensuring compliance, taking delivery, and paying the supplier.

The Government of the Kingdom of Saudi Arabia issued a system called “Government Procurement and Competition System” based on the royal decree number (58M) on 4/9/1427 H. Shortly after that, in 20/2/1428 H the Ministry of Finance issued rules number (362) to further detail the system and they called it “Rules of Government Procurement and Competition System”. The regulation aims to set the policy and procedures of government procurement and sets the basic rules of all interactions between the government and organizations who wish to provide products and services to the government of Saudi Arabia during the procurement lifecycle. This regulation will be a base for this document and will be referred to as the Saudi Government Procurement and Competition System.

Typically, a number of stages are followed in procurement. Within each of these stages there are a number of activities that take place:

- Planning the procurement by defining the procurement outcomes, specifications, identifying the procurement options and scenarios, and identifying the risks and constraints on the procurement

- Selecting a procurement method; whether to execute the procurement by an open tendering, select tendering, or direct contracting methods

- Preparing the procurement artifacts including the procurement plan and the request document

- Publishing the procurement request by announcing the procurement to interested and potential bidders, responding to any questions of inquiries from the bidders, and eventually receiving the bids from the different bidders

- Evaluating the bids and selecting the winning bid by evaluating both the technical and financial aspects of all the bids

- Closing the procurement by negotiating and signing the contract, announcing the awarded contact, and handling any complaints that my come from unsuccessful bidders

This document analyzes the general Saudi Government Procurement and Competition System and defines more specific IT-related procurement process, taking into consideration international best practices and experiences of other countries in this field.



2. Introduction

2.1. Purpose The purpose of this document is to provide guidance in IT procurement. This operational guide promotes the achievement of value for money by providing practical information on managing procurement processes that lead to organizations entering into a purchasing agreement with a supplier or suppliers. This information meets the requirements of the Government’s procurement rules and regulations while also facilitating the delivery of good business outcomes.

The document targets the IT managers / Directors as well as all staff in the IT department who are involved in making decisions regarding the procurement of IT resources.

This document is based on best practices of other countries and international organizations (WTO, World Bank.. etc) while being aligned to the Saudi Government rules and regulations.

2.2. Document Structure The document can be navigated from one related subject to another, simply by clicking on the hyperlinks on the table of contents. The main sections of this document are:

- Background and context (section 3): provides a general definition for Procurement and a discussion of why it is considered an important process for governments and enterprises around the world

- The stages in procurement (section 4): provides an overview of the different stages in the procurement lifecycle which is described in more details in the following sections

- Planning the procurement (section 5): defines the planning activities that should be conducted prior to initiating the procurement process

- Selecting a procurement method (section 6) defines the different possible procurement methods in the Saudi Government Procurement and Competition System and discusses the pros and cons of each method

- Preparing the procurement artifacts (section 7): discusses the content of the main two artifacts in the procurement: the request document and the procurement plan

- Publishing the procurement request document (section 8): defines the mechanisms of announcing the procurement to interested bidders as well as the mechanism of responding to bidders questions and inquiries

- Evaluating the bids (section 9) discusses the criteria of selecting the winning bid by evaluating both the technical and financial aspects of all the bids



- Closing the procurement (section 10) discusses negotiating and signing the contract, announcing the awarded contact, and handling any complaints that my come from unsuccessful bidders

2.3. How to Read this Document For easier reading, this document uses the following notations:

This document contains a number of guidelines and recommendations that will help IT managers and other concerned staff in the IT department to conduct successful IT procurements.

All guidelines, recommendations and tips in this document are framed in a blue box similar to this one

It is also based on the Saudi Government Procurement and Competition System and provides analysis and mapping between the system and best practices. When applicable, the document identifies and suggests areas for improvement in the current system.

All the Saudi Government Procurement and Competition System standards and rules that are used as base for this document are

framed in yellow box similar to this one

All suggested areas for procurement process improvement are framed in an orange similar to this one

2.4. Referenced Documents The documents listed below represent relevant material to the subject of IT procurement and they provide details on their designated subjects:

- Best Practices of IT Budgeting

- Guidelines for Project Management

- Guidance for IT Strategic Planning



3. Background and Context Procurement refers to the overall process of acquiring a product or service. Depending on the organization, it may include some or all of the following actions: identifying a need, specifying the requirements to fulfill the need, identifying potential suppliers, soliciting bids and proposals, evaluating bids and proposals, awarding contracts or purchase orders, tracking progress and ensuring compliance, taking delivery, and paying the supplier.

Procurement in the Public Sector is considered a major administrative responsibility in any organization; governments around the world issued detailed regulations, policies and procedures to streamline and standardize the procurement process.

Regulations and policies of government procurement differ according to each government political direction. Some governments favor domestic procurement over international options in order to promote and develop the local industries, other governments focus on giving better opportunity to small business to support them in growing rather than procuring from large enterprises who are more established in the market, in other countries more focus is given to environment safety and recycling.. etc.

International organizations such as the World Trade Organization (WTO)1 and the World Bank2 have also issued guidelines and recommendations for government procurement in its endeavor to create homogeneous and effective government procurement in the current global markets.

The Government of the Kingdom of Saudi Arabia in its turn issued the “Government Procurement and Competition System” in 1427 H. The regulation aims to set the policy and procedures of government procurement and sets the basic rules of all interactions between the government and organizations who wish to provide products and services to the government of Saudi Arabia during the procurement lifecycle. This regulation will be a base for this document and will be referred to as the Saudi Government Procurement and Competition System.

Although IT procurement in the government should adhere to the government’s rules and regulations, this document sets a practical approach and interpretation of these regulations for the special case of IT procurement; it describes the regulatory mandates that need to be taken into consideration and discusses the areas of improvement in the current regulations to suit sophisticated IT procurement.

1 http://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm 2 World Bank Country Procurement Assessment reports: http://www-wds.worldbank.org/external/default/main?pagePK=64187835&piPK=64187936&theSitePK=523679&menuPK=64187511&siteName=WDS&pageSize=20&docTY=540617

http://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm



4. The Stages in Procurement Typically, a number of stages are generally followed in procurement. Within each of these stages there are also a number of activities that take place. The following diagram outlines these major stages and activities:

Figure 1 - The stages in procurement



5. Planning the Procurement All procurement activities require planning; however, the degree of planning is dependent on the complexity and size of the procurement. Simple procurement such as purchasing personal computers or printers do not usually require detailed planning. In the case of large and complicated procurements such as systems development or infrastructure building the planning process can be very long and complicated, organizations often assemble teams or committees or hire consultants to be in charge of such procurements’ planning.

Successful and effective procurement planning have different objectives including:

- Decide on the feasibility of the procurement

- Clearly and comprehensively define the procurement outcome, scope, and specifications

- Evaluate the different procurement options (public tendering, select tendering, or direct contracting) scenarios and select the most appropriate one

- Identify the different risks that can affect the procurement outcome or the procurement process

This section describes the different steps that may be taken during the procurement planning. It outlines various issues an organization should consider when planning an IT procurement that will achieve value for money.

Figure 2 - Procurement planning steps



5.1. Defining the Outcome Having a clear description of the outcome is an important first step in procurement. By defining the outcome, the organization will define what need is to be fulfilled by the procurement and how it is to be fulfilled.

The outcome of the procurement should be described in relation to the goal that needs to be satisfied; for example, if the target is to deploy a new system in the organization then this should be satisfied by procuring several items such as hardware, software, operating system, and professional services. These items can be the outcomes of several procurements or a single procurement with multiple outcomes.

Once the outcome is defined clearly, the detailed description of this outcome will constitute the detailed specifications and requirements of the procurement as will be described in the following subsection.

The clear and comprehensive description of the outcome of the procurement and sufficient details about its specifications is mandated by Element 4 of the Saudi Government Procurement and Competition System. Element 66 emphasized on this.

5.2. Defining Specifications Each outcome of the procurement should be further detailed into specifications that provide sufficient details about the required outcome in order to enable the providers to successfully bid with adequate products and services.

Organizations should involve the end users as well as appropriate project and technical officials in developing the specifications. Developing specifications is sometimes a complex activity requiring certain expertise that may not be always available in the IT department or in the organization as a whole. Organizations should seek external help in such cases in order to develop sufficient specifications that suffice for the required outcome and be clear enough for the bidders. In some cases, hiring an external consultant to develop the specifications might be required; in other cases the organization can seek for support from other government agencies who did similar procurement in the past or who may offer consultative services.

Specifications are described in terms of functional and non-functional specifications; functional specifications constitute what the outcome should be (description of the different functionalities of the system), non-functional specifications should provide a description of how the outcome should work to achieve its goals successfully; including characteristics such as performance, security, availability, scalability…etc. The example below shows the specifications developed for procuring a printer:



Table 1 - Sample functional and non-function specifications listing Subject: Procurement of Printer for Department X

Functional Specifications Non-Functional Specifications

Property Value Property Value

Colored Yes Availability Available throughout the week (Saturday to Wednesday 8:00 AM to 5:00 PM)

Type Laser Security Ability to have access code and privileges for printing

Network Yes

Paper Size A4 AND A3

Throughput 20 Pages per minute

It is important to keep in mind that technology changes in very fast pace and in often changes faster than the procurement process itself. This should be an important factor while developing the specifications in a way that ensures eventually a fair price is paid for the most appropriate product.

For example, if an organization is procuring a number of personal computers that will be delivered over a period of 6 months, it should keep in mind that the cost of a personal computer might drop drastically over such a period. Eventually, the organization’s specifications should be developed in a more generic manner and should not provide specific details as described in the sample table below:

Table 2 - Sample Good and Bad practices in specifications development

Subject: Procurement of Personal Computers

Functional Specifications (DO NOT) Functional Specifications (DO)

Property Value Property Value

Processor 1 GHz Processor 1 GHz or higher according to market price at the time of delivery

Memory 1 GB RAM Memory 1 GB RAM or higher according to market price at the time of delivery

Disk Space 40 GB Disk Space 40 GB or higher according to market price at the time of delivery

Another important best practice is to develop specifications impartially and in nondiscriminatory manner in order to give the different bidders a fair chance and ensure that the organization is getting the best value of money for the most appropriate product or service.



In fact, partiality in the procurement process is considered illegal in the government procurement in Saudi Arabia as specified by Element 1/A of the Saudi Government Procurement and Competition System. Consequently, no brand name or number should be used in the specifications to avoid any bias and put the whole procurement operation in questionable position. This is also indicated in Element 65 of the Saudi Government Procurement and Competition System.

5.3. Researching the Market Researching the market is very important to understand how the market works in terms of:

- Competition within the market

- Latest developments and innovations

- Price range and nature of the change in the price

- Key players and potential vendors

- Types of services provided normally by the suppliers

- Updates on specifications

Market research can happen through several methods and in different times:

- Consulting with other government organizations who did similar procurements in the past or who provide consultative services

- Conducting market and technology watch activities in a permanent manner; this method is applied by some large organizations to stay up-to-date with the market

- Conducting limited market research through the internet, books, products’ datasheets…etc

- Soliciting information from possible vendors through a formal Request for Information (RFI); RFI can be a very useful tool given that the organization can guarantee that the final specifications will not be biased or inclined to a specific provider or product. RFI is described in more details in the following subsection:

Request for Information (RFI) Request for Information (RFI) is a method that is used specifically in large procurements. As indicated in its name, RFI is used to inquire for information from vendors and potential bidders.

The objective of the RFI is typically one or both of the following:

- Obtaining more knowledge about unknown technology or solution in order to properly identify requirements and specifications of the procurement outcome

- Identifying and/or short-listing potential bidders who demonstrate experience and knowledge in their responses to the RFI

RFI typically consist of the following main parts:



- Introduction about the subject of the RFI and justification of its need in the organization

- Questions and inquiries: since the main target of the RFI is to inquire for information then it is normal that the RFI mainly consist of questions and inquiries. Having more clear questions and inquiries will result in better understanding by the vendors and eventually better and more useful responses

- Terms and conditions of participating in the RFI (such as the deadline for receiving responses, the qualifications of participating vendors …etc)

RFI is a powerful tool that is used at the planning stage for better and more effective procurement.

5.4. Identifying Risks Identifying and managing possible risks is imperative during the procurement cycle. At this stage of planning it is important that any possible risks on the procurement are identified and evaluated, possible mitigation actions should be planned, and any required modifications on the specifications or terms and conditions must take place.

In the case of IT procurement, some of the risks that can be identified are:

- Lack of availability of expertise or technologies to fulfill the desired outcome of the procurement

- High price of technology (over the estimated budget) or price changes during the procurement

- Delays in delivery

- Expiry or change of technology

- Security of information and configuration of the organization’s IT assets that are exposed in the procurement process

While some risks are hard to avoid in IT procurement, most risks can be managed by ensuring the right measures are in place all over the procurement process; for each unacceptable risk that is identified the organization should assess its ability to:

- Reduce the likelihood of occurrence of the risk

- Reduce the severity of the risk or its consequences once it occurs

- Transfer the risk to another party in part or in full

- Avoid the risk

This assessment should finally result in making possible required adjustments to the specifications or terms and conditions.

A practical example for risk assessment is the organization requesting the bidders to sign non-disclosure agreement (NDA) prior to conducting site visits or providing detailed specifications for an existing system… etc.



5.5. Deciding on Timelines In developing the procurement timelines, it is important to allow adequate time to undertake the various tasks of the procurement cycle.

For example, the time given to the bidders to propose should be proportional to the complexity of the requirements to allow the bidders to propose the best products and services. Consequently, the time planned for evaluating the different bids should be proportional to the complexity of the requirements and to the foreseen number of bidders in order to ensure that each bid is adequately studied and evaluated.

The Saudi Government Procurement and Competition System mandates that all information about the procurement should be available for all the bidders at the same time and that all of them should have the same time to analyze the procurement requirements and submit their proposals (Elements 3 and 4 of the Saudi Government Procurement and Competition System). This rule should be kept in mind while deciding on the timelines of any procurement.

5.6. Internal Assessment The IT department is responsible to ensure that the procurement is aligned with the current internal legal, policy, and operational arrangements. Therefore, internal assessment is an integral factor in the risk management of the procurement. This assessment should cover:

- Ensuring that the procurement is not contradicting with any policy or regulation (e.g. internal or governmental black lists, operational policies…etc).

- Ensuring that the procurement is not contradicting with any license, intellectual properties or other obligations on the organization.

- Ensuring that the procurement is not contradicting with any current operational system or process in the IT department or any other department.

- Ensuring that the procurement is inline with the current and planned service levels and service requirements.

- Ensuring that the procurement is aligned with the entity Information Technology strategic direction.

5.7. Acquisition Scenarios The IT department need to consider the most suitable means of acquiring the required products or services in the procurement, the usual acquisition scenarios are buy, hire, or lease.

When buying, the organization has the advantages of ownership, but bears the risks and costs of maintenance, obsolescence and eventually disposal.

Hiring involves renting the products without any fixed term of ownership and hence releases the organization from the typical worries of ownership (maintenance, obsolescence, disposal ...etc). I.e. the organization will be



paying for the time of using the asset with the flexibility to abandon it without bearing the cost of this abandon. Hiring cost might be higher than the cost of ownership over long period of time, however it might carry several advantages on the effectiveness and efficiency of the IT services and may eventually be more cost effective.

Leasing is a middle solution; it entails renting the assets for a fixed term and over an agreed-upon period with regular monthly, quarterly, or yearly payments. At the end of the renting period the organization can decide to abandon the asset or purchase it at a fair market value and price.

The IT department will decide on its preferred acquisition scenarios based on several factors including:

- Total cost of ownership: TCO is a very useful tool for estimating the cost of acquiring IT assets; using TCO enabled several organizations to realize that the options of leasing or hiring were more effective than buying in specific scenarios3

- Budget allowance at the current year; in some scenarios the IT asset is necessary while there is not enough budget to cover for its cost, in these scenarios leasing or hiring options are used

- IT strategic direction and sourcing strategy; outsourcing of services and assets can be a strategic direction taken by a certain organization for many reasons

For example, if the organization is planning to procure servers then the scenario of buying the servers may be considered the best scenario from general point of view, but when considering other factors like:

- The cost of running these servers in secure and available environment such as high availability datacenter

- The cost and skills of the resources that will be operating and maintaining these servers

- The cost of upgrading these servers in the future, or disposing them and procuring new ones

Having such factors in mind may prove that the buying scenario is not the suitable one for this organization or for the budget allocated for this procurement; and hence the organization may decide to consider leasing or hiring scenarios instead.

Element 67 of the Saudi Government Procurement and Competition System gave the government entities the flexibility to select the appropriate acquisition scenario in a way that ensures best use of the available resources.

3 For further information about TCO please refer to IT Budgeting Best Practices report (section 8.1)



5.8. Identifying Alternative Opportunities Once the outcome has been defined, specifications has been developed and risks has been realized, alternative opportunities can be identified to minimize the investment are speed up the acquisition process. Alternative options can be sharing resources with other government organizations or expanding available assets. Alternative options scenarios apply strongly in the cases of procuring infrastructure assets such as connectivity or hardware.



6. Selecting a Procurement Method Any procurement entails investment in time and money not just in the procurement outcomes but also in the process itself. Deciding the most appropriate procurement process will save the effort and time of the IT department and will ensure gaining the best value of money.

In the Saudi Government Procurement and Competition System, several procurement processes are provided; each process is valid in certain scenarios and has certain conditions and requirements4. These procurement processes are described in the following subsections:

6.1. Public Tendering (مناقصة عاّمة) As specified in Element 6 on the Saudi Government Procurement and Competition System, Public tendering is the default method for procurement.

Public Tendering Entails announcing the procurement through channels of official public media (e.g. newspapers or procurement portals) and guaranteeing an open competition between all bidders who meet the required qualifications.

6.2. Special (Select) Tendering ( خاّصة مناقصة ) Special or Select tendering involves inviting a limited number of bidders who are known by the organization as qualified bidders and able to fulfill the procurement outcomes and specifications.

As mandated in the Saudi Government Procurement and Competition System; government organizations are obliged to invite at least 3 qualified bidders for any special tendering.

The selection of the invited bidders is typically based on one of the following reasons:

- The selected bidders have successfully delivered similar procurements for the organization in the past

- The selected bidders are recommended by other government organizations who were involved in similar procurements in the past

- The selected bidders are recommended by specialized government organizations

- The selected bidders are well known in the market for providing products and services similar to the outcomes of the procurement

4 Please refer to Section 2 of the Saudi Government Procurement System



6.3. Direct Contracting (التعاقد أو الشراء المباشر) Direct contracting happens through direct request for quotation from three vendors at the least while eliminating the option of evaluating multiple offers. Although direct contracting is permitted in the Saudi Government Procurement and Competition System, it is considered an exception and cannot occur without fulfilling a number of conditions or the existence of certain circumstances. The main the cases that allow direct contracting are:

- Emergency procurements for amounts that do not exceed 1 million Riyals – Element 44 of the Saudi Government Procurement and Competition System

- Spare parts for existing assets that were procured from the same vendor previously (even if such procurement cost exceeds 1 million Saudi Riyals) – Element 47/C of the Saudi Government Procurement and Competition System

- The procurement outcome is available by one Saudi manufacturer (if there is more than one Saudi manufacturer then direct contracting is not allowed) – Element 47/D of the Saudi Government Procurement and Competition System

- Consultancy and supervisory procurement for values less than 1 million Saudi Riyals – Element 47/B of the Saudi Government Procurement and Competition System

Element 45 of the Saudi Government Procurement and Competition System provided the requirements and regulations for the Direct Contracting method; where direct contracting requires the approval of the minister (he can delegate the authority for procurements of value less than 500,000 Saudi Riyals)5.

Element 46 mandated that procurements for values above 1 million Saudi Riyals must not be partitioned so they can fit the purpose of direct contracting.

5 An important addition that should be noted in the new Saudi Government Procurement System is that direct purchasing can be done using electronic means. Which gives the government entities more ability to do such purchasing more effectively, it also has good effect on facilitating the growth of e-commerce in the Kingdom.



6.4. Comparison and Considerations Each procurement method entails a number of advantages or strengths as well as a number of disadvantages or constraints; the IT department is required to study the procurement’s case carefully and to evaluate all the possible options before making a decision on which method it is going to use.

The table below describes the different pros and cons of each procurement method:

Table 3 - Pros and Cons of the different procurement methods Method Pros Cons

Open Tendering

- Open competition with no preferences

- Eliminates discrimination or biased procurement

- Guaranteed procurement for the best value of money

- Time-consuming process that do not suit urgent needs

- May entail overhead on the organization for evaluating large number of bids

Special (Select) Tendering

- Open but controlled competition

- More optimized process which minimizes the overhead on the organization for evaluating large number of bids

- Faster process than open tendering

- Eliminate chances of unselected possible vendors to participate, and may cause complaints of discrimination

- Not guaranteed procurement for the best value of money

Direct Contracting

- Fastest and most optimized procurement process

- Positive impact on vendor relation

- Positive impact on the consistency in the organization’s assets and services

- Low transparency, and may cause complaints of discrimination

- Not guaranteed procurement for the best value of money

- Constrained by special conditions in the Saudi Government Procurement and Competition System



7. Preparing the Procurement Artifacts Once the decision has been made as to the type of tender process that is appropriate, it is necessary to begin preparing the documents that are required for the procurement initiation.

Two main documents should be prepared during this phase:

- Procurement plan

- Request document (RFP or RFQ)

Where appropriate, a Responses evaluation committee should also be formed prior to an approach being made to the market as the committee should be in agreement on the details of the request document and the content of the bids evaluation plan.

This chapter is structured to describe in turn the purpose of each of the three documents identified above and the role of the bids evaluation committee.

7.1. Developing the Procurement Plan The procurement plan details the process that will be undertaken. It should not describe why a procurement is being undertaken. Instead, it explains how the procurement is to be undertaken.

The procurement plan should cover the following topics (or the applicable topics for the procurement):

- A description of the procurement, including a full description of the outcomes and brief description of specifications

- The conditions for participation (qualifications of participants), and listing of participants (in the cases of select tendering and direct contracting)

- The evaluation criteria that will be used in the procurement6

- The type of procurement method to be used, with an explanation of why an open tender is not being used (in the cases of select tendering or direct contracting)

- Governance arrangements, such as the need for a steering committee. The Saudi Government Procurement and Competition System provides complete description on the different governance requirements for the different procurement scenarios and methods; for example, procurements of value above 1 million Saudi Riyals must be approved and signed by the Minister

- The risk assessment

- Indicative time-lines

- Responses evaluation plan, including the detailed timeline and process of evaluating the responses

6 For more details about the evaluation criteria please refer to section 9.1



- Special considerations and conditions that uniquely belong to this procurement; such as mandating signing NDA agreements by the bidders or the need for conducting site visit… etc

- Financial arrangements for the procurement process, including the price of the request document and the value of the bid guarantee when applicable based on the Rules of Procurement and Competition System.

- Acquiring the best value for the money spent.

The level of detailing the procurement plan depends on the size and the complexity of the procurement. However, the procurement plan need to cover all the appropriate details from the ones listed above whenever appropriate.

The procurement plan should go through acceptance process; all members of the organization who are responsible of the procurement must review the plan and approve it. This includes the IT manager, the members of the tendering committee (when appropriate) and any other officials such as the Director of Administrative and Financial affairs or the Minister (when appropriate).

7.2. Preparing the Request Document In brief, the request document represents the official communiqué between the organization and the bidders, it should clearly express all the requirements and expectations of the organization from the procurement in terms of outcomes, specifications, and requirements. In addition, it should clearly explain the “ground rules” for the relation between the organization and all the bidders throughout the procurement lifecycle.

The level of detailing the request document depends on the size and the complexity of the procurement. In all cases, the request document must deliver all the requirements of the procurement without any ambiguity to all the bidders.

The request document should go through acceptance process; all members of the organization who are responsible of the procurement must review the plan and approve it. This includes the IT manager, the members of the tendering committee (when appropriate) and any other officials such as the Deputy Minister of Administrative and Financial affairs or the Minister (when appropriate).

The request document is called with different names such as Request for Proposals (RFP), Request for Quotations (RFQ), or Request for Bids (RFB) …etc. No matter what name is used, the Request Document contains similar parts with different levels of details. The following subsections provide a description of the main parts of the request document, which should ideally be available (explicitly or implicitly) in any successful request document.



A Description of the Procurement The request document must describe clearly the outcome of the procurement. This may include:

- The nature, scope and quantity of the procurement

- The detailed specifications of the outcome(s) as described in section 5.2 above, supported with all required datasheets, drawings, charts…etc

- All additional requirements and expectations of the procurement, such as training, installation, migration, integration, support ...etc

- Delivery time requirements

- Any qualitative standards and requirements for the outcome(s), such as compliance to international standards or to certain local or organizational standards and codes

Conditions for Participation Conditions for participation are mandatory requirements which describe minimum standards or essential characteristics that suppliers must meet for their bids to be considered.

The specification of conditions for participation in the request document should flow directly from the procurement planning process described above and be limited to assuring the legal, financial, technical and/or commercial capabilities of the supplier to meet the procurement requirements of the case at hand.

This part of the request document is particularly important in open tendering procurement to filter and eliminate any unqualified bidder prior to the evaluation process.

Examples of conditions for participation include suppliers having:

- Special classification, according the Saudi classification system7

- Access to certain technical or operational skills, facilities or capabilities

- Relevant licenses or professional accreditations/registrations

- Minimum level of financial ability or business size in the Kingdom (or outside the Kingdom as well)

- Number of years of experience

It is important to note that the conditions of participation should include mandatory conditions and not preferred characteristics; the later can be specified as criteria in the evaluation criteria as described below.

7 For more information please refer to http://www.momra.gov.sa/classification-agency/index.htm

http://www.momra.gov.sa/classification-agency/index.htm



Evaluation Criteria To enable bidders to provide the most relevant proposals, the request document should provide adequate description for the evaluation criteria against which their bids are going to be evaluated. The evaluation criteria should describe how will the organization select the successful bids from the ones who already passed the mandatory conditions for participation. The request document must clearly identify any criteria that are to be treated as essential in the evaluation of bids.

Including the evaluation criteria in the request document will result in a number of benefits:

- Allows bidders to evaluate their solutions prior to submitting them

- Creates transparency in the procurement process, and assures the bidders that their bids will be evaluated in a tangible and predetermined manner

For more details about the evaluation criteria, please refer to section 9.1.

Content and Format Requirements To avoid ambiguous, incomplete or inaccurate responses, it is customary to include in the request document a description of the minimum content and format requirements of the responses. The organization may include a disclaimer that it will disqualify any response that do not meet these requirements. The content and format requirements differ according to the complexity of the procurement as well as to the requirements of each organization. Some examples of content and format requirements are listed below:

- A description of the structure of the response and how should the response be organized

- A description of the number of pages required in the response or in each section or component of the response

- Templates and forms to be filled and included in the response, such as compliance forms, NDA (Non-Disclosure Agreement), references and profiles templates …etc

Element 11 of the Saudi Government Procurement and Competition System specifies that a bid bond of 1% to 2% of the of the total procurement value is mandatory except in the case of direct purchasing (with open proposals).

Procurement Process Rules This section should describe to the bidders all the rules of the procurement process, including all the rules for disqualification of the bid and all the disclaimers of the organization. It should also describe all the rights of the organization and the bidders, for example, if the organization wants to declare its right to cancel the procurement at any point of time during the process, this is the right section for declaring it.



Draft Contract If the organization has a predetermined contract draft that will be used for this procurement, it is recommended to include this draft as a sample contract in the request document.

This will help the bidders understand what will be their obligations beyond the procurement process should they be selected as winners, and may affect their response accordingly.

Request Document Verification – Checklist

In summary, the request document should include all the above components in different extents of detailing. The following checklist can be used to verify the completeness of the request document. This checklist is useful for quality-assuring or approving the request document:

Table 4 -Request document verification checklist Question Answer Notes

Contains sufficient description of the nature of the outcomes.

Yes No

Contains sufficient description of the scope of the outcomes.

Yes No

Contains sufficient description of the quantities of the outcomes.

Yes No

All the outcomes are described with adequate level of details in terms of specifications.

Yes No

The expected time of delivery is stated clearly.

Yes No

All additional requirements such as training, installation, support... etc are stated clearly.

Yes No

Qualitative requirements are stated clearly.

Yes No

The conditions for participation are stated clearly.

Yes No

The evaluation criteria are stated clearly.

Yes No

A description of the structure of the response is stated clearly.

Yes No

A description of the number of pages required in the response or in each section or component of the response is stated clearly.

Yes No

All required templates and forms to be filled and included in the response are included.

Yes No



Procurement Process rules are stated clearly.

Yes No

Draft Contract included.

Yes No

Table of contents requested from Vendor. Yes No

7.3. Establishing the Responses Evaluation (Tendering) Committee In the cases of open or select tendering, an evaluation committee is normally required. The evaluation committee will be responsible of evaluating all the bids and making the decisions of qualifying or disqualifying the competitors. The Saudi Government Procurement and Competition System mandates that a response evaluation committee must be established in the cases of open and select tendering, the system also mandates that one of the members of the committee should be a financial auditor (Element 16 of the Saudi Government Procurement and Competition System).

The evaluation committee must consist of no less than three members and their number can increase according to the size and complexity of the procurement.

The committee members profiles should reflect their adequate and relevant technical background, and their understanding of the technical specifications of the procurement and their ability to evaluate the responses against them.

The responsibilities of the responses evaluation committee include:

- Ensure that the conditions for participation are met in all responses, and eliminate the responses that do not meet the conditions

- Ensure that the responses format and content are meeting the requirements of the request document

- Evaluate the responses according to the predefined evaluation criteria8

- Prepare responses evaluation reports

- Conduct meetings to compare evaluations and decide on final results

8 For more details about the evaluation criteria please refer to section 9.1



8. Publishing the Procurement Request Document

Now that all the preparations for initiating the procurement process are completed, it is time to publish the procurement request through the right channels. This step consists of three main periods:

- Announcing the procurement through the appropriate channels

- Responding to bidders questions

- Receiving the bids

8.1. Announcing the Procurement The method of announcing the procurement differ according to the procurement method selected:

- In the case of public and open tendering, the organization needs to announce the procurement in the official newspapers or open electronic media such as the organization’s website (Saudi Government Procurement and Competition System – Element 7/A)

- In the case of select tendering, the organization needs to officially and directly communicate with the selected bidders to notify them of the procurement

- In the case of direct contracting, the organization will be communicating directly with the vendor.

- In the case of procurements that will potentially attract bidders from outside the Kingdom, announcing the procurement can take place outside the Kingdom under the condition of announcing it internally as well (Saudi Government Procurement and Competition System – Element 7/B).

In all cases, the Saudi Government Procurement and Competition System mandates that the announcement of the procurement should happen in such a way that ensure that all bidders are notified about the procurement in the same time and with the same information in order to ensure fair and unbiased competition (Elements 3 and 4 of the Saudi Government Procurement and Competition System).

Some of the basic information that should be included the procurement announcements are:

- The name of the organization, and other information needed to contact the organization to obtain the request document

- A description of the procurement outcomes, and listing of all the participation conditions

- The address of submission of the responses



- The closure date of submission of the responses

In the case of open tendering, the Saudi Government Procurement and Competition System allows the organization to charge a specific amount of money for giving away copies of the request document; this amount of money is typically proportional to the value of the procurement.

When some of the bidders were surveyed, they complained that the price of the request documents is very high and that they have to invest a considerable amount of money in purchasing request document.

They have also complained that in some cases they do not get sufficient information about the procurement from the announcement, which discourages them from making the uncertain investment, end eventually impact the competitiveness of the procurement negatively.

In order to ensure open competition in open tendering procurements, the following two guidelines should be considered:

- Consider minimizing the price of the request document; and remember that the objective is not to make profit from this and not to create financial overhead on the bidders

- Ensure that sufficient information about the procurement outcomes are provided in the announcement, to ensure that interested bidders only will be obtaining the request document

8.2. Responding to the Bidders’ Questions As described above, the main objective of this stage is to provide the bidders with sufficient and clear information about the procurement in order for them to respond successfully. Hence, no matter how clear or simple will the request document appear to its publishers, bidders will have questions and inquiries to further understand the procurement outcomes or conditions.

The organization is obliged to respond to all inquiries and questions of the bidders, however, this response is constrained by a number of factors:

- The organization should define a specific period of time for receiving the questions and inquiries; this period of time must be defined in the procurement plan and must also be communicated to all the bidders in the request document

- The organization must also commit itself for a deadline for responding to the inquiries, this deadline should be set in a way that allows enough time for the bidders to update their proposals accordingly

- The organization must send all answers to vendors at the same time.

- The organization should evaluate the bidders’ questions and decide if responding to these questions will really add value to the bidders. The organization should not respond to any inquiry that:



o Will result in unveiling information that the organization did not want to disclose, such as systems configurations or business-sensitive information

o Will affect the scope of the procurement or the specifications of its outcomes

o Will dilute the competitive nature of the procurement; for example, if one of the bidders inquire about the preferred brand of the outcome then the organization must respond negatively and keeps the open competition between all bidders

8.3. Receiving the Bids The period from the date of announcing the procurement until the deadline of receiving the bidders’ responses should be proportional to the complexity and size of the procurement and should give enough time for all the bidders to respond successfully to all the requirements.

In the cases of open ad select tendering, all bids must be received in closed and sealed envelops, all the envelops must be opened at the same time at the end of the given period to guarantee transparency and eliminate any cases of price manipulation and fraud.

Some bidders often request extensions to the deadline of sending their bids, the organization is free to accept or reject these requests.

Element 10 to 17 of the Saudi Government Procurement and Competition System provides details of the procedure that should be followed for receiving and opening bids as well as details of the acceptable bids content.

Element 73 of the Saudi Government Procurement and Competition System mandated that government employees must maintain and ensure the secrecy of all the information and prices proposed to them in procurements and not share or expose such information to other bidders or parties, except in the cases that were allowed by the system.



9. Evaluating the Bids The evaluation of the bids is the decisive and the most important stage in the procurement lifecycle. In this stage, the organization implements the procedures and criteria that were set in the bids evaluation plan earlier. The main output of this stage is the decision of the winner bid or bids.

9.1. Bids Evaluation Bids evaluation must take place according to the predefined procedure and criteria of evaluation.

There are different evaluation procedures that are used by different organizations and different countries:

- An evaluation committee is required in some procedures while other procedures leave the evaluation of the bids to the IT departments to manage without requesting a committee

- Some procedures segregate between the financial evaluation and the technical evaluation of the bids where technical evaluation is done by the IT department and the financial evaluation is done by the financial department9

- Some procedures mandate the opening of the financial bids after the opening of the technical bids, this is done to ensure that the price difference do not impose any inclination on the technical proposals evaluation

According to the Saudi Government Procurement and Competition Rules, any type of evaluation or procurement committee must adhere to the technical and financial criteria in evaluating proposals following the Government Procurement and Competition System as well as the Rules manuals. No offer should be rejected if all requirements are met aligning with the regulations and rules of the Government Procurement and Competition System (Element 30).

According to the Saudi Government Procurement and Competition System, a bids evaluation committee of minimum three members should be formed to pursue the evaluation and selection process (Elements 16 and 17).

As mentioned earlier, the Saudi Government Procurement and Competition System, provides detailed description of the requirements of the evaluation procedure.

One of the main improvement areas that need to be considered is that financial bids are opened at the beginning of the evaluation process. This, as described earlier, may result in inclination of the technical evaluation for the favor of the lowest price. It is recommended to segregate between

9 http://www.usaservices.gov/procurement.htm#s7

http://www.usaservices.gov/procurement.htm#s7



the technical and financial evaluations of the bids; and to delay the opening of the financial bids until the end of the technical evaluation.

During the evaluation, the evaluation committee might decide to send inquiries and questions for the different bidders in order to clarify or to confirm certain areas in their responses. It is recommended to include a time window for this activity inside the evaluation procedure. All such interactions should go through official communication channels only to ensure transparency and integrity of the process.

In terms of criteria, it can be split into two parts; technical and financial criteria:

Naturally, the financial part of any evaluation criteria will imply that that lowest price gets the highest marks. So the financial part is quite straight forward.

However, some countries implement more strict measures to eliminate any possibility of fraud, such as:

- Some countries disqualify the highest and lowest bids automatically no matter what their technical response is

- Other countries eliminate all the bids with prices above and below 20% of the procurement budget

On the other hand, the technical evaluation part entails many details and may be different between different organizations, countries, or even types of procurements in the same organization. Since it is designed to meet the requirements of all types of governmental procurement, the Saudi Government Procurement and Competition System did not specify technical criteria to be used, the design of appropriate technical criteria was left for each organization by itself or for each type of procurement (e.g. IT Procurement evaluation criteria is different from Electrical Appliances procurement ...etc).

Technical evaluation criteria for IT procurement should cover different aspects of the bids including compliance to requirements, quality of response, relevant experience and size of the bidder… etc.

The table below features suggested criteria that can be used in technical evaluation. It is important to note that the weights given in this evaluation criteria are subjective and can be changed according to the procurement nature and specific needs.

Table 5 - Suggested technical evaluation criteria Response Comprehensiveness Criterion Conforming Notes

Addresses the mandatory outcomes and specifications in the request document

Yes No

Provides extra useful features and outcomes

Yes No

Format

Yes No



Response Quality

Technical solution

Yes No

The excellence of the proposed technical solution the quality of the proposed technical components (e.g. the proposed servers, operation systems…etc)

Approach and methodology

Yes No

The excellence of the proposed approach and methodology to undertake the project; project management approach, the quality management approach… etc

Bidder-related measures

Bidder size

Yes No

Number of employee, capital…etc

General experience

Yes No

Number of years experience in the field and the market

Relevant experience

Yes No

The capability to demonstrate ability by showing relevant successful delivery of similar project; references, opinion of the bidder experience and profiles of proposed project staff…etc

When performing a technical evaluation, the committee is required to consider the conformity of technical requirements for each procurement proposal.

Elements 16 to 26 of the Saudi Government Procurement and Competition System discuss the process and regulations for bids evaluation in details. Element 21 specifies that the evaluation committee can negotiate with the bidder that proposed the lowest price or other bidders if the proposed prices are significantly higher than the estimated cost (as estimated during the procurement planning phase) or the market value. Element 22 gives the ability for the evaluation committee to disqualify bids with prices that are lower than 35% of the estimated cost only if the evaluation committee is not convinced with the technical evaluation of the bid or if the bidder is found unable to fulfill the procurement commitments (Element 23). Element 24 specifies that if only one bid was proposed or if one bid only passed the technical evaluation then the procurement must be re-tendered except in special cases that must be approved by the minister or the equivalent head of the independent entity.

The Saudi Government Procurement and Competition System mandates that the winner should be the lowest price among all the bids that passed the technical evaluation successfully, without any consideration of the weight differential.

This approach might be acceptable for some types of procurement but it is definitely not acceptable for IT procurement; IT procurement emphasizes strongly on the quality and the excellence rather than the price, that’s why the cost factor comes second after technical excellence. I.e. the winning technical solution is not necessarily the cheapest one.



Element 21/B could be used in this case as an exception and a special case.

The sample approach in the figure below can be ideal in such case:

Figure 3 - Sample evaluation and negotiations approach

9.2. Bids Evaluation Report At the end of the evaluation, a “Bids Evaluation Report” should be prepared to summarize the results of the procurement and evaluation.

The bids evaluation report may contain:

- Summary of the evaluation process

- Summary of each received bid

- Summary of the assessment of each bid

- Reasons for any bid elimination (when applicable)

- Recommendations concerning the preferred bid

Technical and Financial Evaluation Results

Select bid that match technical requirements

Apply Criteria

Eliminate the bid from the list

Conforming with Technical requirements

Yes

No

Lowest Price No

Negotiate to bring price to accepted level

Announce as Winner

Yes

EndNegotiation Succeeded?

Yes

No



- Details of any issues that need to be clarified with the bidder during subsequent contract negotiations

The report is to be signed by the members of the evaluation committee and addressed to the approver of the procurement (Minister, Deputy Minister, IT Manager… etc). The approver is to sign the report if they are in agreement with its recommendations.

According to Element 26 of the Saudi Government Procurement and Competition System, the final authority of selecting the winning proposal is for the minister or equivalent manager of the independent entity. They can delegate this authority for bids that are less than or equal three million Saudi Riyals.



10. Closing the Procurement The final stage of the procurement is awarding and signing the contract, however, some attention should be given to the final details including the negotiations of the contract, the announcement of the winner, handling the complaints of bidders who did not win ...etc. Such issues are discussed in the following subsections.

10.1. Negotiating the Contract As described in section 9.1 above, negotiations can take place during the evaluation process to ensure that the best value of money is obtained for the best possible outcomes. Further negotiations might include scenarios such as:

- Expanding or shrinking the scope of the outcomes or certain specifications

- Negotiating certain terms imposed by any of the two parties (such as payment terms, warrantees, support, performance bonds and bank guarantees… etc)

- Interviewing, accepting, or replacing the bidder resources who will be working on the project

The agreements that will result for these negotiations should be documented and communicated officially and reflected in the contract before signing it.

It is important to note that terms of contracts in IT related contracts are generally different from other procurements’ contracts. Certain special terms and conditions normally apply on IT related contracts such as:

- Licensing

- Intellectual Property and ownership

- Warranty and support

Elements 27 to 32 of the Saudi Government Procurement and Competition System provide full details for the contractual format and requirements. Element 31 specifies that a contract is not necessary for procurements that are less than 300,000 Saudi Riyals were the exchange of written commitment suffices instead of the contract. Element 32 mandates that if the value of the procurement is over 5 million Saudi Riyals or if the procurement requires more than a year for completion then the contract must be sent to the Ministry of Finance for reviewing and providing feedback prior to the signing.



10.2. Announcing the Awarding of the Contract Once the final agreement has been reached and contract signed, different parties should be informed of the results of the procurement and the awarding of the contract:

- The financial authorities of the organization

- The other bidders who did not succeed

- Other government agencies that might be concerned with the procurement

Announcing the awarding of the contract can be done using official communication through memos or letters. In the cases of large procurements that may concern larger audience, an announcement can be made in the official newspapers.

Element 74 of the Saudi Government Procurement and Competition System mandated that government entities must announce the awarding of contracts.

10.3. Canceling the Procurement According to the Saudi Government Procurement and Competition System (Elements 21, 24 and 25), the organization can decide to cancel the procurement at any time if:

- The need for the procurement outcomes have disappeared.

- The procurement process did not meet the regulations.

- Core or significant mistakes were found in the definition of the outcomes or the specifications of the procurement.

- All the bids did not pass the technical evaluation

- All the bids were considerably higher than the planned budget of the procurement

- Negotiations failed with the qualified bidders

The authority to cancel the procurement is only given to the minister or the equivalent manager of the independent entity. The prices paid for the request document must be returned to all the bidders (Element 25/B)

When procurement is cancelled, the organization needs to communication the cancellation officially to all the bidders and any other concerned government organization.



10.4. Handling Complaints A well planned and transparent procurement is less likely to face complaints. Complaints may occur for many reasons, including:

- Canceling the procurement

- Technical or financial evaluations

- Awarding the procurement to another competitor

However, should a complaint occur, the organization should officially respond to the complaint with clear reasoning and answers to the complaint.

10.5. Reporting As described in the previous sections, several reports will be required along the life cycle of the procurement. In addition, all the discussions, negotiations, and decisions of the bids opening committee or the evaluation committee must be logged and reported properly.



11. Special Considerations Procurement is a cornerstone process in any business. Governments are typically the largest procuring entities around the world, which makes procurement an extremely important administrative activity in governments around the world. This importance is translated into a large number of initiatives, regulations and studies to make the procurement process more efficient, effective, and transparent.

This section summarizes a number of points to be considered that contribute to the success of the IT procurement process:

- Clear and comprehensive definition of the requirements: as described in 5.1 above, providing clear description of the outcomes and adequate level of detailed specifications creates clear understanding between the organization and the bidders about the procurement and makes the bidders job much easier and the whole procurement processes more effective

- Leadership and management ownership: IT procurement should be owned and supported by the IT manager in the organization. In the cases of large IT procurements and key projects, ensuring the leadership and support of higher authorities in the organization is crucial for success. The Saudi Government Procurement and Competition System mandates that large procurements should be approved by higher authorities (procurements for over 3 million Saudi Riyals must be approved by the Minister, procurements for over 200 million Saudi Riyals requires Royal approval)

- Transparency: providing all required information to the bidders and keeping all the bidders informed of the artifacts of the procurement process (such as the evaluation criteria and the evaluation results and inviting the bidders for the opening of the bids…etc) is a great assurance of the integrity of the procurement process. Transparency in procurement is mandated in the Saudi Government Procurement and Competition System for open and select tendering

- Ensuring equal opportunities: ensuring equal opportunities for all bidders is a very important factor for the success of procurement, some of these benefits are:

o Ensuring the best value of money for the procurement by opening the opportunity to all suitable solutions

o Ensuring the excellent quality of outcomes for the procurement, which will result in better services for the IT department and better knowledge and experience for the department resources

o Ensuring fairness and diversity in the procurement process, which will eventually result in benefits for all the bidders and IT sector in the Kingdom in general



- Bigger procurements: bigger procurements result in better value of money, it also result in effectiveness of the procurement. Bigger procurements can happen through different ways:

o Applying frame contracts concept: frame contracts means grouping different outcomes that share the same objective in one procurement; for example, a frame contract may include all the hardware, software, development and operation requirements for an enterprise system rather than procuring those items separately. Frame contracts concept is applied successfully in many countries and even in some Saudi enterprises

o Procuring operations and outsourcing contracts for more than one year. This method will result in more stability in the services and better negotiations position for the organization

o Some countries10 apply a concept of Open Standing Offer Arrangement (OSOA) to encourage collaboration between government organizations for better value of money. An OSOA results from a procurement, which specifies that the contracted price will be made available to other participating organizations. This means that potential bidders have been informed that they are tendering not only for one organization’s purchasing but, potentially, for purchases by other organizations. This will encourage the bidders to offer more competitive prices and eventually achieves more value of money for the organizations

- E-Procurement (electronic procurement): e-Procurement is a part of e-business and is used to designate the optimized, Internet-based procurement process. It refers not just to the purchasing process itself but to electronic negotiations and the conclusion of contracts with suppliers as well. Because the purchasing process is simplified by the electronic handling of operative tasks, strategic tasks can be given a more important role in the process. E-Procurement initiative for the Government of Saudi Arabia is currently being developed

- Government organizations should have the ability to decide what bidders they do not want to work with, and they should be able to share this decision with other organizations for better benefits for the whole government. This should be controlled by mandating the bidders to include references for their work with other government entities and checking with these references for the quality of the services and products provided for them from the bidder. It is recommended to have the references’ evaluation as part of the proposals technical evaluation criteria as proposed in Table 5 above.

10 Such as the UK, Australia and Canada



12. Appendix I – References The following references were used to construct this document:

- “Government Procurement and Competition System” Issued by Royal Decree in number (58M) in 9/4/1427 H.

- “Government Procurement and Competition Rules” Issued by Ministry of Finance number (362) in 20/2/1428 H.

- Effective Competitive Practices in Government Commerce - http://www.fedpubseminars.com/seminar/govproc.html

- http://www.vgpb.vic.gov.au/CA256C450016850B/WebObj/BestPracticeAdvice-EC4P/$File/Best Practice Advice - EC4P.pdf

- World Trade Organization – Government Procurement http://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm

- World Bank Country Procurement Assessment reports: http://www-wds.worldbank.org/external/default/main?pagePK=64187835&piPK=64187936&theSitePK=523679&menuPK=64187511&siteName=WDS&pageSize=20&docTY=540617

- The Office of Government Commerce – The United Kingdom http://www.ogc.gov.uk/index.asp?id=35

- Mandatory Procurement Procedures – Ministry of Finance – the Government of Australia - http://www.finance.gov.au/ctc/steps.html

- Contracts Canada Portal – e-Government of Canada: http://contractscanada.gc.ca/en/

http://www.fedpubseminars.com/seminar/govproc.html

http://www.vgpb.vic.gov.au/CA256C450016850B/WebObj/BestPracticeAdvice

http://www.wto.org/english/tratop_e/gproc_e/gproc_e.htm

http://www.ogc.gov.uk/index.asp?id=35

http://www.finance.gov.au/ctc/steps.html

http://contractscanada.gc.ca/en/



13. Appendix II – Glossary of Terms The following terms have been used in this document with the following contextual meaning:

Table 6 - Glossary of Terms

Term Contextual Meaning

IT Information Technology

TCO Total Cost of Ownership

OSOA Open Standing Offer Arrangement

UK United Kingdom

NDA Non-Disclosure Agreement

CPU Central Processing Unit

GB Giga Byte

MB Mega Byte

RFP Request for Proposals

RFQ Request for Quotations

RFI Request for Information