Procurement planning is the process of identifying and consolidating requirements and determining the timeframes for their procurement with the aim of having them as and when they are required.
A good procurement plan will describe the process in the identification and selection of suppliers/contractors/consultants.
Formulation and development of procurement plans is not just a good practice that must be embraced by Procuring Entities but it is also a legal requirement.
Section 42 (1) of the Public Procurement Act No. 12 of 2008 mandates each procuring entity to plan its procurements. In particular, the Act states that a procuring entity shall:
- aggregate its requirements wherever possible, both within the procuring entity and between procuring, entities, to obtain value for money and reduce procurement costs;
- make use of rate or running contracts wherever appropriate to provide an efficient, cost effective and flexible means to procure goods, works and services that are required continuously or repeatedly over a set period of time;
- avoid splitting of procurement to defeat the use of appropriate procurement methods; and
- integrate its expenditure programme with the procurement plan.
Further, Section 42 (2) of the Act states that procuring entities shall submit their procurement plans to the Zambia Public Procurement Authority.
Steps in Preparing a Procurement Plan
- Assess/list the needs or requirements.
- Collect the list of needs from the user departments
- Research the local market for the prices and availability of goods
- Determine the quantities and estimated costs
- Determine when the requirements shall be needed for use
- Identify the inter-relationships between and among the requirements
- Consolidate similar requirements
- Identify appropriate procurement methods and processes
- Schedule lead times for each process
- Prepare an implementation table and/or a bar chart identifying key dates for each process
Importance of Procurement Planning
Procurement planning is important for the following reasons:
- It is one of the pre-requisites for successful implementation of projects;
- Limits scope on non-compliance with agreed procurement procedures;
- Enhances transparency and predictability;
- Provides a good basis for monitoring; and
- Facilitates efficient and effective treasury management by spreading out annual procurement activities consistent with the needs and resources available.
Consequences of Lack of Procurement Planning
- Delays in project implementation
- Inappropriate procurements
- Use of inappropriate procurement methods and procedures
- Increased packaging costs
Important Considerations for Procurement Planning
- Annual planning should be integrated with applicable budget processes and based on indicative or approved budgets
- Procuring entities should revise and update their procurement plans, as appropriate, during the course of each year
- Good planning is 80% of the task completed
- Poor or no planning manifests in inefficiencies in the procurement function
- Failing to plan is planning to fail
To download the procurement planning template, go to the Documents section