Flipping C INS. Written by : Bakri Baharom. 1 February Designed and Edited by: Azlida Ahmad (PTSS) from TPA s desk 16

Transcription

1 Flipping C INS Written by : Bakri Baharom bkiub@yahoo.com.my / Consultant : Narizah Ismail (POLIMAS) 1 February 2014 from TPA s desk 16 Designed and Edited by: Azlida Ahmad (PTSS)

2 In the last article we touched on the Government Vot Number system and monthly claims. With the issue discussed elaborately, hopefully everyone will put it into good practice. Of course, there are some other aspects which we have not been covered; one is travelling overseas for both official and personal reasons. In our polytechnic management, the administration unit is divided into 3 groups; namely Administrative, Service and Financial under the purview of Senior Executive Officer (PET). The Financial Unit directly involves with matters concerning money. However, the Administrative and Services will carry out various processes that will need financial commitments. The other 3 top posts are Director, Deputy Director (Academic) and Deputy Director (Academic Support). Within the polytechnic, most of the final decision on financial matters lies with the director. However, the others like Heads of Academic Department, PET, Finance Assistant and Finance Clerks are given some roles in handling finance documents and processes. Between the 2 deputies, the Deputy Director (Academic Support) is given more authority than the Deputy Director (Academic) through Treasury Instruction (AP 11). We are still using the circular letter issued on 16 May 2012, signed by the previous Ministry Secretary General, Datuk Ab. Rahim b. Md Nor. According to AP 11, there are certain tasks that cannot be delegated. The Secretary General is the only one who can issue Financial Warrant to Responsibility Centre (called PTJ); Chair Tender Meetings; approve Committee Members to open, evaluate technical and financial specifications for supplies, services and works for tenders. Our Director General in turn can approve similar Committee Members but for Quotations only. Similarly the director cannot delegate his/her position as the Chairman of Procurement Committee. However, the limit varies between directors with Grade DH54 and Jusa C. Look at the scope given to the Director, Academic Deputy Director (TPA) and Non-Academic Deputy Director (TPSA) as below: DIRECTOR TPA TPSA 1. To approve Local Order (LO) up to RM50,000 X 2. To sign LO approved in 1 3. To approve the use of factoring financing X X 4. To approve Petty Cash X X 5. To check and certify Cash Book 6. To verify Cheques 7. To issue and certify Last Pay Slip 8. To sign Payment Vouchers and Journal 9. To approve in e-spkb System as Certifier One or Two 10. To approve claim moving to new government loan house X 11. To approve official outings and flight tickets 12. To approve Salary Adjustment (Kew.8) Let us consider the 3 terms first; SUPPLIES, SERVICES and WORKS. If you are procuring machineries like laboratory equipment or office items like pen, paper, toner etc., that is known as SUPPLIES. Should we get an ICT Company to maintain our computer network or Pest Control Company to get rid of termites, then it is termed as SERVICES. If any contractor repairs our leaking roof or upgrades our tennis court, then it is classified as WORK. Why do you need to be clear about all these terms? They will determine the correct Vot Number to be used. A mistake will cause you a lot of trouble later. The possible 3 terms that match with the right allocation are as follows:

3 Food & Beverages Raw materials supply & materials for maintenance and repair SUPPLIES Other material supply such as spare-parts Vehicle & Machinery Asset Animal, Tree & Seeds Minor Repair & Maintenance SERVICES Professional Services, Hospitality & Other Services Minor Repair & Maintenance WORKS Building & Building Repair Facilities & Facilities Repair In my experience, there seem to be some misconception among our staff regarding Vot , Vot , Vot and Vot Generally, most seem to be familiar with Vot (asset) after having to handle it all the time. However, there are cases where items are regarded as "asset" (Vot ) when in actual fact they are classified under Vot We seldom get Vot (Animal, Tree & Seeds) and it has been a few years that we do not get Vot (Vehicle & Machinery) to buy buses, for instance. Now, the government provides us with Proton Preve through rental (Vot ) from Spanco. The other two big services in POLIMAS are Cleaning and Security contracts which are financed through Vot (Minor Repair & Maintenance) and Vot (Professional Services, Hospitality and Other Services) respectively. Now, let s take a look at the different methods of procurement for supplies, services and works. 1. Petty Cash This is the simplest and fastest method to procure anything for immediate usage. However, the amount is limited to RM500 per purchase. All you need to do is to buy the item using your own money and keep a receipt. All other documents are not necessary. However, it is best that you ask for permission from your immediate superior prior to purchase and fill up a form at the Account Unit. Do not make procurement through petty cash a habit. A possible scenario that warrants petty cash: There is an unexpected visit by our director at the headquarters. We probably need to serve him tea and lunch during the visit. Since it is done within a short notice, then we may resort to Petty Cash for the supply. 2. Direct Purchase You can buy an item or a group of items not exceeding RM50,000 per year through Direct Purchase. The companies must be registered with the Finance Ministry. The normal process is to acquire 3 quotations from 3 different companies for comparison. Should all 3 companies fulfill your needs, then choose the lowest offer. However, as an administrator, you must be careful with Direct Purchase. Suppose you give a subwarrant of RM12,000 each to 5 departments under Vot Each department will handle its own purchase and may not consult others. There is a possibility that every department will spend RM12,000 each on printer toner. That will come to a total of RM60,000 per year which exceeds the limit imposed. However, it is all right if the 5 departments spent RM12,000 each on different raw materials. For instance, Civil Department bought bricks, cement and wood; Electrical Department purchased wires, pipes and fuses; Mechanical Department bought steel bars and welding rods; Commerce and ICT departments spent on their needs with a grand total of RM60,000. That is why it is best that common items like toner, papers, pens, etc., are handled by the storekeeper.

4 The document for DIRECT PURCHASE is not like in the case of Petty Cash. The Account Unit will have to prepare a Local Order, which we will go into detail later. The government policy of Best Value for Money always applies. Take note that Direct Purchase for works involving Class F contractors is RM20,000 maximum. We will also deal with this issue in more detail later. 3. Quotations The third type of procurement is called Quotation (famously called Sebutharga in Bahasa Malaysia). For works; the range is between RM20,000 - RM500,000; while for supplies and services, between RM50,000 RM500,000. By rule, we have to offer to a minimum of 5 companies for bidding. The participating companies must submit Form Q as required by Treasury Instruction. The process of quotation is similar to tender except the Committee Members are appointed by the Director General. The decision to choose a winner is done by consensus. 5. Central Contract If we are obtaining what is termed as Common Items, then we must do it through CENTRAL CONTRACT. To find out about it, refer to Treasury Contract Circulars. The process involved in Central Contract is similar to Quotation, that is by using Local Order (LO). What are the items belonging to Central Contract? They include reading materials, office furniture, firefighting equipment, signal equipment, uniforms, chemical and agricultural machinery, to name a few. 4. Tender Tender is a procurement exceeding RM500,000. For POLIMAS, there are only 2 tenders; Security and Cleaning Services. There are extra steps in carrying out a tender. One, the tender must be advertised in local newspapers. The other method is for the offer to be advertised for 14 days on POLIMAS and eprocurement websites, as well as on notice boards. The tenderers will submit their documents in sealed envelope and placed in locked boxes provided. A few committees; involving the opening of the envelope, technical and financial matters, will be appointed by the Secretary General. The secretariat will prepare a report and submit to Tender Board in Putra Jaya, chaired by the Secretary General himself. We will describe the tender process in more detail, in the next installment. 6. Other Methods There are some other methods of procurement which we are not familiar with. Among them are Emergency Procurement during crises such as flood or any other natural catastrophe; procurement through extended contract; procurement through consultancy and also Negotiated Tender. If you are long enough in our system, recognized as an expert in some ways, you may be called to be involved in these special types of procurement. Now let s see in more details the procurement by Quotation. The latest method is through e-bidding. Let s use a very simple example to demonstrate the process of procuring supply by quotation (via e-bidding), say A4 paper. Since it is a common item, therefore the task should be taken up by Head of Store (HoS). Assume that HoS has determined that our need as listed: 1. A4, 80 gms, White, 5000 reams 2. A4, 80 gms, Red, 1000 reams 3. A4, 80 gms, Blue, 1000 reams 4. A4, 80 gms, Green, 1000 reams

5 HoS will submit the requirement to Head of Procurement (HoP). The two of them will run a market survey. The survey is actually another directive in Treasury Instruction (AP 169). They may refer to the previous purchases, get some feedbacks from a few suppliers, or any other means to estimate the current pricing. The typical estimated price format is like the following: NO. PAPER TYPE/SIZE UNIT QUANTITY UNIT PRICE (RM) TOTAL (RM) 1. A4 (80 gms) White Ream , A4 (80 gms) Red Ream , A4 (80 gms) Blue Ream , A4 (80 gms) Green Ream , TOTAL 95, The next step, HoS and HoP will prepare a formal title for the purchase and the item specification as follows: To supply and deliver A4 white and colour paper to POLIMAS NO. ITEM/SPECIFICATION COMPLY (Y/N) SUPPLIER S SUGGESTION 1. General: The paper must be of high quality to be used on photocopying machines, printers (laser and ink-jet) and facsimiles. Each ream must contain no less than 450 sheets. 2. A4 Paper White a) Size: 210 mm X 297 mm b) Minimum Weight: 80 gms c) Brand/Manufacturer: (write in Supplier s Suggestion column) d) Quantity per ream: 450 (minimum) Provide 5 sheets as sample (mandatory) 3. A4 Paper Coloured a) Size: 210 mm X 297 mm b) Minimum Weight: 80 gms c) Brand/Manufacturer: (write in Supplier s Suggestion column) d) Quantity per ream: 450 (minimum) Provide 5 sheets as sample (according to colour, mandatory)

6 In government procurement rule, you must know that each company registered is allowed to take part for a limited number of scopes only. Normally, it begins with 10. Should you want to extend it, you have to apply and pay some fees. This is known as SCOPE CODE (Kod Bidang) which is made up of 6 numbers. The first 10 out of 28 Scope Codes are as follows: 01 Publication and Broadcasting 02 Furniture, Office Equipment, Internal and Domestic Decoration 03 Sports, Recreation and Musical Instruments 04 Food, Beverage and Raw Materials The first 2 digits: 05 Hospital Equipment, Medical, Medicine and Pharmaceutical 06 Chemical and Laboratory Equipment 07 Agriculture, Forestry and Livestock 08 Civil Engineering, Construction and Public Utilities 09 Construction Materials and Road Safety Equipment 10 Weighting and Measuring Equipment In our example, the relevant first level Scope Code is 01 (Publication and Broadcasting). There are only 6 sub-items. Look at the following second 2 digits: Again, our relevant Scope Code is 02 (Paper). It has 2 sub-items, as follows: 01 Publication 02 Paper 03 Publication Equipment and Printing The third 2 digits: 01 Paper 99 Manufacturer The second 2 digits: 04 Billboard and Accessories 05 Photography and Film 06 Educational Equipment and Training

7 Therefore, only companies with Scope Code: are entitled to take part in the exercise. Since the method used is by e- Bidding, the company must also be eprocurement Enabled. The procurement committee members will write in detail the Offer Terms and Conditions, upload it on the eprocurement for prospective company s reference. A typical write-up is as follows: a) The paper supply must be delivered to the Main Store, POLIMAS, with no extra charge. The company must bear the cost of delivery including labour charges. To make sure the requirement is met, due consideration is given to those who have the experience handling the job before. b) The paper supplied must be brand new, of high quality which can be used for any type of photocopying machines or printers. Each supplier must provide 5 sample sheets for white and each of the coloured papers. c) Each ream must contain a minimum of 450 sheets which is quoted in RM nett. The offer is valid for 45 days from the date of on-line bidding. Once a supplier takes part in the bidding, it is not allowed to withdraw. d) The price quoted by suppliers must include 0.8% of eprocurement Service Charge (with a maximum of RM9, for supplies exceeding RM1.2m) as in Treasury Circular Letter 8, year If any company wins the bidding, for example at RM99,000.00, then the Service Charge deductible is RM e) The suppliers must specify the brand name and material used to produce the paper. A dealership letter must be furnished from its manufacturer. The government reserves the right to check on the supply and rejects any sub-standard quality paper. The supplier must also explicitly state that the papers are as per specification. The procurement committee will also upload some instructions to the bidders; such as the followings: a) Any query about ebidding can only be done to only 2 personnel. In our case, the Senior Executive Officer (PET) and the Head of Procurement (HoP). The communication is normally done through , telephone or facsimile. b) The opening and closing dates of ebidding offer: Normally, it is for 7 days. The closing time is always noon. The prospective bidders will be screened by the pre-procurement committee members. Those who are successful will be notified automatically online. The secretariat will also remind them by phone. For ebidding exercise, there must be no less than 5 companied qualified to take part.

8 c) The real ebidding on-line is slated for an hour, say between am and am, normally around 14 days after the closing date. On the actual day and time, a group of five consisting of our HoP, committee members and a representative from eprocurement will witness the on-line process on screen from our office. None of them is allowed to bring any handset into the room. Their job is only to monitor the ebidding process by the on-line suppliers. d) The ebidding Document also includes a few appendage: 1. Instruction and Terms & Condition to the Bidders 2. The Bidder's Certification Letter 3. The Bidder's Information 4. Comply to Specification Form 5. Offer Price 6. Delivery Location 7. ebidding Check List 8. The Bidder's Integrity Pact 9. The Successful Bidder s Integrity Pact e) The ebidders must download all the mentioned documents and upload again the completed forms and letters (Item Number 2, 3, 4, 6, 7, 8 above are mandatory). f) The ebidders must also submit the following forms and letters manually in the Ballot Box provided at the office: Item Number 2, 3, 5, 7, 8. The other documents are Principal Supplier letter and the latest Bank Statements for 3 consecutive months. The other optional documents include product catalogue and any supporting letter for bank credit facilities. All hardcopy documents are sealed and signed at the top right of the envelope with the title of the ebidding, Document Number and Bidder s bidding number written clearly.

9 There are some other rules that the bidders must abide by. The following are some examples: a) Normally, the supplier is given 14 days to fulfill the order. However, the polytechnic reserves the right to bring forward the delivery date of the supplies. Should there be any price increase after the award, the successful bidder must bear the cost. Equally, it is the responsibility of the supplier to replace any damaged items or items not meeting the specification. Should the supplier fail to deliver the items, polytechnic reserves the right to purchase them from other sources and bill the successful bidder. In the case of natural catastrophe like flood, the bidder is allowed to extend the time, upon request. b) All bidders and committee members are reminded of a few related Corruption Acts, such as the following Malaysian Anti-Corruption Commission Act 2009 (Act 694): "Any act or attempt to corruptly offer or give, solicit or receive any gratification to and from any person in connection with the project is a criminal offense". "Without prejudice to any other actions, disciplinary action against a member of the public service and blacklisting of the contractor or supplier may be taken if the parties are involved with any act of corruption". "Any contractor or supplier who makes a claim for payment in relation to this project although no work was carried out or no goods were supplied in accordance with the prescribed specifications and any member of the public service who certifies the claims commits an offense". For the moment, we are required to procure supplies through ebidding, 2 times in a year. In 2013, we did it for paper and toner. We found that ebidding gave a Better Value for Money to the government. Probably, with the experience gained, we will include other items too in In the coming installment we will cover about the traditional quotation and tender process. Footnote: Finally age has caught up the two workhorses in POLIMAS; Saidon Md Saim and Yong Kim Chea from Mechanical and Civil Engineering Departments respectively. Ask any Joe in POLIMAS, the chance is he would know these two gentlemen. Both of them have reached the mandatory retirement age, 60. By training, Saidon was a Master Welder as well as Welding Inspector and QC of Welding (Arc Welding TIG/MIG Grade 6G), while Yong Kim Chea was a curriculum expert for Facility Management. However, Saidon was well-known for two other areas. He was in charge of the students discipline and always ready to help out at the students parking lot. For many years, Saidon was the brain behind the special souvenirs for His Majesty Sultan of Kedah during convocation. Yong Kim Chea has contributed in many other ways too. He has done a great job as the Chairman of Technical Committee for various procurements. All said, POLIMAS has lost two staff members who really have served beyond the call of duty. We wish the two of you best of luck in your future undertakings. Take care.