Procurement
Policy

Update Record

SOP Details

Purpose and Scope

This Procurement Policy establishes Kilimora CLG's framework for acquiring goods, services, and works in a manner that achieves best value for money, ensures transparency and accountability, complies with applicable legal and donor requirements, prevents fraud and corruption, and supports organizational mission and sustainability.

The policy applies to all procurement activities regardless of funding source, value, or geographic location — including purchases of goods (equipment, supplies, materials), acquisition of services (consulting, training, professional services), contracting for works (construction, installation, infrastructure), and engagement of individuals as contractors or consultants. It applies to all personnel involved in procurement: project managers, procurement officers, technical evaluators, finance personnel, and executive management.

All procurement activities must adhere to fundamental principles ensuring fairness, efficiency, and accountability regardless of transaction value or complexity. These principles guide decision-making when policy provisions prove ambiguous or unprecedented situations arise.

Effective procurement begins with comprehensive planning ensuring requirements are identified, budgets are adequate, timelines align with project schedules, and approaches are appropriate for goods or services being acquired.

Annual Procurement Plans

Annual plans consolidate anticipated procurements across all projects identifying major acquisitions: goods exceeding $5,000 individually, services contracts exceeding $10,000, works contracts exceeding $20,000, and any procurement requiring competitive bidding under donor rules regardless of value. Plans specify estimated values, procurement methods, timelines, budget sources, and approval requirements.

The CCO consolidates departmental inputs into comprehensive plans reviewed by the CEO and board finance committee. Plans are updated quarterly incorporating new requirements, timing adjustments, and budget revisions. Published plans provide transparency to potential suppliers, particularly for specialized goods requiring lead time.

Procurement Requisitions

Requisitions initiate specific procurements and must include clear descriptions of requirements with technical specifications, quality standards, quantities, delivery locations and schedules, and budget availability confirmation including grant or budget line references. Technical specifications must describe functional requirements rather than brand names, enabling competitive bidding.

Market Research

Market research informs procurement approaches, specification development, and budget estimation. Methods include internet searches identifying potential suppliers and typical prices, consultation with peer organizations, supplier inquiries requesting capability statements and indicative pricing, and industry publications. Research findings inform decisions about procurement methods, budget adequacy, and specification appropriateness.

Procurement methods vary based on estimated value, market characteristics, urgency, and donor requirements — balancing competition, efficiency, and administrative burden. Higher-value procurements require more competitive processes and senior management approval.

Full Procurement Authority Matrix

Single-Source Procurement

Single-source (direct contracting without competition) is permitted only under exceptional circumstances: proprietary technology where a single supplier holds exclusive rights, genuine emergencies where competitive processes would cause unacceptable delay, follow-on contracts where original contractor familiarity reduces risks, standardization requirements, or fewer than three capable suppliers in the market.

Solicitation documents communicate requirements to potential suppliers, establish evaluation criteria, specify submission requirements, and define contractual terms applicable to successful bidders. Well-prepared documents attract qualified suppliers, enable objective evaluation, and prevent post-award disputes.

Solicitation Document Content

• Project or organizational background providing context
• Scope of work or technical specifications describing detailed requirements
• Delivery schedule or project timeline
• Terms and conditions including payment terms, warranties, insurance, and dispute resolution
• Evaluation criteria with weighting when multiple factors are assessed
• Submission requirements specifying format, certifications, and supporting documents
• Contact information for questions, submission deadline, and delivery instructions

Solicitation Periods

Minimum 14 days for straightforward goods or services; minimum 21 days for complex requirements or works contracts. Extensions are granted when questions reveal ambiguities requiring clarification or when supplier requests demonstrate that additional time would enable competition.

Questions & Clarifications

Questions must be submitted in writing to designated contact persons by specified deadlines — typically one week before proposal due dates. Responses are compiled and distributed simultaneously to all bidders, preserving questioner anonymity. No clarifications are provided within 72 hours of submission deadlines.

Proposal Receipt & Opening

Proposals are submitted in sealed envelopes or through secure electronic portals. Late submissions are rejected and returned unopened regardless of circumstances. For formal bidding processes, public openings occur on specified dates with all bidders invited to attend. Opening officials verify receipt, announce bidders and pricing, and record information in signed opening registers.

Evaluation Committee Composition

Committees comprise a minimum of three individuals: technical specialists assessing whether proposals meet specifications, procurement professionals ensuring process compliance, and end-user representatives confirming fitness for purpose. All members sign conflict of interest declarations before beginning evaluation.

Evaluation Stages

Effective contract management ensures suppliers deliver goods, services, or works per contract terms, schedules, quality standards, and pricing. Proactive monitoring identifies performance issues early enabling corrective action before project impacts occur.

Performance Monitoring

• Goods contracts: Inspection at delivery verifying quantities, specifications, quality standards, packaging, and documentation including invoices, warranties, and instruction manuals
• Services contracts: Periodic reports, site visits, milestone reviews, and deliverable assessments
• Works contracts: Regular inspections assessing construction progress, workmanship quality, material conformance, safety compliance, and schedule adherence

Delivery Acceptance

Acceptance certificates are issued for services or works confirming satisfactory completion per contract standards. Conditional acceptance may be granted with punch lists for minor deficiencies. Rejection occurs when deliverables fail contract requirements — written notices specify deficiencies and remediation deadlines within reasonable periods before contract termination for default.

Payment Processing

Payments are processed within contract terms — typically 30 days from invoice receipt — following dual approval: project managers confirming acceptance and Finance Manager verifying financial accuracy. Invoices verified against contracts for price correctness, quantity alignment, and term compliance before payment.

Contract Amendments

Amendments exceeding 10% of contract value or 20% of contract duration require approval at the same authority level as the original contract (CEO or board). Change requests are documented explaining changed circumstances, describing modifications, and quantifying cost and schedule impacts.

Strategic vendor management encompasses supplier identification and qualification, relationship development, performance monitoring across multiple contracts, and continuous improvement collaboration. Effective vendor management ensures access to qualified suppliers, negotiates favorable terms, mitigates supply chain risks, and creates value through strategic partnerships.

Supplier Database & Prequalification

The procurement officer maintains a centralized supplier database including contact information, product/service categories, geographic coverage, quality certifications, financial information, insurance documentation, past performance records, and prequalification status. Prequalification criteria include business registration, financial stability, technical capacity, ISO certification, safety records, insurance coverage, and client references. Prequalified status expires after two years requiring renewal.

Supplier Diversity & Local Content

Diversity programmes establish goals for procurement from women-owned enterprises, youth-led businesses, SMEs, and local suppliers within project communities. Capacity building programmes support diverse suppliers through training in business management, quality systems, and financial management. Mentoring pairs diverse suppliers with established businesses facilitating knowledge transfer.

Supplier Code of Conduct

Suppliers acknowledge compliance with applicable laws, ethical business practices prohibiting corruption, fair labor standards, environmental responsibility, human rights respect prohibiting child and forced labor, and confidentiality protection. Compliance is monitored through self-assessments, on-site audits for high-risk suppliers, and third-party certification verification. Serious violations result in contract termination.

Emergency Procurement

Emergency procurement addresses urgent, unforeseeable requirements where standard competitive processes would cause unacceptable delay. Qualifying emergencies include natural disasters requiring rapid response, critical equipment failures preventing operations, security incidents necessitating immediate protective measures, and donor requirements with short deadlines. Emergency justifications are documented and require CEO approval before commitments. Post-emergency reviews assess whether emergencies were genuine or resulted from poor planning.

Repeat Orders & Contract Extensions

Follow-on purchases within specified periods and value limits are permitted. Maximum extension periods of one year; cumulative extension values capped at 50% of original contract values; prohibited when market conditions changed significantly affecting the competitive landscape.

Consulting Services

Consultant selection emphasizes qualifications and technical approach over price. Selection methods: quality-based selection for complex assignments where quality is paramount; quality-cost based (60–80% technical, 20–40% cost) for balanced assignments; least-cost selection for standard assignments with well-defined scope. Terms of reference describe background, scope, deliverables, qualifications, duration, and evaluation criteria.

Framework Agreements

Established with multiple suppliers for defined goods or services over one to three years, enabling streamlined ordering without repeated competitive processes. Frameworks are established through competitive processes and rebid upon expiration for continued competitiveness.

Conflicts of Interest

Personnel involved in procurement must disclose conflicts including financial interests in bidding firms, family relationships with supplier representatives, outside employment with suppliers or competitors, and gifts or hospitality creating a sense of obligation. Discovered undisclosed conflicts result in procurement cancellation, contract termination, and disciplinary action.

Gifts & Hospitality

Modest promotional items displaying supplier logos are generally acceptable. Business meals at reasonable restaurants discussing legitimate business matters are permitted with management approval. Cash, gift cards, luxury items, and entertainment without business purpose are prohibited. Gifts during active procurement processes are declined regardless of value.

Bid Rigging & Collusion

Prohibited conduct includes bid rigging, complementary bidding, bid rotation, market allocation, and price fixing among competitors. Indicators include identical pricing, unusual bid patterns, same personnel submitting for supposedly independent firms, and correlations between bid amounts. Suspected collusion is reported to competition authorities and law enforcement. Colluding suppliers are disqualified and debarred.

Fraud Prevention & Detection

Fraud prevention relies on segregation of duties between requisitioning, receiving, and payment; inspection before payment; vendor due diligence; and complete audit trails. Detection occurs through internal control testing, analytics identifying unusual patterns such as frequent below-threshold splitting, and whistleblower reports. Confirmed fraud results in contract termination, legal action, law enforcement referral, and vendor debarment.

Supplier Debarment

Temporary suspension prevents new contract awards during investigation of serious allegations. Permanent debarment prohibits future participation for 3–5 years or permanently for egregious violations. Grounds include fraud or corruption convictions, document falsification, collusion, serious contract breaches, repeated poor performance, and labor or human rights violations. Due process includes written notification, opportunity for supplier response within 14–21 days, and consideration of mitigating factors.

Sustainable procurement integrates environmental protection and social responsibility into procurement decisions advancing organizational values beyond immediate operational requirements.

Environmental Sustainability

• Preference for energy-efficient equipment reducing operating costs and carbon emissions
• Renewable energy sources such as solar-powered equipment for off-grid applications
• Recycled or recyclable materials minimizing waste and resource extraction
• Products with minimal packaging reducing disposal requirements
• Durable goods with long useful lives reducing replacement frequency
• Locally sourced goods reducing transportation emissions and supporting local economies
• Suppliers with environmental management systems demonstrating systematic responsibility

Social Responsibility & Local Content

Procurement design considers local supplier capabilities, potential barriers to participation, and opportunities for facilitating local engagement — including contract packaging into sizes manageable for small firms. Capacity building programmes address gaps through training in business management, quality systems, and technical capabilities. Progress reporting tracks local content percentages, local supplier participation numbers, and employment figures.

Technology adoption improves procurement efficiency, transparency, and effectiveness through digital tools, automation, data analytics, and innovative approaches. The organization pursues continuous modernization balancing innovation benefits against implementation costs and change management requirements.

E-Procurement Systems

System capabilities include electronic requisitioning with automated workflow routing, a supplier portal for vendor registration and online proposal submission, online catalog ordering for standard items, a contract repository with search functionality, automated alerts for pending deadlines, and reporting dashboards providing real-time visibility into procurement pipeline, spending patterns, and supplier performance.

Data Analytics & Spend Analysis

Analytics capabilities include spend cube analysis examining expenditures by category, supplier, department, and time period; supplier performance scorecards; compliance monitoring identifying policy violations such as below-threshold splitting; savings tracking from competitive bidding; and predictive analytics forecasting future requirements. Regular analytics reviews identify optimization opportunities presented to management with recommended actions.

Mobile & Field Procurement

Mobile apps allow project managers to photograph needed items and submit requisitions, receive and approve requisitions while traveling, confirm deliveries through mobile signatures and photos, and access supplier contact information and contract terms. Offline functionality enables use without continuous internet connectivity — particularly valuable for field projects in informal settlements and rural areas.

Ultimate responsibility for procurement policy effectiveness rests with the Board of Directors, who exercise oversight through policy approval, performance monitoring, and accountability enforcement. The Board Finance Committee reviews major procurements, audit findings, and policy compliance reports.

Performance Metrics

Annual Policy Review

Annual review assesses continued adequacy considering organizational growth, regulatory changes, donor requirement evolution, audit findings, and stakeholder feedback. Review includes staff consultations, donor requirement alignment, legal counsel review confirming Kenya PPADA compliance, peer benchmarking, and performance analysis. Material policy amendments require Board approval. Technical or administrative updates may be approved by CEO with subsequent board notification.

Training & Capacity Building

New procurement staff receive comprehensive training during onboarding covering procurement principles, policy requirements, Kenya PPADA framework, donor requirements, documentation standards, and ethics expectations. Annual refresher training updates all personnel on policy revisions, regulatory changes, and emerging best practices. All personnel involved in procurement must acknowledge receipt and understanding through signed acknowledgment forms renewed annually.

Appendix A — Procurement Authority Matrix

Appendix B — Standard Procurement Timeline

Appendix C — Required Procurement Documentation Checklist

The following documentation is mandatory for RFP-process procurements and recommended for all competitive procurements:

• ☐ Procurement requisition with budget code and approval
• ☐ Market research or price comparison documentation
• ☐ Solicitation document (RFQ, ITB, or RFP)
• ☐ List of suppliers contacted or public advertisement evidence
• ☐ Proposals/quotations received from suppliers
• ☐ Evaluation documentation (scoring sheets, evaluation report)
• ☐ Approval record from authorized signatory
• ☐ Signed contract or purchase order
• ☐ Delivery documentation and acceptance certificate
• ☐ Supplier invoice and payment record
• ☐ Performance evaluation (for contracts above $10,000)

Appendix D — Conflict of Interest Declaration Form

The Conflict of Interest Declaration Form must be completed by all personnel before participating in any procurement activity, including requisitioning, specification development, market research, supplier communication, proposal evaluation, contract negotiation, or approval authority. The form covers financial interests, family and personal relationships, outside employment, gifts and hospitality, competitive interests, prior dealings and disputes, and any other potential conflicts.

Appendix E — Emergency Procurement Justification Template

The Emergency Procurement Justification and Authorization template must be completed for all emergency procurements, covering: emergency identification and category, detailed description and impact assessment, rationale for why standard processes cannot be used, verification of emergency legitimacy, specification of goods/services required, proposed supplier selection and due diligence, pricing and budget confirmation, risk mitigation and safeguards, preventive measures for future, and post-procurement review.

Authorization timeframes: Emergency procurement authorization requests should be reviewed and decided within 4–24 hours depending on value and availability of approving authorities. Donor notification for restricted grant funds must occur within timeframes specified in grant agreements, typically 5–10 business days. High-value emergency procurements approved by CEO may require ex-post board ratification at the next scheduled board meeting.