Module 2: Procurement & Sourcing

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Introduction

Procurement is more than just buying goods and services. It is about making smart, fair, and transparent decisions that ensure organizations get the right quality, at the right price, from the right source, at the right time. To achieve this, procurement follows certain principles that guide professionals and protect organizations from waste, corruption, and poor results. In this lesson, we will discuss the key principles of procurement and why they are important for businesses, NGOs, and governments in Malawi.

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1. Transparency

Procurement must be clear and open. Every step — from announcing tenders to awarding contracts — should be easy to follow and free from hidden deals.

• In Malawi, government ministries publish tender notices in newspapers or online so that suppliers can compete fairly.

• If transparency is ignored, corruption grows, leading to overpriced or poor-quality goods.

👉 Takeaway: Transparency builds trust with suppliers and the public.

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2. Competition

Healthy competition ensures that no single supplier dominates the market. By allowing multiple suppliers to bid, organizations can compare price, quality, and service.

• For example, NGOs like World Vision often invite several transport companies to submit bids before choosing the best.

• Without competition, organizations risk paying higher prices or receiving poor services.

👉 Takeaway: Competition encourages value for money.

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3. Value for Money

This principle means organizations must balance cost, quality, and reliability. The cheapest option is not always the best.

• A school might buy cheap desks, but if they break quickly, the school spends more money in the long run.

• Proper procurement checks both price and durability before making a decision.

👉 Takeaway: Value for money ensures long-term savings and quality results.

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4. Fairness and Equality

All suppliers must be given an equal chance to participate. This avoids favoritism and encourages more suppliers to join the process.

• In Malawi, the Public Procurement and Disposal of Assets Authority (PPDA) ensures fairness in government tenders.

• If suppliers feel discriminated against, they may stop bidding, reducing quality and competition.

👉 Takeaway: Fairness promotes trust and wider participation.

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5. Accountability

Procurement officers must be responsible for their actions. Every purchase should be documented, justified, and open for audit.

• For example, if a hospital buys medicine, records should clearly show how suppliers were chosen and why.

• Without accountability, funds may be misused or stolen.

👉 Takeaway: Accountability protects both the organization and the procurement officer.

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Practical Activity

Think about a secondary school in Malawi buying textbooks.

1. How can transparency be applied?

2. How can competition help the school get better deals?

3. What does “value for money” mean in this case?

Write short answers. This will help you see how procurement principles apply in real life.

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Conclusion

Procurement is not just about buying — it is about buying wisely and fairly. Principles such as transparency, competition, value for money, fairness, and accountability ensure that organizations get the best results while protecting public trust. Whether in government, business, or NGOs, following these principles creates strong systems that deliver quality, save money, and reduce corruption.

Introduction

Every organization depends on suppliers to provide goods and services — from raw materials to transport, office equipment, or even fuel. Choosing the right supplier is not just about who is the cheapest; it is about finding a reliable partner who will consistently deliver what is needed, on time, and at the right quality. In this lesson, we will look at how organizations in Malawi and worldwide select and evaluate suppliers to ensure smooth operations.

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1. Why Supplier Selection Matters

If an organization chooses the wrong supplier, problems like delays, poor quality, or corruption can occur. This affects customer satisfaction and damages the organization’s reputation.

• For example, if a hospital chooses a supplier who delivers fake or expired medicine, lives are at risk.

• If a milling company buys poor-quality maize, the flour will be rejected by shops.

👉 Good supplier selection builds trust, efficiency, and long-term success.

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2. Key Criteria for Supplier Selection

When selecting suppliers, organizations often consider these factors:

1. Price and Value for Money – Not just the lowest price, but the best balance of cost and quality.

   • Example: A school buying desks may choose a supplier whose desks are slightly more expensive but last longer.

2. Quality – Products must meet the required standards.

   • Example: NGOs delivering mosquito nets must ensure nets meet WHO standards, not cheap imitations.

3. Reliability and Capacity – The supplier must be able to deliver on time and in the required quantity.

   • Example: If ADMARC contracts a transporter with only one old truck, delays are very likely.

4. Reputation and Experience – Past performance shows if the supplier can be trusted.

   • Example: Companies often ask for references from other organizations before awarding contracts.

5. Compliance and Ethics – Suppliers must follow the law and ethical practices.

   • Example: The PPDA in Malawi requires suppliers to register and meet legal requirements before bidding.

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3. Supplier Evaluation

Selecting a supplier is not the end — organizations must regularly evaluate performance to ensure standards remain high. Evaluation looks at:

• On-time delivery: Did the supplier deliver as promised?

• Quality checks: Were goods or services up to standard?

• Flexibility: Could the supplier handle urgent or unexpected requests?

• Relationship management: Was communication smooth and professional?

👉 Evaluation helps organizations decide whether to continue, improve, or end a contract.

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4. Tools for Supplier Evaluation

• Scorecards – Suppliers are rated on criteria like price, quality, and delivery.

• Audits – Visiting the supplier’s factory, warehouse, or office to confirm standards.

• Feedback from users – Asking customers or departments about their satisfaction.

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Practical Activity

Imagine you are part of a health NGO in Malawi buying medical supplies. Write down:

1. Three criteria you would use to select a supplier.

2. Two ways you would evaluate the supplier after delivery.

This will help you think like a procurement officer.

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Conclusion

Supplier selection and evaluation are about building strong partnerships that keep the organization running smoothly. By considering price, quality, reliability, reputation, and compliance, organizations reduce risk and improve performance. Regular evaluation ensures suppliers stay accountable and committed. Whether in business, NGOs, or government, choosing and managing suppliers wisely is one of the most important responsibilities in procurement.

Introduction

In procurement, large purchases are usually handled through tendering and bidding. This ensures that organizations buy goods or services in a fair, transparent, and competitive way. After suppliers compete through bidding, the chosen supplier enters into a contract with the buyer. These three stages — tendering, bidding, and contracting — are central to procurement in both the public and private sectors. In this lesson, we will explore what each stage means and why it is important for accountability, efficiency, and value for money.

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1. Tendering

Tendering is the process of inviting suppliers to submit offers to provide goods, services, or works. It is often used for large projects or high-value purchases.

There are different types of tenders:

• Open Tendering: Anyone can submit a bid. Example: The Government of Malawi may issue an open tender for road construction.

• Restricted Tendering: Only pre-qualified suppliers can apply. Example: An NGO may shortlist trusted transporters for food distribution.

• Single Sourcing: Used in special cases where only one supplier can provide the goods.

👉 Purpose: Tendering ensures fairness, transparency, and competition.

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2. Bidding

Bidding happens when suppliers respond to a tender by submitting proposals or quotations. A bid usually includes:

• The price for the goods or services.

• The quality standards promised.

• The delivery timeline.

• Company qualifications and experience.

For example, if the Ministry of Health issues a tender for medical equipment, suppliers may submit different bids. One company may offer low prices but longer delivery times, while another offers higher prices but immediate delivery.

The procurement team then evaluates these bids using evaluation criteria such as price, quality, capacity, and compliance.

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3. Contracting

Once the winning bid is chosen, a contract is signed between the organization and the supplier. A contract is a legally binding agreement that clearly states:

• What is being delivered (goods or services).

• The agreed price and payment terms.

• Delivery schedules.

• Penalties for delays or poor performance.

• Responsibilities of both parties.

👉 Example: If a contractor fails to complete a road project on time, the government can enforce penalties written in the contract.

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4. Importance of This Process

• Ensures Value for Money – Competition lowers costs and improves quality.

• Reduces Corruption – Transparent systems prevent favoritism.

• Protects Both Parties – Contracts make sure each side knows their obligations.

• Builds Accountability – Suppliers can be held responsible if they fail to deliver.

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Practical Activity

Imagine you are part of a Malawi NGO buying school desks for 10 schools.

1. Would you use open tendering, restricted tendering, or single sourcing? Why?

2. List two things you would check in the bids.

3. Write one clause you would include in the contract to protect your NGO.

This exercise will help you connect tendering, bidding, and contracting to real-life decisions.

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Conclusion

Tendering, bidding, and contracting are the pillars of procurement. They ensure that purchases are made fairly, suppliers compete openly, and agreements are legally binding. For businesses, NGOs, and governments in Malawi, these steps protect resources, build trust, and guarantee that projects are completed successfully. When done properly, this process strengthens both organizational performance and public confidence.

Introduction

Procurement is not just about buying goods or services — it is also about doing it in a fair, honest, and transparent way. Ethics and transparency are crucial to prevent corruption, fraud, and poor-quality purchases. In Malawi, following ethical procurement practices is especially important in both government and NGO sectors, where public funds and donor money are involved. In this lesson, we will explore what ethics and transparency mean in procurement, why they matter, and how they are applied in real-life scenarios.

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1. What is Ethics in Procurement?

Ethics refers to moral principles that guide procurement decisions. Ethical procurement ensures that officers act honestly, fairly, and responsibly.

Key ethical principles include:

• Integrity: Procurement officers must not accept bribes or favors.

  • Example: A procurement officer should not favor a supplier because of personal gifts or relationships.

• Fairness: All suppliers must be treated equally.

  • Example: Two companies submit bids for a school project; both must be evaluated using the same criteria.

• Accountability: Officers must justify every decision and be answerable to their organization.

  • Example: If a supplier is chosen over others, records must show why.

• Confidentiality: Sensitive information about bids and suppliers must be protected.

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2. What is Transparency in Procurement?

Transparency means openness and clarity in the procurement process. It allows stakeholders — suppliers, organizations, and the public — to see that procurement is conducted fairly.

Ways to ensure transparency:

• Public tender notices: Publishing tenders in newspapers or online so all qualified suppliers can participate.

• Clear evaluation criteria: Suppliers must know how bids will be scored.

• Documented processes: Every step, from issuing a tender to awarding a contract, is recorded.

Example in Malawi: The Public Procurement and Disposal of Assets Authority (PPDA) requires all government tenders to be publicly advertised and evaluated according to set standards.

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3. Why Ethics and Transparency Matter

• Reduces Corruption: When processes are clear, bribery and favoritism are minimized.

• Improves Value for Money: Fair competition ensures organizations get high-quality goods at reasonable prices.

• Builds Trust: Donors, citizens, and suppliers are more confident in an organization that is ethical and transparent.

• Protects Organizations: Ethical procurement prevents legal issues, project delays, and reputational damage.

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Practical Activity

Imagine you are buying desks for a local secondary school.

1. Identify one ethical principle you must follow and explain why.

2. List one action you can take to make the process transparent.

3. Describe one consequence of ignoring ethics or transparency in this process.

Writing down these answers will help you apply ethical and transparent procurement practices in real life.

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Conclusion

Ethics and transparency are not optional in procurement — they are essential. They ensure that resources are used responsibly, suppliers compete fairly, and organizations maintain public trust. For anyone working in procurement in Malawi — whether in business, NGOs, or government — following ethical standards and maintaining transparency strengthens both performance and credibility.

Company Name: ________________________________
Supplier Name: ________________________________
Supplier Address: ________________________________
Contact Person: ________________________________
Date of Evaluation: ________________________________
Evaluator Name: ________________________________

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Section A: General Information

1. Type of Goods/Services Supplied: ___________________________________

2. Years in Business: ___________________________________

3. Certification/Compliance (e.g., ISO, local standards): __________________

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Section B: Evaluation Criteria

Criteria	Description	Score (1–5)	Remarks
Quality	Consistency, adherence to specifications, defect rate
Pricing	Competitive pricing, value for money
Delivery	On-time delivery, flexibility, lead time
Capacity	Ability to meet demand (volume, technology, equipment)
Communication	Responsiveness, clarity, problem-solving
Financial Stability	Stability to sustain long-term supply
After-Sales Service	Support, warranty, complaint handling
Compliance	Adherence to laws, ethical standards, safety
Innovation	Improvement, product development, adaptation

Scoring Guide:
1 = Poor | 2 = Fair | 3 = Good | 4 = Very Good | 5 = Excellent

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Section C: Summary & Decision

• Total Score: __________ / 45

• Overall Rating: ( ) Excellent ( ) Good ( ) Fair ( ) Poor

• Recommendation:

  • Approve as Supplier

  • Approve with Conditions/Monitoring

  • Do Not Approve

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Section D: Evaluator Comments

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