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Election Procurement: Open and Free
by Stephen Connolly and Bruce Hatch

Overview

Election procurement is the process of purchasing goods, works or services that are:

  • of specified quality;
  • in needed quantity;
  • competitively priced;
  • from qualified providers; and
  • delivered within the scheduled time.

In large part, election commodities are fairly straightforward and consist of the thousand and one odds and ends required to run a registration center or polling station: note pads, pens, pencils, tamper-evident envelopes, printed forms, registration forms, ballot papers, ballot boxes, and packing material. Then there are the items which are a sign of the era in which we live: UV lamps and batteries, satellite phones, laptop computers, laminates, servers, and scanners. Whether high-or low-tech, the procedures for acquiring such materials are much the same.

The use of public monies is subject to a specific regulatory regime, whether that of the funding government or of an international donor. Since elections are publicly funded, this regulatory regime provides the framework for procurement policies and procedures. Procurement policies are broad principles which should be set by upper-level management; an example would be "All procurement should undertaken as part of a procurement plan." Procedures are the step-by-step actions which are necessary to prepare for and make the needed purchases; an example would be "The Procurement Officer shall solicit procurement needs from department heads, compile them into a master list, prioritize them, gather cost data, and present this document to the Finance Director for approval." Despite sometimes-intense time pressures, it is of critical importance to define and adhere to proper procurement policies and procedures.

Open and Free Competition

While "free and fair" are the bywords of credible elections, "open and free" are the hallmarks of good elections procurement processes. Transparency, by which the process is open to scrutiny, is the essential characteristic of an open and free procurement competition. And competition is the foundation of a transparent procurement system.

All procurement transactions involving public monies must be conducted in a manner that ensures, to the maximum extent possible, open and free competition. In addition to giving the greatest number of potential suppliers possible an opportunity to participate, competition will also ensure that materials are supplied at the best price. (Care must always be exercised to ensure that the lowest-priced bid is fully responsive to the requirements as set out in the bid solicitation.)

A responsive and efficient procurement system is critical to project implementation and success. Procurement procedures should permit quick response to program needs and simultaneously provide assurance of the judicious and accountable use of resources.

All countries are unique; their laws, rules, and regulations vary, and each procurement exercise has its special characteristics. Nevertheless, there are common themes to an open procurement process wherever it is conducted.

Theory

Procurement actions can be considered within two broad categories: the first consists of on-going activities that provide the framework for procurement, while the second consists of actions related to a specific procurement process. A simplified schedule of actions follows.

I.
 Ongoing
a. Review of procurement policies and procedures
Review of procurement policies and proceduresBoth policies and procedures should be subject to continual review and modification to ensure that they are appropriate to the times and scope of activity. 
b. Planning
All procurement-related activities should take place in the context of a procurement plan, as funding agencies are justifiably leery of involvement with organizations that seem to conduct business based on "strokes of genius." A simple plan is preferred. Those who execute publicly-funded activity in general, and procurement specifically, must always be able to justify their actions. Referring to an approved action plan is a reasonable point of departure.
c. Contact with suppliers, gathering of price data
The number and location of suppliers are constantly changing, and many of the items required for the conduct of elections, such as computer equipment, are improved on a regular basis. Therefore, it is necessary to maintain regular contact with suppliers in order to keep abreast of changes in companies, specifications, and costs.
d. Liaison with shippers
Establishing and maintaining rapport with shippers is essential when an organization is involved in moving goods over significant distances from suppliers to their destinations. It is also advisable to remain abreast of Customs requirements in the destination country in order to avoid delays in arranging release of shipments.
e. Reporting
Regular reporting, both internal as well as external (i.e. to the funding agency), helps an organization keep track of activities and assists in identifying problems and developing appropriate solutions.
f. Cost control
Cost control is a critical aspect of the management of any enterprise and further ensures an effective relationship with the agency funding the procurement. Cost control is the entire system by which costs are managed, contained, and documented and consists of the defined framework surrounding procurement, i.e. planning (both procurement planning and budgeting), regular price surveys, competitive contract awards, procurement tracking, program reviews, and audits. Funding agencies are generally appreciative of a well-defined cost control regime.
g. Procurement tracking
In order to ensure that the procurement process develops as smoothly as possible, it is recommended that each procurement action be tracked. A simplified tracking system should follow the dates of initiation and completion of all actions related to the procurement exercise (e.g. release of the Request for Bid (RFB), assessment of submissions, contract award, shipment date, arrival at customs, release from customs, delivery of materials, etc).
II.
 Specific

Procurement procedures will vary according to the cost and complexity of the item(s) being purchased: the simpler the procurement, the simpler the procedure. Purchase of a low-cost shelf item (i.e. an item mass produced and readily available) should be straightforward and fast: if required (due to the cost of the item), obtain several price quotes and then simply make the purchase. Larger procurements, in terms of cost, complexity, or after-sales installation and service arrangements that require establishment of a contract, are more involved.

The following general guidance pertains to larger, more complex procurements.

a. Planning

As previously stated, all procurement should take place within the context of a plan.

While election schedules are often subject to last-minute changes, the likelihood of on-time delivery of materials and services is increased significantly by advance planning. A plan for both the overall implementation of the election project and, specifically, the procurement of required commodities, should be established as early as possible. This plan should be as detailed as possible and should include a time-line specifying deadlines ensuring that personnel and financial resources will be brought to bear in an efficient and timely fashion.

An early needs-assessment is an essential part of the procurement plan. The type of activity will, of course, dictate the nature of the commodities to be procured. For example, if the activity involves reinforcing the capacity of an election commission, required items might include computers, photocopiers and other types of office equipment, whereas if the project calls for ballot design and production, then procurement may well be limited to the ballot papers.
b. Draft specifications
Good specifications are a prerequisite to a good procurement: in order to prepare a valid bid, the potential supplier must have a clear and accurate description of the technical requirements for the material, product, or service being procured. Specifications can range from the very simple (for office supplies, most polling station materials, etc.) to the extremely complex (ballots, computer equipment, a registration system, etc.) If the expertise does not exist in house to establish clear and accurate specifications, it is advised that outside assistance be sought.
c. Approval of specifications by the end-user as required
Approval of specifications by the end-user as required.Very often the end-user, in most cases the sponsoring Election Commission, must approve the specifications prior to the issuance of the Request for Bid (RFB).
d. Preparation of RFB

A simple letter of invitation to bid will state the name of the contracting agency and the purpose of the RFB (also known as an Invitation for Bid or IFB), and will include a list of the items enclosed which, depending on the complexity of the material or service being procured, might consist of the following:

· instructions to bidders;
· bid/award/contract form;
· bid schedule;
· forms of bid and performance bonds;
· conditions of contract;
· technical specifications;
· evaluation criteria (price, warranty, service, etc.);
· any other relevant factors which may be taken into consideration.

When dealing with the usual election commodities, this list can often be shortened to details describing the type and conditions of contract and the specifications. The funding agency will, in some cases, insist on approval of the RFB before issuance.
e. Identify suppliers
A list of potential suppliers must be drawn up and a determination of reliability and quality of service made. Depending on the complexity and value of the items being procured, local capacity, and time constraints, the bid may be put out for international competition.
f. Issue Request for Bid
The RFB should be sent to a reasonable number of the previously identified suppliers. Other suppliers can be sent the RFB on request if they hear about it from other sources.
g. Obtain at least three bids
In order to ensure adequate competition and thereby maximize resources, at least three competing bids should be received. However, it is possible that on occasion there may be fewer than three qualified bidders; an example would be if there are only two local printers with sufficient capacity for producing ballots, and the time constraint is such that off-shore procurement is precluded. In all cases, transparency must be maintained. Documenting the reasons for there being only two bids is a necessary step to ensure transparency.
h. On the date stated in the RFB, open the submissions and review competing bids

An internal review committee is often assembled for the purpose of reviewing the submissions and making a supplier selection. The decision to constitute a review committee will depend on the cost and complexity of the procurement. For example, if the procurement involves several off-the-shelf computers, the action is best left to the organization's Procurement Officer. A program to establish a voter registry requiring a complete computer network which results in numerous bids from companies located in several countries, on the other hand, will benefit from the perspective of a committee comprising individuals with knowledge of the program and the types of equipment required for its implementation, as well as the Procurement Officer with his knowledge of suppliers and logistics considerations. Review criteria will include:

· completeness of bid;
· errors in calculations;
· conformance to conditions;
· responsiveness to technical requirements; and
· authorized signature.

Reasons for the choice of a specific supplier should be documented.
i. Awardee/Bidder notified of results
All bidders should be advised of the decision of the review committee and thanked for their participation by means of a formal letter.
j. Establish contract.

Establish contract.The contract should address the method and schedule of payment; the date by which goods or services are to be delivered; the responsibility for the installation of any equipment; the terms of any applicable guarantee or warranty; and maintenance.

While it is not necessary that a contract be complicated, it must be clear. Most organizations conducting elections procurement will have an office or individual responsible for contract preparation. In order to avoid potential problems due to unclear contract language, it is recommended that boilerplate contract language be reviewed by an attorney to determine appropriateness.
k. Supplier/ contractor completes work
Depending on the nature of the work or product being procured, it may be desirable or required that a representative of the Election Commission observe the production process; this is especially true in the case of ballot printing. In order to assist the representative in his/her understanding of the process being observed, some preliminary explanation is advised.
l. Coordinate delivery with the supplier
Very close attention must be paid to delivery means and schedules. Few aspects of an election are more frustrating to those responsible for its administration than being told by a supplier that a shipment has been delayed. While it is not reasonable to subject a supplier to a barrage of calls requesting a status report, it is reasonable to request a regular update. Such a requirement can be included in the contract. Another contract feature that addresses the delivery of the items is a "penalty clause:" late delivery of the items should result in a penalty of a percentage, usually in the area of two percent, of the total contract value. The penalty might be applied according to a sliding scale, i.e. delivery three days after the due date might result in a .05-percent penalty, a seven-day delay could result in a one-percent penalty, and a fourteen-day delay might result in the full two-percent penalty. The details and their application would be determined by the nature of the procurement and in negotiation with the supplier.
m. Reception and inspection of merchandise is essential to ensure both quality and quantity.
Reception and inspection of merchandise is essential to ensure both quality and quantity.A qualified representative of the procuring agency should conduct an inspection of the goods and should sign a receipt. If there is no represenative on-site, a commercial agency can be engaged to perform this function. Any shortages, damage, or quality issues should be noted. Final payment should be made on acceptance of the materials.

Practice

Following are three examples of recent procurement exercises conducted in different parts of the world.

Liberia
During the course of the 1997 presidential elections in Liberia, IFES was asked by the Election Commission to procure various polling station supplies.

The numerous steps can be summarized as follows:
   1. Specifications.
IFES technicians reviewed numerous options with members of the Independent Election Commission (IECOM) and then drafted specifications for the required items
   2. Approval.
IECOM approval of the specifications was obtained.
   3. Preparation and issuance of Request for Bid.
The RFB was assembled and distributed to potential suppliers in Liberia, Europe, and North America. The package consisted of a brief letter to the potential supplier explaining the purpose of the RFB, a three-page bid solicitation which provided information regarding the bid, as well as contract details such as required delivery date, packaging requirements, term of bid validity, etc.
   4. Review.
On the date stated in the RFB, the submissions were opened and reviewed by an internal committee which made a selection and presented its choice to the IECOM for ratification.
  5. Notification.
All bidders were notified of the results.
  6. Awardees notified.
Several of the items were readily available on the local market and therefore were purchased "off-the-shelf." The bulk of the items required assembly off-shore.
  7. Contracts/Purchase Orders established.
Purchase Orders were issued for locally purchased items. A contract was established for the items procured internationally. Approval of the Contracts/Purchase Orders was obtained as appropriate as required by donor and in-house regulations. Larger contracts were approved by the funding agency.
  8. Production/assembly by contractor/vendors was initiated and completed.
  9. Shipping.
Materials were shipped/delivered to the designated office in Monrovia.

Haiti
Ballots were required for the 1995 presidential elections in Haiti.
   1. Specifications.
Ballot specifications were drafted and presented to the Provisional Election Commission (CEP) and the UN Elections Assistance Division (UNEAD) for review and approval. Also reviewed and approved by the CEP and the UNEAD were bid review criteria and weighting.
   2. RFB.
Following incorporation of revisions suggested by the CEP and the UNEAD, the RFB was released to a total of 15 firms located in North America, Haiti, and Europe.
   3. Bid Review.
On the date specified in the RFB, a committee consisting of in-house program managers and a technical adviser from an area printing firm that was not involved in the bidding process met to open and review the bids, seven of which were received. Each member of the review committee ranked the bids according to the approved criteria. The rankings were then summarized and an award recommendation was agreed to. The process was documented for presentation to the CEP and the UNEAD.
   4. Ratification by CEP.
Two members of the bid review committee presented the results of the review process and the recommendation to the CEP. Following discussion of the review process and an outside legal review of the process, the CEP ratified the award recommendation.
   5. Notification.
Bidders were notified of the results of the bid review.
   6. Contract established.
A contract was drafted, approved by the funding agency, and signed by all parties.
   7. Work undertaken.
The printer mobilized the necessary resources and completed the job according to schedule. A representative of the CEP was present on the production floor throughout the entire process. The CEP representative approved each plate.
8. Delivery.
The ballots were airlifted to Port-au-Prince. Accuracy of quantity and quality of printing were confirmed by the CEP. On completion of the job, the plates were destroyed.
9. Payment.
The printer submitted the final invoice for payment.

Bosnia
IFES-provided Logistics Staff assisted in coordinating material supply to the Bosnian elections held in 1996 and 1997. Activities undertaken included the following;
   1. An assessment of needs was conducted, factoring in such variables as voting population, number of candidates, number of polling stations, etc.
   2. Specifications were defined and reviewed by the Provisional Election Commission.
   3. Material requirements were broken into two lots: Polling Material and Printed Materials (including voters lists and ballot papers).
   4. Potential suppliers were identified and Requests for Bids prepared.
   5. FBs were sent to potential suppliers in Europe and North America, indicating that selection criteria would not be based on price alone.
   6. The Review Committee assessed all bids, incorporating compliance to specifications, experience, ability to deliver, price, and flexibility, and notified all bidders of results.
   7. Contracts (in some cases, simple purchase orders) were prepared and signed.
   8. Specific staff were assigned to the various supply contractors to ensure continued compliance with all specifications and on-time delivery.
   9. Polling Material was consolidated and packaged at the election warehouse for subsequent delivery to polling stations.
   10. Voters lists and ballot papers were produced and packaged by the supply contractor for subsequent delivery to polling stations.

Conclusion

As previously observed, both elections and procurement should be based on transparency and competition. As elections are funded with public monies, it is incumbent on those who manage these funds that the public trust be earned with every procurement action.
Note:
Selecting suppliers and awarding contracts are simply two of the many steps in a complex process which subsequently requires that very close working relationships be established between the contracting parties. As stated, the usual tight time-frames under which elections are normally held create unique problems for all involved, necessitating continued flexibility and cooperation.
As material needs are further defined and changes to initial requirements develop throughout the election (procurement) process, an efficient means of adjusting contractual terms becomes critical. Suppliers cannot be expected to add or delete requirements without formal contract adjustments, nor can they be expected to act on requests without proper guarantees of payment.
This challenge of reconciling the adherence to formal procurement procedures with the need for very quick action further highlights the importance of accurately defining material requirements, incorporating contingencies, and effectively managing a cooperative relationship with the supplier.
A number of issues to bear in mind that may cause problems and delays for suppliers include:

   1. An unclear definition of material specifications
   2. Changes to initial quantities
   3. The lack of packaging information
   4. The existence of alternative shipping methods and costs
   5. An unclear contract adjustment mechanism
   6. The lack of key contacts within the procurement group
   7. The lack of communication with end users
   8. Late payment


A brief glossary of words and terms commonly used in procurement:
Acquisition cost: the net invoice unit price of purchased items.
Bid bond or Guaranty: a bond or guaranty that accompanies a bid, when the invitation for bid requires it, to assure that the bidder will, if his/her bid is accepted, execute the project.
C.I.F.: Cost, Insurance, Freight. A cost calculated to the port of entry.
Formal Competitive Bidding: a system of procurement under which sealed bids are solicited through adequate advertising of a full statement of well defined requirements; specifications and all the conditions to be considered in the selection of the successful bidder together with the date are evaluated in terms of the advertised conditions; and the award is made to the lowest price responsive and responsible bidder.
F.O.B.: Free on Board. A cost calculated to the point of shipment.
Invitation For Bid/Request For Bid (IFB/RFB): a solicitation of offers from potential suppliers of specified commodities and/or services under formal bidding procedures.
Lump sum or fixed-price contract: a contract in which the contractor undertakes to provide specified goods or services in return for a single payment amount fixed at the execution of the contract.
Origin: the country in which a commodity is mined, grown, or produced.
Request for Proposals: a solicitation of offers from potential suppliers of described services for a negotiated contract.
Shelf items: goods that are normally kept in stock for sale to meet a general demand.
Sole-source procurement: a procurement in which goods or services can be obtained from only one person or firm. Also known as Proprietary Procurement.
Source: the country from which a commodity is shipped to the cooperating country; or, where a commodity is shipped from a free port or bonded warehouse, "source" means the country from which the commodity was shipped to the free port or bonded warehouse.