Procurement Procedure

PROCUREMENT PROCEDURE
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Water Injection Network Enhancement Project (WINEP)
Phase 2 (The Firm Scope & The Optional Scope)
Content
1. Procurement policy statement .................................................................................. 3
2. Organize and responsibilities .................................................................................... 4
3. Requisition and inquiry .............................................................................................. 6
4. Bid evaluation and vendor selection .......................................................................... 7
5. Purchasing ................................................................................................................ 8
6. Expediting ............................................................................................................... 10
7. Inspection and Testing ............................................................................................ 11
8. Shipment and Freight Forwarding ............................................................................ 11
9. Inland Transportation................................................................................................ 12
10. Logistic Support ..................................................................................................... 14
11. Receipt of Materials at Site .................................................................................... 16
12. Material Storage .................................................................................................... 17
13. Spare Parts ........................................................................................................... 18
14. Tax Exemption Application ..................................................................................... 19
15. Use of Local Products and Services ...................................................................... 20
16. Warranty from Manufacturer .................................................................................. 20
17. Material Control and Tracking System ................................................................... 21
18. Management of Construction Materials ................................................................. 22
19. Attachment 2 – G Part A Procurement experience ................................................ 23
20. Attachment 2 – G Part B Supplier information form ............................................... 25
21. Attachment 2 – G Part C Procurement manpower schedule in Man-days ............. 26
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1. Procurement policy statement
CONTRACTOR will procure all materials, equipment and services required to construct
the Facilities and complete the Work from sources on COMPANY Approved Vendor List.
CONTRACTOR shall ensure vendors to comply with COMPANY requirements as
stipulated in COMPANY’s relevant specifications.
All the procurement related activities shall be performed in compliance with COMPANY
specifications, approved procedures, Contract conditions and the applicable
export/import rules and regulations. CONTRACTOR shall prepare procurement
procedure as per the Scope of Work and the requirements of Contract and stipulated
specifications and submit to COMPANY for approval within 2 weeks after Contract award.
The procedure shall describe full procurement cycle process from inquiry to final
acceptance of Work including requirements for obtaining COMPANY approval.
Procurement activities shall be planned around the overall project schedule to ensure
timely availability of materials on Site as per the date specified for construction.
CONTRACTOR shall prepare a Bill of Materials and establish a procurement schedule.
The long delivery and critical items shall be ordered on basis of priority to meet their
delivery at Site per project schedule. Requisitions and documentation of selected venders
for the critical path equipment and material purchase orders shall be submitted to
COMPANY for review, and such critical PO’s shall be identified by COMPANY at the
early stage of the project.
CONTRACTOR shall try to achieve the standardization of equipment and materials,

especially on electrical, instrument and control systems/equipment to reduce spare parts
inventory and be convenient to operators and technicians familiar with existing equipment
functioning and maintenance.
In view of the work carried out in Iraq, CONTRACTOR shall ensure that all
manufacturers/vendors proposed are legally entitled to do business with Iraq.
CONTRACTOR shall make itself fully aware and informed of any sanction imposed on
companies conducting business related to the works or in connection with supplies
to Iraq and assess the imposed sanction and shall assume any risks, liabilities or
consequences of any action taken by CONTRACTOR in connection therewith.
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CONTRACTOR shall endeavor to maximize the Iraqi content of its supplies providing that
the goods, services, and personnel can be obtained on equally advantageous conditions
without compromising safety, quality, and the suitability of the purpose for which the
goods, services and personnel are intended.
2. Organize and responsibilities.
After contract award, a Procurement Department will be duly formed same as other
functional departments for execution of the project. A procurement manager will be
responsible overall procurement management. Under the manager are buyers,
expeditors, coordinators, and engineers at different posts working on various
procurement related activities.
The Procurement Department shall be wholly responsible for fulfillment of Contractor’s

duties and obligations stipulated in the Contract about procurement, and shall take the
functions and duties mainly at the following aspects:
 Purchasing
 Expediting
 Inspection and testing
 Shipment and freight forwarding
 Tax exemption for imported materials and equipment.
 Customs clearance
 Storage
 Spare parts and consumables preparation
 Material control and tracking

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The typical activities carried out by the Procurement Department are as follows:
 Procurement of all equipment and materials required as per the approved purchase
specifications, data and COMPANY requirements from COMPANY approved
vendors.
 Procurement of materials for capital, construction, installation, tie-ins, pre-

commissioning, commissioning, first fill of chemical and lubricants, consumables,
spare parts, special tools, and handling equipment as necessary and recommended
by manufacturers.
 Vendor documentation and control.
 Inspection, expediting and certification of equipment and materials.
 Customs clearance.
 Overland, sea or air worthy packing, marking, freight forwarding and transportation
with insurance, as required.
 Procurement monitoring and other procurement procedures necessary for the

successful conclusion of the Work.
 Requisitioning of vendor services for field assistance during construction, pre-

commissioning, commissioning phases as required.
 Requisitions, TBE and unpriced PO’s having been accepted by vendors for the
critical and long lead items to be submitted to COMPANY for review within the
specified days after Contract award.
To maintain the efficient performance of procurement activities, Procurement Department

will work alongside of Engineering Department & Engineering Subcontractor. This effort
will improve in the project schedule and allow timely resolution of all technical and
commercial concerns with the vendors.
Procurement Department will also closely collaborate with Project Control Department to
well know the overall progress of project and needs by construction team on availability
of materials and equipment to be installed or commissioned.
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In addition, Procurement Department shall establish an effective communication channel

with the COMPANY’s department concerned for smooth liaison with the COMPANY, to
timely obtain the comments and approvals from the COMPANY regarding the
procurement activities.
3. Requisition and inquiry
Procurement coordinators will be assigned for the purpose of maintaining a close attach
with Engineering and Project Control. Generally, long lead items will be engineered first in
the design effort. So far as possible, requisitions will be issued accompanied by complete
drawings and specifications. Initial bulk material orders may, therefore, represent a
portion of the ultimate order quantity for earlier delivery with balance amounts to be
defined and delivered later.
Purchasing inquiry will be prepared and issued in accordance with the material and
equipment requisition provided by Engineering. The vendors/manufacturers to be invited
to bid will be selected from COMPANY Approved Vendor List. The equipment and
material shall be purchased from the vendors contained in Approved Vender List, subject
to the following clarification:
If CONTRACTOR is unable to purchase in accordance with the Approved Vendor List

due to:
 Listed vendor failure to bid or no response,
 The required equipment or material is beyond the Approved Vendor List categories,
or
 Inability of any vendor in Approved Vendor List to supply in accordance with

specification and data sheets.
Then, CONTRACTOR shall propose to the COMPANY, in writing, an optional item,

vendor or manufacturer or specification for approval and shall secure the COMPANY
written approval to the proposal prior to proceeding with purchase. Each such proposal
shall be considered on a case-by-case basis by the COMPANY.
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Inquiry will be by the way of international tendering. All quotations will be by sealed bids.
Quotation by fax will be only applicable to the small value inquiry.
Inquiry sent to bidders will be complete with all technical and commercial requirements,
including instruction to bidder, terms and conditions, site service agreement, and shipping
and marking instruction to vendor, engineering requisition with detail description of scope
of work, spares, inspection and testing, drawings, statutory approvals as applicable and
relative specifications, etc.
4. Bid evaluation and vendor selection.
CONTRACTOR shall procure all equipment and materials in accordance with the
Contract specifications and Contractor provided & COMPANY accepted data sheets.
CONTRACTOR shall submit Technical Bid Evaluation Report of the proposed vendor for
COMPANY review.
The technical bid evaluation shall contain the following information:
 Complete description of items with specifications or applicable data.
 Contractor shall follow and ensure vendor’s compliance with COMPANY

requirements stipulated in the specifications.
 All deviations and exceptions from the Contract requirements shall be clearly
highlighted.
 Delivery terms, manufacturing duration and delivery period from ex-works to Site.
 Contractor’s recommendation of the proposed supplier with justification.
 Recommended spare parts for pre-commissioning and commissioning.
 Requirement of the vendor representative for testing and pre-commissioning.
 Delivery period.
 Inspection and testing requirements.
 Warranty after service requirements

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Separate technical and commercial evaluation on bids will be made to ensure the
materials and equipment to be purchased satisfying the specifications and offered with
competitive price as well. The sealed bids received from vendors will be opened under
presence of two procurement staff. The procurement manager or deputy manager will be
present in such opening.
The technical evaluation will consider such aspects as standardizing, technical

capabilities of equipment and materials offered, cost of operation, flexibility and ease of
operation, cost and ease of maintenance, service factor, interchange ability and spare
parts availability.
After evaluation and comparison of the bids, the optimum one, viewed from both
technical wise and commercial wise, shall be accepted for contract award. Award to the
lowest priced bid shall be subjected to the technical acceptability of the bid.
CONTRACTOR will prepare a Requisition Status Report and a Purchase Order Status
Report which shall include the information as detailed in ITT. CONTRACTOR shall
update these reports weekly and shall submit them to the COMPANY.
In addition, CONTRACTOR shall prepare a Vendor Information List which shall include
the data as required in ITB and shall be updated and issued to the COMPANY monthly.
CONTRACTOR shall ensure vendors/manufacturers to comply with COMPANY

requirements of the specifications as stipulated in the Contract.
5. Purchasing
CONTRACTOR shall be responsible for the following purchasing activities:
 Identification of long delivery critical items.
 Purchase of equipment and materials as per the COMPANY Approved Vendor List
and in accordance with the Project schedule requirements.
 Processing of requisitions from Engineering, the inquiry and P.O requisition shall
include all the techno-commercial requirements related with the items being
procured, spares, inspection and testing, documentation in line with the Contract.
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 Prepare inquiry status report, purchase order status report and procurement
expediting report and update the same and issue on a monthly basis;
 Preparing purchase orders with purchase specifications complete with all

attachments and applicable inspection, testing and documentation requirements,
spare parts requirements, vendor’s field assistance requirements and the
COMPANY’s specified requirements for procurement related activities as applicable;
 Together with Engineering, review vendor’s drawings/documents for conformance to

project specifications, applicable standards, codes, the COMPANY’s requirements,
etc.;
 Ensure adequate inspection, verification of material & test certificates are performed
and release note is issued prior to packing and dispatch from vendors’ works as
applicable;
 Carry out Factory Acceptance Tests for critical items if necessary and applicable.
For the workshop and laboratory purchased items, CONTRACTOR shall only consider the
list of Appendix 2 and 3 attached in this section.
Major Long Lead Delivery Items Purchased by CONTRACTOR
To ensure the timely delivery and arrival at Site, the long lead items, e.g., GRP Pipe and
Fittings, Instruments, valves, building material for base camp and temporary camp, shall
be ordered on priority basis. These items shall be paid with special attention sine
commencement of detailed engineering. Their material requisitions shall be preferably
worked out earlier as far as possible, so as to be possible inquiry and place purchase
order earlier.
CONTRACTOR shall closely follow up the whole course of processing in this regard,
including issuance of MR’s, inquiry, PO placement, ex-works inspection, delivery,
shipment and inland transportation, trying the best to achieve every step of the whole
cycle being performed in an expeditious and efficient manner, so as to ensure these
critical items to arrive at Site on schedule, timely satisfy the needs by construction,
installation and commissioning to secure the scheduled key milestones as per the
Contract for this Project to be realized.
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6. Expediting
CONTRACTOR shall undertake all expediting necessary to achieve or improve the

required delivery dates while maintaining the purchase order design specification and
conditions. Any actual or potential deviation or slippage from these requirements shall be
immediately informed to the COMPANY.
CONTRACTOR will prepare and submit expediting procedure for the COMPANY's review
and approval. The expediting work will be carried out in accordance with the approved
procedure.
CONTRACTOR shall perform expediting of equipment, materials, vendors and

manufacturer’s data, manufacturer’s technical assistance from bid invitation to delivery to
Site for vendor and manufacturer’s items including the materials on suborders.
CONTRACTOR shall similarly expedite all replacement materials and associated

documents, which are the subject of guarantee or insurance claims. Such expediting
shall be performed, as necessary, for the duration of the Contract.
Compliance with delivery schedules will be enhanced by assignment of desk expediters,

field expediters and/or by intervention of management as necessary. The expediters will
send and receive expediting information by means of telephone, fax, e-mail or letter. The
regular expediting actions and/or visits shall be performed to ensure the purchase order
commitments are being met. More frequent expediting actions and/or visits will be
arranged, if the order execution is lagging behind the schedule and is likely to affect the
delivery and overall Project schedule.
To meet the project schedule, CONTRACTOR will take appropriate remedial action with
vendors and suppliers in case they are behind schedule. CONTRACTOR will promptly
recommend appropriate alternative remedial action to the COMPANY and implement the
same.
Regular status reports will be issued highlighting problems, concerns and corrective
actions taken.
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7. Inspection and Testing
CONTRACTOR shall be responsible for inspection and testing activities for the procured
equipment and materials and will engage a reputable third-party inspection company
acceptable to the COMPANY to perform inspection of major equipment and materials
procured by CONTRACTOR.
CONTRACTOR shall carry out the factory and site inspection and testing as required, in
accordance with the project specification, and shall be responsible for ensuring that all
goods are strictly in accordance with the Contract and the specifications as defined in the
purchase order.
Provision shall be made at all times for COMPANY to have the option of participating in
pre-inspection meetings, inspection visits and test witness. CONTRACTOR shall prepare
anticipated weekly testing programs providing COMPANY 15 days advance notice for
their participation.
CONTRACTOR shall submit the vendor inspection and test plan, schedule, and
procedures for COMPANY information for the equipment and materials requiring factory
acceptance test to be undertaken. All inspection and expediting reports shall be
submitted on a weekly basis along with the progress.
Upon completion of inspection of material or equipment and/or review of the

manufacturing data records, CONTRACTOR inspectors shall fill out an inspection release
certificate indicating that it has been fully inspected. The inspection release certificate
shall be signed by CONTRACTOR inspectors. CONTRACTOR shall maintain a status log
to be issued to COMPANY for all inspection notice, inspection report and inspection
release certificate issued on each purchase order.
8. Shipment and Freight Forwarding
CONTRACTOR will be responsible for approving the release of completed goods for
shipment after satisfactory completion of final inspections and will also be responsible for
organizing and coordinating packing, marking and transport of equipment and from the
source of supply determined in the purchase order to the Site.
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CONTRACTOR shall ensure that the methods of transportation and packing used are
suitable for the type of material and comply with environmental requirements. Packing
shall take into account the type of rough handling which may occur during operations
such as loading on or off ships, and shall be designed to prevent damage to the
materials.
CONTRACTOR shall inform COMPANY every week with advance information on the
arrival of shipments and the nature of the material in every shipment. CONTRACTOR
shall provide information to COMPANY with 30 days’ notice on packing, handling, route
survey and transport of material involving special heavy lift and oversized cargo prior to
shipment.
CONTRACTOR shall provide insurance for transportation in accordance with the

Contract. CONTRACTOR shall employ a registered forwarding agent at each entry point
into Iraq. CONTRACTOR shall liaise closely with local Port authorities and airport
authorities and shall agree on detailed procedures with them.
CONTRACTOR shall be responsible for air-freighting of materials and equipment in the

event this mode of transportation becomes necessary to meet the Project schedule
requirements as set forth in the Contract or as it may have been changed in accordance
with the Contract.
9. Inland Transportation
CONTRACTOR has acquired many successful transportation experiences from previous

projects in Iraq. CONTRACTOR is fully aware of the difficulty of inland transportation in
Iraq. In order to provide the better transportation service for this project, a full
investigation on Iraqi custom requirements and inland transportation condition will be
made by CONTRACTOR at the project outset. This will be essential for future traffic
management and performance because Iraq has a long rainy season and the Site is
located remotely from traffic centers.
Cargoes arrived from overseas locations to Port of Iraq/Bagdad Airport need to go

through some regulatory and customs formalities. A local broker entrusted by
CONTRACTOR will handle under instruction and supervision by CONTRACTOR
responsible person on the following issues:
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 Define the time limit for inland forwarder.
 Receive and review the shipping documents in advance of cargo arrival.
 Obtain COMPANY’s certificates supporting application for tax exemption.
 Pre-notice ETA of concerned cargo and follow-up the updated ETA from local
shipping agent and make notification accordingly.
 Prepare all required customs forms and complete the customs formalities within 3
days.
 In emergency of shortage of original B/L, coordinate with shipping co. to get telex
release of concerned cargo.
 Coordinate with the Port Authority and the local carrier for loading and delivering the
cargo to the site.
 If any damage or loss or short landing happened prior to our acceptance of cargo,
make it clear which side should be responsible and arrange insurance survey in time
and obtain the short landing and/or discrepancy certificate from shipping agent/port
authorities.
 Notify the CONTRACTOR logistic coordinator of any problems or discrepancies

associated with the import shipment.
 Transfer the import certificate of concerned cargo and other custom documents to
consignee.
To guarantee the on-time and safe delivery, a qualified and experienced local forwarder
shall be selected through bidding evaluation, and the following requirements shall be
fulfilled:
 Try to arrange all shipping cargo to be transported by direct way upon the vessel
arrival at Port of Iraq.
 For heavy or oversize cargo, after review with COMPANY, CONTRACTOR logistic
coordinator will make a use of handling facilities of port and arrange the direct
transportation with inland carrier. Such deliveries of special cargo are usually as a
part of a master plan in which all phases of transportation from the factory in origin to
the jobsite are closely intertwined.
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 A wireless communication and tracing system shall be established for follow up the
status of on-way cargo.
 A delivery time limit must be imposed upon inland forwarder.
 During rainy season some urgent cargo, if possible, will be delivered by air from Port
Iraq/Bagdad Airport direct to jobsite.
 For sensitive and expensive cargo, prior to loading and off-loading, an expert of this
field must be present.
The CONTRACTOR logistic coordinator will issue regular reports concerning local
customs maters and port matters.
The international freight forwarder (having a local office) may also be utilized to
coordinate these activities.
10. Logistic Support
A logistic office each set up at Port of Iraq, Basra and worksite will be responsible for
supporting of customs clearance, transportation, and warehousing operations. All
controls and procedures will be updated periodically to ensure management and control
is maintained to meet job requirements.
Logistic office shall provide the support and services mainly as follows:
1) Customs Clearance and Transportation
 Monitor all shipments scheduled to arrive at local seaports or airports to ensure the
necessary customs documentation (commercial invoices, packing lists, ocean bills of
lading, certificates of origin, insurance certificates, etc.) to be available prior to the
arrival of the cargo.
 Work closely with the customs broker personnel to ensure proper classification of
materials as to import category and tariff heading and assist with the translation of
documents by providing technical definitions.
 Maintain logs of inbound cargo shipments, assign control numbers for all documents,
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packages and posting each step of the processing through final clearance and
dispatch, expedite the Project customs broker’s personnel as may be necessary, to
ensure the expeditious release of all Project cargo and materials.
 Ensure the expeditious handling, customs clearance and movement of

personal/household effects for all employees, including family and single status
personnel.
 Liaison with local purchasing to route and trace locally procured materials.
 Coordinate with the contracted carriers including the maintenance, incoming freight
logs, both ocean and air, dispatch logs, preparation of shipping notices, load
inspections, tracing and processing of freight claims.
 Obtain gate passes from COMPANY for all material and equipment deliveries.
 Prepare and distribute of ocean and air cargo reports, also daily shipping reports to
other local procurement groups, construction group, engineering group or other
disciplines as required.
 Coordinate insurance claims with COMPANY’s insurance company.
 Ensure COMPANY receives advance notification of heavy and oversized equipment.
2) Material Receiving and Warehousing
 Coordinate with the local source buyers/expediters and the personnel in charge for
transportation and customs affairs to receive and disburse the procured materials
and supplies.
 Supervise a warehouse that may be deemed necessary to receive and store

procured materials.
 Verify received cargo, check the quantities against bills of lading, freight bills, airway
bills, including inspection of cargo for any visible in-transit damage.
 Check in detail the materials to ensure conformance to packing slips and purchase
orders, if necessary, with assistance by discipline quality inspection engineers.
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 Prepare material receiving reports and any shortage and damage reports, as may be
required from time to time and the notification of the field material requisition
originator that materials have arrived.
 Store and protect procured materials, segregate, and disburse as required, including
consumable supplies, small tools, etc., within the warehouse and storage yards.
 Preparation of material withdrawal form for all disbursements with necessary

approval signatures prior to release of any materials.
 Coordination for damaged material returns for repair or replacement.
11. Receipt of Materials at Site
 CONTRACTOR will compile all fabrication and manufacturing data dossiers/reports

containing mill test certificates, machinery test certificates and all other relevant
inspection data after delivery of equipment to Site, as applicable.
 Warehouseman should inspect the relevant documents including invoice, packing list,
mill test certificate, operating and maintenance manual, inspection certificate, spares
list (commissioning spare list), vendor drawings, certificate of origin, etc. before the
arrival of goods at site.
 After offloading, a detailed check of the equipment/material shall be conducted

according to the delivery document. If there are any discrepancies or damage a
shortage and damage report will be issued in a timely manner.
 Warehouseman will notify CONTRACTOR quality inspector and COMPANY

engineer of all imminent deliveries of CONTRACTOR supplied equipment and
materials. After initial inspection, all equipment and material being delivered direct to
the Site will be inspected by CONTRACTOR inspector and COMPANY engineer on
arrival. CONTRACTOR quality inspector and COMPANY engineer will indicate their
acceptance or rejection of the equipment/material. Accepted material will be notified
to the material controller of a receiving inspection report. In the case of non-
compliance equipment/material found, quality inspector will complete a non-
compliance report. Copies of the non- compliance report and the shortage and
damage report will be forwarded to expeditor for liaison with the relevant disciplines
to clear the shortage and damage in
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the most expeditious manner. Warehouseman will notify quality inspector when the
equipment/material is available for re-inspection, upon released by quality inspector
the shortage and damage will be closed out and equipment/ material made available
for construction use.
 After completion of receipt, certification check and quality inspection, material

receiving report will be issued for each delivery against the shipping documents.
 As for Portable Power Station as free issue material provided by the COMPANY,
CONTRACTOR shall organize to inspect, take custody, and transport it to the
designated Power Station location at Neem.
12. Material Storage
 CONTRACTOR will utilize warehouses and fenced storage yards to receive, store
and protect all project equipment and materials. Handing, preservation and storage
of equipment will be carried out in accordance with vendor’s instruction and the
COMPANY requirements.
 A comprehensive safety plan will be initiated involving training, worker awareness,

teamwork, an attitude of concern for others and individual employee safety
recognition. Regular inspection of stored items will be carried out to verify adequacy
of storage protection provided.
 Liquids such as chemicals, lubricants etc. shall be stored on hard standings with
shed and proper facility for spillage and drainage control.
 Regular inspection of stored items shall be carried out to verify adequacy of storage
protection provided.
 The precautions for material storage are highlighted as follows:
 For indoor storage, the warehouses with security and protection shall be arranged
for storing the weather sensitive materials or equipment, such as electrical fittings,
instruments, small size pipe fittings, valves, spare parts, and all other items
designated for covered storage. If required, some materials and equipment will be
stored in air-conditioned enclosed storage.
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 For outdoor storage, the stockpile yards will be enclosed by fencing with gate to
control all incoming and outgoing traffic. Materials will be stored off the ground by
use of pallets, rough lumber, cross ties, or a like. Element protection as
necessary will be accomplished by the proper use of polyethylene, tarps, or
temporary structures. All weather roadways will be provided around and within
receiving and storage areas and will be maintained with through space for trucks and
operation of lifting equipment. The area will be secured by fencing no lower than 2.5
meters with barbed wire on the top. There will be 6 meters wide traffic gates in at
least two points. There will be personal gates next to these and in other strategic
locations that will be approximately 1.5 meters wide and 2 meters clear height. There
should be sufficient loading/unloading areas to accommodate trucks, trailers, cranes,
forklifts, etc. simultaneously. There will be absolutely No Smoking in any of the
material storage areas.
13. Spare Parts
As part of Request for Quotation, all the vendors will be required to quote spare parts to
ensure the smooth performance of start-up and commissioning as well as long period
continuous normal operation after Provisional Acceptance of the facilities, which shall be
carefully considered and planned.
The spare parts are categorized as:
 Start-up/commissioning spares
 One year’s continuous operation and maintenance spares
 Insurance/capital spares.
The spare parts must be prepared with adequate quantity to satisfy the needs of
application, and moreover, must satisfy the requirement in nature strictly interchangeable
and suitable for use in place of the corresponding parts supplied with the facilities. They
should comply with the specifications and must be suitably marked and numbered for
identification and packed for storage under the weather conditions prevailing at Site.
The commissioning and start-up spare parts shall be provided for all equipment/facilities
to ensure continuity of commissioning, and shall include the following:
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 Parts used during the testing and commissioning of the facilities.
 Other parts may be necessary for the facilities up to the time of Provisional
Acceptance.
These are the spare parts deemed to be required for two years normal operation of the
facilities. They shall include all wearable and maintenance spares based on the supplier’s
recommendation. After contract award, as a part of formal Request for Quotation,
CONTRACTOR will obtain vendors’ quotation including all necessary information for
spare parts for 2 years normal operation of the facilities, which will be filled up in the
Spare Parts Interchangeability Form (SPIR) as required by ITB.
A list of Capital Spares is also necessary, which includes the parts of equipment,
equipment assemblies or complete items of equipment, that are required for replacement
of the items not subject to deterioration by normal use but whose failure is critical for
continual operation of the facilities. So, the purpose of capital spares is to guard against
lengthy unplanned outage of the facilities, and to ensure the availability of spare
assemblies or components to minimize downtime during overhauls and ensure high
overall availability.
14. Tax Exemption Application
CONTRACTOR shall apply for a tax exemption certificate from Government of Iraq with
respect to the Work with assistance of the COMPANY.
CONTRACTOR shall duly submit to COMPANY for review and endorsement the
application for tax exemption for imported material and equipment containing all the
application forms and related supporting documents as specified in ITB, to timely obtain
grant of tax exemption from the Government of Iraq.
To strictly observe the laws of Iraq and properly resolve the issue of tax exemption,
CONTRACTOR shall make itself aware of the tax regulations enacted by the
Government of Iraq regarding imported materials and equipment and any change to the
tax exemption eligibility from time to time.
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15. Use of Local Products and Services
CONTRACTOR will source materials and equipment locally so far as possible, provided
that the service, materials, and equipment can be obtained on equally advantageous
conditions without compromising safety, quality, and the suitability of the purpose for
which the service, materials and equipment are intended.
As per CONTRACTOR experience, CONTRACTOR may procure some material from

local market for civil work, e.g., cement, reinforcement bar, concrete block, wood, etc.
CONTRACTOR may also procure most consumable gas, i.e., oxygen, acetylene, argon
from local manufacturers and suppliers.
CONTRACTOR will subcontract all custom clearance and inland transportation to local
companies.
16. Warranty from Manufacturer
CONTRACTOR will secure warranties from manufacturers and vendors of equipment,

machinery, and materials or supplies purchased by CONTRACTOR and used in the
Work. Such warranties will be assigned to the COMPANY to the full extent thereof.
Each purchase order for equipment, materials or supplies will bear the following clauses:
All articles, materials and work supplied by sellers shall be of good quality and free from
any defects. However, purchaser's failure to inspect or reject any article, material or work
shall not relieve seller of any warranties or obligations provided hereunder.
Seller warrants that if any article, material, or work furnished fail to conform to the
purpose expressly specified or manifestly implied in this order or is otherwise found to be
defective (excluding wear and tear from normal use and not due to conditions more
severe than stated or implied in this order), then seller shall promptly correct or replace
the deficient article or material delivered to purchaser at the address prescribed on this
order at seller's sole expense.
The articles, materials, or work to be furnished are to be used in a facility being

constructed by purchaser for the COMPANY. It is understood and agreed that all the
rights and benefits hereunder, including without limitation, all warranties and guarantees.
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shall accrue in favor of both purchaser and the COMPANY and may be enforced by
either of them.
17. Material Control and Tracking System
Sound material management will be essential to the project success. The sheer volume
of purchases orders, the number and geographical diversity of vendors, the numerous
steps and activities in the procurement process and the critical schedules create a very
complex system to be managed.
Accordingly, a detailed computer system will be used to track the routine activities,
beginning with engineering requisitions and following through the entire procurement and
materials control cycle including warehousing and final issue at the construction sites.
This system will collect and maintain scheduling, requisitioning, purchasing, inspection,
expediting, delivery, shipping, site warehouse inventory and field issue status.
Information from this system will be used to provide the required periodic reports on
procurement activities.
CONTRACTOR will prepare and submit material control procedure for receiving storage,
issuance and track ability of material or equipment for COMPANY review and approval.
The material control work will be carried out in accordance with the approved procedure.
CONTRACTOR will plan and exercise materials control through computerized tracking
and record of materials receipt and handling at site for the project material control. The
computerized material tracking reports, shortage & damage reports, material inventory
records on regular basis will be prepared and updated. A detailed material status report
showing all milestones from receipt of the engineering requisition through to delivery of all
goods and documentation will be prepared and updated by the Procurement Department
monthly. Sample of material status report form computer inventory system is attached
herewith.
CONTRACTOR will take prompt procurement action on all shortage & damage reports to
ensure timely availability or replacements for the short/damaged items in line with the
construction requirements.
eni iraq bv
CONTRACTOR will ensure that the specifications, drawings, test certificates, installation
and maintenance instructions for all equipment and materials from vendors, are available
at site, for ready reference during the construction phase.
18. Management of Construction Materials
All materials used in the Work shall be inspected and approved before incorporation in
the Work, which must be following related specification. The stored materials, even
approved before storage, may again be inspected prior to their use in the Work.
All the surplus materials will be stored properly, and the surplus report will be issued to
concerned parties. Any surplus material, which has been issued to construction, will be
removed from Site, and return to warehouse after the Work completion. The warehouse
will repeat the receiving, inspection, storing procedures and update the inventory records.
eni iraq bv
Water Injection Network Enhancement Project (WINEP) Phase 2 (The Firm Scope & The
Optional Scope)
19. Attachment 2 – G Part A Procurement experience

ATTACHMENT 2 - G
PART A - PROCUREMENT EXPERIENCE
Name of Company or member of joint venture / consortium: CONTRACTOR
Contract Scope of Procurement Value of Procurement Year Reference

To be filled by To be filled by
CONTRACTOR CONTRACTOR
To be filled by
CONTRACTOR
eni iraq bv
Optional Scope)
20. Attachment 2 – G Part B Supplier information form

ATTACHMENT 2 - G
PART B - SUPPLIER INFORMATION FORM
Description of Goods or
List of Suppliers Country of Origin Nearest Service
Services Provided
CONTRACTOR TO FILL
eni iraq bv
Optional Scope)
21. Attachment 2 – G Part C Procurement manpower schedule in Man-days

ATTACHMENT 2 - G
PART C - PROCUREMENT MANPOWER SCHEDULE IN MAN-DAYS
Project Month
CATEGORIES OF PERSONNEL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Main Office
- Procurement Manager 10 30 30 30 30 30 30 30 30 30 30 30 30 30 30
- Buyer 1 30 30 60 60 30 30 30 30 30 30 30
- Buyer 2 60 60 60 30 30
- Buyer 3 30 30 30 30 30
- Expeditor 60 60 30 30 30 30
Airport In Iraq
- Logistic Personnel 5 5 5 10 10
Port In Iraq
- Procurement Coordinator 40 40 30 30 30 30
- Logistic 40 40 40 60 60 30
Office
- Procurement Coordinator 30 30 30 30 30 60 60 60 30 30 30 30 30
- Material Coordinator 30 30 30 30 30 30 30 30 30 30 30 30
- Warehouseman 30 30 30 30 30 60 60 60 60 60 60
TOTAL 10 150 210 270 325 295 315 310 310 270 210 180 120
150 150

Procurement Procedure

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PROCUREMENT PROCEDURE

1. Procurement policy statement

CONTRACTOR shall try to achieve the standardization of equipment and materials,

2. Organize and responsibilities.

The Procurement Department shall be wholly responsible for fulfillment of Contractor’s

 Inspection and testing

 Shipment and freight forwarding

 Tax exemption for imported materials and equipment.

 Spare parts and consumables preparation

 Material control and tracking

 Procurement of materials for capital, construction, installation, tie-ins, pre-

 Vendor documentation and control.

 Inspection, expediting and certification of equipment and materials.

 Procurement monitoring and other procurement procedures necessary for the

 Requisitioning of vendor services for field assistance during construction, pre-

To maintain the efficient performance of procurement activities, Procurement Department

In addition, Procurement Department shall establish an effective communication channel

3. Requisition and inquiry

If CONTRACTOR is unable to purchase in accordance with the Approved Vendor List

 Listed vendor failure to bid or no response,

 Inability of any vendor in Approved Vendor List to supply in accordance with

Then, CONTRACTOR shall propose to the COMPANY, in writing, an optional item,

4. Bid evaluation and vendor selection.

The technical bid evaluation shall contain the following information:

 Complete description of items with specifications or applicable data.

 Contractor shall follow and ensure vendor’s compliance with COMPANY

 Contractor’s recommendation of the proposed supplier with justification.

 Recommended spare parts for pre-commissioning and commissioning.

 Requirement of the vendor representative for testing and pre-commissioning.

 Inspection and testing requirements.

 Warranty after service requirements

The technical evaluation will consider such aspects as standardizing, technical

CONTRACTOR shall ensure vendors/manufacturers to comply with COMPANY

CONTRACTOR shall be responsible for the following purchasing activities:

 Identification of long delivery critical items.

 Preparing purchase orders with purchase specifications complete with all

 Together with Engineering, review vendor’s drawings/documents for conformance to

Major Long Lead Delivery Items Purchased by CONTRACTOR

CONTRACTOR shall undertake all expediting necessary to achieve or improve the

CONTRACTOR shall perform expediting of equipment, materials, vendors and

CONTRACTOR shall similarly expedite all replacement materials and associated

Compliance with delivery schedules will be enhanced by assignment of desk expediters,

7. Inspection and Testing

Upon completion of inspection of material or equipment and/or review of the

8. Shipment and Freight Forwarding

CONTRACTOR shall provide insurance for transportation in accordance with the

CONTRACTOR shall be responsible for air-freighting of materials and equipment in the

CONTRACTOR has acquired many successful transportation experiences from previous

Cargoes arrived from overseas locations to Port of Iraq/Bagdad Airport need to go

 Define the time limit for inland forwarder.

 Receive and review the shipping documents in advance of cargo arrival.

 Obtain COMPANY’s certificates supporting application for tax exemption.

 Notify the CONTRACTOR logistic coordinator of any problems or discrepancies

 A delivery time limit must be imposed upon inland forwarder.

10. Logistic Support

1) Customs Clearance and Transportation

 Ensure the expeditious handling, customs clearance and movement of

 Coordinate insurance claims with COMPANY’s insurance company.

 Ensure COMPANY receives advance notification of heavy and oversized equipment.