Guidelines for Procurement of Goods and Services

I. Basic Principles of Procurement

  1.   Efficient
  2.   Effective
  3.   Competitive
  4.   Transparent
  5.   Fair and reasonable
  6.   Accountable

 

II. Ethics for the Procurement of Goods/Services includes:

  1. Carry out tasks in an orderly manner with a complete sense of responsibility to smoothly and accurately achieve the objectives of the procurement of goods/services;
  2. Work professionally and independently based on honesty to prevent irregularities in the procurement of goods/services;
  3. Do not influence each other, either directly or indirectly, to prevent and avoid unfair competition;
  4. Accept and be responsible for all decisions made by the parties following the agreement;
  5. Avoid and prevent the occurrence of conflicts of interest of the parties involved, directly or indirectly, in the process of procuring goods/services;
  6. Avoiding and preventing the occurrence of waste and leakage of company finances in the procurement of goods/services;
  7. Avoiding and preventing abuse of authority and/or conducting joint activities with the aim of a person, group or other parties’ gain that directly or indirectly disadvantages the company.

 

III. Procurement Guarantee

  1. The Guarantee is used to procure goods/services with more than Rp. 250,000,000 (two hundred and fifty million rupiahs) work value.
  2. Guarantees in the procurement of goods/services in the form of Bid Insurance, Refutation Bond, Deposit Guarantee, Performance Insurance and Maintenance Guarantee.
  3. Bid Insurance may be issued by Commercial Banks or Non-Bank Financial Institutions/Insurance or in cash.
  4. Refutation Bond, Deposit Guarantee, Performance Insurance and Maintenance Guarantee must be issued by Commercial Banks or in cash.
  5. Guarantee Value:
    a. Bid Insurance value is 1% (one percent) up to 3% (three percent) of the Offering Value;
    b. The value of the Refutation Bond is equal to the Bid Insurance;
    c. The value of the Refutation Bond is equal to the Bid Insurance;
    d. The value of the Performance Insurance is at least:
    a) 5% (five percent) of the contract value for bids of more than 80% (eighty percent) of the HPS Value;
    b) 5% (five percent) x HPS Value, for bids less than or equal to 80% (eighty percent) HPS Value;
    c) The value of the Maintenance Guarantee is at least 5% (five percent) of the Contract Value by considering the risks of construction service work;
  1. For Consultancy Service Providers, there is no need for a Deposit Guarantee, Performance Insurance and Maintenance Guarantee.
  2. For providers of goods/services from Higher Education Institutions, Scientific Research Institutes or Government Agencies, there is no need to use such guarantees.
  3. For the Provision of Motor Vehicle Goods Procurement Services, the service provider can replace the implementation guarantee with a Guarantee Certificate from the Manufacturer/ATPM (Authorized Main Dealer).

 

IV. Methods of Procurement of Goods/Services

  1. Auction/Open Selection:

1)   Work value above Rp. 1,000,000,000 (one billion rupiahs);
2)   Carried out with post-qualification;
3)   Announced openly through national print media and can be followed by announcements through other media;
4)   Participated by at least 3 (three) bidders who meet the requirements;
5)   Goods/services providers who are entitled to participate in the auction/open selection are those who meet the requirements in the document for the procurement of goods/services;
6)   Only for providers of goods/services according to their classification and qualifications.

  1. Direct Selection/Selection:

1)  Work value above Rp. 250,000,000,- (two hundred and fifty million rupiahs) up to Rp. 1,000,000,000,- (one billion rupiahs) for Head Office;
2)  Work value above Rp.100,000,000,- (one hundred million rupiahs) up to Rp. 1,000,000,000,- (one billion rupiahs) for Regional Division;
3)  Announced on a limited basis through a bulletin board at the office of the work unit and/or inviting providers of goods/services who have a good track record;
4)  Participated by providers of goods/services who have a good track record and/or other goods/services providers that meet the requirements in the procurement document;
5)  Have at least 3 (three) providers of goods/services according to the classification of qualifications.

  1. Direct Appointment:

1)  Work Value up to Rp. 250,000,000,- (two hundred and fifty million rupiah) for the Head Office;
2)  Work Value up to Rp. 100,000,000, – (one hundred million rupiah) for the Regional Division Office;
3)  The procurement of goods/services through direct appointment is carried out by direct appointment of 1 (one) provider of goods/services that meet the requirements;
4)  Conduct clarification and negotiation;
5)  Head Office and Regional Divisional Offices can make a direct appointment purchase with work values ​​that exceed the limit of the provisions above if the service provider meets at least one of the following requirements:

  • Goods and services that are needed for the primary performance of the Company and cannot be delayed (critical business assets);
  • The provider of the said goods/services is the only one (specific goods);
  • Goods/services that are knowledge-intensive in which to use and maintain these products requires continuous knowledge of the Goods and Service Providers;
  • If the open auction/selection has failed 2 (two) times;
  • Goods/services owned by Intellectual Property Rights (HAKI) holders or who have warranties from Original Equipment Manufacture;
  • Emergency management for security, public safety and company strategic assets;
  • Advanced goods and services which technically constitute a single unit that cannot be separated from the work that has been carried out previously;
  • Providers of goods and services are SOE, SOE Subsidiaries or SOE Affiliated Companies, as long as the goods and/or services referred to are products or services from SOE, SOE Subsidiaries, SOE Affiliated Companies, and/or small and micro businesses, and as long as quality, price, and objectives can be accounted for, and are possible in sectoral regulations;
  • Procurement of goods/services under certain circumstances or of a unique nature.

6)  The direct appointment, as specified in point 5, can be carried out after a review and written approval is obtained at the Head Office by the President Director or by the Regional Division Head at the Regional Division Office.

 

  1. Direct Procurement:

1)  Procurement value up to Rp. 30,000,000, – (thirty million rupiah);
2)  Proof of receipt of goods is sufficient with a receipt/ticket and signed by the user official stating that the goods have been well-received;
3)  For procurement through small businesses/cooperatives, LMDH/KTH, shops/warung, modern retail traders and individuals;
4)  Specifically for the procurement of motorized vehicles through the Brand Holder Sole Agent (ATPM) and Authorized Main Dealer, the procurement will be adjusted to the authorized limit of the official user of goods/services.

 

  1. Self-management

Self-management is carried out with the approval of the authorized official for a job that meets one of the following criteria:

1)  Work aimed at improving and utilizing the technical capabilities of human resources and following the user’s main functions and duties;
2)  Works whose operation, implementation and maintenance require the participation of the local community;
3)  Jobs that in terms of size, nature, location, or financing are viewed as not in demand by the provider;
4)  Work that is not able to be calculated/determined in detail in advance so that if the provider carries it out, it will bear a significant risk;
5)  Organizing training, courses, upgrading, seminars, workshops, exhibitions, assessments or counselling;
6)  Work for a pilot project that is specifically for the development of technology/work methods that the provider has not carried out;
7)  Specific work like data processing, policy formulation, laboratory testing, development of particular systems and research by higher education institutions or scientific institutions;
8)  Work that is confidential to the company.
9)  Research implementation work; and/or
10)   The work that is not completed by the Goods and Services Provider with the work weight has reached 75% (seventy five percent).
11)   The implementing officials of Self-management carry out self-management of the above mentioned work.
12)   There is no dual authority between the elements of planners, implementers and work inspectors in implementing self-management work.

 

V. General Procedures for the Goods/Services Procurement

  1. The ULP Team carries out the process of procuring goods/services through the following stages:
    a. Document Preparation;
    b. Announcement/Invitation;
    c. Registration and Submission of Goods/Services Procurement Documents;
    d. Explanation;
    e. Submission of Bidding/Proposal Documents;
    f. Opening of Bidding/Proposal Documents;
    g. Evaluation and Assessment of Bidding/Proposal Documents;
    h. Clarification and Negotiation (for systems other than an open auction);
    i. Proposed candidates selections of winner/competition/contest;
    j. Determination of winners/competitions/contests;
    k. Announcement of winners/contests/contests;
    l. Rebuttal period (for open auction/selection system);
    m. Issuance of Letter of Appointment for Goods/Services Provider (SPPBJ);
    n. Contract;
    o. Issuance of Work Order (SPMK).
  2. The procurement process of goods/services is carried out by the Goods/Services Provider under the established Work Contract and other binding provisions.
  3. The goods/services inspection committee completes the inspection process to procure goods/services.
  4. The process of handing over the work of the procurement of goods/services by the Authorized Official who signs the Work Contract as the Commitment Making Officer.
  5. The General Treasurer carries out the payment process per the applicable treasury rules.

 

VI. Announcement /Invitation for Procurement of Goods/Services 

  1. Made by ULP (Procurement Services Unit).
  2. Contains at least the following points:
    a. Name of Work Unit;
    b. Job Name;
    c. Fiscal year;
    d. Registration Time and Place;
    e. Budget Ceiling;
    f. Qualifications of Goods/Services Providers;
    g. Classification of Goods/Services Providers;

 

VII. Registration and Submission of Goods/Services Procurement Documents 

  1. ULP prepares documents for the procurement of goods/services.
  2. Goods/Services Procurement Documents which include, among others:
    a. Explanation;
    b. General Terms;
    c. Special Conditions:
    d. Administrative requirements;
    e. Technical requirements including drawings and TOR;
    f. Attachments.
  3. Prospective providers of goods/services take the Documents of Procurement of Goods/Services according to the invitation that the ULP Team has predetermined.

 

VIII. Explanation of Procurement Documents

  1. The ULP team explains the procurement documents.
  2. The explanation as referred to in point 1 includes:
    a. Work Plan and Conditions (RKS) for procurement of construction goods/services;
    b. Terms of Reference (TOR) for consulting services;
    c. Written questions submitted by Prospective Goods/Services Providers who participate, and the ULP Team provided answers in writing.
  3. If deemed necessary, the prospective goods/services providers can review the work location.
  4. Make and sign the Minutes of Pre-Bid Meeting.

 

IX. Submission of Bidding Documents

  1. Goods/Services Providers are required to submit bidding documents.
  2. The submission of the bidding documents, as referred to in point (1), shall use the one-cover method or the two-cover method.
  3. The one-cover method is submitting the bidding documents consisting of administrative, technical, and price quotes, which are included in 1 (one) closed envelope to the ULP Team.
  4. The two-cover method is submitting the bidding documents in 2 closed envelopes. Envelope 1 consists of administrative and technical requirements, while envelope 2 consists of the bidding/offering price, then both envelopes are put into 1 (one) envelope (cover envelope) and submitted to the ULP Team.
  5. The participating providers must include the bidding document submission method in the goods/services procurement document.

  

X. Opening of Bidding Documents

  1. The ULP Team opens the bidding document.
  2. The prospective provider of goods/services will witness the opening of the Bidding Document.
  3. The ULP team verifies and assesses the validity of the proposed Bidding Documents following the requirements of the goods/services procurement document.
  4. The ULP team prepares and signs the Report of Bid Documents Opening with at least two witnesses.

 

XI. Bidding Document Evaluation and Assessment

  1. The ULP Team carries out evaluation and assessment of Bidding Documents.
  2. The evaluation and assessment of Bidding Documents for procurement of goods/construction work are as follows:
    a. Knockout System: bidding document evaluation and assessment using a qualitative method approach by examining and comparing bidding documents against the fulfilment of the requirements set out in the goods/services procurement document, in the following order:
    1) Administrative Evaluation
    2) Technical Evaluation
    3) Price Evaluation
    b. Value System: this system evaluates goods/services procurement that considers technical advantages compared to the bid price. The assessments cover the following aspects:
    1) Administrative Evaluation.
    2) Technical Evaluation.
    3) Price/cost evaluation. After passing the administrative evaluation, the bids will have technical and price evaluations.
    The value system uses a quantitative approach by providing numerical values ​​for technical and price elements. The provision of technical weights and prices/costs is regulated as follows:
    1) The element of price/cost ranges from 10% to 30%;
    2) The technical elements range from 70% to 90%, and each technical element must be quantified;
    3) The more complex the work, the technical weight has more substantial proportion value;c. Cost Valuation System Over Economic Life
    1) This system is used for goods/services procurement valued above Rp. 1,000,000,000 (one billion rupiah).
    2) The cost valuation system over the economic life evaluates the bid assessment by assigning a value to the technical elements. The price is assessed according to the economic life of the goods/construction offered based on the criteria and values ​​specified in the document for providers of goods/construction works/other services selection. The value of these elements is converted into a specific currency unit and compared with the total value of each participant’s offer with the bids of other participants.
  3. Evaluation and Assessment of Bidding Documents for consulting services procurement: Consulting services procurement is carried out through a qualification assessment process. This means the providers shall prove their competence and/or ability to do the work of consulting services. Then evaluation and assessment of bids are carried out using one of the methods below:
    a. The Technical Quality and Cost Evaluation System: an evaluation based on the value of the best combination of technical offers and costs. After that, technical clarification and cost negotiations are carried out.
    b. Budget Ceiling Evaluation System: an evaluation based on the best technical quality bids from participants whose offers are the lowest or the same as the budget ceiling, then technical clarification and cost negotiations are carried out.
    c. Lowest Cost Evaluation System: an evaluation based on the lowest cost offer whose technical offer is above the predetermined technical requirement threshold, then technical clarification and cost negotiations are
  4. The ULP  must include the Bidding Document evaluation and assessment method used in the goods/services procurement document.
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