Contents

1. INTRODUCTION…………………………………………………… 9
   • Purpose……………………………………………………………… 9
     • Objectives………………………………………………….. 9
     • Procurement…………………………………………… 9
     • Statement of Policy………………………………. 10

2. PROCESS………………………………………………………… 12

2.1.  Key Roles and Players………………………………… 12

3. PROCUREMENT PROCESS OVERVIEW……….. 13
   • Total Cost of Ownership (TCO)…………………….. 13
   • Delegation of Authority………………………………… 13
   • Declaration of Interest………………………………… 13
   • Advice and Assistance…………………………………. 13
   • Appointment of Consultants………………………… 14
   • Financial Soundness and Insurance Requirements………………………………………………. 14
   • Quality Management Assurance………………….. 14
   • Emergency Procurement……………………………… 14
     • Emergency Circumstances……………………. 15
     • Process…………………………………………………. 15
     • Emergency Orders (Outside Office Hours) 15
   • Ethics & Non-Compliance…………………………….. 16
   • Purchases outside the Process…………….. 16
4. PROCUREMENT METHODS…………………………….. 17
   • Purchase Requisitions……………………………….. 17
   • Placement of Orders………………………………….. 17
   • PO Exceptions………………………………………….. 17
   • Low Value Purchases…………………………………… 18
   • Sourcing Committee Spend and Tier Structure 18
   • Delegation of Authority……………………………. 18
5. Tender procedures and Process…………………….. 19
   • Document Structure…………………………………….. 20
   • Terms and definitions………………………………. 20
   • RFP Preparation………………………………………. 20
   • Sign‐off from End‐users…………………………… 21
   • RFP Preparation………………………………………. 21
   • Issue RFP to Chosen Suppliers………………… 21
   • Determine Weighting Criteria…………………… 22
   • Opening Tenders……………………………………… 22
   • Evaluate Tenders…………………………………….. 22
     • Interaction with Suppliers………………………….. 23
     • Negotiations with Suppliers………………………. 23
     • Risk and Compliance Report……………………… 23
     • Sign‐off of the Evaluation………………………….. 23
   • Sourcing Committee…………………………………… 24
6. Finalising Contracts……………………………………….. 29
7. SUPPLIER SELECTION……………………………………. 31
   • Local Empowerment………………………………… 32
   • Supplier Types…………………………………………. 32
     • Approved Suppliers………………………………. 32
     • Preferred Suppliers………………………………. 33
     • Strategic Suppliers……………………………….. 33
   • Supplier Database……………………………………. 33
   • Supplier Performance……………………………… 33
   • Supplier Payment…………………………………….. 34
   • Effect of Blacklisting………………………………… 34
8. Measurement………………………………………………….. 34
   • Introduction……………………………………………… 34
   • Implementation of a Procurement Checklist 34
   • Reference Documents………………………………….. 35

             List of Abbreviations

1. INTRODUCTION

1.1   Purpose

1. The purpose of this document is to set forth the policy and procedures of MTN Rwanda in respect of how products, goods and services are being The document will outline the process to be followed in procuring the products and services and how the contractual agreement are being set to insure that MTN Rwanda has taken all reasonable steps in a fair and transparent process to acquire its goods and services and avoiding any risk in managing its contractual obligations.
2. MTN Rwanda will endeavour to procure its goods and services from companies that comply and have met the pre‐set supplier selection criteria and conditions determined by the Cross Functional Team (CFST) within the organization. Thus, the supplier base of MTN Rwanda will reflect this requirement to position the company in the Rwanda Market as the company in the fore front of exercising the best practices in the corporate
3. For the purpose of this document the word “procurement”, “sourcing” and “purchasing” will be used interchangeably each one will mean the Procurement shall mean any activity where MTN Rwanda acquires any goods or services for its own usage.

1.1.1  Objectives

The objective of this policy and procedure is to establish a competitive advantage through procurement of “Best In Class” or “World‐Class” practices that enables MTN Rwanda to procure technologies, products and services that meet the needs of MTN Rwanda and its customers which will enable MTN Rwanda to supply services to the whole spectrum of the Rwanda Market in a cost effective and best possible overall value.

1.1.2   Procurement

The MTN Rwandacell business model is based on the centralization of the Procurement function and this includes the functionality of Support Services. The Procurement Process outlines an end‐ to‐ end responsibility for the Procurement department from recognition of the need to delivery of the order (Obtaining the needs from the users –HODs, sourcing quotes, Issuing RFI documents, Issuing RFP documents and negotiating with suppliers). Procurement is fully responsible for the

purchase of all goods and services and this includes specialist areas such as Network, IS, and Marketing, EBU and Mobile Money. Functional departments will provide expert input as required.

1.1.3   Statement of Policy

1. It is MTN Rwanda’s policy to procure technically suitable quality products and services that meets the needs of MTN Rwanda at the best overall value and in the most cost-effective manner. The award of business will be based on the pre‐set criteria and conditions that are determined by the CFST. It is the policy of MTN Rwanda that all suppliers will be treated fairly and in unbiased manner unless business needs dictate
2. Procurement will conduct its activities through a Cross Functional Team to maximize relevant input in the sourcing
3. All contract awards, purchase orders and commitment to purchase shall be done through the Procurement Policy
4. Procurement Policies, Procedures and Process and authorizations are executed per the Delegated Level of Authority (DLA) as amended from time to
5. All procurement activities will be performed in accordance with the Procurement Policy and Procedures as amended from time to time
6. All contracts and MTN Rwanda terms and Conditions will be sanctioned by Legal department before the contract can be signed or amended to protect MTN Rwanda from any Legal and or Regulatory
7. It is the policy of MTN Rwanda not to conduct business on Standard Terms and Conditions of the supplier and best efforts will be made to ensure that MTN Rwanda interests are protected through acceptable terms and
8. Procurement will take ownership and lead all commercial discussions and negotiations, including but not limited to pricing and contract terms, for sourceable goods and services
9. Procurement shall strive to conduct sourcing transactions based on fair, equitable, transparent, and free competition without involving personal interests or arbitrary considerations
10. Procurement shall comply with all relevant laws, regulations and MTN’s internal rules,

including spirit behind them, when conducting sourcing transactions

1. Procurement will ensure local supplier empowerment efforts will be made to develop local supplier pool
2. Procurement will utilize eSourcing tool for procurement actions as per the defined criteria
3. No supplier will be paid without an authorized PO/Contract, unless payments are for government fees such as taxes and general expenses e.g. utility payments, intercompany payments. Refer to Sievo Product Hierarchy on classification of non-sourceable and sourceable Spend
4. Procurement shall endeavour to prevent illegally acquiring or divulging confidential information regarding suppliers. The contractual obligations (non-disclosure agreements and confidentiality undertakings) always need to be adhered to by MTN personnel
5. Procurement will treat all suppliers in a fair and equitable manner
6. Procurement will not solicit or receive any personal benefit from suppliers, such as

entertainment or the acceptance of gifts and gratuities in accordance with MTN’s gift policy

1. All sourcing activities will be conducted with a view of the Total Cost of Ownership to MTN in line with the product / service lifecycle
2. Procurement will select the best and/or the most appropriate suppliers for MTN after considering such factors as the stability of their management foundation, quality of Goods and Services supplied, prices, supply stability, technology development capabilities, financial stability, CSR activities and business ethics reputation
3. Procurement will facilitate and manage supplier performance including any related consequences due to poor
4. Procurement will retain and keep under its control all relevant documents relating to Supply Chain Operations according to documentation retention standards established
5. Contract renewals and approval to roll contracts over will need to be submitted to Sourcing Committee for approval
6. Procurement will limit the number of intermediaries within the procurement process
7. Every effort will be made to optimize supplier tail
8. No verbal commitments will be made to
9. For the purpose of aligning with the local regulation on imported services, a local Tender should be run before opting for the foreign options. There should be tangible reasons to show that there is no local capacity, and this should be

NOTE: This document was developed in reference to MTN Group Supply chain Y’ello book, we are therefore guided by all the detailed clauses in the Y’ello book.

2.  PROCESS

PROCESSES – METHODOLOGY

Procurement Strategy

This section outlines the Vision, Mission and Strategic Objectives for MTN Rwanda.

Vision

To provide a world‐class Procurement service which creates value and contributes to MTN

Rwanda vision to be a leader in telecommunications in Rwanda.

Mission

To create sustainable mechanisms to increase value and standardize processes within Procurement while ensuring compliance to best practice

Strategic Objectives

• Standardize Procurement through‐out the operation.
• Ensure that Procurement is fully centralised within MTN
• Play a primary role to ensure that MTN Rwanda least cost operator objectives are met
• Establish and maintain partnerships with reputable strategic suppliers that will create
• Ensure compliance with Procurement best practice

2.1.     Key Roles and Players

CFO

The CFO is the custodian and executive manager of all procurement activities in the operation. The CFO ensures the implementation and adherence to the procurement policy and procedure.

Supply Chain Senior Manager and Procurement Manager

The Supply Chain Senior Manager and Procurement manager are responsible for:

• Establishment and maintenance of MTN Rwanda procurement policies and
• End‐to‐end procurement process from recognition of the need to delivery of the order (Obtaining quotes, Issuing RFI documents, Issuing RFP documents and negotiating with suppliers).
• Interfacing with suppliers and maintaining good relations with
• Purchase of all goods and services and this includes specialist areas such as Network and Marketing.
• Enforcing Group and Regional Contracts at MTN
• Filtering prospective Tenders to the Region or Group

3. PROCUREMENT PROCESS OVERVIEW

Procurement of all goods and services will be done by the Procurement Department, which is responsible for the procurement processes. Once a need or requirement is communicated to the Procurement department, they will assume full responsibility for the process. This includes but is not limited to the preparation of RFI’s, RFQ’s, RFP’s, negotiations and evaluation of suppliers, issuing of tenders, placement of orders and expediting.

3.1. Total Cost of Ownership (TCO)

Total Cost of Ownership (TCO) is a fundamental principle by which procurement at MTN Rwanda is undertaken. Value for money is the ideal combination of whole life‐cycle costs, referred to as Total Cost of Ownership (TCO), risk, and quality. TCO includes the purchase price, the cost of using and maintaining the equipment throughout its useful life and the cost of its disposal.

Risk varies with the purchase of different goods or services but must be managed using the principles of assessing the probability, determining the degree of impact, and planning possible mitigation.

3.2.   Delegation of Authority

All procurement will be conducted according to the delegation of Authority as approved by the Board of Directors of MTN Rwanda. Procurement department facilitates all Sourcing Committee Meetings.

3.3. Declaration of Interest

Business, personal or close family interests “Conflict of Interest” which may influence or may be deemed by others to influence an employees’ impartiality in any matters relevant to his or her duties should be declared. Any such declaration should be communicated in writing to the head of department, prior to the start of the procurement process or during the process if a conflict occurs then. Where the conflict of interest may influence the ability of the employee or representative to complete his/her duties, then that employee or representative should excuse themselves, or be asked to excuse themselves from performing that function.

For further information consult the Code of Conduct document

3.4.   Advice and Assistance

The Procurement department exists to advise and assist departments on all procurement related matters.

3.5.   Appointment of Consultants

In order to use Consultants/Contractors more effectively in MTN Rwanda, all appointments will be made with the prior approval of the CEO of MTN Rwanda for Procurement to process the orders and Finance to effect payment of such Consultants. The motivation for Consultants/Contractors should be authorised by the relevant HOD.

Consultants/Contractors cannot form part of the CFST. Their expertise can be used by the requesting Business unit employee interfaces and not with CFST (except where a Consultant has been asked specifically by the HOD to give specific advice on complex technology solution and the skill is not available internally).In this case the expertise of the Consultant will form part of the CFST recommendation and be noted as such. Consultants should not be given any Delegation Level of Authority to evaluate or sign‐off any Tender, Quotation and Invoices for payments. Contractors and Consultants cannot assume any level of Delegated Authority in the procurement process.

3.6.   Financial Soundness and Insurance Requirements

MTN Rwanda will conduct business with companies that are financially sound and are able to execute and support the services or products that are to be procured. Care should be taken when dealing with Local Empowerment companies so that they should not be penalized unduly because of their financial standing. It will be the responsibility of the Procurement Personnel to ensure that fairness is applied to create economic opportunities for Local companies with reasonable limits. Financial soundness shall mean a supplier who will be able to carry out the service/product supply without burden of risking the cash flow of the business unduly. For Local Empowerment purposes supplier contracts may be disaggregated to ensure that the company is in the position to supply without unduly risking the cash flow of the business.

3.7.   Quality Management Assurance

Quality Management Assurance (QMA) programs will serve to promote and encourage suppliers to maintain a “Best in Class” or “World Class” process in supplying MTN Rwanda. The QMA process will be implemented to ensure that suppliers meets MTN Rwanda quality standards, implementation of quality assurance programs and the acceptance or rejection of non‐ conforming products/services purchased through Procurement. The CFST will ensure that the standard quality of MTN Rwanda is adhered to in conjunction with the department representative. The department representative is accountable for the quality compliance component of the CFST.

3.8.   Emergency Procurement

The need for emergency procurement occurs when unforeseen events make it extremely urgent to obtain certain products, services and these products/services could not be obtained in time by means of formal RFx procedures. The unforeseeable urgency of the requirement and its impact on MTN must be clearly demonstrated before the approval. Poor planning will not be acceptable for bypassing the procurement process. Emergency procurement should not be confused with an “urgent” requirement, which upon review is deemed to have been foreseeable as opposed to Supply Chain’s definition of emergency. Procurement emergencies are defined as:

• Emergency Circumstances

Emergency purchases should be:

Immediate threats/risk to human life or safety,

• Immediate threats/risk of interruptions in the supply of network / communication to customers,
• Immediate quantifiable opportunity loss due to Marketing and Sales dynamics,
• Immediate threats/risk of substantial ecological damage,
• Immediate threat/risk of major consequential expense to MTN,
• Immediate threat/risk of serious damage to MTN’s reputation and good name (brand),
• Immediate threat/risk of legal suit against MTN
• Adverse immediate impact on business continuity/ cause business

When such an emergency arises, the Head of the Business Unit or CEO along with the head of Supply Chain decides on the action needed to mitigate the threat and authorizes the required procurement. In cases where an item is not available and must be expedited using airfreight, it is essential to refer to the Freight Policy for clarification on the deviation from recommended freight mode.

Emergency Procurement Form is prepared ex post facto and signed by the CEO and Head of Supply Chain, thereafter, provided to the respective sourcing committee, Group EXCO and Audit and Risk Committee for information and additional review if required. It is the responsibility of the service custodians to ensure that the threat facing MTN is alleviated. However, if the emergency happens within working hours but response is required within 24 hours, the MTN Head of Supply Chain’s written approval is a requirement to exempt the procurement of the goods or service from the RFx process. It is imperative that the Sourcing committee be provided with details of the emergency procurement, without exception, at its next sitting.

An emergency procurement method cannot be used to obtain retrospective approval for transactions that are not classified as an emergency as defined in this policy. Retrospective transactions should be reported to the Sourcing Committee and disciplinary action taken against individuals that have breached the policy.

• Process
• An emergency purchase order will be placed on the ordering system
• The end‐user will have the option to select alternative approvals, if the primary

requisition approver is not available, to ensure a speedy process

• The requisition will then be routed to the Procurement department
• Emergency Orders (Outside Office Hours)

The use of the emergency process is solely for use in the event of a genuine emergency e.g. because of a fire, flood, or adverse weather conditions or any other dire emergency outside office hours.

• The corresponding requisition must be raised on the system within 24 hours of the order number being issued
• The requisition must clearly cross‐reference the emergency order number
• A monthly report stating the emergencies should be kept by the Head of

3.9.   Ethics & Non-Compliance

All staff involved in the procurement process must do everything to promote the company’s interest, not their own. All negotiations and transactions must be done in an ethical manner, displaying the highest standards and professionalism. Compliance with all laws, regulations and procedures is mandatory in all transactions. This section should be read in conjunction with the MTN Code of Conduct document. Responsibility for compliance resides with both the individual and their line manager. Non‐compliance shall constitute misconduct or gross misconduct and will be dealt with in accordance with the appropriate disciplinary policy.

• Purchases outside the Process

No service or delivery will be paid for without an order number. Any person who commits MTN Rwanda to a purchase, a lease or any other commitment without a valid purchase order number will be personally liable for it.

4.    PROCUREMENT METHODS

Overview

The following guidelines should be applied to all goods and services procured. It applies to either a single item, falling within the price band, or multiple items which form a logical group and whose aggregate value falls within a particular price band. Any departure from these guidelines should be documented for audit purposes and will require justification.

4.1.    Purchase Requisitions

All purchase requisitions should be accompanied by three quotations, any departure from this guideline should be justified in writing. Only the procurement department is responsible for requesting quotations from Suppliers.

4.2.    Placement of Orders

Purchase Orders are formal Company documents used to make a purchase transaction official with a supplier. All purchase orders will be done through Procurement and where a contract does not exist a purchase order should contain standard terms and conditions that will serve as a contract to govern the transaction. All goods or services delivered to MTN Rwanda must quote an MTN Purchase Order number. Purchase orders sent out to suppliers must be signed by an Authorized Signatory from the procurement department.

• PO Exceptions

A PO must be raised for the procurement of all Goods and services, with the exception of the following:

• Staff and other advance payment
• Expense claims
• Utility payments
• Taxes
• Rental/Lease payments
• Restaurant
• Purchases ≤ USD $500
• Marketing Sponsorships
• Sellable tock

4.4. Low Value Purchases

One quote is required for purchases less than $500 otherwise three quotations are required for any purchase made unless tangible reasons are in place.

4.5. Sourcing Committee Spend and Tier Structure

4.6.        Delegation of Authority

The Delegation of Authority for Purchase Requisitions is as follows:

• If the amount is ≤ USD 500: Low purchase, there is no need of a PO and approval is required the procurement manager
• If the amount is >$500 to =<$1,000 a PO is needed, and approval is required by SCM Senior Manager
• If the amount is >$1,000 to =<$50,000 a PO is needed, and approval is required by CFO
• If the amount is >$50,000 and above a PO is needed, and approval is required by the CEO

5. Tender procedures and Process

A Tender process represents the manner in which approval for a spend value is obtained.

Where a Tender is to be followed as required in terms of this process, the process flow presented in the diagram below serves as a process guideline.

Figure 1: Tender Process Flow

This process will not be deemed necessary where the supplier has a GFA/local contract and agreed pricelist and when the value is equal or below $50,000, in that case the Procurement manager/SC Snr Manager will present the details of the supplier to the Sourcing Committee. Where necessary the terms of the GFA may be modified/amended for local conditions, and an in-country contract signed.

5.1.   Document Structure

This document provides an overview of the MTN Rwanda approach to issuing a Tender and is structured into the following main areas:

A.  Process:

This is further subdivided into:

1. Prepare RFP: This focuses on the requirements for completing a RFP document
2. Sign‐off: Before the RFP is issued the end‐user must approve the RFP

• Issue RFP: Issue the RFP to chosen suppliers through

1. Weighting Criteria: This section reflects when the weighting criteria should be agreed and what it should include
2. Tender Evaluation: This section indicates the various stages of the evaluation process

Sourcing Committee Preparation: This section includes the constitution of the various Sourcing Committee and the preparation of the Sourcing Committee report

• Terms and definitions

RFI ‐ Request for Information

A Request for Information (RFI) serves to request information from industry in order to address or learn about a particular issue. A response to a RFI requires very specific information about the supplier, such as corporate information including financial records and technical capabilities. The RFI could be considered a litmus test to determine whether necessary services and goods are available in the market or the ability of a supplier to provide it.

RFQ ‐ Request for Quotation

Request for Quotation (RFQ) is used when the specifications and requirements are known, and price only is requested. Price is the determining factor in selecting a supplier. An RFQ will be used for non-contract items or when a Price book is renegotiated.

RFP ‐ Request for Proposal

Request for Proposal (RFP) is a request for suppliers to tender for a service or contract. All detailed requirements of the tender may or may not be known at the time of issuing a tender and responses are subject to negotiation. Price must be a factor in the award but not the sole factor.

NOTE: MTN proposals will only contain these three (3) terms.

• RFP Preparation
• Procurement will facilitate the RFP creation
• A standard RFP Template is included in the toolkit
• Procurement will, in consultation with the end‐user, select the team who will form part of the cross‐functional evaluation team (CFT)
• Ideally members will comprise of Procurement and the relevant stakeholder (technical representatives) and depending on the value of the Tender, Risk and Compliance and / or Legal
• This team will be responsible for compiling the Tender as well as the evaluation thereof

• A RFP Template will be sent to the end‐user who will populate it with the required

technical information and / or specifications

• The CFT should ensure that the relevant business areas provide input, including scope of work, specifications, volume forecast, anticipated delivery schedule,
• The Tender evaluation criteria to be used during the evaluation process should be contained in the RFP document. However, the percentage breakdown (weighting criteria) should not be disclosed as this should only be determined prior to the Tender Evaluation
• Local content objectives and compliance frameworks should be included which are specific to each market
• At this time a pro‐forma contract should be prepared by Legal for inclusion in the RFP document, including key commercial terms to streamline the negotiation process, Including:
  • proposed payment terms
  • advance payment guarantee

o performance guarantee

o currency of pricing and payment

5.4. Sign‐off from End‐users

• Once the RFP has been drafted Procurement will request sign‐off of the RFP and confirm that it represents the end-user’s interests

• The RFP document must be approved by: o Relevant Stakeholder
  • Legal Representative (when necessary)
  • Procurement

• RFP Preparation

The Tender document should be allocated a unique code before loading into an online platform (eSourcing), hardcopy submission or sent via email in case it is proved that there are enough reasons to run a tender outside the online platform

• Issue RFP to Chosen Suppliers
• The suppliers selected to whom the Tender will be issued are based past service delivery of the supplier
• The Tenderers selected for participation in the RFP, must be informed in writing, g. via eSourcing platform, email, post, newspaper e.t.c.

When issuing the RFP:

• A pre‐tender meeting may be held with Tenderers at the discretion of the CFT
• There should only be one point of contact with the Tenderers and the Procurement Manager1 should fulfil this role
• No other employee may communicate with the Tenderers during the Tender process in the absence of a Procurement Manager
• Tenderers must be requested to send questions relating to the RFP, in writing, to the Procurement Manager
• A Question and Answer sheet addressing all queries will be sent to all Tenderers
• The Tender Delivery List is sent to the receptionist to record when completed Tenders are delivered by Tenderers and placed in the tender box
• Procurement informs the receptionist of the process to follow when tenders are delivered by Tenderers
• Determine Weighting Criteria
• During this process, weightings are assigned to the evaluation criteria to ensure that a fair and holistic evaluation is performed
• The weighted criteria should be decided after the Tender is submitted but before it is opened for evaluation
• Not all evaluation criteria have the same level of importance, therefore it is essential to determine these weightings before the actual evaluation so that the evaluation process remains objective

5.8. Opening Tenders

• The Tender Opening Procedure involves both the official closing of the Tender on the Tender closing date as stipulated in the RFP as well as the actual opening of the shared Tender documents from Tenderers
• In case the tender is not issued through eSourcing, the Tender should be opened with Procurement, Risk and Compliance and /or the Legal Representative present (when necessary)

1 A Procurement Manager operates in the Strategic Sourcing department and is responsible for issuing RFI’s, RFP’s and in addition concludes contracts with suppliers.

• Evaluate Tenders
• During the process of evaluating tenders, corporate governance matters need to be adhered to for example declaration with respect to conflict of interest and non‐ disclosure requirements
• It is important to ensure that the evaluation team has appropriate representation from key stakeholders
• An evaluation template is provided as a reference guide
• A briefing session must be held with the evaluation team prior to the start of the evaluation to agree on the weighting criteria and the process to be followed when evaluating.
• Once the evaluation begins, neither the evaluation criteria nor the weightings used for the evaluation can be

5.9.1.   Interaction with Suppliers

• It may be necessary to clarify any queries relating to the RFP with Tenderers on the shortlist
• Short listed Tenderers may be required to do presentations to clarify Tenders
• Site visits to the premises of short-listed Tenderers may be required
• No liaison with suppliers is allowed during tender process, other than regarding the Tender and this will be initiated by the Procurement

5.9.2.  Negotiations with Suppliers:

• The required MTN Rwanda representation (Technical, legal, Financial etc.) must be

pre‐determined before negotiations are held with suppliers

• The scope of the team and the roles and responsibilities must be defined
• Assemble a suitable negotiation team to conduct the negotiation
• Pre‐determine the negotiation strategy and tactics
• Record the negotiation sessions for future reference

5.9.3.   Risk and Compliance Report

• It is recommended that Risk and Compliance be involved throughout the Tender process
• The role Risk and Compliance plays is to ensure that due process has been followed throughout the Tender Process and to ensure that the evaluation of the Tenders is done fairly and objectively against predetermined evaluation criteria
• Risk and Compliance documents the process followed and highlights any discrepancies or points for future learning

5.9.4.   Sign‐off of the Evaluation

• The recommendation to the Sourcing Committee must be signed off by the Procurement

Manager and end‐user

• The end‐user signs off that he has the budget available should the Tender be awardedThe

end‐user also signs off that he is happy with the process and that the

Tender was undertaken as a result of his request

• Other relevant stakeholders may also be called upon to sign‐off on the document i.e. Risk and Compliance

5.10.   Sourcing Committee

a.    Introduction

These terms of reference are based on the requirements of good Corporate Governance and are in line

with the Procurement Y’ello Book requirement for Sourcing Committee

b.  Objective of the Sourcing Committee (“The Committees”)

The overall objective of the Committees is to consider (within their respective thresholds) all MTN Rwanda procurement sourcing and ensure that the procurement of goods and services is commercially and legally sound and conducted in a fair, honest, transparent and equitable manner. Including

• Endorsement on supplier landscape/strategy based on alignment with Group Operations Committee (GOC) and/or relevant functional unit
• Making sure that the SoW is to the satisfaction of the business
• Confirming the balance and quality of the multi-functional evaluation team
• Identification of any apparent bias in scoring by the team or individuals
• Assurance that all commercial, legal and reputational risks have been identified and mitigated
• That the best of business ethics has been deployed during the sourcing process

c. Role of Committees

• To review and endorse (or reject) the procurement process on all MTNR sourcing activities as per thresholds.
• Ensure compliance to the uniform group sourcing culture to promote consistent sourcing practices in line with the values of
• Ensure that the local sourcing activity is fair, honest, equitable, transparent, competitive and cost-effective.
• Furthermore, the Committee would ensure the strict confidentiality of proceedings and correspondence on all sourcing activity and related
• Promote local empowerment in a constructive and sustainable manner thereby ensuring sound economic development in Rwanda
• To have Delegation of Authority over Operating Company Sourcing Committees for any sourcing activity it reviews (to eliminate duplication and delay).

d. Submission of tenders and contracts to sourcing committees

• All sourcing activity that meets any one of the following conditions must be submitted to the respective Souring Committee for approval of award
  • Total value of the Sourcing activity (budgeted, current baseline or award value) during the contract period meets the threshold as defined in the table 5.
  • Contract renewals or rollover which contracts leads to a financial commitment
  • Sourcing activity that will lead to a contract award with financial commitment of greater than 2
• If neither of the above conditions are met but due to exceptional conditions (suspected fraud / bias) based on recommendations from Risk and Compliance Function Head and/or Sourcing Committee at time of initial submission the sourcing activity can be presented to the respective Sourcing
• Award of sourcing activities based on existing price books (PBs) / Group Frame Agreements (GFA) and/or supplier landscape should be presented by round robin resolution to the Sourcing Committee that approved the original
• THE ROLE OF THE CHAIRMAN
  • Ensuring all Committee members have an opportunity to participate in discussions in an open and encouraging manner; and
  • Where a matter has been debated significantly and no additional information is being discussed to call the meeting to order and ask for the debate to be finalised and the motion to be

e.      Authority and powers of the committees

• The Committees will have access to any information they require to fulfil their respective responsibilities.
• The Committees must ensure that any legal matters that could have a significant impact on the Company’s business have been properly reviewed by the Head of legal and regulatory as part of the tender adjudication process. The Committees are authorised by the Board to obtain outside legal or other independent professional advice, as they consider necessary to enable them to achieve their
• The Committees will have due regard to principles of good governance and codes of best practice.
• The Committee will have due regard to principles of corporate governance and codes of best practice.
• The committee shall be able to request Risk and Compliance to audit and review any sourcing activity and related processes where they feel such a review is

f.        Meetings

• Meetings shall be held as follows;
• SC meeting will be Bi-monthly or as and when
• If there is no business to be discussed or tenders to be considered, the Committees shall not sit.
• A quorum for decisions will be made of listed sourcing committee permanent members and voting in person, by video or tele-conference.
• All substantive members of the Committees shall be required to sign a declaration of interest form before the start of a meeting. Any member declaring a conflict of interest shall recuse him/herself from decisions of the Committee and the Chairman shall make the final
• A Sourcing Committee invited member supporting the particular sourcing submission should recuse him/herself from the commercial discussion and final decisions when Tenders from their respective functions are presented to the Sourcing
• Only Sourcing Committee members, Procurement and Risk and Compliance shall be present during the presentation on the commercials of a tender
• The Chairperson may invite such executives and senior management as appropriate to
• All Committee members and attendees shall receive from the Secretary of the Committee, not less than three working days, or such less period as necessitated by the circumstances, prior to the meeting, a formal agenda, together with working documentation where necessary, to ensure adequate preparation and effective contributions at
• Communication to both successful and unsuccessful vendors will be as made no later than 24 hours (unless otherwise agreed by the Committee)
• In the absence of the Chairperson, another member of the Committee shall Chair the meeting of the Tier I Sourcing Committee while the Chief Financial Officer shall Chair the meeting of the Tier II Sourcing Committee and the Chief Executive Officer shall Chair the Tier III Committee.
• The Tier III Committee shall in the absence of the Chief Financial Officer elect a Chairperson from the members
• In the event that a member of any Committee has been personally involved in the business decision that gave rise to the recommendation to the Committee or having any interest direct or indirect, then such a member will have to recuse him/herself from the related discussion and decision. This recusal shall be
• The Secretary of the respective Committees shall maintain a bound record of each meeting containing minutes of the Committee’s proceedings and persons in attendance as well as submissions, which shall be signed by the Chairperson and Secretary of the
• The minutes of the meetings shall be made available by the Secretary for inspection by any Member of the Board of Directors, External Audit, and Group Procurement or Risk Management, and a summarised schedule of tenders awarded by the Tier I, II and III Committees shall be tabled at each audit committee

g.      Notification

1. Notification by the Committee relates to the confirmation/validation of internal decisions that have already been made which may bind the company externally vis a vis third
2. Notification will also apply to single vendor procurement if the decisions were taken by:
3. the Board;
4. Single Source Motivation signed CEO, CFO and respective functional Executive; and
5. the Executive

h.Round robin decisions

1. It is a good governance for the Committee to keep round robin decisions to a
2. A decision that could be voted on at a meeting may instead be:
   1. submitted for consideration to the members; and
   2. voted on in writing by the
3. A decision contemplated
   1. will have been adopted if it is voted in favour by all the members of the committee; and
   2. if adopted, has the same effect as if it had been approved by voting at a

i. General

The Board or Chief Executive Officer, in consultation with the Chief Financial Officer, Procurement and Legal, may from time to time amend these terms of reference.

j.Dissolution

The Tier I and Tier II Committees may be dissolved by a resolution of the Company’s Board while the

Tier III Committee may be dissolved by the Chief Executive Officer.

k. Review of the terms of reference

These Terms of Reference will be due for periodic review on annual basis as and when necessary to ensure that they remain relevant to the business objectives of the Company and the mandate of the Group Sourcing Committee and are up to date with legislative and regulatory requirements.

l.Approval of terms of reference

These Terms of Reference shall be approved by the Chairman of the MTN Rwanda Board and the Chief Executive Officer.

m.   Meeting Content (For All SCs)

The SC meeting content will consist of the following:

• Round Robin Ratifications
• New SC Submission(s)
• Previously approved SC Submissions that have deviations to original recommendation
• Updates of past Sourcing Committee Submissions (i.e. award details)
• Procurement Waivers (i.e. Single Source Justifications )
• Tender Submissions (if requested from past SC meeting)
• Contract Renewals
• Emergency Procurement
• Supplier Performance Management Report

NOTE: Stock POs that are sourced from approved vendors are exempted from the SC approval. However, they are required to follow the other normal sourcing process.

6. Finalising Contracts

When finalising the contract:

• Once the outcome of the Tender process is known, the unsuccessful Tenderers should be informed accordingly
• Legal should be involved while the terms and conditions are being agreed and must provide input and finalise the Contract
• The designated signatory according to the Delegated levels of Authority (DLA) will sign the Contract
• Procurement and the Legal department will keep copies of the contract
• The Contract is maintained by:
  • Ensuring that the successful Contract is communicated to the relevant people
• Updating the measurement and control process
• Adding to or updating the approved supplier list Starting the Contracts Management process

6.1.    Contracts

The tender process will normally conclude by awarding a contract to a supplier. MTN Rwanda makes use of the following types of contracts:

Committal

• A committal contract which stipulates the exact quantities to be bought with the said specification, scope of work, conditions, or services to be bought over a period of time. This type of contract obligates MTN Rwanda to buy exact quantities and services from the suppliers on agreed terms and conditions before the expiry of the contract or annually. i.e. Contract to build a site

Non‐Committal

• A non ‐ committal contract is a contract with no definite quantities or strict service delivery timelines or schedules to purchase. It does however obligate MTN Rwanda to buy certain quantities as forecasted with reasonable volumes or service expectation within the stipulated parameters as set out in the tender requirements. This contract will enable MTN Rwanda to purchase as and when required with agreed period of months or years. i.e. Contract to a supply handset, Simcards, scratch cards

Blanket Contract

• Blanket Contracts are agreements entered into with a supplier who will deliver repetitive goods and / or services during a specified period according to the pre‐negotiated terms. Blanket contract agreements are not in themselves a commitment to spend money, but the

subsequent purchase order is. These purchase orders are placed by the Procurement Department. An example of typical items covered by a blanket purchase order is stationery or cleaning materials, motor vehicle repairs, etc.

• At the end of each financial year Blanket contracts will be reviewed and where necessary renegotiated.
• No Purchase order relating to a Blanket Contract may be issued for multiple years or remain open from one financial year to the

Payment Process

Payment of invoices will be affected in a three-way matching processing, which means that the invoice has to be authorized and accompanied by a Goods Received Note (GRN)/Parcial Acceptance Certificate (PAC) or Final Acceptance Certificate (FAC) and copy of the purchase order.

7.   SUPPLIER SELECTION

When selecting a supplier, careful consideration should be given to the following aspects; which includes but is not limited to the following:

• TCO – All aspects included in the product life cycle from purchase to disposal
• Financial Stability‐ Is the supplier dependant on the MTN business or is it able to sustain itself
• Service Excellence – Does the supplier provide after sales service, guarantees, hand‐over to

local partners etc.

• Delivery – Is the supplier able to provide within the required time frame required by MTN. Is the partner dependent on an international parent company or is it a small business
• Quality – Does the supplier have quality control mechanisms in place, Zero defect programmes and inspection procedures
• Reference Checks – Conduct independent reference checks on the supplier to ensure that the details provided are correct

7.1.Local Empowerment

MTN Rwanda supports Local Empowerment because it recognizes that it has a role to play in the development of the community and is committed to assisting the local industry. Although MTN Rwanda is committed to assisting the local industry, value for money remains a key policy imperative. It ensures that MTN Rwanda achieves the best possible outcome for the amount of money spent over the total life cycle of the purchase. The total life cycle cost is also referred to as Total Cost of Ownership (TCO). This however, does not necessarily mean selecting a Tenderer based on the lowest price or local content alone. Should a supplier be Foreign, every effort should be made to ensure that a local partner is engaged. Where this is not possible, some elements of the agreement with a supplier may be set aside for local participation as maintenance or other value-added service.

7.2.Supplier Types

Goods and services should be purchased from an approved supplier. Qualification as preferred and approved suppliers require an understanding of the supplier in terms of quality controls, compliance with statutory legislation, Health and Safety and Environmental policies as well as financial viability.

7.2.1.     Approved Suppliers

The approved supplier list consists of all the possible suppliers, which MTN Rwanda could transact with to meet its identified needs and requirements for the particular spend area under review. These suppliers should have fulfilled the supplier pre‐qualification criteria and be registered on the database. The suppliers which do not meet MTN Rwanda’s standards and requirements will not attain Preferred supplier status but may remain on the database for future reference and will need to undergo a supplier development program before being considered for future Tenders.

7.2.2.     Preferred Suppliers

Preferred suppliers are those who are approved and have previously delivered good service to MTN Rwanda. The suppliers to whom RFI’s, RFQ’s or RFP’s are issued will generally be taken from the preferred supplier list but may include Approved suppliers as well.

7.2.3.     Strategic Suppliers

Strategic suppliers are those with whom partnerships or collaborations have been formed. These relationships will be nurtured and monitored to ensure continuation of a mutually beneficial relationship. The importance of this is the creation of open and transparent relationships between the supplier and MTN Rwanda Ltd. These suppliers are distinguished by the criticality of the goods or service supplied and the value of the business.

7.3.Supplier Database

Any supplier who wishes to conclude business with MTN Rwanda should be registered on the supplier database. Suppliers who are not registered on the database are not excluded from tendering but should ensure that they are registered and verified before the closing date of the Tender. However, it is preferable that Tenders are issued to Preferred Suppliers but may include Approved Suppliers as well. Suppliers who form a Joint Venture to submit a tender must be registered and verified before the closing date of the Tender.

7.4.Supplier Performance

The suppliers work history with MTN Rwanda should be captured on the Supplier Database. At the

end of a contract term the supplier’s performance should be rated.

GOOD: Indicates that the supplier’s performance was above average, and the procurement officer can recommend the supplier without reservation.

FAIR: Means the supplier’s performance was acceptable and nothing specific prohibits the

procurement officer from recommending its service

UNSATISFACTORY: There are some aspects of the supplier’s performance that was not up to the required standard. This does not mean that the supplier is blacklisted but serves to caution Tender evaluators that pertinent information about that supplier may be necessary when considering that supplier for future tenders. This rating mechanism will be instrumental in determining whether a supplier moves from being an “Approved” supplier to a “Preferred” supplier.

7.5.Supplier Payment

Suppliers will generally be paid 30 days or above from date of receipt of invoice unless agreed otherwise in writing.

The Finance department will assume all responsibility for the payment of suppliers, once the user Department has verified the goods and or service and sent a signed payment authorisation.

7.6. Effect of Blacklisting

Consistently unsatisfactory performance may provide motivation to blacklist a supplier.

8. Measurement

8.1. Introduction

Measuring the application of this Procurement methodology is essential to ensure standardization of the process across the operation.

8.2. Implementation of a Procurement Checklist

Upon implementation of the Procurement methodology the Internal Audit function will perform a risk-based audit on Procurement. This audit will form part of the Exco approved annual audit plan with the objective of providing independent assurance on the effective operation of key controls.

In preparation for the audit and as a tool for internal control, the Procurement Checklist below should be used as part of a control self-assessment exercise. The Procurement Checklist is a list

of minimum requirements which can be used to measure the successful implementation of the Procurement methodology.

The basics of the Procurement Checklist are as detailed in the table below:

8.3.  Reference Documents

• Procurement Checklist
• Code of Conduct
• Group GSSC yellow book