PROCUREMENT POLICY

Office of Accountability: Head of Departments / Human Resources Department

Office of Administrative
Administration & Human Resources Department
Responsibility:
Effective Date of Policy: (DD/MM/YYYY)

Policy Prepared by: Human Resources Department

CHANGE HISTORY

DATE OF CHANGE NATURE OF CHANGE REVIEWER(S)

(DD/MM/YYYY) Original Policy Drafted. Human Resources Department

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 Contents

Preamble...............................................................................................................................................3
Objectives..............................................................................................................................................3
1. Procurement Procedure (Rules)....................................................................................................4
2. Approval Limits ..........................................................................................................................11
3. Administrative (Operating) Expenditure......................................................................................12
4. Capital Expenditure.....................................................................................................................12
5. Expenditure Approval..................................................................................................................13
6. Procurement of Professional Services.........................................................................................13
7. Settlements of Payments.............................................................................................................13
8. Inventorying Petty cash Items.....................................................................................................14
9. Definitions:..................................................................................................................................14

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 Procurement Guidelines

Preamble

The Ministries and Departments and the other organizations funded by the “Government
Consolidated Fund”, must follow the Government Procurement Guidelines. Since the
Institute of Bankers of Sri Lanka (IBSL) is a statutory body, not funded by the Consolidated
Fund, it is not required by law to follow procurement guidelines 2006/2018 and Procurement
Manual 2018 (Final), issued by the Government, but it may consider such guidelines as a
base for developing its own Rules on procurements. Under Section 7 of the IBSL Act, the
Governing Board may issue Rules applicable for its operations. Accordingly, the Rules on
procurement are developed based on the decisions taken by the Governing Board of the IBSL
from time to time.

Objectives

Generally, the procurement for IBSL can be grouped into four categories:

a) Goods - equipment, material, commodities, stationary items, books etc.

b) Works - construction of buildings and related works etc.
c) Information Systems – computer software and related hardware and communication
equipment; and
d) Services (Non-Consultancy) – Janitorial services, security services, building
maintenance, equipment maintenance, etc.

A sound procurement system is one that combines all the following:

a) Maximizing economy, efficiency, and effectiveness (Value for Money).

b) Adhering to prescribed standards, specifications, local laws, rules and regulations and
obligations.

c) Fair, equal and maximum opportunity for interested parties to participate in

Procurement.

d) Expeditious execution of Works, delivery of Goods, provision of Services and

completion of Information Systems.

e) Ensuring Transparency and consistency.

f) Environmentally friendly (Green) Procurement; and

g) Retaining confidentiality of information

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1. Procurement Procedure (Rules)

1.1 These rules shall govern the procurement of works, Information Systems, goods, and
services (non-consultancy) and incurring of expenditure for such procurements by the
Institute of Bankers of Sri Lanka (IBSL). In the procurement of works, Information
Systems, goods and services under these rules, due regard shall be made to fairness,
competitiveness, transparency, and cost effectiveness of the intended procurement in
addition to taking into account the quality, price and reliability of supply. Such
procurement shall be done in a manner most advantages to the IBSL.

1.2 Heads of Departments/Operations engaged in procuring works, Information Systems,

goods, and services shall establish procedures for segregation of functions in the
procurement of works, Information Systems, goods and services to ensure checks and
balances.

1.3 A Procurement Committee (PC) shall be formed with members, comprising Heads of
Administration & HR, Examinations, Member Relations, Information Technology
Operations, College of Banking and Finance (COBAF) and Finance Departments with
the concurrence of the Director General, which shall evaluate and recommend each
procurement greater than the value of Rs. 50,000 for relevant purchase approval as
per the limits given at para 2.1 below.

1.4 Centralized Functions

The following functions of the IBSL shall be the centralized functions of specific
departments as described below. Therefore, Heads of Departments and other officers
of departments other than the specific departments should not use the authority vested
in them by these rules for such functions except as specifically provided by these
rules.

Functions Department

A.  Recruitment of staff Human Resources

(Temporary/Permanent) Management

B.  Purchase of Land, Leasing, construction, Facilities Management

renovation, maintenance & repair of IBSL
buildings and the installation, repair,
reconditioning of any ancillary systems.
 Repairs and maintenance in relation to
buildings, plant and equipment (other than
office equipment).

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  Maintenance of all the service agreements
related to the IBSL Towers & premises

C.  Procurement of consumable items, office Administration

supplies, stationaries. Procurement of spares
and other items for Facilities Management
Department etc.
 Services related to courier and mail.
 Procurement of goods and services relating
to printing and advertising
 Procurement of Computers, Printers, related
accessories and software, maintenance with
service agreements etc.
 Purchase, maintenance, leasing and renting
of vehicles & Motorcycles.
 Procurement of security services, Tea
Service, Janitorial Service, Pest Control
Service, and any other service needed for
the smooth functioning of the IBSL
operations.
 Payment for utilities
 Procurement of goods and services for
Canteen facilities
 Medical Insurance for staff members
 Insurance for the Buildings and Vehicles &
equipment
 Procurement of goods & services related to
IBSL operations
 Procurement of furniture and fixtures
 Renting movable & immovable property.
 Any other procurement of goods & services
related to the operations of the IBSL
deemed fit by the Director General
 Procurement of Consultation/Professional
services for the smooth functioning of the
IBSL

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  Any other procurements other than
specified above

D.  Books & Periodicals including those in Library

electronic form, subscriptions & systems

E.  Updating/Upgrading IT systems and Information Technology

purchase of new software packages and
systems including firewall, clouds, backups,
etc.

1.5 If a Department needs to procure works, Information Systems, goods or services that
are within the centralized functions as set out in 1.4 above, the originator for such
procurement shall be the Head of Department/Operations requiring the goods or
services and the one of the recommending officer to procurement committee shall be
the Head of the Department to which the function is centralized. For the purposes of
this rule, the procurement of works, Information Systems, goods and services for
Library shall be originated only by the Head of Department under whom the Library
functions.

1.6 It shall be the duty of every officer recommending the procurement to satisfy
him/herself of the need for such procurement or expenditure prior to recommending
the procurement subject to the condition that provisions for such procurements are
available in the budget approved by the governing Board.

1.7 All procurement of works, Information Systems, goods, and services shall be finally
routed through Director/Administration by issuing Purchase Orders after obtaining
expenditure approvals from the relevant authority. Issuing Goods Received Notes and
entering into contract/maintenance agreements with related parties if necessary.

1.8 The Administration Department shall be responsible for maintaining stores where
necessary, following proper stock control procedures such as maintaining minimum,
maximum and reorder levels of stocks.

1.9 Procurement of temporary labour services (casual/contract basis) shall be in

accordance with approved administrative procedures.

1.10 Methods of Procurement:

(i) Any procurement with the value up to Rs.50,000 shall be approved by the
Director/Administration, subsequent to the recommendation from respective Head
of Division/any other authorized officer by calling at least three (03) quotations.
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(ii) Works, Information Systems, Goods & Services including Capital items above
and including Rs. 50,001/= shall be procured by inviting written quotations from
not less than three reputed suppliers of such work, Information Systems, goods &
services. Sealed quotations shall be obtained after issuance of Request for
Quotation (RFQ) which articulates specifications and basic conditions for
procurement. In the case of works, Information Systems, goods, or services for
which the IBSL has registered suppliers, quotations may be called such registered
suppliers and reputed suppliers of required items at the discretion of the IBSL.
Quotations shall be submitted to the Procurement Committee for evaluation and
recommendation.

email quotations could be accommodated with prior approval of the Director

General in case where the IBSL requires urgent procurement under specific
situations.

(iii) Appointment of Tender Board – Work, Information Systems, Goods &

Services including Capital items of a value exceeding Rs. 500,000/- shall be
procured by calling for tenders by a Tender Board in accordance with the
following Tender Board Appointments.

Limit (Rs.) Appointed by Chairman Mandatory

Members

500,001 – Director Director/Facilities Head or Deputy Head

2,000,000 General Management – in the of Finance
case of a procurement And
for the Facilities
Management Director or Deputy
Department Director of Admin &
HR
And
Director/IT– in the case
of a procurement for the Director/Head or
IT Department Deputy
Director/Deputy
Head of user
Director/Administration Department
& HR – in the case of And
procurements for all
other Departments. In case of purchasing
of a technical related
item, any Technical
officer for evaluation
of such technical

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 related goods

Head or Deputy Head

2,000,001 – 5 Chairman/ Vice Any member appointed
of Finance
mn. Chairman by the Governing Board
And
Director or Deputy
Director of Admin &
HR
And
Director/Head or
Deputy
Director/Deputy
Head of user
Department
And
In case of purchasing
of a technical related
item, any technical
officer for evaluation
of such technical
related goods

Chairman/ Vice Director General

Above 5 mn. Governing
Chairman/ Governing
Board And
Board member
Head of Finance
And
Director of Admin &
HR
And
Director/Head of user
Department
And
In case of purchasing
of a technical related
item, any Technical
officer for evaluation
of such technical
related goods

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(a) Administrative functions relating to a tender shall be handled by the
Administration & HR Department. Tenders/Quotations shall be called and
evaluated as per the Tender Board’s recommendations.

(b) However, this rule shall not be applicable for functions such as recruitment
of staff, training of officers etc. where tender procedures are not applicable
and special approved procedures are in force.

(c) Tender notices shall be published in newspapers at the discretion of the

IBSL in which advertisements are generally placed by the IBSL, and in the
IBSL website.

(d) Bidding shall be conducted through the Bidding procedures as specified in

the Government Procurement Guidelines 2006/2018 at the discretion of
the IBSL.

(e) Software package/s or any other building installations that are above Rs.
500,000 recommended by a Technical Evaluation Committee (TEC)
appointed by the Chairman may be procured, following the above
procedures.

Composition of Technical Evaluation Committee (TEC)

 There shall be TECs for all Procurements above Rs. 500,000 falling
under the purview of Facilities Management and Information
Technology Departments. No member should serve in both the Tender
Board and TEC.

 TECs should consist of subject specialist/s, and at least one member

who is sufficiently knowledgeable on Procurement procedures.

 A TEC where necessary may obtain expert advice from external

members or institutions on specific subject matters with the approval
of appointing authority of TEC.

 A TEC may also obtain assistance for drafting bidding documents and
evaluation of Bids from external consultants who shall be guided and
directed by the TEC this may be done, with the approval of appointing
authority of TEC.

 A TEC is however solely responsible for the technical evaluation.

(f) Where clear guidelines are not specified in these rules or other guidelines,
separate specific approval shall be obtained from the Chairman.

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(iii) Procurement from Sole Agents/Direct Sellers

(a) If the goods required constitute proprietary items, such goods, Information
Systems, and services connected with such goods, may be purchased on
written quotations from authorized agents or the principal supplier after
approval for the procurement has been obtained in accordance with these
rules.

(b) Software packages, recommended by a committee appointed by the

Chairman may be purchased after obtaining due purchase approval from
the direct sellers or authorized agents through internet, and the Head of
Finance may pay for such purchases using the Corporate Credit Card,
through fund transfer or by cheque, provided that:

(i) Local suppliers are not available for such software, and

(ii) The value of each such package does not exceed USD 10,000.

(iv) Procurement from Limited Suppliers - Where the estimated value exceeds Rs.
500,000, subject to these procurement procedures, the Tender Board, if it has
reasons to believe in respect of any particular item, work, Information Systems,
good or service, that the number of reputed suppliers is limited, or likely to be few
or for any other valid reason, may authorize that such item, work or service be
obtained by written sealed quotations from specified suppliers only.

(v) Procurement in exceptional circumstances - In case of urgent requirement or in

exceptional circumstances, works, Information Systems, goods or services may be
procured from a supplier in a previous tender for a similar purpose, with the
approval of the Director General. Such repeat orders may be authorized only up to
50% of the original contract value, provided that not more than six months have
lapsed from the date of award of the original contract and the recommending
officer certifies that –

(a) The necessity for additional requirements was not foreseen and identified at
the time the original invitation to bid was issued.

(b) It is not economical to follow the bidding procedure again or following the
bidding procedure is impracticable due to the urgency of the requirement.

(c) The price of goods has not dropped significantly since the original order.

The originator and recommending officers of the procurement should use their
best endeavors to negotiate with supplier to obtain more favorable terms and
conditions. If the authorizing officer is of the view that the prices of the works,

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 Information Systems, goods or services display a downward trend, repeat orders
on these works or goods or services shall not be authorized.

(vi) Procurement in emergency situations - Where a works, Information Systems,

good or service is required urgently to ensure the day to day operations of the
IBSL, soon after in the case of an emergency situation, in exceptional
circumstances, such as system failures, manmade disasters etc., which warrants
procurements under the provisions contained herein, subject to a limit of Rs. 5
million, with the approval of the Chairman or Vice Chairman, such works or
goods or services may be procured by inviting written quotations at least from
three suppliers. However, if the cost of the purchase is Rs. 50,000 or below it can
be done with only one quotation with the recommendation of the respective
Director/Head subject to the approval of the Director General.

2. Approval Limits

2.1 Purchase Approvals - The purchase approvals for Administrative and Capital
Expenditures shall be as per table below:

Approval Limit (Rs.) Authorizing Officer

Up to Rs. 200,000 Head of Departments/Operations

200,001 – 500,000 Director General

500,001 – 1,000,000 Vice Chairman

1,000,001 – 2,000,000 Chairman

Above 2,000,000 Governing Board

Note: The above limits were approved by the Governing Board at the Meeting No.
04/06/2023, held on ( ),2023.

2.2 Disbursement Approvals

Subsequent to the Purchase approval, disbursement approval shall be obtained as per

table below for administrative and capital expenditure and the authorized officer for

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 such disbursement approval shall ensure the receipt of value for procured works,
Information Systems, goods and services:

Limit (Rs.) Authorized Officer

Up to 200,000 Head & Deputy Head of Department

Up to 500,000 Director General & Head of Department

Up to 1,000,000 Vice Chairman & Director General

1,000,000 and above Chairman & Vice Chairman

3. Administrative (Operating) Expenditure

3.1 Approval shall be required for a procurement involving administrative expenditure

from the authorized officer with the limits as specified in para 2.1 above. For the
purpose of obtaining such approval, the officers originating the procurement shall, as
far as possible, ascertain a realistic value of the proposed procurement.

3.3 The incurring of administrative expenditure approved in principle or in advance such

as payment of salaries and other emoluments, statutory payments such as EPF, ETF,
NBT and VAT, payments for utilities based on official invoices, rental, rates, or lease
payments on the basis of valid agreements entered into under due authority shall not
require individual approval. The disbursement approval for the aforementioned
administrative expenditure shall be given by the authorized officer with the limits as
specified in para 2.1 above. However, the Director/Administration responsible for
recommending or authorizing payments such as payments for overtime, payments for
utilities and other variable payments should review such payments on a regular basis
to ensure that they are not excessive. If the Director/Administration observes that
payments are excessive, such matter should be brought to the notice of the Director
General in order to take appropriate action.

4. Capital Expenditure

Approval shall be required for a procurement involving Capital expenditure from the
authorized officer with the limits as specified in para 2.1 above. For the purpose of
obtaining such approval, the officers originating and recommending the procurement
shall, as far as, possible, ascertain a realistic value of the proposed procurement,
subject to the following:

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 (a) All Heads of Departments/operations shall submit their respective Department’s
capital expenditure requirements to Head of Finance by first week of September,
in order for Head of Finance to prepare the budget for the coming year in
consultation with Director General and Director/Administration. The Head of
Finance, when preparing the budget may allocate some funds for any exigencies
(2% from the total capital budget) that may arise.

(b) The Director General shall recommend the capital expenditure budget to the
Governing Board for approval.

(c) When the Governing Board approves the budget, then the respective Departments
shall send their request to Director - Administration & HR for procurements.

5. Expenditure Approval

Prior to the acceptance of a selected quotation or a tender, the relevant Head of

Departments shall obtain approval for the expenditure from the authorized officer as
set out in para 2.1 above.

6. Procurement of Professional Services

Nothing in these rules shall prevent professional services in any specified area
required by the IBSL in special circumstances being obtained from a duly qualified
identified professional having requisite knowledge and experience if, for reasons to be
recorded, the Governing Board determines that it is necessary in the interest of the
IBSL to do so. The term “Professional” includes a firm of professionals. The approval
limits for obtaining such services are the same as para 2.1.

7. Settlements of Payments

7.1 The settlement for Goods and Services shall be made after following the procedures
with regard to the receipt of Goods and Services (i.e., Inspection of goods received
with Goods Receipt Notes - GRN), recommendations of the users on Goods &
Services provided etc.

7.2 The settlement for all the Goods & Services shall be made after one month credit
period from the date of delivery, after the recommendations of the users or as
stipulated in the quotation. However, one month credit period may not apply in the
case where supplier has explicitly mentioned its payment terms and conditions.

7.3 A signatory to a payment instrument or a person effecting a payment shall satisfy

himself/herself that the expenditure has been duly approved, and value has been
received where applicable.

7.4 The settlement of administrative and capital expenditure shall be effected by signing
the cheques or by online internet services in the following manner:

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 Amount (Rs.) Signing of Cheques/Authorizing internet
payments

Up to 200,000 Head & Deputy Head of Department (B2 & C)

Up to 500,000 Director General & Head of Department (B1 & B2)

Up to 1,000,000 Vice Chairman & Director General (A2 & B1)

1,000,000 and above Chairman & Vice Chairman (A1 & A2)

Note: In the event of Chairman or Vice Chairman is not available for signing the
cheques or effect the payments through internet, a Board Members are to be
appointed by the Governing Board to represent them.

8. Inventorying Petty cash Items

Works, goods & Services shall be procured out of petty cash or cash advance from
the Finance Department as per guidelines issued by Head of Finance. Items of goods,
other than consumables, having a life span of over one year purchased out of petty
cash shall be entered in an inventory of the division, and information relating to the
procurement shall be forwarded to the Head of Finance Department monthly.

9. Definitions:

(i) “Capital Expenditure” means outlay of Rs. 50,000/- or more on an asset with life
span of more than one year.

(ii) “Administrative expenditure” means all expenditure for goods and services other
than capital expenditure.

(iii) “Consumables” mean items that are frequently used and need to be replaced
quite often. eg.; toner, stationary items, CDs, DVDs, and USB Flash Drives. Etc.

10. Review and Update

These guidelines shall be reviewed from time to time and updated with new
developments and Governing Board decisions.

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