Overview CESM procurement principles

Overview flow chart

We provide this flow chart that shows CESM’s board-approved ‘request for tender’ process – the whole process is held under strict, reciprocal confidentiality

Business ethics

The following is extracted from our procurement manual……

Business ethics overview

All Company personnel will conduct their activities with honesty and integrity at all times. These qualities shall not vary by country or culture.

No 'code of conduct' can address the appropriate moral conduct or ethical behaviour for every situation with which personnel may be confronted.   Whenever or wherever personnel find themselves confronted with a potentially compromising situation, they must seek counsel from their supervisor or the Company.   Most importantly, they must consistently use their own good judgement to assure protection of the Company's proprietary information and avoid even the appearance of tolerating improper inducements and favours.

Conflicts of interest

No gifts, excessive entertainment or favours from a vendor/contractor or prospective vendor/contractor or from its representatives shall be accepted or requested.   Any situation with vendors/contractors, or other organisation which might be construed as a conflict of interest must be avoided.   Company personnel must promptly disclose any situation that may be, or which they suspect may possibly be, construed as a conflict of interest.

Proprietary information

No disclosure to third parties of patents, inventions or proprietary information, to persons outside the Company, is permitted without clearance from Company senior management.   An appropriate signed release form from a vendor must be obtained to protect the Company's interest in cases where vendor's/contractor's inventions, patents or proprietary information are involved.

Procurement principles

'Optimum Purchase Value' (OPV) will be achieved not only by buying good quality, reliable materials, equipment  and provisions at the lowest prices but also by consideration of such important factors as availability, timeliness of delivery, discounts, minimum order charges, packing, freight costs, terms of purchase / payment and standardisation.

Total Value Concept

'Total Value Concept' (TVC) may make it advisable in certain circumstances not to buy at the lowest cost, provided the price differential is not excessive and it is more offset by other advantages that the Company may consider to be more favourable.

Principles of competitive bidding

Competitive bids will be used to select goods / services / repairs.  Vendors' / Contractors' responses will be considered by the company and must pass the following test criteria:

·         1st test - Must be technically acceptable

·         2nd test - TVC above applies

Bids will be solicited generally in closed enquiry.   The Company uses a uniform procedure for competitive bidding that controls and authorises procurement.  The above diagram applies.