American University of Beirut

Procurement Strategy

1. The AUB procurement strategy is to increase competitive advantage in the procurement process by making sure that it is procuring products and services from as large of a field of competitive bidders as possible. AUB and its PCA Director will constantly be looking into ways of increasing competition to improve its ability to procure goods and services at the best price available for the quality required. This will be done by having the PCA Department and the members of the AUB community make requisitions that commit AUB funds under the following conditions: 

a. Ensure that all products and services have at least three alternative brands or competitors to choose from so that suppliers have to provide the lowest market price to be selected. Exceptions to this are set forth in Chapter VI, Section 5 of this manual; 

b. Ensure that standardization of goods is done in a way that considers all competitive products and brands in the analysis before selecting a specific product for standardization, and that the analysis is re-done annually to ensure that it is still economically justified or that a new product will become the standardized product. If multiple suppliers can provide the standardized requirement, competition shall be sought on a ‘no substitute’ basis for the specified requirement; 

c. Ensure that preferred items are provided with equivalent alternatives by the end user making such a request, or by the procurement agent, if the end-user does not provide three alternatives; 

d. Source on a global basis to the extent feasible. 

e. Commit to volumes large enough to reduce prices and increase competition. 

f. Utilize early discount payments, whenever possible, and resist cost inflation.

g. Proactively seek price reductions. 

2. Commodity teams are an important part of this strategy. Commodity teams are formed, either formally or informally, depending on the nature and value of the commodity (at the discretion of the PCA Director), consisting of the PCA Director and/or a procurement agent with familiarity with certain commodities, with the help of end users and representatives of the applicable committee or technical department, to analyze purchases across the organization of goods from the same or similar commodity category purchases, to determine how to combine orders or bundle purchases of the same or similar commodities that are requested by various departments and analyze and evaluate the cost savings gained by bidding on certain commodities and tying the orders to larger orders under purchase orders or annual contracts/purchase orders, or to arrange for the release of orders from preferred suppliers under existing blanket purchase orders (with pre-agreed 

3. Effective management of key suppliers with emphasis on ensuring contract deliverables are monitored and reported and action is taken when unsatisfactory results and performance is observed. Effective management of suppliers by diligently maintaining a product and supplier database also ensures that each request for quotes, RFQ, RFP, or ITB is sent to each company with the same or similar product that is competitive, with the product or equipment requested, and in order to ensure that the goods are purchased from a reputable supplier that does not have a poor track record with AUB. 

4. The PCA Department will categorize its suppliers as “Approved suppliers” who can be shortlisted on purchases according to the nature of commodity. 

5. The PCA Department will be responsible for maintaining a file on each supplier that is used by AUB. 

6. Competitive bidding will also be ensured by the PCA Director who will have a plan for the rotation of procurement agents from time to time when feasible. 

7. Reduce the cost of ordering and increase the financial controls over the Express Buy Process (Micro-Purchases) by rationalizing the number of suppliers and allowing ordering through preferred approved suppliers only. 

8. Analyze orders from time to time and determine the major suppliers and enter into a dialogue with major suppliers on how to reduce the total cost of supply. 

9. Increase the procurement made through the PCA Department against purchase orders in order to have better control over cost, quality, supplier and contractor performance and inventory. 10. All procurement transactions are subject to audit reviews

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