The Institute of Chartered Accountants
of Sri Lanka

19. Selection of Suppliers for Materials, Equipment and Construction work.



When procurements are done, in addition to the normal criteria for ensuring good quality at a reasonable and competitive price, the likely necessity of completing the documentation and procedures themselves during a relatively short period of time has to be taken into consideration. Selection of suppliers can be done in one of the following ways depending on the value of purchase.

 19.1

 By Public Tender

 Public tenders may be called for large or medium sized construction jobs and the supply of materials or equipment. Some of the major steps  involved in  such a procedure are indicated below.

 1)

Appointment of a Tender Board.

The Governing Body may decide to appoint the majority of members from amongst themselves to the Tender Board. The presence of  members from outside is essential and members from the following sectors would be useful, depending on the circumstances.

 a) Technical
 b) Legal
 c) Government
 d) Financial

The Heads of the Financial and Project Divisions of the Organisation should normally be invited to attend Tender Board meetings even if  they are not nominated to the Tender Board.

 2)

Preparation of Tender Documents

This involves amongst other tasks, the drafting and approval of Tender Documents, Tender Notice and Technical Specifications and deciding  on Guarantees and Tender Deposits, Performance Bonds and Arbitration. Consultants and experts may have to be employed for these  purposes.

 3)

Publication of Tender Notification and the issue of Tender Documents.

 4)

Receipt and Opening of Tenders.

 5)

Evaluation of Tenders probably by a specially appointed Technical Evaluation Committee.


The Tender Board may be assisted by a Technical Evaluation Committee which would be called upon to examine the technical and financial aspects. It would examine and report on the Draft Tender Documents before they are adopted  by the Tender Board. The Technical  Evaluation Committee would also evaluate the tenders when they are received and submit a report to the Tender Board. The Technical  Evaluation Committee will be constituted with representatives from different relevant disciplines including finance and include a member  who is familiar with the project. The selection of the members of the Technical Evaluation Committee would be handled by the Governing  Body of the Organisation with the advice and assistance from the members of the Tender Board. The Governing Body may also obtain the  services of a project consultant whose advice and assistance would be sought for specific issues including those raised by the Technical  Evaluation Committee.

 6)

Final determination of Tender Award

 7)

Publication of such Award
In the case of large projects or procurement of costly material or equipment, where elaborate Tender Procedures may have to be  followed, reference may be made to the following guidelines published by the government.

  • Guidelines on Government Tender Procedure - Revised Edition - August 1997
  • Guidelines on Government Tender Procedure Part I - Revised Edition - January 1998
  • Treasury Circulars pertaining to the Guidelines on Government Tender Procedure 1997

 19.2

 By calling Quotations from Registered or Reputed Suppliers

 Reputed suppliers may be identified and updated periodically for supply of selected products and equipment and it may be considered proper and  feasible to call for sealed quotations only from them. The same principle could be applied to select construction contractors from those registered  under a National or Regional Registration System by confining the issue of tender documents to them. The Organisation may also under certain  circumstances publish a notice for the registration of suppliers and prepare lists of registered suppliers for various categories of items.

 19.3

 By personally selected Suppliers

 Authority may be granted to the Project Officer at site to handle relatively small purchase of local materials.