GP HANDBOOK - 2021

PROCUREMENT HANDBOOK

by
Strategic Advisory Services

July 2021

Contents

Section Descriptions

A OVERVIEW OF END-TO-END PROCUREMENT PROCESS & WORKFLOW

B ENDORSEMENT REQUIREMENT OF COMMITTES BEFORE ENTERING SOURCING PROCESS (IF APPLICABLE)

C IMPORTANCE OF BUDGET & PLANNING

D PURCHASE VALUE TIER

E LOW VALUE PURCHASE (UPTO RM50K)

F PURCHASE ABOVE RM50K PROCESS

G PROCUREMENT AWARD
H METHODS OF BIDDING
I CONTRACTING
J OVERVIEW PR/PO
K ZERO TOLERANCE TO PROCUREMENT NON-COMPLIANCE
L PAYMENT

M CONTACT US



SECTION A
OVERVIEW OF END-TO-END PROCUREMENT PROCESS

& WORKFLOW

Overview of End-To-End Procurement Process & Workflow

Endorsement (If Applicable) Sourcing and Procurement

Identify Write business Project endorsed Prepare Procurement is the
needs justification and as per CAAP RFTF/RFQF acquisition of goods and/or
procurement method services at the best
possible total cost of
ownership, in the right
quantity and quality at the
right time

Sourcing and Conduct evaluation Tendering Process Contracting Award and Payment
Procurement
ARIBA/OFFLINE

Prepare Review draft Negotiate contract Vetting and Issue
Management Paper contract on T&C approve contract LOI / LOA / PO
and obtain approval
with Legal E-Chamber

SECTION B
ENDORSEMENT REQUIREMENT OF COMMITTEES

BEFORE ENTERING SOURCING PROCESS
(IF APPLICABLE)

STEERING COMMITTEE (SC) ENDORSEMENT

Group ITSC – Project > RM500K / Non-ITSC – Project > RM1 Million / Investment Committee (IC) > RM7 Million up to RM20

Paper Reviewed by Recommended Million Raise RFTF Raise PR in Start Sourcing
Prepared by (HOD/Sub- by (Any SAP
Endorsed by
(Any CEO) (GCxO/Division) (Steering Grades/HOD)
Grades/HOD) Comm)

Endorsement of related committees are mandatory before sourcing process for projects can be initiated.

Descriptions ITSC Non ITSC IC
Monthly, and as and when required
Frequency Monthly, and as and when required Monthly, tentatively on every Thursday second
• Non-ITSC meetings shall convene at the Group’s week of the month
Mode of • Group Digital/ ITSC meetings shall convene at the • IC meetings shall convene at the Group’s HQ

Meeting Group’s HQ HQ • May also be conducted through telephone

• May also be conducted through telephone • May also be conducted through telephone conference, electronic or such other
communication facilities which would permit all
conference, electronic or such other communication conference, electronic or such other such persons participating in the meeting to
communicate with each other simultaneously and
facilities which would permit all such persons communication facilities which would permit all instantaneously

participating in the meeting to communicate with such persons participating in the meeting to

each other simultaneously and instantaneously communicate with each other simultaneously and

instantaneously

Secretariat Head of Strategy and Governance Head of Budget and Forecasting Senior Manager, Budget and Corporate Planning

Compositions 1. Chief Digital Transformation Officer (CDTO) / Head of 1. Group Chief Financial Officer/Deputy Group Chief 1. Group Chief Financial Officer/ Group Chief
Operation Officer (Chairman)
2. IT (Chairman) Financial Officer (Chairman) 2. Group Chief Transformation Office
3. Group Chief Operating Officer 3. Group Chief Strategic Officer (GCSO)
Group Chief Operating Officer 2. Head of Strategy
4. Group Chief Operation Officer shall
5. Group Chief Financial Officer/Deputy Chief Financial 3. automatically assume the role of the Chairman
6. of the meeting, in the absence of GCFO
7. Officer 4. Head of IT
8. Head of Business Unit (Alternate Members) By • .
• Head of Airport Services 5.

Head of Strategy Invitation

Head of Digital Commercial • Deputy GCFO shall automatically assume the role
Head of IT of the Chairman of the meeting, in the absence of
GCFO
Head of Commercial Business Process By Invitation

Head of IT shall automatically assume the role of the

Chairman of the meeting, in the absence of CDTO  Refer to Business Integrity portal for

SECTION C
IMPORTANCE OF BUDGET & PLANNING

The Importance Of Budget & Planning

Good budget and planning is critical to ensure smooth day-to-day activities. Spending of
unbudgeted Capex

and Opex is
Prohibited.

Procure Budget Proceed with PR
Sufficient and PO approval
PR raised Budget check
in SAP in System Budget PR cannotbe
insufficient saved

System Approved Request for
Update Reject Budget

Supplement

Review and Availability check +

Justification process Budget pooling

 Query on budgeting processes: [email protected] / [email protected]

SECTION D
PURCHASE VALUE TIER

Purchase Value Tiering Framework

/ Above RM500K Steering  RFQF CAAP Approval E-Chamber
Committee  RFTF  Management  Contract
PROJECT  ITSC
 Non-IT SC Award Paper Management
Above RM50K  Investment
PURCHASE VALUE TIERING OPERATION  Purchase CAAP Approval E-Chamber
GENERAL Committee Requisition, PR  Management  Contract

Up to RM50K Procuring Process  NO PR Award Paper Management
OPERATION  RFQF
GENERAL  RFTF

PO Exempted

Procuring Process  Purchase CAAP Approval via E-Chamber
 SOQ Requisition, PR SAP  Contract
PO Exempted
 NO PR Management

12

Types of Purchases

Low Value Spot / ad hoc buys Purchase ≤RM50K
Purchase A PO with General Terms & Conditions (“GTC”) is sufficient (do not require a Contract). *Unless if

there is any comprehensive SLA is required.

Strategic Request for Quotation (RFQ) >RM50K up to RM500K
Purchase Request for Tender/Proposal Tender (RFT/ RFP) Purchase RM500K Above

 Refer slide for single sourcing/sole sourcing

Single Sourcing / Purchase type which does not go through the RFQ /RFT or competitive bidding process
Sole Sourcing

Emergency & The Emergency and Urgent Purchase guidelines were designed to cater for purchases that are
Urgent Purchase
unable to follow the normal procurement process due to emergency or urgent circumstances
Refer slide for Emergency & Urgent Purchase



SECTION E

LOW VALUE PURCHASE

(Up to RM50K)

Low Value Procuring Process & Workflow

GENERAL OPERATING RULES FOR LOW VALUE PURCHASE (UP TO RM50K PER PURCHASE ORDER)

Business Unit (BU) START (b) (c) Budgeted Please ensure following has been done prior Legend
to issuance of Low Value PR
(a) 2. Complete 3. Raise PR in SAP all goods and/or services have approved Offline
Summary of and attach quotations Manual Form/Offline
1. Obtain Quotation (SoQ) budgets. SAP system
quotations from and SoQ  approval to spend has been obtained,
regular suppliers
including discretionary expenses.
For fixed asset, obtain asset code from

Fixed Asset Department

Yes Unbudgeted

Approval As Per CAAP Yes 7.Auto PO 8. Order
sent to Order Management
5. Management to amend &
Approval
Error push PO
No
END No 4. Obtain 6. Auto PO
budget created and
approval No error released to

supplier

END

Notes:
(a) To obtain minimum 3 suppliers’ quote(s). Any new suppliers introduced, BU needs to register them in SAP vendor master. Preference is existing supplier in SAP database.
(b) Complete the SoQ form but doesn’t require any approval(s).
(c) Supporting documents namely, SoQ and suppliers’ quotation(s), are required for PR approver to peruse before approving and for future audit purpose.

Process Activities Low Value Purchase

Step Process Operating Rules

1 Obtain quotations from registered a) Applicable to all purchases up to RM50K except:

and approve supplier or approved i. Goods/Services with valid contract and Outline Agreement (OA) in SAP

supplier list. ii. Goods/Services listed in items exempted from PO-CAAP (Please refer to Business Integrity Link for the latest CAAP at

https://mabitdept.sharepoint.com/sites/BusinessIntegrity .

b) BU is responsible to obtain quotations from minimum 3 suppliers and ensure negotiation is conducted to obtain fair and competitive

value. Advisable to call/award to existing suppliers registered in SAP.

c) Any new suppliers to be awarded. BU need to register via http://enterprise.mas.net/adobeform/

using Internet Explorer.
d) If less than 3 suppliers invited, including single sourcing or direct negotiation, the approval is with BU during PR approval
e) GP will not consider these suppliers as active suppliers if it is ONLY meant for Low Value Purchase and not contracted.
.

2 Complete Summary of Quotation a) BU is responsible to complete the SoQ with prices from rounds of negotiation with the supplier(s).

(SoQ) b) No approval(s) required.

3 Raise PR in SAP and attach quotations a) BU is responsible to create PR and attach the complete SoQ and all supplier quotations.

and SoQ b) This will be the base for approvers to approve the PR and for future audit purpose. BU is answerable for any audit queries and will be

subjected to disciplinary action in the event of any non-compliance.

c) Please note that:
SAP will gives out a warning message to PR creator and approver for repeat purchase of same item within 2 months time and

exceeds the RM 50K threshold on cumulative basis.
 BU has the option to cancel OR proceed. If cancel, they need to go to GP for proper sourcing activity. If proceed, they are at of

potential consequence management.

4 Obtain budget approval a) Budget transfer approval can only be obtained from finance.

5 Approval a) Approval as per CAAP.

6 Auto PO created and released to a) Once PR is fully approved, PO will be automatically converted to PO and released to supplier(s). This only apply to material and/or

suppliers service and/or vendors that are already in the SAP/ARIBA system.

7 PO Sent to Order Management a) PO which has error during creation will be sent to Order Management and not direct release to supplier. Failed Job Log email will be

created by system and sent to Order Management team

8 Order Management to Amend and a) Order Management will amend the PO and push the PO for Auto released to supplier.

Push for Auto released

Procurement Award Management Paper (Below RM50K)

Prepared by Reviewed and Approval
BU Recommended by
(Based on CAAP)
(Any Grade) BU

(Immediate Superior)

Procurement Value Document Preparer Reviewer CAAP
N3
(RM) Type Immediate
Superior
Below 50k MP Any

Violation of procurement rules Low Value Purchase

 Split purchase to circumvent purchasing limits Subject to disciplinary
 Procuring fraudulent quotations actions including,
 Procuring from non-registered vendor when termination of
employment.
registered vendor is able to supply the same
product or services

Internal Audit (IA) will perform periodic internal control process reviews to ensure all
processes are within the boundaries of compliance requirements.

Consequence management and disciplinary action will be applied on all acts of non-compliance.

Refer E Voice dated 12 Nov 2018



SECTION F
Purchase Above RM50K Process

2. Process Workflow

GENERAL OPERATING RULES FOR PURCHASE (ABOVE RM50K)

START

Business 1. Raise 3. Prepare 4. Raise 7. Prepare 13. Provide 15. 19. Upload
Unit (BU) RFQF/RFTF Specifications Sourcing PR in Award MP inputs for Upload in in E
2. GP to Guide contract
Documents SAP 8. e- Chamber +
2. Appro Chamber Universal
Approval N Approv Y N 5. ved? 10.
As Per CAAP Appr Sign 16. 20. Create
ed? oved Y LOA Vetting OA in SAP
?
(e- - E-Cert
Y Chamb - Signed
Contract
GP 6. Tender 9. Prepare 11. Send LOA 12. Draft er) -MP
Sourcing Activity LOA to Supplier Contract E-
cert
Team Notes: See 13. Send draft
1. All Purchases Above RM50K must have Milestones Contract to Y
Contract in the form of COC/definitive agreement. Supplier
Preference is to use supplier’s agreement which on 17. Send
RFQ/RFT 14. Receive Hardcopy
Process draft Contract Contract to
Supplier
incorporate MAB’s Applicable Terms & Conditions
18. Receive
signed
Contract

(Refer GLP’s Contract Development Manual)

2.As an effort to reduce the SLA, Contract in E-Chamber can also be uploaded for vetting while BAFO is ongoing, in this case

Contract of All shortlisted bidders for BAFO and draft MP need to be uploaded however the final approval in E-Chamber will

be upon obtain the final Approval on MP.

Vendor Registration (Applicable for RFx Above RM 50K Only)

- Malaysia Airlines is only allowed to engage with suppliers with acceptable risk based on performance and profile
review.

- Non-refundable fees are imposed to suppliers that wish to do business with Malaysia Airlines (Applicable for RFx
Above RM 50K)

- Important : Malaysia Airlines reserves the right to invite/allow only the eligible suppliers to participate in the RFx

Two (2) types of fees (Applicable for RFx Above RM 50k)

i) Supplier Registration Fee (ARIBA) Amount of fees

- Per registration / every 2 years i) Local Supplier

ii) RFP/Tender Participation Fee (ARIBA/Offline) a) Registration Fee : MYR 50

– Per tender participation (Applicable for RFx above RM b) RFP/Tender Participation Fee : MYR 200

500k) ii) International Supplier

Note : Supplier registration fee can be paid anytime. a) Registration Fee : USD 50
Even though there is no RFP/Tender participation. b) RFP/Tender Participation Fee : USD 200

Please refer to the following link for the detail of Supplier Registration guide :
https://procurement.malaysiaairlines.com/index.php?action=eprocurement&ID=1

SOURCING REQUEST FORM (Above RM50K)

RFQF and RFTF Workflow and Approval Matrix for Project and Non Project
Endorsement of related committees are mandatory before sourcing process for projects can be initiated

Prepared by Reviewed by Finance Rep GP Rep
BU
BU (FBP/Sub-CFO/HFBP) (C1/C2/B1/HGP)
(Any Grade / HOD)
(HOD/Sub-CEO)

RFx MILESTONE

Develop and 2 Vendor 3 Release 4 Manage 5 Proposals 6 Conduct 7 Conduct 8 Award
Registration RFP/Tender Clarification Submission Evalaution Negotiation
1 approve
RFP/Tender
request

GLP/FBP BU GP -Develop work plan - Registration of -Develop RFP pack - Suppliers submit the -Conduct -Prepare the -Prepare

and agreed on Supplier process •Check against - Collate proposals as per the Commercial negotiation Appendix 2 for
timeline, criteria etc. the blacklist for clarification pre-determined Evaluation. strategy MP
•Due diligence of interested questions and timeline.
•Responsible for the supplier suppliers respond to •Technical/Co •Conduct •Review MP
overall management suppliers •Seek HGP consent to mmercial negotiation
of the RFx •Issuance of NDA to •Release RFP to accept the late clarification by sessions with •Prepare
supplier via upon docusign of queries submission with bidders (if shortlisted LOI/LOA
•Guide BU to docusign NDA by suppliers reasons (if necessary) necessary) bidders.
complete RFT/RFQ •Conclude
•Fees collection draft Contract

--------------------------------------------------------------------------------------------------------------------------------------------------------------------

• Raise Strategic • Assist to provide • Conduct • Prepare overall
Sourcing PR answers to Technical Management Paper
clarification Evaluation (if for approval. GP
• Complete questions necessary) must be included.
RFTF/RFQF
• Sign LOI/LOA per
• Develop CAAP.
evaluation criteria
• Provide input for
Contract.

--------------------------------------------------------------------------------------------------------------------------------------------------------------------

• GLP/FBP to
advise on
Terms and
Conditions

• Vetting in E-
Chamber



SECTION G
PROCUREMENT AWARD

Procurement Award Management Paper (Above RM50K)

Prepared by BU Reviewed and Endorsed by GP Endorsed by Finance Approval
RReeccoommmmeennddeeddbbyy
(Any Grade/HOD) (C1/C2/B1/HGP) (FBP/Sub-CFO/HFBP/GCFO (Based on CAAP)
BU

(HOD/Sub-CEO/GCxO

SECTION H
METHODS OF BIDDING

Two Methods Of Competitive Bidding – The Rules

Open Tender Close or Restricted Tender

• All tenders in excess of RM1Million • Tenders amount less than
and with large pool of potential RM1Million
vendors.
• Tender amount exceeding
• Official open tender advertisement RM1Million and with small/niche
is through Malaysia Airlines Website pool of potential vendors, Example:
and social media ground handlers (for stations with
more than one providers, engine
Medium of overhaul providers, inflight caterer,
Bidding: lounges, etc..)

Ariba or offline • Strategic procurement (such as
(email) consultancy works, creative works,
new innovations, etc..) which might
give insights to competitors should
be conducted in restricted or close
tender manner.

Managing The Tendering Process & Committee

Tender Evaluation • Established during the formulation of the specification, and prior
Committee to quotations or tenders being called.

• Appropriate mix of technical, practical knowledge, skills and
financial acumen, will help to ensure that the procurement
process results in the best outcome for Group.

Technical and • Technical and Commercial proposal from suppliers will be opened
Commercial Opening in a sequential manner whereby the latter will be opened upon
completion of the former evaluation.
and Evaluation
• Only successful technical bidders will proceed with commercial
opening. Any exception to this policy must be approved by Head
of GP.

Treatment of Supplier • By default, requests to participate in any tender prior to closing
during Tender Floating submission deadline will be entertained, provided that there is
no changes/extension to the submission dateline.
Period
• Any exceptions to this or any changes/extension to the
submission dateline will require an approval from the Head of GP.

Exemptions To The Competitive Bidding
(ii) Sole Sourcing
(i) Single Sourcing
 Sole Source is where there will be no other options than
 Single source is where several supplier supplying or buying goods and/or services direct from particular
producing similar goods and/or services however, there is supplier. Situation which consider for sole source will be:
only one known supplier that meets the
requirements to provide the product and/or service. a) Monopoly situation
b) Regulatory requirements
 Source that has been singled out based on price c) Purchase of more or the same or compatible
competitiveness,
good quality, delivery records and/or technology platform equipment from the original supplier
whereby; d) Maintenance of proprietary equipment by the supplier
e) Sole Distributorship - only one authorized by the
a) The supplier meets the timeframe required by the
business unit/requester, and/or manufacturer

b) There is no core or strategic supplier for particular f) Opportunity is identified by business partners or suppliers
product and/or service, and/or (suppliers may be selected based on requirements of the

c) There is insufficient time to conduct thorough Group where business partners or other suppliers may
sourcing
identify an opportunity and request Group Procurement to
d) Intellectual Property
e) Licensing (including Software) where the Group is use a specific supplier (that is, business partner or supplier).

required to buy a license. g) Only known source for a product or service within a zone
f) Extension of Contract with incumbent or region such as within a state, country or continent.
Example: Sole agent to a specific equipment manufacturer or

government appointed agencies in a state or region. Spare

Note For Single Sourcing: parts manufacturer (OEM). To justify for sole source, a letter

Fill in the Supplier Risk Assessment and signed-off by Group of distributorship from OEM or principal is applicable.
Procurement before it is submitted for approval as per CAAP. h) Reciprocal contracts/ agreements

Emergency & Urgent PR

This is an EXCEPTION to No PO No Pay Policy – PO is only raised after the completion

of the work/receipt of goods. Follow these steps: SUPPLIER BU

BU BU Provides service / Raise necessary
deliver items documents* 5
Determine it is Raise Form E and
emergency / urgent obtain approval as per working days after
CAAP (via email/sms/ completion of
situation work or upon
whatsapp). receipt of the
Send LOU to supplier.
goods/services.
Emergency or urgent situation arising Budget still needs to be in
from poor planning will be subsequently place. If insufficient, budget Note : *Raise EmergencyPR
managed through consequence need to be sought through (ZEPR), attach approved
management. budget transfer or Form E & LOU. PO will be
supplementary budget as per generated and sent to the
supplier.
Emergency Situations: CAAP before PR israised.

- natural or manmade disasters

- failures of critical infrastructure orequipment;

- critical health or environmental emergencies;

- political emergencies

- critical security emergencies;

- unpredictable and beyond the Group’s control that affect the services andoperations

Urgent Situations:
- Commercial requests received less than 10 working days;
- Incidents which affect safety and security of passengers and/or employees in critical working conditions.

(e.g.: Aircraft-On-Ground[AOG]);
- Other circumstances which needs to be duly justified.

SECTION I
CONTRACTING

Contract Extension

 It is responsibility of Contract Owner from respective BU to monitor contract validity and
contract performance.

 GP will provide list of contracts with 6 months to expiry and inform the relevant BU (Email
communication with the list will be sent to all Head of Department and CxO)

 GP or BU conduct market research as to what are the prevailing market rates,
etc., in order to decide on the extension.

 Supplier Evaluation Performance form is required to be fill-up for contract
extension request.

 BU inform GP on thedecision:

i) Extension ii) Allow contract to
Expire

Raise PR Raise PR (with RFQF/RFTF) to
Require RFQF/RFTF – Changes in SOW initiate sourcing Process
Do not require RFQF/RFTF – No Changes in SOW

Note : Note :

1. Contract period + extension • new contract award to be
≤ 5 years completed before the
expiry of the current
2. Prepare MP contract
3. Issue Addendum vetting in

e-Chamber

Contract 12 3 74
Milestones
Issue LOA and Obtain Physical Prepare Create OA in
Draft contract to Signature for SAP
Supplier Contract Contract
 Create OA in
 Issue  Send cert. and SAP
LOA contract to
and supplier for Load to  Upload E-
approve signature Cert, Signed
d System Contract, MP
Contract  Obtained in OA
GP to signed
supplier contract
BU  To upload sign  Provide softcopy
 Obtafoinred  Obtain contract into e- of signed
appsroigvneadtur signature chamber contract, E- Cert
Conetract as per and MP to GP
from E- CAAP  Lodge physical
Chamber contract to GLP
 Execute &
 Safe Keeping
of physical Monitor contract
contract
performance and

utilization

GLP

SECTION J
OVERVIEW PR / PO

Why PR / PO

1. Purpose of PR: 2. Delay in PR/PO creation process

Forces proper planning on all purchasing BU raised wrong type of PR
needs
Incomplete or no supporting
Audit trail for the intended purchase by documents
Business Unit & approval
Exceeded contract value
 Check-and-balance mechanism –
safeguard from unnecessary orders. Only Contract expired
required and approved products, services
and/or intellectual property assets are to Budget exceeded the allocated
be purchased monthly limit

Services rendered without a valid PO

Important Note:

If there is any changes of CAAP for SAP approval please liaise with Business Integrity and fill up the Change
Request Form (CRF) available at Business Integrity Link https://mabitdept.sharepoint.com/sites/BusinessIntegrity

Purchase Requisition (PR) Type

# PR Doc Type Business Scenario Supporting documents required
Service requirement or product specification(if
1. ZTPR : Tactical Sourcing PR Tactical purchase
• where spot buys/ one-off buys apply; applicable), quotations (if available)

• Purchase Order (PO) with GTC is sufficient; Request for Quotation Form (RFQF) or Request
for Tender Form (RFTF)
• Do not require a Contract.
Form E - Emergency/Urgent Justification Form/
2. ZSPR : Strategic Sourcing Strategic purchase Quotation/Invoice
PR • all other purchases that do not fall within the definition of Tactical Sourcing.
Eg: Rental/lease/Services Agreement
3. ZEPR : Emergency PR Emergency & Urgent scenario
Does not require supporting documents to be
4. ZFO : Framework PR • Recurring purchases – rental & lease attached
• Fixed validity period
• Fixed price Supporting document on Agreed Price & quantity
• Goods receipt is not required Fixed Vendor/OA in place

5. ZNPR : Non - Sourcing PR • Normal purchase where long term contract exists (Valid Contract/Outline Repair cost quote to be verified by BU & GP
Agreement in place)
Quotations, Summary of Quotation (SoQ)
6. ZUB : Intercompany STO PR Intercompany purchase

7. ZRPR : Repair PR • Subcontracting
• Borrow & return
• Repairs
*for Ground Support Equipment & Flight Simulator maintenance only

8 ZLPR : Low Value PR Low value purchase up to RM50K only

MAB has different purchase requisition types. Depending upon the type of procurement different purchase requisition type needs
to be selected

Blanket PO Why Blanket Criteria when using When not to use Blanket
PO? Blanket PO PO?
What is blanket
PO? 1. Reduce issuance 1. Contract exists for the 1. When it is used to provide
of PO goods/ services in which an open line of credit
A purchase order which unit price/ total contract
is issued to the supplier 2. Mitigate the value is known 2. Prices are unknown at
which contains multiple issuance of retro ordering time or subject
delivery dates over a PO 2. Consumption pattern can to change without
period of time be estimated notice

Gauge Create and Approve Purchase 3. Quality of the supplier
Consumption Requisition and/or services are
questionable.
Who: Business Who: Business
Unit Unit Drawdown from
Blanket PO
How How
• Identify repetitive • Include details Who: Business
Unit
purchases of a) Period to be covered by blanket agreement
specified services or (should not exceed 1 year) How
items or categories of • BU performs GRN after
items from the same b) Items and/or categories of items to be covered
supplier (when available) each delivery
• Forecast consumption • Finance process
of product / services c) Maximum quantities (if any)
• E.g. drinking water, d) Prices and pricing arrangements payment based on
A4 paper etc. e) Terms and billing arrangements invoice.
f) Cancellation clause (if any)
• Price, quantity and terms are negotiatedupfront Check your
• If changes or increase to a blanket PO, updatePR. budget!
• Approval based on CAAP

SECTION K
ZERO TOLERANCE TO
PROCUREMENT NON-COMPLIANCE

PROCUREMENT NON-COMPLIANCE?

What is it?
Procurement non-compliance is
being non-adherence to principles governing the procurement
activities within the Malaysia Airlines Group (MAG)

What is procurement compliance requirement (Non-exhaustive)

BU is only authorized to spend company's No PO No Work
money with fully approved PR & PO.
Hence, fully approved PO must be issued No Split POs
before vendor commencing work

Involve GP for 3rd PROCUREMENT COMPLIANCE No extension of
party purchase contract without
bidding

Proper approvals as Do not continue to No contact with bidder , other
per outlined CAAP purchase or raise than the formal meetings,
request from a
(Please refer to contract that has correspondences and discussions
Business Integrity link organized as part of a running
expired. RFx prior to award of a contract
for the latest CAAP)

What is procurement non-compliance (Non-exhaustive)

Lack of proper approvals Procuring fraudulent Split POs to
for sourcing request quotations circumvent purchasing

limits

Procuring from non- PROCUREMENT NON-COMPLIANCE Invoice arrives for
registered vendor when payment but there
registered vendor is able to Not involving GP when
supply the same products procuring goods and/or services is no PO
or other transactions under the
or services (Retro-PO) BU
category of Procurement place a PO for
(Important Note : Please refer to Contracts and Hybrid Contracts products and/or
Contract Development Manual (Combination of Procurement & services that have
Non-Procurement Contracts) already ordered
(CDM) at GLP link and/or completed
(https://echamber
.malaysiaairlines.com/index.php
?action=announcement (at the
‘Library’ section from e-chamber
home page)) for categories of
Contracts and their respective

definitions

HOW TO STAY COMPLIANT Accountability
(All MAG)
Involve GP at Adhering to
ZERO
the early stage procurement Tolerance to
Procurement
of sourcing processes
Non-
intention - Adhering to Compliance
procurement
Avoid Retro- - BU is processes as per
encouraged to GP Policy
PO involve GP during
the initial - No PO No Pay
- Ensure contract discussion with /No PO No Work
is in place for potential supplier.
Fully frequent purchase.

approved PR - Raise blanket PO
for regular
& PO services. (example
office rental,
- BU is only printing machine,
authorized to instructors
spend monthly fees,
company's retainers fees,
money with etc..)
fully approved
PR & PO.

Best Practices!

 Involve GP during the early stage of sourcing intention.

 A PO MUST be raised before any work starts and a copy sent to the supplier
prior to receiving an invoice - avoid retro PO.
NO PO, NO WORK
NO PO, NO PAY

 PO MUST be raised to cover the total project or cost per year - via blanket PO.
No split PO’s.

 Please refer to the Contract Development Manual (CDM) if unsure of the
Contracts that requires mandatory involvement of GP

SECTION L
PAYMENT

Payment Process & Workflow

Perform GR immediately upon receipt of
goods/services (Expensesposted) – Please
ensure the right quantity and acceptable

quality before performing the GR
Submit Invoicewith PO reference
directly to Finance AP

SECTION M

If you have queries, please do not hesitate to forward them to
the contact below:

[email protected]
ALL FORMS ARE AVAILABLE AT:
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