Business Goovernan
nce Grooup Poliicy
GP 3-28
P
Procure
ement
Date: 01.112.2013
2/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
Table of Content
1 Objectives and Background
4 2 Scope and Implementation
4 3 3.1 3.2 3.3 3.4 Overarching Principles
Principles of fairness and competition
Ensuring confidentiality in the procurement process
Cases of emergency
Monitoring of Maverick buying
5 6 6 6 7 4 4.1 4.2 4.3 4.3.1 4.3.2 4.3.3 4.3.4 4.4 4.4.1 4.5 4.6 4.6.1 4.6.2 4.6.3 4.6.4 4.6.5 4.7 4.7.1 4.8 4.8.1 4.8.2 4.9 4.9.1 4.9.2 4.9.3 4.10 4.10.1 4.10.2 Procurement processes
Category Strategy
Tender approval
Tendering
Specification
Request for Quotation (RFQ)
Tender Return and Tender Opening
Evaluation of quotes
Negotiation
Change of requirements / Variations to the Tender
Contract approval
Contracting
Authorisation of Contracts
Variations Post Contract Award
Contract Extension vs. Repetition
Tender documentation
Usage of eCatalogues
Contract management
Claims Management
Procure-to-Pay
eCl@ss
Payment terms
Management of suppliers
Key supplier management
Supply Base Development
Supplier relationship management
Controlling and Reporting
Savings
Reporting (BI)
7 8 9 9 11 11 12 12 12 13 13 14 14 15 15 15 15 15 16 17 17 17 18 18 19 19 20 20 21 5 5.1 5.2 5.3 Special regulations
Procurement of Goods and Services from internal suppliers
Procurement of Professional Services / Management Consulting
Procurement of Engineering Services and Temporary Labour
22 22 22 22 6 Entering into Force
23 7 Glossary
23 Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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7.1 7.2 7.3 7.4 Communication / Information
Appendices
Definitions
Abbreviations
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Board approval: 25.11.2013
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Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
1
Board approval: 25.11.2013
Objectives and Background
The E.ON board has given the Support Unit Procurement the full mandate to procure
all external spend in E.ON reflecting the business requirements. Procurement either
directly executes procurement processes or sets the framework for the business to
procure themselves (in areas specified by Procurement), as regulated in this Policy.
This Policy is designed to define all relevant duties and responsibilities within the
procurement processes and to ensure effectiveness and compliance within the E.ON
Group. It also clarifies what can be expected from Procurement (deliverables) and
what are the requirements towards the business.
The objective of this Policy is to



define overall and group wide operational principles for Procurement
define group wide valid processes and tools for procurement operations: ensure
clear compliance with other relevant group wide processes
clarify the interfaces to the business, as well as Accounting and other relevant
cross-functions
The application of this Policy is mandatory, any deliberate and/or gross breach of this
Policy will be treated as a non-compliance issue with the potential exposure to
disciplinary action which will vary, according to the extent of the non-compliance,
between a written warning to dismissal of the respective employee.
2
Scope and Implementation
This Policy covers all products, works and services procured by E.ON. However, all
permitted exceptions where Procurement does not need to be involved (e.g. fuels,
financial transactions, donations) are stated in this Policy, Appendix 01 “Exception
list”. For “small volume orders”, Procurement only has to be involved as described in
Appendix 02.
For all demands, health, safety and environment as well as sustainability risks have to
be assessed by the requester. For further details, please see Appendix 06.
This Policy applies to all E.ON companies, where E.ON SE is directly or indirectly
the majority owner. It also applies to joint ventures where E.ON has a controlling
interest (normally at least 50%) and to companies where E.ON is responsible for
management and operation of the company. In addition, any agency staff and all
contractors’ employees involved in procurement activities on behalf of E.ON are
expected to meet the requirements of this Policy. This Policy governs all procurement
processes including all tools, systems, templates and forms used within the processes.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
This Policy must be read in conjunction with

Management Group Policy Procurement (GP1-32)
which details the procurement mission, the organizational setup of
procurement and the roles and responsibilities of the involved parties
In addition it relates to the following binding policies:


Policy “Delegations of Authorities in Procurement” (available soon)
E.ON Responsible Procurement Policy (March 20th, 2007)
This Policy replaces all existing procurement guidelines, handbooks, policies and
management instructions in all procurement organizations within E.ON. Any
additional guidelines and tools influencing the procurement process that may be
needed, must be aligned closely with the Procurement Center of Competence (CoC)
Governance & Performance.
Each E.ON company is responsible for the timely and effective implementation of this
Policy. Each Head of Procurement (HOP) is responsible for supporting the
implementation by proactively informing requesters and line managers in the business.
In cases in which a deviation of this Policy is considered necessary due to legal
requirements, the responsible legal entity shall notify the case to the CoC Governance
& Performance and ask for approval. Documentation of the approval or denial of the
deviation will be done by the CoC Governance & Performance.
Procurement processes within E.ON are based on GLOBE SAP. GLOBE SAP
processes need to be strictly adhered to by all E.ON employees involved in
procurement activities. In units where GLOBE SAP is not yet implemented,
intermediate processes must be agreed with CoC Governance & Performance to
ensure that all procurement activities are closely aligned with the E.ON standards
provided by this Policy.
3
Overarching Principles
The segregation of duties between Business, Procurement and Accounting throughout
the entire procurement process must be ensured in all units by the respective
management. A consistent following of the GLOBE SAP processes by all involved
parties supports to fulfill this task. Splitting of demands as well as splitting of
contracts in order to circumvent any thresholds is not allowed.
All employees who take part in procurement activities have to comply with the
following principles of procurement:
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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3.1
Principles of fairness and competition



3.2
Board approval: 25.11.2013
E.ON staff will always act according to E.ON’s Code of Conduct and to the
Group Policies Procurement (GP 1-32 and 3-28).
All suppliers will be treated on an equal basis.
Suppliers will be selected on a rational, transparent and consistent basis.
Ensuring confidentiality in the procurement process
All information during procurement activities have to be treated with a high level of
confidentiality.
Procurement data, in particular all information regarding sourcing strategies, supplier
relations, purchase prices, contractual terms & conditions are considered to be
sensitive data.
Only directly involved E.ON staff shall have access to the information contained
therein. It is not allowed to share the information with any third party. It is not allowed
to publish or otherwise let third parties know prices, names and numbers of
competitors. This applies to ongoing as well as concluded tenders. Exception: Where a
third party is contracted to support the tender process, a non-disclosure agreement
must be signed in advance.
3.3
Cases of emergency
In case of an emergency (including imminent danger), to prevent any damage to E.ON
- regarding safety of people and environment
- regarding the availability of assets
- regarding the risk to negatively impact the service to customers
- to protect E.ON’s legal interests regarding the observance of short-time
deadlines set by the authorities or in case E.ON or E.ON employees are
subject to official investigations which necessitate immediate legal action.
The business is entitled to take necessary steps without involvement of Procurement.
The costs for these measures have to be limited as far as possible. The requester has to
place the requisition in SAP as soon as reasonably possible and it must be
accompanied by written approval of the requester´s functional manager.
Procurement takes over responsibility of the procurement process as soon as they are
informed by the requester. Emergency cases have to be documented in the tender
documentation.
The respective Heads of Procurement have to provide a reporting at the end of each
quarter (i.e. end of March, June, September and December) of relevant cases of
emergency (i.e. above a threshold of EUR 100,000.00 or equivalent) to the CFO of
their legal entity and, in parallel, to their respective director of CoC/ Regional Unit
Procurement.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
3.4
Board approval: 25.11.2013
Monitoring of Maverick buying
Purchases without involvement of Procurement – i.e. Maverick buying – are a serious
breach of this Policy and will be sanctioned by the respective line organization as a
non-compliance issue. This does not apply for demands explicitly listed in the
Exception list (Appendix 01) or for small volume orders (Appendix 02).
Incoming invoices which are recognized by Accounts Payable as “Maverick buying”
will be sent back to the supplier without payment of the invoice.
To organize consistent follow up on cases of Maverick buying, the respective
procurement organization is required to monitor and escalate the following issues:




Late purchase requisition set up by the requester leading to insufficient
timeline for tender activities
Purchase done by the business (without involvement of Procurement)
Service rendered or goods delivered (without involvement of Procurement)
Supplier has sent an invoice before purchase order has been placed in SAP
For these issues, the responsible purchaser is required to record the respective case in
SAP. For details, see Appendix 03.
The respective Heads of Procurement have to provide a reporting (at least at the end of
each quarter) of relevant cases of Maverick buying plus an ad hoc reporting of cases
above a threshold of EUR 100,000.00 or equivalent to the CFO of their unit and, in
parallel, to their respective director of CoC/ Regional Unit Procurement and to CoC
Governance & Performance via the email account: [email protected].
4
Procurement processes
The core procurement processes, which are illustrated in the following, must be
followed for every sourcing activity above EUR 10.000,00 or equivalent. Below this
threshold, please refer to 4.3.2 and Appendix 02. Above a threshold of 1 m EUR, there
are some special requirements indicated explicitly in the respective process steps.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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Group Policy
P
GP 3-28
3
Procureement
Version 2.0 (Dec. 20013)
Effectivee: 01.12.20113
4.1
Board approval: 25.11.2013
Category Straategy
b a CoC are called “globbal categoriess”
All purchhasing categgories that aree managed by
irrespecttive of the unnderlying maarket situation.
The conssistent definiition and folllowing of a sound
s
strateggy for E.ON’’s global
categoriees is a prereqquisite for a best-in-class
b
approach too the market and
a thereforee an
importannt driver of value
v
for E.O
ON.
Thereforre strategies for global caategories neeed to be definned by the caategories and
d
communnicated to thee business. Where
W
a technnical categorry lead has beeen defined in
i
is
the businness, the devvelopment off the categoryy strategy toggether with Procurement
P
one of thhe technical category
c
leadd’s main taskks.
A globall category strrategy consissts of the folllowing:
 Defined/
D
giv
ven category targets (costt, quality, dellivery)
 Analysis
A
of the
t respectivve supply maarket & its dyynamics
 Specific analysis and proofiling of exiisting and potential new suppliers
s
 Analysis
A
of nature
n
of dem
mand, cost drrivers and voolume forecaasts
 Segmentatioon of categoryy supply/ dem
mand positiooning
 Formulation
F
of category strategy andd identificatioon of levers regarding
r
o Supp
plier panel annd geographhies to be souurced from
o Prodducts/ servicees and volum
mes to be souurced
o Proccess to be useed for sourcing of produccts/ services
 Implementat
I
tion plan inclluding KPIs
Author: Support Un
nit Procurem
ment
Issuer: Legal & Com
mpliance/F//LC1 Group Governancee
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Group Policy GP 3-28
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Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
Each global category strategy has to be presented by the respective global category
team (at least by the responsible purchaser and the technical category lead) to the
Sourcing Board (CPO, respective CoC Director and selected members of the
procurement management team) at specifically defined “strategy review days”. The
mandatory documentation for global category strategies has to be submitted at least 2
weeks before the respective slot in the “strategy review days” to the CoC Governance
& Performance.
The strategy has to be structured along a short-term perspective (one year ahead) and a
mid-term perspective (three years ahead). The category team is asked to give once a
year an update into the Sourcing Board on status of the strategy, an overview on target
achievements and, if needed, propose corrective measures to be taken. Every three
years the category teams will be asked to completely update the category strategy and
to present to the Sourcing Board for approval.
A conclusive list of all global categories as well as the templates for documentation of
the strategies can be found on the corporate procurement intranet. Approved and valid
strategies need to be stored on the procurement sharepoint.
4.2
Tender approval (for demands above EUR 1 m)
Prior to start of the tendering, a tender approval is established to ensure transparency
of the spend as well as a thorough procurement planning and to make sure all bundling
opportunities are met.
Therefore, the responsible purchaser has to hand in every demand above EUR 1 m or
equivalent via the eSourcing platform before start of tendering and has to get an
approval from the respective CoC Director. More details are found on the corporate
procurement intranet.
4.3
Tendering
The tendering process is always led by Procurement, but executed in close
collaboration with the business. Alignment with the objectives of the business is as
important as meeting the cost targets. Therefore, Procurement has to be involved by
the requester at an early stage in the specification of the demand.
Where a category strategy is in place, the responsible purchaser has to comply with
this category strategy (see chapter 4.1).
Adhering to the tendering process and consistent documentation are prerequisites for
approval of the contract. The usage of eSourcing is recommended for transparency
purposes.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
10/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
Where a global category team is in place, the tasks of the requester in the tendering
process can be taken over by the technical category lead due to the decision of the
category team.
The tender process has to be executed along the following five essential steps.
Respective templates for documentation of the process are stored on the corporate
procurement intranet. This documentation requirement does not apply for tenders
below EUR 1 m or equivalent:





Definition of tender strategy and tender targets (cost, quality, delivery)
“Tender – Category Strategy” alignment (if global category strategy exists)
For all non-global categories (for global categories please refer to global
category strategy chapter 4.1):
o Analysis of the respective supply market & its dynamics
o Specific analysis and profiling of existing and potential new suppliers
o Analysis of nature of demand, cost drivers and volume forecasts
o Segmentation of category supply/ demand positioning
Development of core elements of tender:
o Scope of tender, i.e. technical specifications, service level agreements,
volume forecasts etc.
o Tender design, i.e. lot structures, contract duration, pricing
mechanisms, specific tender rules/ criteria (e.g. transparency level,
cost savings idea contribution etc.)
o Supplier list for tender participation
o Overall tender and negotiation time line
o Evaluation model
Supplier selection for negotiation and initial negotiation planning
The responsible purchaser aligns upfront with the requester, which evaluation model
shall be used in the tender, i.e. scoring and weighting of “quantitative” parameters
(e.g. cost/ price, payment terms etc.) over defined “qualitative” parameters (e.g.
technical compliance, delivery terms, quality risks/ commitments, references etc.). The
quantitative parameters should have a weighting of at least 50% in the evaluation
model.
As a minimum requirement, the successful quote is selected on cost-components only.
The following principles apply:



Tenders that bundle demands internationally (i.e. global tenders) are always
executed on behalf of E.ON SE, where allowed by national legislation.
Procurement staff involved in these transactions must indicate clearly to the
third parties that they act as representatives of E.ON SE, not as a single entity.
In the tender preparation phase, the leader of the negotiation (i.e. the
responsible purchaser) will be announced and communicated. They lead the
negotiation process until contract signature.
For tenders in E.ON’s global categories, the CoC Director sets a negotiation
target or a range to be achieved. Meetings with suppliers for technical
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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Version 2.0 (Dec. 2013)
Effective: 01.12.2013


4.3.1
Board approval: 25.11.2013
clarification can be executed regionally, commercial negotiations should be
held at the location of the respective CoC or Regional Unit Procurement.
The category manager must be given the opportunity to participate in
commercial negotiations. To ensure this, the responsible purchaser has to
involve the respective category manager in the negotiation planning.
The tendering process has to be clearly communicated upfront, both internally
and towards the potential suppliers (e.g. timeplan, planned number of
negotiation rounds).
Specification
Tenders have to be based, wherever feasible, on a supplier-neutral specification (for
goods and /or services) which has to be provided by the requester. The requester has
the responsibility to describe the demand and the requested quality. Functional
specifications should be used if possible. Pricing shall be based on lump-sum and/or
unit-prices. Time and material based tenders and contracts should be used in
exceptional circumstances only.
The responsible purchaser has the right to challenge the specification together with the
requester with the aim to reach the level of best value for E.ON.
4.3.2
Request for Quotation (RFQ)
Procurement will issue requests for quotation only based on an approved requisition.
Prior to this, Procurement can issue a request for information, if appropriate, to get
transparency on the budget need or to ask the suppliers for any sort of upfront
information. In this case, the responsible purchaser has to make clear to the supplier
that this quote is for informative purposes only and a competitive tender will be issued
later.
Exception: Requests for information and quotation can also be issued by the requester
if mandated by Procurement.
The minimum number of quotes required is 3 (three) for every demand exceeding
EUR 10,000.00 or equivalent. Below this value, the responsible purchaser decides
how many quotes are necessary. For details, see Appendix 02. In case that the
minimum number of quotes cannot be obtained, the responsible Head of Procurement
or CoC Director has to authorize this in writing (to be stored in the tender
documentation).
The decision as to which suppliers will be invited to tender should be taken jointly by
the requester and Procurement. In case of disagreement regarding the tender invitation
list, the final decision shall be taken by Procurement to ensure consistent supplier
management. All invited suppliers must be provided with the RFQ at the same time to
avoid unfair advantages of selected suppliers.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
12/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
4.3.3
Board approval: 25.11.2013
Tender Return and Tender Opening
Tenders shall be handled in a fair and transparent way, treating all suppliers in the
same manner to avoid manipulation, preferential treatment or fraud in the tender
process.
The responsible purchaser will state in the tender instructions the timeline and the way
quotes have to be submitted. Extensions of the time plan must be communicated via
the purchaser to all potential suppliers to ensure equal treatment.
All quotes submitted for demands above EUR 1 m or equivalent shall be submitted as
hard copy in sealed envelopes, at a specified tender return date and time, following the
instructions of the responsible purchaser. This hard copy requirement for tenders
above the threshold does not apply in case of eSourcing.
The initial tender opening has to be executed in the presence of the responsible
purchaser plus one other E.ON employee and documented based on a standard form.
This is mandatory for all tenders with an expected value exceeding EUR 1 m or
equivalent.
It is acceptable to have quotations with more than one part (technical, commercial,
legal part). The responsible purchaser shares the prices and further commercial
conditions with the requester preferably after technical evaluation.
For contracts below EUR 1 m or equivalent, quotes can be submitted in electronic
format (e.g. by email), subject to the decision of the responsible purchaser.
4.3.4
Evaluation of quotes
All tenders will be evaluated by Procurement and, if applicable, by the requester
(focus on technical content). Based on the evaluation according to the predefined
evaluation model, Procurement and - if applicable - the requester will choose the final
quote that proves to be the lowest cost based on the total cost of ownership
consideration.
In the event of disagreement, escalation will be done via the requester’s organization
and via the functional procurement organization.
4.4
Negotiation
During the negotiation, all contract-relevant questions regarding commercial, technical
and HSE issues with potential suppliers must be clarified (if not previously handled in
a technical clarification).
Methodologies to be used in order to obtain the necessary transparency and
preparation for the negotiation are detailed on the corporate procurement intranet. The
outcome of the negotiation (including the presentation of applied methodologies) has
to be presented to the Sourcing Board afterwards (see chapter 4.5), if the tender value
is at least EUR 1 m or equivalent.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
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Version 2.0 (Dec. 2013)
Effective: 01.12.2013
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Procurement has to ensure a transparent process (especially an equal treatment of all
potential suppliers) and document the negotiation results. Procurement is responsible
for economic and commercial aspects, the business is responsible for the accuracy of
the technical aspects of the documentation.
eAuctions are a valuable and recommended option to generate savings. Where all
open relevant questions are clarified, eAuctioning can replace a face-to-face
negotiation and can be conducted after the technical alignment. Further details can be
found on the eSourcing platform.
4.4.1
Change of requirements / Variations to the Tender
Variations to the tender requested by the business pre-tender return have to be
communicated at the same time to all tenderers issued by Procurement. These tender
variations have to be recorded in the tender documentation.
If a change of requirement (e.g. timeline) has implications on the competitive
situation, the requester and Procurement jointly decide on the appropriate measure
concerning the two alternatives:


Setting up a new tender
Renegotiating with all suppliers in the tender to adapt the quotes to the new
situation
The decision has to be documented in the tender documentation.
4.5
Contract approval (by the Sourcing Board)
Every sourcing activity with at least EUR 1 m of value or equivalent has to be
presented by the responsible purchaser in a Sourcing Board meeting to the CPO plus
the respective CoC Director or RUP Director prior to award of the contract. The CPO
has the right to pass on the presentation or to delegate the task. A call-off based on an
approved contract does not require Sourcing Board approval. Purchasing activities on
behalf of customers of E.ON do not require Sourcing Board approval either.
For this process step, regular Sourcing Board meetings are set up and the responsible
purchaser is requested to register at least 2 weeks in advance for a presentation of his
sourcing activity.
The standard documentation is stored on the corporate procurement intranet and has to
be filled in completely and correctly. The responsible purchaser has to submit this
documentation at least 3 working days before the Sourcing Board meeting to the
respective process manager. It is the purchaser’s duty to include this contract approval
into the sourcing time plan to avoid actions on short notice.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
14/25
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Version 2.0 (Dec. 2013)
Effective: 01.12.2013
4.6
Board approval: 25.11.2013
Contracting
The term “contract” in this Policy implies all different sorts of agreements with
suppliers including purchase orders, frame orders, (global) contracts, as well as calloffs.
Every contract apart from the exceptions detailed in Appendices 01 and 02 has to be
created in SAP. Procurement has to ensure that existing frame contracts are used
consistently. The responsible purchaser involves the legal department into the
development of the contract, if required.
E.ON Conditions of Contracts shall apply to all contracts, irrespective of their value.
Procurement does not accept other companies’ conditions unless left with no choice
due to extraordinary circumstances. In this case, differing conditions have to be
approved by the legal department, if the purchaser considers the deviation as
considerable risk. CoC Governance & Performance keeps the E.ON Conditions of
Contracts up to date. To take country-specific requirements into account, there can be
E.ON Conditions of Contracts per country derived from the E.ON SE Conditions of
Contracts.
The communication to the losing suppliers (including suppliers who have been invited
but did not provide any quote) has to be done by the responsible purchaser.
Confirmations of contracts are requested above a threshold of EUR 10,000.00 or
equivalent apart from call-offs. They have to be sent out together with the SAP
contract to the supplier. Below this value, the responsible purchaser decides if he
requests a confirmation from the supplier. Return of the signed confirmation must be
followed up by the responsible purchaser (including follow up on potential deviations
in the confirmation).
For details see Appendix 03.
4.6.1
Authorisation of Contracts
All procurement contracts need to be authorized (via physical, electronic signature or
via workflow-authorization) in line with the Policy “Delegations of Authorities in
Procurement”.
Levels of delegated authority do not change when demands are split in multiple
requisitions / positions. Authorisation shall be asked for the maximum sum eventually
due for goods and services contracted, irrespective of whether this is done via
framework, call-off, or single contracts including contract extensions. A prerequisite
for the authorisation of a contract above EUR 1 m or equivalent is the contract
approval, see chapter 4.5.
For details as well as exceptions for small volume and automatically produced orders,
see the Policy “Delegations of Authorities in Procurement”.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
15/25
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Version 2.0 (Dec. 2013)
Effective: 01.12.2013
4.6.2
Board approval: 25.11.2013
Variations Post Contract Award
Variations to contracts will only be done by Procurement, unless Procurement agrees
otherwise, and shall be carried out in accordance with the conditions of the contract in
close co-operation with the business responsible for executing the work. Verbal
agreements are not permitted. Any variations have to be recorded in the tender
documentation. The SAP contract has to be adjusted accordingly based on an
approved requisition that covers the value of the variation. For details, see Appendices
03 and 04.
4.6.3
Contract Extension vs. Repetition
A contract can be extended once and for one year. If, due to market reasons, a new
tender would lead to a less favorable cost situation than an extension of the contract,
the respective HOP or CoC Director has to confirm this decision in writing and to
store this confirmation in the tender documentation.
If a new demand arises with substantially the same characteristics as a tender
performed less than one year ago, the results can be used without re-tendering
(repetition).
Generally, Procurement is responsible for taking a decision regarding contract
extension or contract repetition. When in doubt, the HOP or CoC Director takes the
decision.
4.6.4
Tender documentation
The tender documentation consists of the specification, the requests for quotation, the
requests for information if applicable, all quotes returned as well as denials from
suppliers, the evaluation, documentation of negotiation, all relevant correspondence,
all filled templates in the course of the tender and the contract including contract
history. The tender documentation must be stored by Procurement either physically in
a traceable archive system or via optical archiving in SAP. Legal requirements of
physical archiving can be addressed at a regional level.
4.6.5
Usage of eCatalogues
Where applicable, Procurement has to set up e-catalogues to secure lean processes and
bundling effects in their respective categories. The requester is responsible for
checking on the eCatalogue platform to fulfill the specific demand. If there is no
catalogue in place, the requester issues an SAP purchase requisition if the expected
value of the demand is above EUR 1,000.00 or equivalent. For details, see Appendix
02.
4.7
Contract management
The requester is responsible for following up on the delivery or service provision
related to the contract and to confirm the delivery by setting the goods receipt in SAP
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
16/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
(or confirming the service entry sheet in SAP). Procurement shall provide support in
the contract implementation and interpretation if required.
In case of a frame contract, the responsible purchaser has to follow up on the usage of
the contract (checking amounts and time limits).
Only Procurement is entitled to cancel or terminate contracts, irrespective of the value.
Procurement and the requester will jointly negotiate regarding potential cancellation
fees with the supplier.
4.7.1
Claims Management
Claims management at E.ON is the systematic monitoring and assessment of
deviations and/or changes to existing contracts between E.ON and its suppliers
including their commercial impact with the aim to identify, enforce or defend potential
entitlements.
A claims procedure must be clearly defined in all contracts with a value of EUR 1 m
(or equivalent) or more.
Claims with respect to a contract such as (but not limited to) liquidated damages, nonor underperformance, warranty issues, etc. shall be handled by Procurement. The
requester and the CoC Legal shall cooperate with Procurement during discussion and
negotiation. Where a claim exceeds 10% of the contract value (at least EUR 1 m or
equivalent), the responsible purchaser will consult with the CoC Governance &
Performance to decide whether the claim should be managed by the responsible
purchaser or whether it should be dealt with by the claims experts from CoC
Governance & Performance.
All claims have to be processed in accordance with the agreed conditions of the
contract.
In major asset projects of the E.ON Group, the claims management function within the
CoC Governance & Performance will conduct claims management procedures either
directly or via embedded operational claims managers in the projects. Alignment on
and necessity for an operational claims manager within a project will be made
between CoC Governance & Performance and the project. The nomination right for an
adequate resource to be deployed in the projects as operational claims manager
remains within Procurement, however will be intensively discussed and aligned with
the project. The process for searching, identifying and, in case of external resources,
tendering and contracting of operational claims managers is in the responsibility of
Procurement.
Detailed operational procedures and responsibilities between operational claims
managers, projects and CoC Governance & Performance will be clarified in a
“Handbook – Operational Claims Management” until March 31st, 2014.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
17/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
4.8
Board approval: 25.11.2013
Procure-to-Pay
The end-to-end process from the development of a demand from the external market
to payment of the invoice is of utmost importance for both process security and
efficiency. All involved parties have to ensure compliance with the process description
with the following major parts:

Definition of need/specification

Early creation of a complete requisition in SAP

Transparent set up of purchase orders in SAP

Setting the goods/services received

Highly automized invoice processing
The GLOBE SAP principle “No purchase order no pay” applies, the only permitted
exceptions are exclusively listed in Appendices 01 and 02.
In the Appendix 03 “SAP-Guideline for purchasers”, and Appendix 04 “Guideline for
the requester” the deliverables of the requester as well as the interface and the relevant
process steps of Accounts Payables are defined.
4.8.1
eCl@ss
The complete table of valid eCl@sses is listed on the corporate procurement intranet.
eCl@sses are a classification of spend categories used for two different purposes:
Automation of the routing process:
The requester classifies the requisition with an appropriate eCl@ss. The SAP system
processes this purchase requisition automatically to the responsible purchaser in the
respective Regional Unit Procurement. For details, see Appendix 04 “Guideline for
the requester”.
Responsibility of the purchaser to secure transparency of spend:
The eCl@sses provide a basic structure for Procurement to analyze spend. This spend
analysis provides a foundation in supplier negotiations and spend governance.
For contracts which are set up including Procurement involvement, the responsible
purchaser checks the eCl@ss provided by the requester and changes, in case of
inaccuracy, the eCl@ss in the contract. ‘For details, see Appendix 03 “SAP-Guideline
for purchasers”.
4.8.2
Payment terms
Only the standard payment terms implemented in GLOBE SAP are accepted for all
contracts.
The regulations for procurement in order to select the payment terms the most
economical for E.ON in an overall perspective are currently in development with the
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
18//25
Group Policy
P
GP 3-28
3
Procureement
Version 2.0 (Dec. 20013)
Effectivee: 01.12.20113
Board approval: 25.11.2013
E.ON 2.0 Working Capital
C
Project. This Policy will be uppdated once the
t procedurres
are alignned.
4.9
M
Managemen
nt of suppliers
Managem
ment of supppliers within E.ON Procuurement rangges around thhree essentiall
aspects: Key Supplier Managem
ment, Supply Base Develoopment and Supplier
S
Relationnship Manageement. All off these areas are closely linked
l
into each other annd are
followinng three essenntial objectivves:
 increase
i
E.O
ON purchasinng power across the groupp
 make
m
supplieer performannce, risk and developmennt needs transsparent and
t
traceable
 improve
i
struucture and “right-size” E..ON’s suppliier base acrosss the group
u
“Manaagement of Suppliers”
S
are structured along a
All aspects covered under
o E.ON suppliers accord
ding to the tw
wo dimension
ns – procurement
clusterinng approach of
spend annd spend cov
verage acrosss number of E.ON
E
units supplied.
s
Bassed on these
definitioons, four grouups of suppliiers can be cllustered:
1234-
4.9.1
Suppliers wiith high spennd and a highh spread acrooss E.ON
Suppliers wiith high spennd focused onn few units within
w
E.ON
Suppliers wiith medium spend
s
and a high
h
spread across
a
E.ON
Suppliers wiith low spendd across E.ON
N or supplieers with mediium spend
f
focused
on few
f units witthin E.ON
K supplierr managemeent
Key
Key Suppplier Manag
gement (KSM
M) within thee CoC Goverrnance & Perrformance
actively manages, drrives business relationshipps and supplly base structtures across
a
the spend
E.ON foor the supplieer groups 1 annd 2. Thereffore KSM wiill regularly assess
volume oof E.ON and
d identify andd communicaate all suppliiers in scope of KSM to
Procurem
ment and thee affected bussiness.
K
activitiees will be to increase
i
E.O
ON’s purchasing power,
Core objjectives of KSM
increase performancee of key supppliers as well as restructuure and further develop
c
supply base.
b
These core objectivves will be exxecuted by a number of core
c
E.ON’s core
activitiess:

Screening (innternal & exxternal) opportunities systtematically to
t leverage
E.ON‘s glob
E
bal purchasinng power withh identified key
k supplierss
Author: Support Un
nit Procurem
ment
Issuer: Legal & Com
mpliance/F//LC1 Group Governancee
19/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013



Board approval: 25.11.2013
Defining corporate supplier strategies and managing/ensuring consistent
messages as “one voice” to E.ON’s key suppliers
Increasing key supplier performance by deploying consistent performance
metrics, defining targets and leading the execution of agreed improvement
measures
Creating transparency on E.ON’s supply base structures and actively drive
supply base restructuring and consolidation
To achieve these objectives, KSM will define an effective and efficient operating
model by March 31st, 2014.
4.9.2
Supply Base Development
Especially supplier groups 3 and 4 need to be analyzed, monitored and later in the
transformation be also managed actively with the aim to streamline E.ON’s supply
base, reach higher bundling rates with suppliers and to reduce complexity in
management of supply base by smaller number of suppliers.
This streamlining will require a thorough analysis of all boundary conditions and
potential interdependencies across categories and CoCs and will need to follow a
structured and unified framework across the E.ON Group.
To achieve these objectives, the Coc Governance & Performance will define and align
an effective and efficient framework and transformation path for supplier groups 3 and
4 until the end of 2014, however might already implement first steps as pilots in
specific categories and/ or CoCs.
4.9.3
Supplier relationship management
All parts of Supplier relationship management (Prequalification, Supplier risk
assessment, Supplier evaluation, Supplier development) have to be followed
accordingly and documented in GLOBE SAP. These processes are designed to ensure
sustainability in the supply chain and prevent and/or mitigate risks connected to
external spend. Further concretization and improvement of these processes will be
done in 2014 and updated in this Policy.
Prequalification: Every new external supplier has to be prequalified if he/she
performs works on E.ON`s premises with a contract value of more than EUR
100,000.00 or equivalent. Prequalified suppliers relocating production completely or
at least significant parts thereof have to undergo a new plant audit process as part of a
valid prequalification.
Additional needs for prequalifying a supplier are defined by the responsible purchaser,
taking into account both the risk level of the country sourced from as well as HSE-risk
of works provided by the requester. The prequalification process and questionnaire
can be found in the GLOBE eBook. The completed documents have to be stored on
GLOBE SAP.
Supplier risk assessment: Every supplier with an annual spend volume of more than
EUR 5 m or equivalent has to be assessed in the four risk dimensions Finance, Market,
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
20/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
Corporate Responsibility / Compliance and Performance. The assessment has to be
repeated every 2 years to confirm up-to-date information.
For E.ON’s top suppliers, responsibilities for execution of the supplier risk
assessments are listed on the corporate procurement intranet.
For all suppliers not listed on the intranet, the purchaser actually dealing with the
supplier is responsible for executing the assessment.
Details and templates can be found on the GLOBE eBook. The completed documents
have to be stored on the GLOBE SAP.
Supplier evaluation: Every contract above EUR 500.000,00 or equivalent is selected
by the GLOBE SAP-system for supplier evaluation to ensure a consistent approach in
supplier relationship management. Lower thresholds can be implemented on country
level. Besides this, both business and Procurement can select additional contracts to be
evaluated based on their experience and criticality of the purchase.
The evaluation has to be performed by the requester on the evaluation template
provided on different dimensions with a rating from 1 (=excellent) to 5 (=insufficient).
In case of an insufficient rating, immediate actions for improving the supplier’s
performance have to be taken. The responsible purchaser and the Supplier
Relationship Management (SRM) coordinator or Quality Manager of the respective
unit agree on the appropriate measures.
All performed supplier evaluations are stored in the GLOBE SAP, and are available
for the whole procurement community.
Supplier development: Individual measures arising out of identified gaps in supplier
performance (identified in prequalification, supplier risk assessment or supplier
evaluation) as well as improving performance of potential suppliers are driven by
Procurement and supported by the business. For more information on storing the
documentation of supplier development measures please refer to the GLOBE eBook.
4.10 Controlling and Reporting
4.10.1 Savings
As long as the E.ON 2.0 project is operative, the group wide savings reporting
approach is defined within this project. The collection of procurement relevant savings
in the project is based on the “previous price” concept, as described below, meaning
that we move away from the savings to budget and cost avoidance concepts.
In summary, identified savings have to fulfill the following criteria:

Use 2010 as baseline for calculating the savings, if not possible, the previous
year’s spend can be used (if consistent volumes). If there are significant
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
21/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013



Board approval: 25.11.2013
volume increases or decreases, the savings should be calculated on the basis
of price difference between previous unit price and the new unit price, times
the actual quantity.
Savings have to be the result of concrete measures/initiatives/actions that
decrease the baseline spend.
Only comparable items in the baseline and the new contract can be used when
calculating the savings, i.e. there has to be a comparable “spend position” in
the baseline.
The financial impact of the savings has to be confirmed by the local
controlling department.
Negative “savings” (e.g. increased unit prices leading to increased spend, one-off
investments leading to future savings) have to be reported as well.
In recognition that the calculation of the E.ON 2.0 saving is time-consuming, the
savings reporting can be performed only for certain transactions. The savings
reporting is completed within the E.ON 2.0 project (category deep dives) and through
the local savings initiative. Within this initiative, further guidance is provided
regarding the number of transactions to be considered. Until further notice only E.ON
2.0 savings will be collected centrally.
A review of this section will be necessary in time to ensure a common savings
reporting approach after the E.ON 2.0 project. This will be completed in the course of
2014 ready for implementation on January 1st, 2015.
For detailed information on savings calculations, reporting and examples, see
Appendix 03.
4.10.2 Reporting (BI)
Procurement reports are a key element for steering purposes and to increase spend
transparency.
Procurement has specific reports to steer its business. The reports for units using
GLOBE SAP and units not using GLOBE SAP differ. Units which already
implemented GLOBE SAP can retrieve their data from the GLOBE SAP System and
the Business Intelligence (BI).
Details and training materials can be found in training material “P2P for Purchaser”.
BI reporting contains procurement reports for purchase orders/contracts, purchase
requisitions, logistic and service orders, material stocks and movements. The basis of
all reports are the master- and movement data of Procurement and Logistic. BI
provides a standard reporting, which is built on a general, standardized database. For
detailed information about the different reports see the GLOBE eBook.
Some of the procurement data is also used for the Group Performance Report, which
is presented to the E.ON board on a quarterly basis. This Performance Report shows
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
22/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
the main procurement figures: PO-Volume (internal/external), PO-Amount and
savings.
There is a harmonized reporting process for all GLOBE SAP reporting units. For these
units, the relevant procurement data is centrally taken from GLOBE SAP reports in
the BI on the first working day after quarter-end. The CoC Governance &
Performance then sends the downloaded data to the reporting unit to be checked for
potential inconsistencies.
All non-GLOBE SAP reporting units have to report the predefined procurement data
to the CoC Governance & Performance in a predefined template.
All units are responsible for the accuracy of their spend data in GLOBE SAP and
compliance with this policy (e.g. correct handling of exceptions).
5
5.1
Special regulations
Procurement of Goods and Services from internal suppliers
For the procurement of goods and services from internal suppliers, special rules are in
place to secure an efficient and reliable internal process without any additional
processes involving third parties. For details, see Appendix 05.
5.2
Procurement of Professional Services / Management Consulting
For the procurement of Management Consulting Services, special rules are in place for
release of budget and purchasing procedures. In particular, a centralized budgeting and
authorization process has been introduced, requiring every requester to follow a
specific prioritization process as well as every procurement unit having to verify
existing authorizations before issuing contracts. Familiarity with the definition of
management consulting and other indirect categories is therefore very important.
Details relevant for Procurement and for the requester are found on the corporate
procurement intranet.
5.3
Procurement of Engineering Services and Temporary Labour
Group-wide processes for Temporary Labour and Engineering Services will be rolled
out. As soon as the new processes are implemented, these processes will be
mandatory. For further details are found on the corporate procurement intranet.
For Temporary Labour there is a special requirement in some countries: The
responsibility of obtaining the approval from the workers council to contract
temporary labour lies with the local demand carrier.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
23/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
6
Board approval: 25.11.2013
Entering into Force
This Policy shall enter into force on December 1st, 2013 and remains valid until
November 30th, 2015.
7
Glossary
7.1
Communication / Information
All documents and forms available for the whole procurement organization are listed
on the corporate procurement intranet.
Within Procurement and for all E.ON staff involved in sourcing activities, the
corporate procurement intranet contains all available information and relevant links to
procurement tools such as EBP (catalogue system).
In addition information exchange in Procurement is fostered via regular Procurement
leadership meetings (two to three times a year), regular Procurement leadership
telephone conferences as well as a Procurement Newsletter every four to six weeks.
Procurement leaders must ensure that their respective staff is regularly updated.
7.2
7.3
Appendices

Appendix 01: Exception list

Appendix 02: Small volume orders

Appendix 03: SAP-Guideline for purchasers

Appendix 04: Guideline for the requester

Appendix 05: Internal Suppliers

Appendix 06: HSE/ Sustainability risk identification in the Procurement
Process
Definitions
Claims
management:
Claims management at E.ON is the systematic monitoring and
assessment of deviations and/or changes to existing contracts
between E.ON and its suppliers including their commercial impact
with the aim to identify, enforce or defend potential entitlements.
Contract:
Covers all sorts of documents for the purchase of goods and
services (e.g. Frame order, purchase order, frame contract, order).
Demand:
Goods, services and other contracts purchased from third parties
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
24/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
for the purpose of carrying out E.ON business.
eCatalogue:
E.ON procurement tool allowing the acquisition of goods and
services through an electronic medium based on electronic
catalogues.
Evaluation:
The combined results of the technical/content review and the
commercial review determining which offer provides best value
for money for the lowest total cost of ownership.
Global
Category:
Procurement Category which is centrally steered by a CoC.
Imminent
Danger:
The situation in which (A) immediate actions are required to
prevent a serious HSE related incident or (B) to prevent the
business from significant harm, i.e. loss of an asset or significant
loss of production.
Maverick
buying:
Purchases without involvement of Procurement.
Non-disclosure
agreement:
Agreement between E.ON and a third party to secure that no
E.ON-internal knowledge can be passed on by third parties.
Procurement:
The E.ON support unit Procurement responsible for the acquisition
of third party goods and services.
Quote:
The quote handed in by a supplier (synonym to offer, bid).
Request for
information:
Request that is sent to third parties to gather information on
capabilities of suppliers.
Request for
quotation:
Request that is sent to third parties specifying the demand and the
frame conditions and inviting the third parties to tender.
Requester:
E.ON Employee or department raising a requisition (also referred
to as demand carrier).
Requisition:
SAP requisition used to start the procurement process leading to
the purchase of goods and services.
Sensitive Data:
Sensitive data is data that needs to be protected, as it includes
private information on suppliers. This data can only be used and
retrieved under restricted circumstances. Usually this includes the
voluntary, written consent of the respective person.
Sourcing
activity:
Any procurement activity which leads into a contract with a
supplier.
Specification:
The service or product description.
A functional specification is a clear indication of the purpose,
function, application and performance expected of the supplied
material or service, whereby the supplier is allowed or encouraged
to provide an appropriate product.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
25/25
Group Policy GP 3-28
Procurement
Version 2.0 (Dec. 2013)
Effective: 01.12.2013
Board approval: 25.11.2013
Supplier:
Any third party (synonym to vendor, contractor).
eSourcing
platform:
The Synertrade platform used for the tender approval and tender
process.
Total cost of
ownership:
Total cost of ownership (TCO) is a method to determine the direct
and indirect costs of a project over its expected operational
lifetime.
7.4
Abbreviations
BI
Business Intelligence
CFO
Chief Financial Officer
CoC
Centre of Competence
CPO
Chief Procurement Officer
DoA
Delegations of Authority
EBP
Enterprise Buying Portal
GP
Group Policy
HOP
Head of Procurement
HSE
Health, Safety & Environment
KPI
Key performance indicator
KSM
Key Supplier Management
PO
Purchase order
RFI
Request for Information
RFQ
Request for Quotation
SRM
Supplier Relationship Management
TCO
Total Cost of Ownership
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
1/2
Appendix 01
Exception list
Version 2.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
Valid from: 01.12.2013
01.12.2013
Board approval: 25.11.2013
1. Objectives
Appendix 01 to Group Policy GP 3-28 lists all purchasing activities where Procurement does not need
to be involved.
2. Process
All procurement transactions listed in this Appendix can be procured by the business without
involvement of Procurement. This is a conclusive list. Any purchase done by a requester which does
not belong to one of the mentioned areas in this Appendix will be treated as a case of Maverick
buying.
To enable the invoice verification workflow, the requester uses a purchasing template provided by
local procurement wherever applicable. The template needs to be signed by the budget holder. The
respective supplier invoice must be handed by the requester to Accounts Payable.
3. List of Exceptions
Category Commodity deals and trades incl. related fees Transaction 








Fossil, nuclear and biomass fuels Recycling materials in power plants Electricity supply and trading Renewable obligation certificates / green certificates Carbon emission rights Charges for energy trading and payment transactions Commissions and fees from commodity transactions Contracts for regulated services e.g. transmission and distribution costs Initial and variation margins (STANDARD: managed in Treasury system WSS, only in exceptional cases via Accounting systems) 




Acquisition costs M&A transactions Financial market transactions (derivatives, FX, MM, collaterals) Asset Management transactions Fees of financial transactions and other fees Insurance expenses 
Real estate transactions 



Financial deals and trades incl. related fees E. g. insurance costs for real estate transactions Acquisition and sale of property or buildings Leasing costs Rental costs Additional property expenses Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
2/2
Appendix 01
Exception list
Version 2.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
Valid from: 01.12.2013
01.12.2013
Employee related expenses Board approval: 25.11.2013







Wage payments, extended wage payments, wage taxes (including non‐wage labour costs) Pension payments Car leasing (deferred compensation) Apprentice and trainee salaries Fees for job advertisements Compensation for job applicants Trainings conducted by E.ON employees Travel and entertainment expenses 

Travel costs via company credit card invoices Entertainment expenses (dining, beverages, accommodation) Tax payments 




VAT Corporate tax PAYE tax Energy taxes Other taxes Judicial disputes 


Fees for legal advice subject to special confidentiality Court costs, notary fees, Charges for bailiffs Penalties of legal authorities Governmental fees and bills 
Bills for fees from government offices, authorities, state offices, municipal authorities, city councils and other public administrative bodies Other expenses or charges 


Acquisition of works of art Call charges and postages Settlement of accounts for purchasing cards (STANDARD: managed in HR system, only in exceptional cases routed via Accounting systems) Exceptions in this context are business activities conducted by E.ON companies on behalf of a
third party (no E.ON internal business according to Appendix 05). These business activities (e.g.
maintenance, technical service, building) are services performed following the requests of the
client. For the procurement of required subcontractors and materials for the service provision, the
corresponding IT-systems can be used.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
1/2
Appendix 02
Small volume orders
Version 2.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
Valid from: 01.12.2013
Board approval: 25.11.2013
This Appendix sets standards for procurement of small volume orders which are not covered by
existing framework contracts.
1. Objectives
The Support Unit Procurement has the target to minimize administrative effort in the purchasing
process and to further focus priorities on tasks adding value to E.ON.
Therefore, two value thresholds are implemented to harmonize the existing unit-specific regulations:
1. Threshold for purchases without involvement of Procurement: A value threshold of up to EUR
1,000.00 for single purchases directly executed by the requester, i.e. without requisition and SAP
purchasing process for goods and services which are not covered by catalogues or other existing
frame contracts
2. A value threshold of up to EUR 10,000.00 where Procurement executes a simplified purchasing
process without the requirement to obtain alternative offers.
These Procurement thresholds relate to the total value and package of a good or service. Splitting a
purchase into multiple units to circumvent the threshold is not permitted.
2. Scope
This guideline is valid for all Procurement organizations within E.ON. Exceptions are defined for
those units that already today have higher value thresholds and for units whose regulatory
requirements are not in line with this regulation. These are as follows:
Procurement organization of the
respective country
Simplified purchasing
process in EUR
E.ON Sverige
CoC Renewables
E.ON Slovakia
Threshold for purchases
without involvement of
Procurement in EUR
2,000.00
5,000.00
150.00
E.ON Romania
0
10,000.00
50,000.00
50,000.00
3,000.00
All defined exceptions will be re-evaluated regularly by CoC Governance & Performance.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 02
Small volume orders
Version 2.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
2/2
Valid from: 01.12.2013
Board approval: 25.11.2013
3. Procure-to-pay Process for purchases up to EUR 1,000.00
The following process description is based on the GLOBE standard template. Until complete rollout of
GLOBE with all its functionalities, some units must establish alternative processes with the aim to get
as close as possible to the described standard.
There will be an upcoming change due to the E.ON 2.0 Project “Procure to pay optimization”.
1. First, the requester checks whether the specific need can be covered by an existing eCatalogue or
frame order and uses them. Stock materials, if appropriate, need to be procured via the local calloff procedure as well. Only in cases where the need cannot be procured by existing eCatalogues
and frame contracts and is not higher than EUR 1,000.00, the requester procures without raising a
SAP purchase requisition, but using the purchasing template provided by local procurement. The
template needs to be signed by the budget holder. The respective supplier invoice needs to be
handed to Accounts Payable.
2. Accounts Payable accepts supplier invoices without reference to a purchase order number up to a
value threshold of EUR 1,000.00 in all cases where the requester`s name, his cost center number
and the account number are filled in the attached purchasing template. Invoices without this
information must be sent back to the supplier.
3. The invoice must be booked against the supplier number, in exceptional cases at the discretion of
Accounts Payable against a dummy supplier number.
4. Accounts Payable checks the correctness of the account number (important in cases of low value
assets – Account Payable is responsible for correct choice of account number).
5. For payment terms, the standard terms are to be selected that are closest to those on the invoice.
For invoices without indication of payment terms, the Regional Unit standard is to be selected.
6. Accounts Payable selects the characteristic for „Maverick Buying“. This will be utilized for future
monitoring.
7. Accounts Payable routes the invoice via workflow to the requester for content inspection. Content
release by the respective line manager is not foreseen.
8. Via regular monitoring, Procurement makes sure that bundling opportunities are met. Procurement
also ensures process compliance by escalating non-compliant purchases.
4. Simplified purchasing process for orders up to EUR 10,000.00
For purchases up to a volume of EUR 10,000.00 or equivalent, a single quote is sufficient. Below this
value, the responsible purchaser decides how many quotes are necessary. The purchaser has the
discretion to request alternative quotes.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
1/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Table of Contents
1. Objectives
2 2. Procurement at E.ON
2 3. GLOBE SAP Modules & interfacing systems
2 4. Procure–to-Pay Process
3 5. 5.1 5.2 5.2.1 5.2.2 5.2.3 5.3 5.3.1 5.3.2 5.3.3 5.4 5.5 5.5.1 5.5.2 5.5.3 5.5.4 5.5.5 5.5.5 5.6 5.6.1 5.6.2 5.7 5.8 Specific procurement processes
Procurement via EBP
Procurement via direct business call-off from a contract (BDN process)
BDN requirements
BDN roles
Create & follow up on BDN contracts
Procurement via Extranet (External Service Provider process)
Extranet requirements
ExSP roles
Setup & maintain Extranet
Procurement via automatic creation of Purchase Orders
Master data
Vendor master data
Service master data
Material master data
Source Lists
Purchasing Info Records
Standardized texts
Contract Management
Global Contracts
Local Contract
Frame orders
Call-offs
16 16 16 17 17 17 17 17 18 18 18 19 19 20 20 20 20 21 21 21 21 22 22 6. Reports for Purchasers
22 7. Abbreviations
22 Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
2/23
Valid from: 01.12.2013
Board approval: 25.11.2013
1. Objectives
Target of this process related guideline is to establish a compliant, consistent and
efficient execution of the procurement processes at all E.ON companies.
While systems are being harmonized through implementation of the GLOBE template,
current operational processes might differ between Units. This guideline aims to
standardize procurement processes for purchasers within Support Unit Procurement
and make it leaner for all involved parties, i.e. Business, Procurement and Accounts
Payable.
2. Procurement at E.ON
Procuring at E.ON follows globally harmonized processes and tools, which mean that
purchasers shall work and use the same tools regardless of which unit they work for.
All purchasers have to familiarize themselves with the E.ON Procurement SAP
Toolbox (see chapter 4) and to adopt new ways of working in order to reach the most
cost efficient harmonized processes. Being open-minded, willing to learn from other
units and implementing best practices are important parts of the procurement role.
Golden Rules for Procurement at E.ON
1. All purchase orders must be created from an approved purchase requisition except
call-offs from agreed contracts as well as call-offs from Electronic Buying Portal
(EBP) catalogues.
2. EBP must be used for items which are available in EBP catalogues, where
available, global contracts must be used.
3. All purchase orders require a goods receipt or service entry step to confirm that the
items are delivered / completed except where: contents of the order cannot be
specified or defined in advance.
4. PO order lines and values have to correspond with future invoice order lines and
values to ensure automatic invoice verification.
5. Purchase order texts must be created based on the SAP text manual.
6. Purchase orders are only allowed in written form via SAP.
7. Purchase orders without stating a purchase volume are not accepted.
8. Price – quantity changes in purchase orders are not accepted.
9. Usage of dummy suppliers is not accepted.
3. GLOBE SAP Modules & interfacing systems
Materials Management (MM) is the core module for all procurement activities in SAP
GLOBE. In order to achieve efficient process and tool combinations MM interfaces
with other SAP Modules and external systems.
Changes of the interface to other modules and interfacing systems which are
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
3/23
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
Valid from: 01.12.2013
Board approval: 25.11.2013
impacting MM are initiated by the local Procurement Key Users. The Key User places
a ticket about the request to the EON Global Service Desk ([email protected]).
The ticket is then forwarded to the corresponding support unit within the central
Business Support Unit.
Note: Changes within other modules & systems than MM / Accounting and
Controlling are considered as “Non-scope” and are handled by local IT, not by the
Business Service Center (BSC) Procurement.
Examples of SAP modules and external systems are:
 PM, Plant Maintenance
 IM, Investment Management
 xFS, e.g. nuclear power plant maintenance/warehousing systems
 BI, Business Intelligence
 EBC, EON Business Connector
 CS, Customer Service
Configuration and maintenance of E.ON systems follow a standardized process where
some parts are done by central support units and some parts are done locally by the
Regional Unit Procurement. Generally, any customizing of SAP GLOBE MM is done
centrally and minor configuration is done either by local Key Users. All requests for
customizing of SAP GLOBE are initiated by the local procurement Key User via a
ticket to the Global Service Desk. More information about the process can be found on
the corporate procurement intranet.
4. Procure–to-Pay Process
The Procure-to-Pay process starts with the creation of the SAP requisition in GLOBE,
executed by the requester. The process ends with the invoice payment and
documentation. Throughout the whole procurement process, Procurement acts in close
cooperation with the requester.
In case of a Call-off, please see chapter 5.9. The following table is an overview of the
entire process. Each step is detailed in the course of this document below.
No.
1
2
3
4
Process step
Create purchase
requisition (PR)
Approve
purchase
requisition
Definition of
suppliers
Responsible
Requester
Supporting
Procurement
Comment/Description
PR contains all needed
information
Depending on respective
workflow
Procurement
Requester
Joint decision on vendor
pool
Request for
Quotation
Procurement
Requester
Send-out of commercial and
technical documents to
Approver
(Business)
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
4/23
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
Valid from: 01.12.2013
Board approval: 25.11.2013
5
Comparison of
bids
Procurement
Requester
6
Negotiation(s)
Procurement
Requester
7
Awarding of
contract
Create purchase
order (PO)
Approve/Sign
purchase order
Check of
purchase
confirmation
Contract
management
Procurement
Requester
Procurement
Requester
Service
acceptance/
goods receipt
Invoice
management
Requester
Procurement
Accounts Payable
Procurement
Requester
Documentation
Procurement
8
9
10
11
12
13
14
Procurement
Procurement
Requester
Procurement
Requester
suppliers
Evaluation of received bids
based on commercial and
technical aspects
Negotiation(s) with shortlisted suppliers
Decision on supplier
PO contains all needed
information
Depending on respective
regulation
In case of deviations, joint
decision on next steps with
requester
Check of delivery, service
execution with focus on
time, budget and quality
Acceptance/receipt template
contains all needed
information
Factual check of incoming
invoices/ take notice of the
automatic invoice
verification
All necessary documents
must be archived.
(1) Create purchase requisition
This process step is described in the Appendix 04 “Guideline for the requester”.
(2) Approve Purchase requisition
An approved purchase requisition (PR) is the basis for the procurement process. The
PR contains all needed information as described below for materials and/or services to
be procured:
 eCl@ss
 (Probably supplier-neutral) specification
 Date of delivery
 Place of delivery
 Estimated price/order volume
 Optional: Proposal for possible suppliers
 In case of amendment: number of the existing purchase order
 Classification of HSE risk. For details, see Appendix 06.
Business approval of the purchase requisition
This is an automatic process step implemented in GLOBE. Approval is done by the
requester, above certain thresholds also by the requester’s manager (approver) and –
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
5/23
Valid from: 01.12.2013
Board approval: 25.11.2013
optionally in some units – by Controlling and/or Health and Safety Department. Last
step of the process is purchasing approval.
Procurement approval of the purchase requisition
The approved requisition is routed to the responsible purchaser (via automatic routing
in SAP or via manual distribution). The purchaser checks completeness and approves
the requisition. A requisition with too low value or missing data is rejected and sent
back to the requester.
Supplier evaluation
In case that the demand is classified by the requester as business critical, he or she has
to set the flag for the supplier evaluation irrespective of existing thresholds.
Management Consulting Services
For the procurement of Management Consulting Services, special rules are in place for
release of budget and purchasing procedures. In particular, a centralized budgeting and
authorization process has been introduced, requiring every requester to follow a
specific prioritization process as well as every procurement unit having to verify
existing authorizations before issuing contracts. Familiarity with the definition of
management consulting and other indirect categories is therefore very important. If the
demand includes Management Consulting Services, please refer to the corporate
procurement intranet for further information.
Temporary Labour
For procurement of temporary labour, the respective category team is currently rolling
out a harmonized process. Until this process is rolled out, there is a special approval
step necessary in Germany: involvement of the workers’ council has to be regulated
locally.
(3)
Definition of suppliers
Process step outside SAP.
(4)
Request for Quotation
For this process step, SAP can be used, but is not mandatory.
(5)
Comparison of bids
For this process step, SAP can be used, but is not mandatory.
(6)
Negotiation(s)
Process step outside SAP.
Price
The purchaser has to negotiate net prices (without VAT). All agreed additional costs
must be precisely declared.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
6/23
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
Valid from: 01.12.2013
Board approval: 25.11.2013
PO order lines and values have to correspond with future invoice order lines and
values to ensure automatic invoice verification.
If the exact purchase order quantity is not defined, the purchase order has to be limited
to a specific order value.
Payments
In order to increase the receipt of paperless invoices, Procurement should agree on
electronic invoicing with the supplier. Payment Terms are defined in GLOBE SAP.
The purchaser has to use these in all contracts. It can be a default value in the vendor
master record.
The E.ON net working capital improvement project is developing a new concept for
payment terms and payment runs. This concept is in development and this Appendix
will be updated as soon as the concept is defined and in implementation.
Incoterms
E.ON uses the International Commercial Terms in the Version 2010 as a standard
setting.
(7)
Awarding of contract
Process step outside SAP.
(8)
Create purchase order
The order text shall be created based on the SAP text manual. Purchase orders without
reference to an approved purchase requisition are not allowed (except call-off orders
from contracts). Purchase orders are only allowed in written form via SAP. Purchase
orders without stating a purchase volume are not accepted. The following table
contains an overview of steps in order to create a purchase order. Each step is detailed
in the course of this document below.
No.
1
Process step
Select appropriate
order type
Select correct
vendor number
Responsible
Procurement
Comment/Description
Procurement
Procurement
5
Start PO with
reference to PR
Insert correct
eCl@ss
Criteria selection
Every purchase order has to refer to a
vendor number in SAP. It is not
acceptable to create a purchase order
related to a dummy –vendor
number.
If applicable, insert reference to contract
number
Check and, if necessary, correct
requester’s proposed eCl@ss
6
Set up PO in line
Procurement
2
3
4
Procurement
Procurement
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
7/23
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
with expected
invoice set up
Use standard texts
7
8
Set goods receipt
flag
Set purchase order
confirmation flag
PO release
(optional)
SAP invoice plan
Purchase order
number
Contact person
Document savings
9
10
11
12
13
14
(8.1)
Valid from: 01.12.2013
Board approval: 25.11.2013
Procurement
Text handbook available on the corporate
procurement intranet
Procurement
Procurement
Procurement
Procurement
Procurement
Procurement
Procurement
Select appropriate order type
Order types with mandatory goods receipt and account assignment:
Order type
Order description
Comment
NB
Standard PO
‐ Manually created by purchaser
‐ Based on approved PR
EC
Electronic
Commerce Order
‐ Automated generated by EBP with reference on
catalogues
YAB
Call-off for non
stock material
‐ Manually created by requester
Call-off for
Services
‐ Manually created by requester
UB
Stock Transport
Order
‐ Manually created order for the stock transfer
MB
Automatic PO
Warehousing
‐ Dependent on the MRP run by MRP Planner or System
AB
Call Off
‐ Manually created by MRP Planner
Warehousing
‐ Mandatory Contract reference
Third-Party
Order
‐ Purchasing process for third party
YSC
YSB
‐ Mandatory Contract reference
‐ Mandatory Contract reference
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
8/23
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
Valid from: 01.12.2013
Board approval: 25.11.2013
Order types without mandatory goods receipt and optional account assignment:
Order type
Order description
Comment
FO
Framework Order ‐ Order for a defined period
‐ Content (services, materials) not specified and not
defined
‐ frame order is only budget related
‐ purchase order with „limit“ control
‐ Undefined number of invoices
‐ unknown account assignment category is possible
(8.2) Select correct vendor number
Create new supplier in SAP. With the transaction /GBE/EBC_EMDCA the purchaser
can copy the vendor from the central company code 9999 or he can request a new one.
(8.3) Start PO with reference to PR
Purchase orders without reference to an approved purchase requisition are not
allowed. Quantity units (e.g. pieces, meters) can be changed by the responsible
purchaser, if appropriate. In this case, the responsible purchaser must ensure that the
total value of the requisition is not overrun.
(8.4) Insert correct eCl@ss
The consistent application of eCl@sses enables a high spend transparency – therefore
the purchaser has to verify the proposed eCl@ss of the PR before adopting it into the
contract.
E.ON use the eCl@ss Key 5.1++
eCl@ss-Usage is detailed on the corporate procurement intranet.
(8.5) Award Criteria selection
The purchaser has to select one of the following award criteria in SAP, to enable
reporting, especially reporting on Maverick buying (criteria 8-11):
00 – standard competitive tender process followed resulting in PO
02 – Order is below procurement threshold
03 – Orders raised under Emergency Procedure
08 – Late purchase requisition set up by the requester leading to insufficient
timeline for tender activities
09 – Purchase done by the business (without involvement of Procurement)
10 – Service rendered or goods delivered (without involvement of Procurement)
11 – Supplier has sent an invoice before purchase order has been placed in SAP
16 – Single source
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
9/23
Valid from: 01.12.2013
Board approval: 25.11.2013
(8.6)
Set up PO in line with expected invoice set up
PO order lines and values have to correspond with future invoice order lines and
values to ensure automatic invoice verification. If the exact purchase volume is not
defined, the purchase order has to be limited to a specific purchase volume.
(8.7) Use standard texts
Contracts have to be created by the purchaser in consideration with E.ON SE - SAP
text manual. In addition, local SAP text manuals can be used. Local Procurement has
to make sure that the local SAP text manual is checked by Legal on a regular basis.
The standard texts are published on the corporate procurement intranet.
Deviations from the standard texts have to be confirmed by the Legal department.
(8.8) Set goods receipt flag
Purchase order with “goods receipt” flag
To enable automatic invoice verification, the purchaser must set the flag “goods
receipt” in every individual purchase order (order type NB, EC, YAB, YSC, UB, MB,
AB, YSB). This also applies to all automatic orders and all purchases for services with
clear content description.
The purchaser can issue a frame order (order type FO) with underlying cost object
coding without a goods receipt flag only
a) for services without clear content description or
b) in cases where a clear delivery date cannot be defined.
(8.9) Set purchase order confirmation flag
The purchaser decides, based on the delivery risk of the purchase order, whether to
request a purchase order confirmation or not. If yes, a SAP standard form is used and
sent out with the PO.
In case of Call Off, the order confirmation is not necessary.
(8.10) PO release (optional)
Local Procurement can set up an approval process for purchase orders in GLOBE
SAP. Depending on the threshold it can be more than one step and starts with the
approval from the purchaser who creates the purchase order. Call offs from a contract
do not need to be approved.
(8.11) SAP invoice plan
The invoice plan allows to schedule desired invoicing dates independent of the receipt
of the relevant goods or services. It lists the dates and amounts of payments and is
especially suitable for regular payments.
The following two types of invoicing plan are available:

Periodic invoice plan
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013

10/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Partial invoice plan
SAP invoice plan is optional.
(8.12) Purchase order number
The purchase order number is automatically created in SAP.
(8.13) Contact person
The name of the responsible purchaser and the relevant contact details must be
evident. In case of call offs the name of the person in charge must be notified
(8.14) Document savings
General remarks
As long as the E.ON 2.0 project is operative, the group wide savings reporting
approach is defined within this project. The collection of Procurement relevant savings
in the project is based on the “previous price” concept, as described below, meaning
that we move away from the savings to budget and cost avoidance concepts.
A review of this section will be necessary in time, to ensure a common savings
reporting approach after the E.ON 2.0 project (see “the way forward” section below).
Specifics for E.ON 2.0 savings
Savings within E.ON 2.0 logic are collected from the following areas:
 Identified savings are the results of a deep dive in a global category
 Locally identified savings relating to the area of a global category, which was
not part of a deep dive yet
 Locally identified savings in other spend areas, not part of any global category
Identified savings have to fulfill the following criteria to be reported according to the
E.ON 2.0 logic:
 use 2010 as baseline for calculating the savings. As an exception within
Procurement, the previous year can be used as baseline, if it is not possible to
retrieve the 2010 baseline.
 be the result of concrete measures/initiatives/actions that decrease the
baseline spend (there has to be a corresponding spend amount in the E.ON
2.0 baseline)
 savings are calculated for the years 2013 till 2015, i.e. the savings have to
have an impact on these years.
 the financial impact of the savings have to be confirmed by the local
controlling department.
Price increases or “negative savings” should also be reported, i.e. if the new unit price
is higher than the baseline price it should be reported as a negative saving.
In addition to the above E.ON 2.0 specific criteria, there are general guidelines
(described in the following sections) that have to be considered when reporting
savings.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
11/23
Valid from: 01.12.2013
Board approval: 25.11.2013
General guidelines
Comparable items
Only comparable items in the baseline and the new contract can be used when
calculating savings, i.e. there has to be a comparable “spend position” in the baseline.
Example: If additional services have been added into the new contract (not included in
the baseline), the additional services have to be discarded when calculating the
savings.
To calculate project related savings, a comparable project or comparable segments in a
larger project can be used as baseline.
Should the purchased function or service be unique, i.e. no comparability exists with
previous purchases it may be possible to calculate the saving by comparing for
example the cost per meter cable laying or the cost per megawatt.
Financial impact
The reported saving should have a financial impact on the year, i.e. only effective
months of the contract should be reported in a year.
Example: A three year frame contract with a start date on 01-08-2013: The saving is
reported for August to December in 2013. The following year, the saving is reported
for the full year.
To capture the financial impact in cases of volatile baseline/significant fluctuations in
quantities, the savings should be calculated and reported based on the quantity or
spend of the respective year of the contract.
Example: Financial impact/savings reporting when volatile baseline
Savings calculations
Following the E.ON 2.0 logic, savings are calculated based on 2010 as the baseline
year, consequently, only reductions compared to the 2010 baseline should be reported.
Example: If there has been a price increase in the previous years and the new
negotiated price is lower than the price in 2010, the saving is calculated based on the
price difference in new contract and the price in 2010.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
12/23
Valid from: 01.12.2013
Board approval: 25.11.2013
As an exception within Procurement, the previous year can be used as baseline, if
it is not possible to retrieve the 2010 baseline.
Example: Savings calculation with 2010 as baseline year
-
savings calculation when consistent quantities over time
If the purchased quantities are more or less consistent over time, the savings
calculation is done by comparing the baseline spend with the new spend volume.
Baseline spend – New spend = Savings
-
savings calculation when change in quantity (increase or decrease)
If the purchased quantities have decreased or increased significantly, compared to the
baseline, the savings should be calculated on the basis of the price difference between
baseline unit price (PB) and the new unit price (PN), times the new quantity(QN).
(PB - PN) x QN = Saving
-
savings calculation for outsourced/insourced services
Calculation of savings from outsourced services has to include the whole cost
(previous internal and external costs in comparison to future external costs), the same
logic applies for insourced services.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
13/23
Valid from: 01.12.2013
Board approval: 25.11.2013
The calculation of internal costs has to include direct costs as well as allocated costs =
fully loaded costs.
Example: Savings calculation for outsourced/insourced services
Savings reporting
Savings deriving from global category activities and deep dive initiative are captured
and reported into the E.ON 2.0 central project by the respective CoC and central
category team. Locally identified savings, relating to the area of a global category
team or other spend areas, not part of a category team also contribute to the fulfilment
of the E.ON 2.0 savings target. These savings are collected separately by the CoC
Governance & Performance,, following a step-by-step roll-out approach. Therefore, it
is essential to continue tracking local savings, focusing on the “previous price”
concept.
The way forward
As mentioned in the introduction of this appendix, the savings reporting will be based
on the “previous price” concept.
In the course of 2014, CoC Governance & Performance will present an updated
savings definition, covering the savings definition to be used after the E.ON 2.0
project. This definition will also be based on the “previous price” concept, wherefore
previously reported KPIs; savings to budget and cost avoidance will not be collected.
At the same time, the savings reporting in SAP will be adjusted accordingly and a
guideline for the reporting will be presented.
(9)
Approve/ sign purchase order
This process step is described in the Policy “Delegation of Authorities”.
(10)
Check of Purchase confirmation
In case of deviations, joint decision on next steps with the requester.
(11)
Contract Management
Check of delivery, service execution with focus on time, budget and quality.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
14/23
Valid from: 01.12.2013
Board approval: 25.11.2013
(12)
Service acceptance/ goods receipt
The process step “confirmation of goods receipt” (responsible: requester) is described
in Appendix 04.
(13)
Invoice Management
The subsequent process step “Invoice management” [responsible: Accounts Payable]
is described in the Accounting Policy (in development).
The following thresholds for invoice checks are defined for E.ON: Chart will follow.
Implementation of these thresholds will be done subsequently for all units as soon as
their accounts payables are transferred to EBS.
Invoice verification workflow
In case of deviations of the invoice value from the contract value, Accounts Payable
has to send the invoice to the responsible purchaser via the invoice verification
workflow. Within the GLOBE template, this involvement has to be documented
through automated system settings in the invoice verification workflow. The purchaser
checks the deviation (role “Price Inspector”) and, if the invoice is incorrect rejects the
invoice and drives clarification with the supplier.
If the invoice is correct, but the total invoice value is different from the contract value,
the responsible purchaser resolves the issue in two possible ways:
If the difference between invoice value and contract is low, the responsible purchaser
approves the invoice without any adaptation of the requisition. A low deviation is
defined as a difference of up to EUR 1,000.00 between invoice value and contract
value, or a difference of up to 10% of the contract value given that it is still less than
EUR 10,000.00 or equivalent.
If the difference between invoice value and contract is high i.e. exceeds the thresholds
mentioned above, the responsible purchaser contacts the requester to set up a new
purchase requisition, which after approval, will be turned into an additional order
position in the contract.
These tolerances also apply in cases of Self Billing, see below.
For decreasing values (e.g. cancellations), the contract value has to be adjusted by the
purchaser without adjustment of the requisition.
SelfBilling/ERS process
SelfBilling/ERS (Evaluated Receipt Settlement) is an efficient process enhancer both
for E.ON and the vendor. It’s a more secure and reliable process than the regular
invoicing process as it’s a structured process removing manual work for the
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
15/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Requesters/Content Inspectors, Procurement Key Users/Price Inspectors, Accounts
Payable and the vendor.
Setup & maintain Selfbilling/ERS
Agreement with the vendor about the process of passing responsibility for invoicing to
E.ON.
Setup and maintenance of Selfbilling involves both Procurement and Accounting &
shall be initiated via a ticket to the global Service Desk stating which company code &
vendor will be enabled. Procurement will initially decide whether a ticket is to be
opened.
Requirements (technical & legal)
Procurement has to flag the vendor master data to enable Selfbilling.
(14)
Documentation
The documentation consists of the specification, the requests for quotation, the
requests for information if applicable, all quotes returned, the evaluation,
documentation of negotiation, all relevant correspondence, all filled templates in the
course of the tender and the contract including contract history. The tender
documentation must be stored by Procurement either physically in a traceable archive
system or via optical archiving in SAP. Legal requirements (§§ 257 HGB and 147 AO
according to German law) of physical archiving can be addressed at a regional level.
Automatic sending of Purchase Orders to suppliers
Enabling automatic sending of Purchase Orders from SAP GLOBE to suppliers
increases the process efficiency and free up time for Purchasers from this
administrative task not adding any value.
Requirements
Requirements for enabling of this functionality are:
- SAP contract
- Either a UC4 batch job is setup or a message output type is customized
- Email address or fax number exists in the Vendor Master
More information about requirements can be found on the corporate procurement
intranet.
Setup & maintenance
Setup of this functionality is initiated by the local Procurement Key User placing a
ticket to the Global Service Desk.
Any changes to the master data e.g. the email address of the supplier need to be
maintained by the Accounts Payable.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
16/23
Valid from: 01.12.2013
Board approval: 25.11.2013
More information about setup & maintenance can be found on the corporate
procurement intranet.
5. Specific procurement processes
5.1
Procurement via EBP
SAP EBP (Enterprise Buyer Professional) is a web based tool linked to SAP MM for
catalogue buying. Stored master contracts, automated workflows and lean approval
processes make procurement via a centralized SAP EBP system particularly efficient:
Buyers and requesters make selections from the offerings and order products or simple
services directly via a shopping cart – direct supervisor approval is required only for
purchase orders in excess of a specified value. SAP EBP then automatically creates a
purchase order in SAP ERP (ERP = Enterprise Resource Planning) or purchase
requisitions according to the settings in the customisation. Free text orders are directly
created as a PR in SAP. A credit note for the supplier can be created upon receipt of
the goods.
SAP EBP application currently contains a general catalogue listing over 4 million
products from around 220 suppliers. The product groups range from advertising,
working and protection clothes, electronics, chemical products, tools, pipes, IT
supplies & spare parts.
EBP requirements
In order to use EBP, some requirements must be met, e.g:
 Contract with the vendor agreeing on catalogue content & prices for the
unit/country
 Request for implementation via a Ticket to E.ON Business Services.
 Customization by central E.ON IT enabling either existing catalogue or setup of
new catalogue
 Training of requesters
 Monitoring and follow-up on the usage after roll-out
 Vendor master settings must be maintained – auto PO creation box selected and
email address must be maintained.
Information about how to implement EBP and setup a new catalogue in your unit is
found on the corporate procurement intranet.
5.2
Procurement via direct business call-off from a contract (BDN process)
With the BDN Process, the business creates a call-off directly from an existing
contract, without involvement of the purchasing department and without a Purchase
Requisition in SAP. An order confirmation is not necessary.
Additional information is in the GLOBE eBook.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
5.2.1
17/23
Valid from: 01.12.2013
Board approval: 25.11.2013
BDN requirements
The Key User together with the business has to define the service spectrum, which is
needed to find the right contract. The service spectrum is search criteria which is
stored in the contract. The Key User has to set up the User Controls in SAP.
5.2.2
BDN roles
Key User:
Purchaser:
Requester:
5.2.3
Sets up the user controls; call off limits for all contracts and
activates the BDN process
Creates the Contract with the BDN parameters, set the call off limit
for the single contract
creates the call off directly from the contract
Create & follow up on BDN contracts
The Requester searches the contract on the basis of the service spectrum and gets an
overview about the fulfillment rate and validity time of the contract. The requester
creates the call-off directly from the display function.
5.3
Procurement via Extranet (External Service Provider process)
The Extranet Service Provider (ExSP) is a portal application for the supplier. The
ExSP offers the following applications:
 Order confirmation
 Entry of service and material measurement documents
 Material requisition
 Tender platform
 Document exchange
 Reporting system for the service provider
In addition to the extranet application, the SAP backend system contains the following
functions:
 Acceptance reports for service and material measurements
 Automatic acceptance functions for service and material measurements
 Material provision for the service provider
 Submissions for the targeted support of the RFQ process
The Extranet is used by different E.ON Companies, e.g. EBX, ECZ, E&P, EDI, EHA
Additional information is in the GLOBE eBook.
5.3.1
Extranet requirements
The requirements for the ExSP are service master, customizing by E.ON IT, approval
of the supplier, training of the supplier and internal person.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
18/23
Valid from: 01.12.2013
Board approval: 25.11.2013
For the approval process of the supplier, there is more information available from
Business Services Procurement (BSP).
5.3.2
ExSP roles
E.ON IT:
Key User:
training
Purchaser:
Supplier:
Technician:
5.3.3
set up the basic customizing for the application
set up the user tables for the application, approval of the supplier,
creates the tender, attaches documents to the Purchase Order, etc.
creates the service entry, the material request or, the offer, etc.
approves or rejects the service entry or material requisition
Setup & maintain Extranet
To setup the system, submit a ticket to the global Service Desk to implement the basic
settings in SAP.
5.4
Procurement via automatic creation of Purchase Orders
Efficient procurement functionality is to let SAP Globe create Purchase Orders
automatically from approved Purchase Requisitions. It speeds up the process and
reduces manual workload which does not add value within the Procurement
department.
MM – Automatic POs
Automatic creation of POs within MM is achieved either by standard SAP
functionality using central customizing, configuration of Vendor Masters on company
code level, maintained Source Lists and creating a batch job which runs periodically
and picks up and converts any released PR into a PO. The batch job is created by
central IT.
The other alternative which exists in SAP GLOBE is called “/GBE/MM_AB”. This is
recommended since its less time consuming and utilizes a transaction specially
developed for local Key Users & Purchasers. With this transaction necessary data can
be maintained using a contract in SAP as a source. Further it gives an overview about
automatic order processing.
More information about how to setup automatic POs within MM is found on the
corporate procurement intranet.
PM
Automatic creation of POs from approved PRs/PM-orders created in PM can be setup
with central customizing of batch jobs, maintenance of vendor masters on company
code level, Material Masters on plant level and contract reference.. Setup of this
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
19/23
Valid from: 01.12.2013
Board approval: 25.11.2013
process is initiated by a Procurement Key User submitting a ticket to the global
Service Desk to request a batch job on specified company code, plant and purchasing
organization.
xFS
If the MRP run for the relevant stock material takes place in SAP (e. g. in OneBFS)
the transaction “/GBE/MM_AB” can be used. For further information see “MM –
automatic POs” and the corporate procurement intranet.
If the MRP run for the relevant stock material is not processed in SAP (IBFS, BFS95,
IFS) the quantity to be ordered is determined by BFS on the basis of the material
shortage and PR-release takes place in xFS. Through the interface a PR with document
type NB is created in SAP without release strategy.
A batch job is needed to convert the NB-PR (with relation to a contract and/or to a
particular purchasing group) to an automatic call off Purchase Order. If the call off
Purchase Order is created with document type AB it can be issued by a predefined
amount/value limit either by FAX or printing.
SD
Automatic creation of POs from approved SD-orders created in SD can be setup with
central customizing, batch jobs, maintenance of vendor masters on company code
level, Material Masters on sales level and contract reference. Setup of this process is
initiated by a Procurement Key User placing a ticket to the global Service Desk for
request the customizing settings.
5.5
5.5.1
Master data
Vendor master data
Vendor Masters in SAP GLOBE contain purchasing and accounting relevant data.
The Vendor Masters consist of segments of data relevant for either accounting or
procurement. Each segment can only be maintained either by Accounting or
Procurement staff based on SAP roles authorization.
With the transaction /GBE/EBC_EMDCA the purchaser can copy the vendor from the
central company code 9999 or he can request a new vendor.
Procurement segment
Procurement is responsible for the M-segment of the Vendor Master. It contains
information about payment terms, self-billing etc.
Accounting segment
Accounting is responsible for the B-segment of the Vendor Master. It contains
information about payment method, bank, tax and about the e-Mail and Fax address
for the printout.
A new solution for the procurement address data are in development.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
5.5.2
20/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Service master data
A Service Master can be created as harmonized Service Master on the Master Data
Hub by BSC Procurement. Non-Harmonized Service Master are create locally by the
procurement business.
Service Master is used in contracts, purchase orders or model Service Specifications.
5.5.3
Material master data
Material Masters, preferably harmonized materials, should be set up as applicable to
automate the subsequent purchasing process. The same goes, where applicable, for
Service Masters.
Material Masters are requested in SAP by the local Material Management Key User
and created centrally by the Master Data Hub. Material Masters exist both as local
material and harmonized Materials valid for whole of E.ON.
More detailed information about Material and Service Masters can be found on the
GLOBE eBook.
5.5.4
Source Lists
The source list defines a clear relationship between a material and a contract or a
vendor.
A source list is used for:
 Restricting the selection of sources during the source determination
process
 Defining a source as a fixed source
 Blocking a source
Via the source lists, the field for the reference source in the purchase requisition is
filled automatically and is the basis for the automatic creation of a purchase order.
In the source list, the validity period, vendor or contract and contract item, fixed
source indicator, block source indicator, and MRP-relevant indicator will be
maintained.
5.5.5 Purchasing Info Records
The purchasing info records define a clear material and supplier relationship. Each
combination of a single supplier and material or material group can be represented and
stored in an info record. Info records are used in different automatic processes, to
create an automatic purchase requisition or purchase order.
Purchasing info records consist of:
 General data (Vendor data, Purchase order unit, Text, Administration data)
 Purchasing organization data (Delivery time, min quantity, price, discount,
statistics, PO-text)
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013

5.5.5
21/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Purchasing organization plant level data (Delivery time, min quantity, price,
discount, statistics, PO-text).
Standardized texts
General text block: standardized texts should be used to avoid mistakes and nontransparency.
Standardized and legally approved text modules are published in the SAP text manual
on the corporate procurement intranet.
5.6
Contract Management
Within E.ON, the following types of contracts exist:
 Global Contracts
 Local Contracts
Additional information can be found in the GLOBE eBook.
5.6.1
Global Contracts
Global Contract for E.ON will be created by the different CoCs and Category Leads.
The responsible Purchaser creates the Global Contract with the central Purchasing
Organization (9990) and all necessary basic information within the new GLOBE SAP
Platform.
The Global Contracts are distributed to the particular connected local GLOBE SAP
Systems directly into the local purchasing organization of the Unit.
The local Business can create a Call Off against the distributed contract.
Before using Global Contracts, some preconditions must be addressed all involved
SAP Systems:
 Harmonized Material Master Data
 Harmonized Service Master Data
 Existing Vendor Master data in the received SAP System
 Special Authorization Roles for the SRM System
5.6.2
Local Contract
Local Contracts will be created by the local Purchasing Organization.
The responsible Purchaser creates the Contract, if no Global Contract exists, with the
local Purchasing Organization in the local SAP System. These contracts are valid only
for this local Unit. The local Business can create a Call Offagainst this contract.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
5.7
22/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Frame orders







5.8
Order for a defined period
Content (services, materials) is not specified and not defined
frame order is only budget related
purchase order type FO
purchase order with „limit“ control
Undefined number of invoices
unknown account assignment category is possible
Call-offs
In the case of an existing, valid contract, the business can create a call- off directly
from the contract. In this case no purchase requisition is needed and procurement does
not have to be involved. The call- off can be created up to the threshold.
6. Reports for Purchasers









Reporting requirements, why, what, when, where to (central/local)
Report for Purchase Order: (transaction: /GBE/MM_BIG_EKKO)
Rerchase Requisition: (transaction: /GBE/MM_BIGBANF)
Report for Reservationport for Pu
: (transaction:/GBE/MM_BIGRES)
Report for Service PO: (transaction:/GBE/MM_BIGSRV)
Invoice report: (IRB: transaction: /GBE/MM_IV_IRB)
PO per account assignment (ME2K)
Maverick buying follow up
7. Abbreviations
Abbreviation
BDN
BI
BSC
EBP
EBS
ERP
ERS
ExSP
FO
GLOBE
IM
Wording
Business direct call-off navigator
Business Intelligence (SAP Module)
Business Service Centre
Electronic Buying Portal
E.ON Business Services
Enterprise Resource Planning
Evaluated Receipt Settlement
Extranet Service Provider
Order type for Frame Orders
Global Business Excellence
Investment Management (SAP Module)
MM
Materials Management
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 03
SAP-Guideline for purchasers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
MRP
NB
PM
PO
PR
RFQ
SD
SRM System
xFS
Materials requirement planning
Order type for manually created POs
Plant Maintenance (SAP Module)
Purchase Order
Purchase Requisition
Request for Quotation
Sales Distribution (SAP Module)
Supplier relationship Management System
FS= “Führungssystem” i.e. leading system
X : I (Sweden) or B (German “Betriebs-“)
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
23/23
Valid from: 01.12.2013
Board approval: 25.11.2013
Appendix 04
SAP-Guiideline for the
t requester
Version 1.0 (Dec. 2013)
To Group
p Policy GP 3-28
3
1/55
Vaalid from: 011.12.2013
Dated:
01.12.2013
Board approval: 25.11.2013
This Apppendix contaains all main tasks for thee requester allong the purcchasing proccesses.
1. Objecctives
Objectivve of this Appendix is to
t provide the
t requesterr with a clear descriptioon of responnsibilities
within thhe purchasin
ng processes.. It applies too any kind of
o demand appart from thee exceptionss listed in
Appendiix 01 and sm
mall volume orders
o
defineed in Appenddix 02.
Consisteent adherencee to the proceesses is key to
t achieving two major goals:
g
-
Establishing lean, highlyy automated procedures to minimize transactionaal effort and securing
E
q
quick
supply
y of required materials an
nd services
A
Adding
valu
ue by ensurinng the early innvolvement of
o Procurem
ment
E
Ensuring
thaat the requireements of HS
SE are given the appropriiate priority
2. Beforre creating a purchase requisition
r
The requuester has to check the foollowing stepps before creaating a purch
hase requisitiion:
1. Ste
ep
• Checkk whether the n
needed materiaal is stock materrial. •Please contact the waarehouse perso
onnel to cleariffy the formalitiees and to perform the materiaal issue.
Wareho
ouse
2. Ste
ep
e‐
ment
procurem
3. Ste
ep
• Checkk whether an ap
ppropriate E.ON
N e‐procuremen
nt catalogue is available
• Please
e put the needeed item into your shopping carrt and perform the online order
via e‐‐procurement ssystem.
• Checkk whether an ap
ppropriate fram
mework contracct is avaiblable.
• Please
e perform the rrespective call‐o
off with referen
nce to the framework order.
• If avaiilable use the reelevant template provided by procurement d
department
Framew
work Contra
act
4. Ste
ep
Framew
work
Ordeer
5. Ste
ep
Small me Volum
Ordeer
• Checkk whether an ap
ppropriate fram
mework order iss avaiblable.
• If supp
ported, please use the operational managem
ment system to perform an
autom
matic call‐off ord
der with refereence to the conttract. Otherwisse skip to next
step.
• Checkk whether the eestimated valuee of demand is b
below EUR 1.00
00,00
• Apply Group Guidelin
ne GP 3‐28, App
pendix 02 (smaall order volumes)
Author: Support Uniit Procuremeent
Issuer: Legal & Com
mpliance/F/LC
C1 Group Govvernance
2/5
Appendix 04
SAP-Guideline for the requester
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from: 01.12.2013
Dated:
01.12.2013
3. The Procurement Process and the requester’s duties
Board approval: 25.11.2013
In order to maintain a sufficient procurement process, the requester is asked to follow the described
process.
First, the risk identification in terms of HSE risks for the goods and services to be procured must be
performed by the requester. For further details, see Appendix 06 “HSE risk identification for
procurement”. The result has to be documented in the purchase requisition (Process step number one
in the following chart:
No. Process step
1
Create purchase
requisition (PR)
2
Approve purchase
requisition
3
Definition of suppliers
4
Request for Quotation
Approver
(Business)
Procurement
Procurement
Requester
Requester
5
Comparison of bids
Procurement
Requester
6
Negotiation(s)
Procurement
Requester
7
8
Awarding of contract
Create purchase order
(PO)
Approve/Sign purchase
order
Check of purchase
confirmation
Contract management
Procurement
Procurement
Requester
Requester
Requester
Procurement
13
Service acceptance/
goods receipt
Invoice management
Requester
Procurement
14
Documentation
Procurement
9
10
11
12
Responsible
Requester
Supporting
Procurement
Depending on respective workflow
Procurement
Procurement
Comment/Description
PR contains all needed information
Joint decision on supplier pool
Send-out of commercial and
technical documents to suppliers
Evaluation of received bids based on
commercial and technical aspects
Negotiation(s) with short-listed
suppliers
Decision on supplier
PO contains all needed information
Depending on respective regulation
Requester
Procurement
Requester
In case of deviations, joint decision
on next steps with requester
Check of delivery, service execution
with focus on time, budget and
quality; follow up on the delivery or
service
Acceptance/receipt template contains
all needed information
Factual check of incoming invoices/
take notice of the automatic invoice
verification
All necessary documents must be
archived
(1) Create purchase requisition (PR)
A purchase requisition (PR) is the basis for the procurement process – the PR contains all required
information as described below for goods and/or services to be procured:


Precise description of the good or service in the short text
eCl@ss number
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 04
SAP-Guideline for the requester
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
3/5
Valid from: 01.12.2013
Dated:
01.12.2013
Board approval: 25.11.2013
 Accurate, supplier-neutral specification of the good or service. If necessary also: brand,
model, part number, drawing number, work number of the corresponding main engine,
performance data, rules and requirements etc.
 Certificates
 Hazardous substances (yes / no)
 Need of an additional data-protection agreement (yes / no)
 Place of delivery
 Estimated price / order volume
 Any proposal for potential bidders
 Name, phone number and respective Group ID (KID) of the requester
 Classification of HSE risk (see Appendix 06)
Taking into account the approval process, the requester has to provide the approved PR with sufficient
timeframe for the tendering process. This also allows a pooling of demands by Procurement.
In order to handle CSR/HSE requirements in an adequate manner, please see Appendix 06.
If the demand includes Management Consulting Services, consider the special regulations in place.
In case of a temporary labour demand, an approval of the workers’ council and/or head of HR (due to
local regulations) must be attached to the PR.
(2) Approve purchase requisition (PR)
The created PR will be approved within the respective workflow for the specific business unit (e.g.
budget owner and controlling). The requester is responsible to secure the approval of the PR (in order
to check the status, please see GLOBE eBook.
After the approval the PR will be forwarded to the procurement department and the respective
purchaser gets in charge of this PR.
(3) Definition of suppliers
The decision as to which suppliers will be invited to tender should be taken mutually by the requester
and Procurement. In case of disagreement regarding the tender invitation list, the final decision shall
be taken by Procurement to ensure consistent supplier management.
In order to handle CSR/HSE requirements in an adequate manner, please see Appendix 06.
(4) Request for Quotation
Process is driven by Procurement.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
4/5
Appendix 04
SAP-Guideline for the requester
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Dated:
01.12.2013
(5) Comparison of bids
Valid from: 01.12.2013
Board approval: 25.11.2013
The comparison of bids has to be distinguished between technical and commercial evaluation.

Technical bid evaluation / technical clarification:
The evaluation by the technical departments includes the examination of the technical content,
scheduling situation as well as CSR/HSE requirements. Technical clarifications with the
providers have to be done before the negotiation phase. It is prohibited to make any
commitments to the provider with regard to contract award.
Scheduling technical clarification is driven by Procurement in cooperation with the business.
Under certain circumstances, a revision of the specifications is required according to the
results of technical clarifications. The revised specifications have to be provided to all eligible
bidders to adjust the offer. This is to ensure that the technical content of offers are comparable
and equally with all bidders.

Commercial bid evaluation:
Procurement examines the commercial content of offers and creates a written bid comparison
on the basis of predetermined award criteria.
(6) - (10) Process steps are driven by Procurement, supported by the business.
(11) Contract management
The requester is responsible to follow up on the delivery or service provision related to the contract
and to confirm the delivery by setting the goods receipt in SAP (or confirming the service entry sheet).
Procurement shall support him in the contract implementation and interpretation where required.
(12) Service acceptance/goods receipt
The requester must confirm the goods receipt in SAP immediately after the physical good has been
delivered or the services have been rendered by the supplier. Latest when the requesting unit is
transferring Accounts Payable to the EBS Accounting Center, this regulation apply with the
consequence that confirmation of goods receipt must be done prior to receipt of the invoice (“duty for
immediate confirmation of goods receipt”).
In case of a frame contract, the responsible purchaser has to follow up on the usage of the contract
(checking amounts and time limits).
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 04
SAP-Guideline for the requester
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Dated:
01.12.2013
(13) Invoice management
5/5
Valid from: 01.12.2013
Board approval: 25.11.2013
The requester is responsible for the factual approval of incoming invoices. For commercial/price
aspects, procurement will organize the approval/clarification. For further information please see
documentation workflow invoice verification.
(14) Documentation
Procurement is responsible to store the tender documentation.
Warranty claims
In case of possible warranty claims, the requester has to contact the responsible purchaser in order to
check E.ON’s rights of compensation against the supplier.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Appendix 05
Internal Suppliers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Dated:
01.12.2013
1/3
Valid from: 01.12.2013
Board approval: 25.11.2013
This Appendix sets standards for all procurement activities where E.ON internal suppliers are
involved.
1. Objectives
All procurement activities must be in accordance with both legal requirements (notably Competition
Law) and high ethical standards. This requires a clean, fair and transparent process for all potential
suppliers, resulting in the award of the contract towards the most competitive bid for E.ON as a group.
To ensure a clear, fair and transparent approach, the internal supplier shall be subject to the rules
governing the procurement process. This Appendix clarifies the process and regulations that have to
be applied when scope of supply is contracted which can potentially be delivered by E.ON internal
suppliers.
For those business areas where E.ON focuses on internal suppliers for a strategic advantage, the
decision-making process has to be aligned within E.ON in the future. Therefore, this Appendix will be
updated in due time. However, any conceptual changes from make to buy or vice versa must be
closely aligned with Procurement to avoid any market disruptions.
2. Principles to meet the objectives:






There is no last call
Contracting processes to internal suppliers need to be executed based on the E.ON compliance
standards and arm’s length –principle (parties have to be independent and on an equal footing)
If, as a result of a benchmarking process, a contract with an internal supplier proves to be more
expensive than the market price, a solution needs to be found to either lower the price to match the
market price or to award the contract to a third party
Cost comparisons are based on total costs of ownership including effects of repetitive orders
Contracting of internal suppliers implies that the majority of the scope will be delivered by the
internal supplier himself and not substantially sub-contracted (alignment between Procurement,
business and the respective internal supplier needed).
Contracts between E.ON companies do not contain any clauses concerning collateralization (debt
guarantees) and no regulations concerning penalties.
Exceptions are IT Services provided by EBS.
Author:
Issuer:
Support Unit Procurement
Legal & Compliance/F/LC1 Group Governance
Appendix 05
Internal Suppliers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Dated:
01.12.2013
2/3
Valid from: 01.12.2013
Board approval: 25.11.2013
3. Process steps
The precise timelines as well as the definition of responsible persons from all involved parties need to
be aligned upfront.
3.1 Decision on core scope
The internal supplier has to define his core capability as precisely as possible (categories where they
provide services to E.ON units) for the respective businesses. For these services, the internal supplier
develops a comprehensive description of the deliverables as well as a pricing model (including price
sheet). For this, the respective business shares their planning to the internal suppliers. In order to
secure market comparability at any time, the target pricing model has to be based on standard prices.
Pricing models based on time and material can only be permitted for ad hoc services where scope of
works cannot be described by the business or for consulting services.
Business, internal supplier and Procurement jointly decide on the scope to be provided (make-decision
on core scope).
This process must be repeated / updated on an annual basis. The involved parties set up a monitoring
procedure to secure market ability of the prices.
Contracting of aligned scope
Within the timeframe of the make-decision, all defined scope is provided exclusively by the internal
supplier. Procurement provides a framework contract, the individual call-offs are done by the business.
In case of disagreements between the parties, clarification has to be done by the line organizations of
the involved parties, following the same principles that are applied to third party suppliers.
3.2 Make-decision on a case-by-case approach
For requests that belong to the core scope, but are not part of the contract under the conditions of 3.1,
capacities of the internal supplier have to be evaluated first:
Both the business and Procurement are entitled to involve an internal supplier at a very early stage into
the definition of such request (including a quick quote within 10 days, for complex tasks a budget
quote is sufficient). If all parties consent, then the purchase is done without a tendering procedure
directly to the respective internal supplier. If no agreement can be reached, the request has to be
tendered without further involvement of the internal supplier (see chapter 3.3).
3.3 Involvement of internal suppliers in competitive tender activities
For procurement activities that are not part of the core scope described in chapter 3.1 and not directly
contracted as described in chapter 3.2, involvement of internal suppliers can happen in two different
areas:
Author:
Issuer:
Support Unit Procurement
Legal & Compliance/F/LC1 Group Governance
Appendix 05
Internal Suppliers
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Dated:
01.12.2013
3/3
Valid from: 01.12.2013
Board approval: 25.11.2013


If appropriate, the internal supplier can provide support in the sourcing activity if requested by
the business (e.g. development of specifications, prequalification of potential suppliers).
On the other hand, the internal suppliers can be included in the tendering procedure as a third
party to provide a bid.
Before start of the tendering process, the role of the internal supplier needs to be clarified and clearly
communicated to ensure that the same internal supplier never takes both roles in one tender.
An internal supplier who bids in a competitive tender must be treated by the sourcing team like a third
party. This means he does not get access to any sort of information or help that might be considered by
the competitors as an advantage. The principal of equal treatment of all competitors has to be ensured
during all stages of the purchasing process.
Capability of an internal supplier to provide any requested scope will, if appropriate, be checked using
the standard prequalification process. For further details, please refer to the corporate procurement
intranet.
3.4 Handling of risks
In this competitive situation, the like-to-like comparison of an internal supplier vis-à-vis an external
supplier is based on a total cost of ownership approach. Therefore, the internal supplier has to
calculate any risks in the execution of the potential contract like a third party.
If an internal supplier can provide only part of a lot with the required quality and / or cost structure,
Procurement considers, if appropriate, to facilitate the internal supplier becoming a sub supplier of
another main bidder to minimize interfaces.
In the execution of the contract, the internal supplier will be treated exactly like a third party and any
additional costs (e.g. claims) will be challenged by Procurement.
Where in the execution of the contract additional costs arise as a direct consequence of an act or
omission by internal supplier’s work such costs will be borne by the respective internal supplier.
Where as a result of an act or omission by the internal supplier this results in additional third party
costs these shall also be borne by the internal supplier. This ensures a consistent approach with the
third party suppliers.
4. Subcontracting done by internal suppliers
To ensure efficiency and a consistent approach to the market, alignment of planned subcontracts
between the internal supplier and Procurement is of the utmost importance to avoid a situation where
different E.ON units duplicate the approach to the supply market.
Author:
Issuer:
Support Unit Procurement
Legal & Compliance/F/LC1 Group Governance
Appendix 06
HSE/ Sustainability risk identification in the Procurement Process
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
01.12.2013
1/5
Valid from: 01.12.2013
Board approval: 25.11.2013
This Appendix sets minimum requirements for identification and assessments of HSE/Sustainability
related risks for all procurement activities. This Appendix has to be applied in connection with the
Business Directive OP-EA-HSE 3 Contractor Management.
1. Objectives
E.ON recognizes that Health, Safety and Environment (HSE) and Sustainability are among its highest
corporate priorities in all aspects of its business across its entire value chain as virtually everything
E.ON does or plans to do will in some way impact upon HSE. That is why E.ON shall fully integrate
HSE/Sustainability management into all aspects of E.ON´s business.
Therefore it is mandatory for every requester to carefully balance if an intended procurement for any
goods or services may somehow be related to HSE/Sustainability risks. If that is the case, a HSE risk
evaluation has to be performed by the requester according to the instructions described in this
Appendix.
This Appendix describes how to identify and evaluate HSE related risks in the context with purchasing
goods and services. Based on the results of the HSE risk evaluation defined actions (see chapter 3) for
the next steps in procurement process are required.
In case of any uncertainties during an intended procurement with relation to possible HSE/
Sustainability risks the responsible HSE manager of the requesting unit should be involved.
2. HSE Risk Evaluation
When considering risk, two aspects must be considered. This includes the nature of the goods and
services to cause possible incident or injury; and the size and complexity of the goods and related
services as well as sole services which adds to the challenge of management of the risks. The HSE risk
evaluation identifies high, medium and low risks of these two aspects to establish an overall risk rating
and provides a framework of required actions. The highest category should be used when the activity
has components in more than one section.
A Risk Evaluation has to be performed by the requester for all kind of services to be purchased. Goods
to be purchased have also to be considered in the same way in case the entry into service requires a
service conducted by the supplier or on behalf of the supplier (excepting activities of extradition).
Naturally all goods have to be evaluated regarding their impact on health and safety of human beings
and environment.
In case the requested goods show after a documented risk evaluation (in the electronic procurement
systems i.e. GLOBE SAP modules, see App. 03) that there is no risk coming along with the goods
then the following HSE Risk Evaluation Matrix does not need to be applied.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
2/5
Appendix 06
HSE/ Sustainability risk identification in the Procurement Process
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
Valid from: 01.12.2013
01.12.2013
Board approval: 25.11.2013
HSE Risk Evaluation Matrix
Size/Complexity of the goods and/or services
Risk of
incident
or injury
HIGH
MEDIUM
LOW
HIGH
HIGH RISK
HIGH RISK
HIGH RISK
MEDIUM
HIGH RISK
MEDIUM RISK
MEDIUM RISK
LOW
MEDIUM RISK
LOW RISK
LOW RISK
Risk of incident or injury examples
HIGH
MEDIUM
Potential for fatalities or major
injuries due to nature of the
work e.g. electrical work, work
at height, toxic substances,
confined spaces
Potential for lost time incidents
e.g. minor civils (non-network),
other non-network field activity
Potential for no lost time
incidents e.g. office based
activity
Potential risk for causing injury
to general public or other third
parties e.g. other contractors
Defined operational site with
potential for third party visitors
Boundary controlled site with
no public or other third party
interaction e.g. office sites
Potential for breach of
environment legislation causing
significant environmental
damage e.g. major oil spillage,
river pollution
Potential for minor
environmental damage or
potential for ineffective
management of waste e.g.
generation of spoil or excess
package material
Minimal or no environmental
risk. No waste produced or
potential for pollution or need
for waste management e.g.
office based training.
Specialist work requiring
method statements, permits
and/or other authorizations e.g.
work on electrical network, gas
appliance work, use of cranes
Generic method statements
acceptable for carrying out the
work and/or standard license
requirements e.g. some
maintenance and cleaning work
and/or heavy goods vehicle,
forklift truck licensing
No formal systems of work
required e.g. use of computers,
printing, photocopying and
general office work.
Goods which require additional
services from the supplier on
E.ON premises.
Hazardous goods
Powered Tools
Equipment where the use may
cause HSE related incidents
Chemicals
Hand tools
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
LOW
3/5
Appendix 06
HSE/ Sustainability risk identification in the Procurement Process
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
Valid from: 01.12.2013
01.12.2013
Board approval: 25.11.2013
Size/Complexity examples
HIGH
MEDIUM
LOW
Notifiable construction design
and management) projects
Non notifiable construction
design and management) work
Non construction activity
Three or more different parties
involved in concurrent
operational activities
Different parties working on the
same operational site/activity at
different times
Single party delivering activity
Highly specialist operational
workers required e.g. SAP
engineers
Skilled operational workers
required e.g. heavy goods
vehicle drivers
No specialist operational skills
required
Work requires complex
management e.g. phasing
complexity, technical
complexity, logistical
complexity
Use of sub-contractors is
required to carry out the work
3. Required actions based on the HSE Risk Evaluation
Due to the evaluated HSE risk the supplier has to fulfill different requirements. The corresponding
capabilities of the suppliers have to be ensured in the course of purchasing process.
Required actions
Process
Steps
acc. to App.
04
(1)
create
purchase
requisition
HIGH RISK
The HSE manager of the
requesting unit has to be
informed about an
intended procurement.
MEDIUM RISK
The HSE manager of the
requesting unit has to be
informed about an
intended procurement.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
LOW RISK
Appendix 06
HSE/ Sustainability risk identification in the Procurement Process
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
01.12.2013
4/5
Valid from: 01.12.2013
Board approval: 25.11.2013
Prequalification
questionnaire and
additional HSE-specific
questionnaire required for
orders of 100 TEUR and
more.
Prequalification
questionnaire and
additional HSE-specific
questionnaire required for
orders of 100 TEUR and
more.
HSE questionnaire only
required for orders below
100 TEUR.
HSE questionnaire only
required for orders below
100 TEUR.
Re-Prequalification
required every three (3)
years.
Re-Prequalification
required every three (3)
years.
(5)
comparison
of bids
Full HSE evaluation
required with HSE
involvement from the
requesting unit.
HSE to be consulted for
advice on choice of
evaluation method.
(5)
comparison
of bids
Potential supplier is
certified according to
OSHAS 18001, ISO
14001, EMAS 3 or if not
certified, the potential
supplier will be audited
before an order is placed
or a contract is signed. In
any other cases the HSE
manager of the requesting
unit has to decide if the
potential supplier is able
to deliver the requested
goods and services based
on his qualification.
The HSE manager will
audit the documentation
and will decide about the
acceptance of the potential
supplier.
The responsible HSE
manager from the
requesting unit will be
involved in the tender
evaluation.
The responsible HSE
manager from the
requesting unit will be
consulted for the tender
evaluation if requested by
procurement or by the
requester.
(3)
definition of
suppliers
(4)
request for
quotation
(6)
negotiations
(5)
comparison
of bids
(6)
negotiations
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance
Simplified HSE
questionnaire.
Normally “desk top”
evaluation of contractor
activity for orders below
100 TEUR.
Appendix 06
HSE/ Sustainability risk identification in the Procurement Process
Version 1.0 (Dec. 2013)
To Group Policy GP 3-28
Valid from:
01.12.2013
5/5
Valid from: 01.12.2013
Board approval: 25.11.2013
(10)
check of
purchase
confirmation
Formalized assessments/
work methods and HSE
systems required for all
elements of the supply,
particularly detailing on
site activity and
documentation of them.
Formalized assessments/
work methods and HSE
systems required for some
elements of the projects
Simplified generic work
methods to be agreed.
(10)
check of
purchase
confirmation
Regular annual HSE
instruction and
documented supplyrelated HSE instruction
before work starts.
Regular annual HSE
instruction and
documented supplyrelated HSE instruction
before work starts.
Minimum annual HSE
instruction or businessspecific instruction.
(11)
contract
management
All phases of the supply
require detailed
supervision and or control
of work activity.
Key phases of the supply
may require direct
supervision or control of
work activity. Random
check inspections of work
activity.
Limited HSE involvement
with supervision and or
control of work activity
required.
(12)
service
acceptance/
goods receipt
Supplier evaluation will
be performed independent
from the contract value.
Supplier evaluation will
be performed in coordination with HSE.
(11)
contract
management
(14)
documentati
on
4. Further HSE Involvement in other procurement activities
As most of the goods and services procured by the E.ON group are available through electronic
systems or already provided by standardized systems it has to be ensured, that HSE/Sustainability will
be involved when setting up or updating the content in an electronic system such as, but not limited to,
SAP EBP, BDN process, Extranet, Vendor Masters, SRM Contract Management. In addition to that,
HSE/Sustainability will also be involved when setting up and negotiating contracts with future
suppliers.
Author: Support Unit Procurement
Issuer: Legal & Compliance/F/LC1 Group Governance