ISO 9001:2015 / 22 000:2005/

“MERDEM” Economic Society ISO 45001:2018

Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

APPROVED by
General Director of the
“MERDEM” Economic Society

____________CHOLYYEV H.A.
January 30, 2022

SUPPLIER SELECTION PROCEDURE

Document code MRD.HSE.30.01-22

Revision No. 1

Valid from 01.02.2022 till 01.02.2027

Extended to

Developed by Head of Procurement and Supply Department

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 ISO 9001:2015 / 22 000:2005/
“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

Table of contents
1. PURPOSE .................................................................................................................................................... 3
2. FIELD OF APPLICATION .............................................................................................................................. 3
3. TERMS, DEFINITIONS AND ABBREVIATIONS.............................................................................................. 3
4. CROSS REFERENCES ................................................................................................................................... 3
5. PROCEDURE ............................................................................................................................................... 4
6. RESPONSIBILITY MATRIX ........................................................................................................................... 9
7. STORAGE .................................................................................................................................................... 9
8. RECORDS FORMS ....................................................................................................................................... 9
9. REVISION RECORD SHEET .......................................................................................................................... 9
10. ACKNOWLEDGEMENT SHEET .............................................................................................................. 11

Revision No. 1
 ISO 9001:2015 / 22 000:2005/
“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

1. PURPOSE
The purpose of the procedure is to ensure an effective process for controlling the procurement of
goods and services, as well as the selection and evaluation of suppliers, in order to minimise risks.

2. FIELD OF APPLICATION
This document establishes the procedure for managing the procurement of goods and services
necessary for the provision of services to the established requirements of the Company ensuring
the implementation of the Integrated Management System in accordance with the requirements of
international standards ISO 9001:2015, ISO 22001:2005 and ISO 45001:2018 which field of
application is “Production and serving of meals (catering), sale and cultivation of vegetables and
fruit (apples, peaches, pears, cherries, plums, potatoes)”.
The requirements of this document are mandatory for application by specialists of departments
involved in the arrangement of procurement, warehousing, acceptance and delivery, storage,
processing and preparation of semi-finished food product, ready-made meals, delivery of finished
products to destinations and its wholesale distribution.

3. TERMS, DEFINITIONS AND ABBREVIATIONS

The following terms are used in this document with their respective definitions:
Management Systems (MS) mean the set of organisational structure, procedures, processes and
resources required for the overall management of quality.
Process means an activity that utilises resources and is managed to transform input data.
Request means a document that justifies the need to purchase any goods, product or service.
Procurement means the process of purchase of raw materials, auxiliary materials and services for
the Company from a supplier.
Principle means the principle of selecting Suppliers of raw materials, supplies and other products.
The Company is “MERDEM” Economic Society - a set of production and trade facilities, which are
under common management.
Supplier means a legal entity or an individual entrepreneur, which has expressed its intention to
enter into contractual relations with the Company (or who already has contractual relations with
the Company) for the supply of goods intended for use in the Company's own production or other
needs.
Commercial proposal means a quotation of the Supplier to conclude a supply contract of raw
materials, materials and other products of the Company under the terms and conditions specified
in such proposal.

Abbreviations:
D - General Director;
MS - Management System;
QM - Quality Manager;
RD - Regulatory documentation;

4. CROSS REFERENCES
− International Standard ISO 9001:2015 Quality Management Systems. Requirements.
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“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

− International Standard ISO 22001:2005 Food safety management systems. Requirements for
all organisations in the food production and consumption chain.
− International Standard ISO 45001:2018 Occupational health and safety management
system.
− Labour Code of Turkmenistan No. 29-IV dated 18.04.2009.
− Civil Code of Turkmenistan No. 294-I dated 17.07.1998.

5. PROCEDURE
5.1. PROCUREMENT PLANNING AND EXECUTION
Procurement at the Company is planned on the basis of concluded contracts on won tenders and
internal requirements for infrastructure maintenance. For procurement of equipment, raw
materials and auxiliary materials, the Head of the Procurement Department develops a production
plan and delivery schedules for 12 months based on the needs under won contracts and internal
requests by divisions and facilities. The production plan and delivery schedules are submitted to the
General Director for approval. After approval, the production plan and delivery schedules are
transferred to the Head of Procurement department, who in turn distributes to the marketing and
logistics managers the placing of orders to manufacturers and transportation, and monitors their
fulfilment.
5.2. WORK WITH SUPPLIERS
Only approved suppliers are used to procure food, raw materials, equipment and spare parts,
chemicals and materials used to manufacture products (provide services). Suppliers are selected in
a combination of two ways:
 When selecting a supplier, all information relevant to the potential supplier is taken into
account, including feedback from similar enterprises, online feedbacks and site visit to the
raw materials production site, if necessary;
 verification for certificates or other documentation confirming quality and safety.
Material suppliers provide appropriate documentation of compliance with the quality,
requirements, specifications and safety in use at the Company. As a result of the production control
the decision to use suppliers for a long term is made.

Suppliers in the Company are selected according to the approved form – “List of approved suppliers
(manufacturers of food products, semi-finished products, production equipment, spare parts, raw
materials and supplies)”.
“MERDEM” ES is committed to build partnership relations with all suppliers and manufacturers
based on the principle of open mutually beneficial co-operation. This principle describes the main
methods and criteria for selecting Suppliers, and the procedure of interaction with the selected
Suppliers of goods and services.
This principle is developed in accordance with the requirements of the current legislation of
Turkmenistan on consumer rights protection, as well as taking into account the requirements of the
suppliers' trade rules. The Company selects Suppliers on the basis of unified criteria formed on the
basis of experience and objectives of economic efficiency of its activity. The Company provides
potential and existing Suppliers, if necessary, access to the information on the principles of Supplier
selection, to the draft of supply contract, as well as to other information, essential for cooperation,
placed on the official website of the Company.
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“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

Confidentiality of actions. Guided by the principles of transparency and openness in relations with
Suppliers, the Company recognises the right of the Supplier to commercial secrecy and
confidentiality of the information provided by him.
Efficiency. The Company is committed to sell quality products at economically justified prices
through its network of trade dealers by selecting the most favourable terms of cooperation with
Suppliers. The Company makes every effort to optimise costs at the stages of product delivery to
the retail customer.
Reasonable prudence. Within the bounds of possibility, the Company checks the Suppliers, goods
for their integrity and compliance with the requirements of the legislation of Turkmenistan. When
selecting a counterparty, preference is given to those Suppliers who have been trading for quite a
long time and have established themselves in the market as reliable partners, focused on long-term
cooperation with customers.
Procedure for selecting Suppliers, procedure for working with commercial proposals
The needs in procurement of goods are determined on the basis of assortment matrix of necessary
food products and semi-finished products, equipment, spare parts, raw materials, materials and
other products, which is developed by the marketing department of the Company, based on
concluded contracts as a result of won tenders (so-called market demand) and production plan.

The assortment matrix by category is reviewed to find new or alternative items of equipment and
spare parts, raw materials, supplies and other products for which demand is expected to be higher,
in the event of interruptions in the supply of goods, as well as other circumstances affecting the
proper performance of the Company's supply and service activities.

The necessity to revise the assortment matrix is carried out by the decision of the Head of the
Company.
Main ways to define the Supplier.
The Company independently searches for potential Suppliers supplying the required goods in the
following cases:
 If raw materials, materials, or other products are not represented in the Suppliers' quotations ,
but there is a need for them, or presented, but it is required to increase the scope of
manufactured products, including in connection with the opening of new sales markets, or its
substitution with other raw materials, materials and other products, due to the identification of
violations and non-compliance with the requirements of the Company, or non-performance or
improper performance by other Suppliers of obligations under the supply contract.
 If the Company has a need to search for potential suppliers in other cases. In this case, the
Company selects Suppliers either by searching in public sources or in the database of
commercial proposals received by the Company.
 The Supplier initiates co-operation with the Company by sending a quotation.
Wishes and recommendations for the preparation of the commercial proposal
The commercial proposal should be received at the following email address and should contain the
following information:
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“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

 Brief information about the Supplier: period of time, during which the company operates in the
market, main direction of activity, cooperation with key customers (specify); Product
presentation: consumer characteristics of products, product photos, features and competitive
advantages of products, product segmentation (with specifying of competitors in this
segment), information about the market share of products in the whole market in the
Supplier's country and by regions (preferably according to analytical agencies data), rating of
products in the market (preferably according to analytical agencies data), rating of products in
the market by regions (preferably according to analytical agencies data).;
 The commercial proposal should include answers to the following questions:
1) The possibility of direct deliveries to the warehouse of our Company;
2) Principle of return of goods
3) Deferred payment: number of days;
4) Price List;
5) Discount system.
6) Contact information: Position, full name, business phone number, e-mail address.
The term for examination the commercial proposal and decision making is not more than 30
working days from the date of receipt of the relevant request by the Company, provided that
the Supplier has prepared the commercial proposal in accordance with the recommendations of
the Company.
 The responsible employee of the Marketing Department sends a notification to the potential
Supplier of receipt of the Commercial Proposal within 2 working days.;
 The Suppliers are selected based on the aggregate evaluation of the commercial proposal, in
terms of: assortment, proposed prices, possible scopes and frequency of deliveries, geography
of deliveries and logistics.
 On the results of the commercial proposal examination the Company notifies the Supplier of
the decision made by e-mail or requests from the Supplier additional information about the
Supplier and the goods supplied by it, including samples of goods for laboratory tests. After
receipt of additional information from the Supplier the Committee of the Company makes a
final decision on co-operation on this type of products.
 If a favourable decision is made under the commercial proposal, further contacts are made
through the Head of the Marketing Department who sent the reply, which will contain the
necessary contact information.
All commercial proposals received by the Company are stored in the commercial proposals
database. If the Company has a need for alternative suppliers and/or goods, commercial proposals
received by the Company may be re-examined in accordance with these Principles.
Principle of selection of Suppliers of raw materials, materials and other products by "MERDEM" ES
Criteria and conditions for selection of Suppliers.
Legal criteria:
 The Supplier is duly registered as a legal entity or individual entrepreneur;
 Supplier is not enters into liquidation;
 There are no bankruptcy instructions or legal proceedings against the Supplier;
 No facts of non-fulfilment or improper fulfilment by the Supplier of its obligations to the
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“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

 No information on claims against the Supplier by tax, customs and other state authorities
regarding violation of legal requirements binding on the Supplier.
Price criteria:
 The purchase price of goods must be attractive and competitive.
Product proposal:
 The quality of the offered products shall comply with the requirements of sanitary, technical
and all other applicable norms and standards of Turkmenistan;
 The products shall comply with the requirements of this Principle for the supply of raw
materials, materials and other products;
When selecting a Supplier, the advantages are folowing:
 When selecting a Supplier to conclude a supply contract, preference is firstly given to product
manufacturers, secondly to official distributors and thirdly to all other contractors;
 The Supplier shall have its own production facilities, premises for packaging and storage of
manufactured raw materials, materials and other goods;
 Availability of additional quality, environmental safety and health and safety certificates of
international standard; (in case of absence to choose more environmentally friendly
production).
 Availability of registered trademarks of the Supplier;
 Availability of transport and logistic capabilities of the Supplier, which allow independent
delivery of goods to the Company;
 Availability at the potential Supplier of a permanent stock of goods, which can be used for
uninterrupted supply of goods ordered by the Company;
 Availability of additional technical documents;
 Terms of fulfilment of orders;
 Availability of statutory documents;
 Relationships with high reputable organisations (not required to be taken into account);
Grounds for refusal to cooperate with a particular Supplier
 Abundance of raw materials and supplies at the time of Supplier's request;
 Supplier's failure to meet one or more of the selection conditions set out in these Principles;
 Providing false information;
 Refusal of the potential supplier from the agreed terms and conditions stipulated in the supply
contract or failure to reach agreement on material terms and conditions of the supply contract;
Requirements for quality, labelling and packaging offered by the Supplier:
 The quality of goods shall comply with the requirements of sanitary, technical and all other
applicable norms and standards of Turkmenistan, as well as the requirements of the Company;
 The goods must be labelled and contain information in accordance with the requirements of
the current legislation of Turkmenistan, as well as be accompanied by documents confirming
the quality, safety, origin of goods, phytosanitary condition, veterinary and sanitary condition,
legality of production and turnover and other documents provided for by the current
legislation of Turkmenistan in respect of this type of product
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“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

 Product packaging must ensure its safety during transport, loading and unloading operations
and storage;
 The external packaging of goods must be made of material that allows transporting and storing
goods on pallets, as well as withstand at least five reloading of goods to different places of
storage or transport;
 Product packaging must comply with the requirements of the "Regulations on the Procedure
for Temporary Storage of Goods Subjected to Customs Control" of the State Customs Service of
Turkmenistan;
 Prior to the conclusion of the Supply Contract the Supplier shall provide samples of goods and
documents confirming their quality and safety to the employees responsible for quality control
at the Company, which consists in the following:
o Verification of the availability and procedure for certification of accompanying
documents confirming the origin, quality and safety of goods, depending on the type of
product (certificates of conformity, declarations of conformity, certificates of state
registration, veterinary documents for controlled goods, etc.).
o Verification of the labelling of the consumer packaging of the goods, as well as the
labelling of the transport packaging for compliance with the requirements of the current
legislation of Turkmenistan and the provision of complete and reliable information about
the goods.

5.3 PROCUREMENT IN THE COMPANY IN CASE OF EMERGENCIES

Emergencies in which procurement problems may arise:
 natural disasters (earthquake, flood, hurricane, volcanic eruption, fire);
 mass diseases (epidemics);
 strikes;
 wars and military actions;
 terrorist acts, sabotage;
 government prohibitive measures, embargoes, international sanctions;
 other circumstances beyond the control of the parties to the contract.
Procedure for procurement in case of emergency

Procurement planning
In order to maintain continuous operation, all purchases are made on a planned basis. Procurement
planning is also carried out in case of emergencies, which will help to keep raw materials and
auxiliary materials in stock in case suppliers fail to fulfil their contractual obligations due to force
majeure.

Selection of suppliers.
As in the normal regime, only previously approved suppliers are used for procurement in case of
emergency. If it becomes necessary to use a new/previously unapproved supplier, customer
feedback and supplier information from other reliable sources should be used.

Logistics routes
Searching of safe/possible logistical routes for transporting raw materials and products, together
with suppliers if necessary. In addition, transport conditions are negotiated to confirm compliance
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“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

with the modes, conditions of transport of raw materials and packaging material in support of
quality and safety.

Incoming control.
The occurrence of emergencies does not provide grounds for non-compliance/mitigation of entry
control procedures. Entry control shall be carried out as usual. Unloading shall be carried out in
accordance with the regulations for incoming control of raw materials, auxiliary materials.

6. RESPONSIBILITY MATRIX

The QM supervises the fulfilment of the requirements of this procedure, is responsible for selecting
suppliers, collecting complaints, contacting consumers and responding to complaints received, is
responsible for processing complaints and informing relevant staff.

Head of Procurement and Supply Department is responsible for the execution of the production
plan, delivery schedules, product sales, responsible for the correct turnover and storage of finished
products, storage conditions and taking preventive actions.

Marketing (Procurement) Manager is responsible for purchasing in the Company.

7. STORAGE
The Quality Management Representative shall keep the original copy of this Procedure under No.
MRD.HSE.30.01-22 User Controlled Copy according to the mailing list.

8. RECORDS FORMS
Document name Document reg.No. ISM
Services, Works, Purchase Request Form MRD.СМК.21.01-22
Supplier Request Form MRD.СМК.22.01-22
Technical and Commercial Proposal Calculation Form MRD.СМК.23.01-22
Supplier Evaluation Form MRD.СМК.24.01-22
Service Provider Evaluation Form MRD.СМК.25.01-22
List of Approved Suppliers MRD.СМК.26.01-22

9. REVISION RECORD SHEET

Sheet (page) numbers Total sheets
Rev. (pages) in the Document No. Signature Date
revised replaced new withdrawn
document
1 2 3 4 5 6 7 9 10
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 ISO 9001:2015 / 22 000:2005/
“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

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 ISO 9001:2015 / 22 000:2005/
“MERDEM” Economic Society ISO 45001:2018
Certified company
Supplier Selection Procedure
MRD.HSE.30.01-22

10. ACKNOWLEDGEMENT SHEET

№ Position Full name Date Signature

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.
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