- Leading to efficiency of procurement processes
- Ensuring time saving and value for money
- Minimizing loopholes for corrupt practices
- Increasing accountability and transparency
- Inclusion of local experts, firms, goods and commodities in all procurement
Since its enactment the Public Procurement Act, 2011(‘the Act’) has been criticised by the general public for being inefficient, time consuming, failure to adhere to value for money principles and opening avenues for corrupt practices in selection of successful tenderers.
On 29th June 2016 the Parliament passed the Public Procurement (Amendment) Act, 2016 (‘the Amendments’). The Amendments were published in the Government Gazette of 8th July 2016 on which they became operational. These Amendments aimed at addressing the problems associated with the implementation of the Act. Therefore, the Act was amended with a view of enabling efficiency in regulating public procurement processes and ensuring value for money in public procurement.
EFFECT OF THE AMENDMENTS
The Amendments are expected to have the following effect on the public procurement:
i. Minimizing procurement transaction costs and processing time
The amendments require a procuring entity to enter into open framework agreements (Section 15(a) and (b) of the Amendments). Open framework agreements contain specified terms and conditions but do not contain agreed prices. Closed framework agreements have been blamed for setting exorbitant prices beyond real market prices. This amendment will ensure minimization of procurement transaction costs.
The Accounting Officer has been permitted to dispense with the requirement of seeking approval of the Tender Board before signing of the procurement contract (Section 11 of the Amendments). There will be no need to wait for approval of the tender board but will proceed with the signing of the contract. This will reduce time and shorten the procurement process.
Similarly, the Accounting Officer is no longer required to seek approval of the Pay Master General or Budget approving authority prior communicating to the tenderer whose award is beyond the approved budget. This process was to be done within 14 working days.
The Accounting Officer prior to rejecting a tender or proposal was required to obtain approval of the Public Procurement Regulatory Authority. This was time consuming. The amendments have allowed the Accounting Officer to dispense with this requirement (Section 17 of the Amendments Act).
ii. Enhancing transparency and accountability in procurement system
Procuring entities are required to submit to the Public Procurement Authority details of procurement contracts awarded and annual procurement plan for the ensuing financial year (Section 12 of the Amendments). Procurement entities are further required to ensure usage of electronic infrastructure so as to facilitate availability of procurement information electronically.
Publication of procurement contracts and annual procurement plan enhances transparency by ensuring that the public will be aware of all tenders intended to be undertaken in a financial year and public entities will be held accountable for all awarded contracts.
iii. Enhancing special groups such as women, youth, elderly and persons with disabilities
Selection of procurement methods for the benefit of achieving certain social objectives has to take into consideration special groups including women, youth, elderly and persons with disabilities (Section 21 of the Amendments). This consideration did not exist before the Amendments. It is expected to speed track procurement of goods for special groups taking into consideration their special needs.
iv. Procuring goods and services reflecting prevailing market prices (Ability to procure from Manufacturers and wholesalers directly)
The Amendments allow procuring entities to procure goods directly from manufacturers and wholesalers or service providers so as to obtain value for money (Section 23 of the Amendments). Purchase from retailers and other middle men, in most cases, does not reflect the real market prices.
Procuring entities were debarred from negotiation of lower prices for procurement of goods, works and services with a successful tenderer. This requirement has been abolished by the Amendments. Procuring entities are at liberty to negotiate for lower prices so as to reflect market prices (Section 26 of the Amendments). Also, procuring entities may negotiate for higher prices in cases of disposal of assets.
v. Minimizing corruption loopholes and increasing accountability in procurement
Firms, companies which and directors who engage in fraudulent, collusive, coercive or obstructive practices in competing for procurement, award of a contract or execution of the contract may be debarred from tendering and blacklisted by the Public Procurement Regulatory Authority (Section 28 of the Amendments). In so doing, corruption practices in tendering process are minimized for fear of the consequences of being blacklisted by the Authority.
vi. Involvement and enhancement of local firms, experts, goods and commodities
A new provision has been introduced by the Amendments to cater for prevalence of local firms, experts, goods and commodities in public procurement (Section 16 of the Amendments). As per the Amendments, it is mandatory for local firms and experts to be included in non emergency procurements involving goods, works and non-consultancy services. Foreign firms bidding for any non-emergency assignment are required to include local experts and firms in their teams. This exposes local firms and ultimately enhances capacity building to local firms.
In addition to the above, the amendments have introduced a requirement for preference of local goods and commodities of up to 15%. This increases domestic market for locally manufactured goods and will encourage industrialization due to market assurance.
vii. Emergency procurement procedures
Prior to the Amendments, emergency procurement required approval of the Government Procurement Services Agency (GPSA). This was time consuming and defeated the rationale for emergency procurement. The Amendments have done away with the requirement of obtaining approval from GPSA in cases of emergency procurement (Section 22 (c) of the Amendments).
Similarly, procuring entities are required to seek retrospective approval of the Pay Master General to validate emergency procurement. Also, this is a measure to shorten the time taken for emergency procurement.
A new provision has been introduced to deal with lifesaving health commodities such as medicines, medical devices and health supplies. Procurement of such commodities is placed under emergency procurement (Section 24 of the Amendments). The reason behind this is to take care of public interest, which is, saving lives.
viii. Minimizing time for determination of procurement disputes
Before the Amendments, an aggrieved tenderer was supposed to lodge his complaint with the accounting officer within 21 working days from the date of becoming aware of the circumstances leading to the complaint. This period has been reduced by the Amendments to 7 working days (Section 34 (a) of the Amendments).
The Accounting Officer has to deliver a decision on the complaint within 7 working days from the date of receipt of the same instead of 14 working days set previously (Section 34 (b) of the Amendments).
A tenderer aggrieved with the decision of the Accounting Officer has to file an appeal to the Appeals Authority within 7 working days instead of 14 working days (Section 35 (a) of the Amendments). These days are counted from the date of communication of the decision of the accounting officer or upon expiry of the period within which the accounting officer ought to have made a decision.
Reduction of the time (approximately 28 days axed) within which procurement disputes are determined aims at ensuring efficiency and speedy in disposal of procurement claims. This will be time saving and cost effective to parties involved in such disputes.
The concerns by the general public on the Public Procurement Act, 2011 have largely been addressed by the Public Procurement (Amendment) Act 2016. It is expected that these amendments will restore efficiency in public procurement processes, ensure value for money and eliminate loopholes for corrupt practices.
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.