Introduction to Public Procurement

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1 Introduction to Public Procurement Anura Lokugamage MA (Finance Econ) , PGD (Econ), PGD (Corporate finance) , Dip in IT (SLIDA) , Dip in IT (Thailand), HNDA , DPFM , Dip in Eng (SLIDA) , DIPCA , MAAT, IPFDA Anura_lokugamage@yahoo.com

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2 " procure", means to "obtain, especially by care or effort". Meaning Of procure

Definition of Public Procurement System:

Definition of Public Procurement System The Procurement System is a function of government that involves using government resources (public funds) to obtain goods, works and services to meet the the needs of the government as it carries out its responsibilities to the citizens. (Dr. Gonzalo de la Cruz Salas)

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4 Example for types of Contracts Supply only BOQ type Contract Lump-sum contract Design and Build Supply only & Installation Measure and pay Supply , Installation & Maintenance

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5 Methods of procurement National Shopping Limited National Competitive Biddings - LNB National Competitive Biddings - NCB Limited International Bidding - LIB International Shopping International Competitive Biddings -ICB

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6 Methods of procurement Pre -Qualification Community Participation Force Accounts Post Qualification BOO , BOT , BOOT ,BRT , BOOST , BT & MOT Single source Procurement

Procurement Process:

7 Procurement Process

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8 Important Stages of the Procurement Process Contact Management & Monitoring Stage Advertising Stage Preparation Stage Award Stage Response Management Stage

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9 Preparation Stage Planning of the Procurement process , Followings are the activities : . Specifying the requirement . Selection of type of Procurement . Selection of method of procurement . Preparation of bidding documents

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10 Advertising Stage Advertising stage includes following activities . Advertising the procurement . Issuance of the SBDs

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11 Response Management Stage Management of the received bids, includes . Opening of the bids . Evaluation of the bids . Negotiation with the bidder(s) . Recommendation to relevant authority

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12 Award Stage Contract awarding activities are: . Approval of the relevant PC . Contract award . Debriefing

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13 Contact Management & Monitoring Stage Management of the contract, includes activities as: . Contract performance . Contract completion . Payment . Dispute resolution

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14 Important Elements of the Procurement Process Bid opening Bid evaluation Preparation of Bidding Documents Procurement planning Closing of bids submission Award of contract Issuance of bidding documents

General Principles of Procurement :

15 General Principles of Procurement Subject to Competition Value for Money Transparency Accountability Fairness- (Non-Discrimination) Equal Opportunity Development of Local Business Achievement of National Development Objectives win-win Outcomes.

Competition :

Competition

Value for Money :

Value for Money Obligation to spend public funds more economically ,efficiently and effectively to achieve the public interest.

Transparency:

Transparency The ability to understand and see through the process to determine if the process has adhered to the principles and achieved the objectives that the system is trying to implement . Required information are freely available Easy to access the information Can participate to the decision making process

Fairness:

Fairness It is necessary to operate in a manner that is perceived as offering an opportunity for bidders to win contracts in accordance with an agreed set of rules that are not bias to any bidder.

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Good governance key to economic development 2. Procurement absorbs more than 60% of government expenditure (It may vary country to country) 3. Accountability at all levels is therefore important ( Government procurement agencies and individual procurement personnel should be, and be seen to be, accountable to their governments, the end users, the public and suppliers for efficient , cost effective , and fair conduct of their procurement and that mechanisms for scrutiny of the procurement process and avenues for review of complaints should be available ) COMESA- (Common Market for Eastern and Southern Africa) Good Governance in public procurement

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“ Proper exercise of economic , political and administrative authority to manage a country’s affairs at all levels” Good Governance

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22 www.unescap.org/pdd Good Governance

Good governance can promote through::

Good governance can promote through: Proper procurement planning Proper Bidding document Transparent invitations to Bidders Efficiency and fairness in the Evaluation process Fair award of contracts Effective implementation – On time completion ,delivery and installation Independence of the Public Audit function

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