Enhancing Public Procurement for Better Performance in South Asia Region

The Sixth South Asia Region Public Procurement Conference focuses on professionalization of public procurement to improve performance. Recent activities, achievements, regulatory framework, and scope of the Public Procurement Regulatory Authority in Pakistan are discussed. The main functions of PPRA include developing procurement laws, monitoring their application, and evaluating procurement practices for improvement.

• Public Procurement
• South Asia
• Performance Improvement
• Regulatory Authority
• Professionalization

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2. SIXTH SOUTH ASIA REGION PUBLIC SIXTH SOUTH ASIA REGION PUBLIC PROCUREMENT CONFERENCE: PROCUREMENT CONFERENCE: PROFESSIONALIZATION OF PUBLIC PROFESSIONALIZATION OF PUBLIC PROCUREMENT FOR BETTER PROCUREMENT FOR BETTER PERFORMANCE PERFORMANCE

3. PUBLIC PROCUREMENT REGULATORY PUBLIC PROCUREMENT REGULATORY AUTHORITY (PPRA) AUTHORITY (PPRA) (PAKISTAN) (PAKISTAN) MR. MUHAMMAD ZUBAIR MR. MUHAMMAD ZUBAIR MR. ALI TEMOOR MR. ALI TEMOOR DIRECTOR GENERAL (MONITORING & EVALUATION) DIRECTOR GENERAL (MONITORING & EVALUATION) Manager Knowledge Transfer Manager Knowledge Transfer (PMU (PMU- -e e- -Procurement) Procurement)

4. Recent Activities and Achievements (2018 and 2019) - Content Legislative and Regulatory Developments Public Procurement Performance Measurement Status of Introduction and Operationalization of Electronic Government Procurement (e-GP) Status of Public Procurement Professionalization and capacity building Major Issues, Challenges and Solutions Key activities planned for next two years 4

5. Public Procurement Regulatory Framework Law : Law : PPRA Ordinance, 2002 Rules : Rules : Public Procurement Rules, 2004 Regulations: Regulations: PPRA Regulations, 2008 (Bidding Documents of Engineering Works & Record to be kept) PPRA Regulations, 2009 (Posting of Contract Awards on PPRA s website) Consultancy Services Regulations, 2010 PPRA Regulations, 2011 (International and inter-governmental commitments) Public Procurement in Pakistan is completely decentralised. Ministries, Divisions, Departments, Authorities making their own procurements. 5 5

6. PPRA Scope To regulate the public procurement of goods, works and services and the matters ancillary there to; within the ambit of the Federal Government whether within or outside Pakistan. In pursuance of Section 5 of the PPRA Ordinance, PPRA may take such measures and exercise such powers for improving the governance, management, transparency, accountability and quality of public procurement Power to Make Regulations Power to Conduct Investigations and Enquiries Power to Recommend to the FG for Granting Exemption 6 6

7. Main Functions of PPRA Development of procurement laws, regulations, procedures, guidelines and standards bidding documents; To monitor the application and implementation of Procurement Laws; To Evaluate the Procurement Laws, and to recommended the FG for reformulation and revision of these laws To monitor the procurement practices and to recommend the PAs, improvement in their institutional setup and procurement activities 7

8. Public Procurement Performance Measurement Regulatory Tools: Complaint Management System In case of deviation from Rules: Evaluation Report (Six Reports in Fiscal Year 2018-19) containing: Observations/Findings Regulatory Directives (Binding in Strict Sense) Recommendations (Binding unless alternative solution acceptable to PPRA) Suggestion (For Sake of Improvement) In case of serious violations suffering transparency of the process: Investigation Reports (Four Reports in Fiscal Year 2018-19) Inquiries (to be initiated) in case of further probing 8

9. Public Procurement Performance Measurement Regulatory Tools: Regulatory Reviews (as a Pro-active Regulatory Approach) In case of the projects of broader national interest, and based on the complexity of the projects and huge expenditures involved, PPRA may select following Control Points: Hold Points (PA cannot move forward without review or inspection) Witness Points (PA may move forward if Regulator could not conduct review or inspection in time) Record Points (Only documents are called upon by the Regulator to check for the violations) Regulatory Review Reports: Observations/Findings Regulatory Directives (Binding in Strict Sense) Recommendations (Binding unless alternative solution acceptable to PPRA) Suggestion (For Sake of Improvement) 9

10. Public Procurement Performance Measurement Regulatory Tools: Procurement Audits: Compliance Audits:By virtue of section 5(2)(b) of PPRA Ordinance, PPRA is mandated to monitor the extent of compliance to the Public Procurement Laws. In carrying out the compliance audit, the Authority has prepared 7 indicators and respective sub-indicators to conduct the Compliance Audit; Value for Money Audits: By virtue of section 5(1) of the PPRA Ordinance, the Public Procurement Authority is mandated to exercise powers for improvement in quality of procurement. In doing so, the Authority have prepared 5 indicators and respective sub-indicators to be used in assessing Value for Money during Audits Capacity Building: Capacity building of Procuring Agencies Capacity building of suppliers, contractors, consultancy firms 10

11. Public Procurement Performance Measurement Tenders V/s Violations 60000 54914 50000 38230 37146 40000 31844 28046 30000 26122 24104 20880 20226 18404 17913 17124 17078 20000 11905 10000 26 22 21 16 10 14 11 7 5 95 75 68 58 13 0 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 Tender Uploaded Violations Indicated % PP Rules Violations 11

12. Public Procurement Performance Measurement Total 6390 Public Procurement Officials have been trained in Public Procurement Rules during Financial Years 2006-07 to 2018-19 1200 977 1000 881 807 762 800 600 429 410 405 390 343 400 326 231 220 209 200 0 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 12

13. Status of E-GP Introduction and Operationalization MoU signed b/w PPRA & NITB for successful implementation of the Projects PMU (Project Management Unit) Constituted for the execution of the project & for Transfer of Knowledge Task Force Constituted to accomplish the Regulatory Framework 13

14. E-Procurement: Major Modules Centralized Centralized Registration Registration System System (Contractors, Consultants, Procuring Agencies etc.) Past Past Performance Performance Retrieval vendors, on their previous works shall be available Retrieval System System: : The performance of contractors, suppliers and E E- -Tendering Tendering (e-Publishing/e-Advertisement, e-Evaluation, e-Contract award) system. Encrypted Encrypted Tender encrypted form, and traceable by authorized person after expiry of submission deadline. Evaluation Evaluation Matrix Matrix: : The system shall automatically generate the comparison matrix of all the tenders based on their quoted price & evaluation criteria for the reference to the evaluation Committee. Tender Submission Submission: : Tender will be stored in e-procurement database in 14 12

15. E-Procurement: Major Modules E E- -Contract Contract Management Management System System: : Tracking Mechanism for verification of Critical Critical Path Path Method Method (CPM) (CPM) Standard Entries for the results of Quality tests and Acceptance criteria 15 12

16. Status of Public Procurement Professionalization and Capacity Building PPRA POLICY ON CAPACITY BUILDING: Objective: To develop institutional capacity in procurement at country level to attain the objectives of VfM and Sustainable Procurement in an effective professional and efficient manner. Main Ingredients: Standard requirements to determine the optimum level of staffing in PMUs of PAs defining: Institutional arrangements Procurement leadership characteristics (including Procurement Culture) Requisite Qualification & Expertize of Procurement Cadre Accountability Mechanism 16

17. Status of Public Procurement Professionalization and Capacity Building Main Ingredients: PPRA Procurement Knowledge Management Pool having procurement professionals Identification of Procurement Categories below which Procurement of PAs mainly revolves Standardized and Customized Training Modules as per the needs of PAs Train the Trainer Course(s) for Certification of Procurement Professional Trainers Introducing the subjects of Procurement Management in all professional undergraduate Courses Introducing the Subjects of Contract Management & Engineering Economics in all Engineering Disciplines Initiative to start PGD and MS Degrees in Procurement Management in collaboration with High Profile University of Engineering & Technology and of Management 17

18. Major Issues & Challenges 1. Administrative and Financial Autonomy of PPRA for Regulatory Independence 2. Harmonization of Procurement Laws (in Federal & Provincial PPRAs) 3. Development of Regulatory Framework 4. To declare public procurement as separate Cadre and to add procurement management as subject in the selected educational fields at graduate & post graduate level. 5. Issues in Procurement Practices Poor Procurement Planning Seeking Exemptions (due to poor planning and lack of requisite skills) Adoption of Innovative Techniques and Best Practices Conventional Bureaucratic Approach in Grievance Redressal 18

19. SOLUTION/WAY FORWARD 1. Political Will for legislative change, Permanent Members of the PPRA Board, Central Contractor Registration System 2. Formation of Procurement Reforms Committee (to harmonize the regulatory framework) 3. Development of Regulations, Codes and Standards to fulfill the objectives of the PPRA Ordinance 4. Road Map for Implementation of Policy on Capacity Building 5. Introducing Procurement Culture including Standardized Normative Framework for Cultural Assessment and Gap Analysis in the light of this framework 19

20. Enhanced Procurement Culture 20

21. PPRA Procurement Normative Framework/ Traits of Positive Procurement Culture Visible Procurement Leadership Procurement is Learning Driven Sustainable Procurement & VfM are Clearly Recognized Values Quality of Procurement is integrated into all the Projects Activities Accountability of Procurement is Well Defined 21

22. Key activities planned for next two years (2019 and 2020) Legislative tweaking to incorporate e-Procurement Development of Standard Bidding Documents Strategy for Sustainable Procurement Implementation of e-Procurement at the Federal Level by 2020 (50 %) Implementation of e-Procurement at the Federal Level by 2021 (90 %) 22

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