1. Introduction TO Public Procurement PDF

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Warning: TT: undefined function: 22PROFESSIONAL STAGE FOURSUBJECT: PUBLIC PROCUREMENTCODE: PTOPIC ONEINTRODUCTION TO PUBLIC PROCUREMENTLearners being able to:-a) Describe public procurement and its objectives. b) Explain importance of public procurement. c) Evaluate public procurement as a policy to...

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BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

PROFESSIONAL STAGE FOUR SUBJECT: PUBLIC PROCUREMENT CODE:

P13 TOPIC ONE INTRODUCTION TO PUBLIC PROCUREMENT

Learners being able to:a) Describe public procurement and its objectives. b) Explain importance of public procurement. c) Evaluate public procurement as a policy tool. d) Describe principles/pillars of public procurement. e) Explain similarities and difference between procurement in public sector and private sector. Definitions According to the Public Procurement Act, 2011 procurement means buying, purchasing, renting, leasing or otherwise acquiring any goods, works or services by a procuring entity and includes all functions that pertain to obtaining of any goods, works or services, including description of requirements, selection and invitation of tenders, preparation and award of contracts.

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

PPA, 2016 amend the definition of procurement by deleting the words, “preparation and award of contracts” and substituting for them words, “preparation, award and management of contracts. Therefore according to PPA, 2016 procurement means buying, purchasing, renting, leasing or otherwise acquiring any goods, works or services by a procuring entity and includes all functions that pertain to obtaining of any goods, works or services, including description of requirements, selection and invitation of tenders, preparation, award and management of contracts. The successive stages in public procurement cycle 1. Procurement planning. 2. Choice of procedures. 3. Solicitation of offers from bidders or tenderers. 4. Examination and evaluation of bids or tenders. 5. Approval of tender. 6. Award of contracts. 7. Contract management. Objectives of public procurement The main objectives of public procurement includes acquisition of supplies of right quality, quantity, price, from right supplier, taking into account economy, accountability, efficiency, value for money, allow competition,

ensure

integrity,

transparency

and

equity/non-

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

discrimination among potential suppliers and respect for international obligations, in order to protect the public interests. Therefore objectives of public procurement can be elaborated as follows:  To ensure economy and efficiency.  To ensure value for money.  To ensure accountability and integrity of public officers and others who participate in procurement process.  To ensure transparency.  To give equal chances of participation and selection of all eligible tenderers.  To empower dis-abled groups. Public Procurements as a Policy Tool Policy is a set of ideas or a plan of what to do in particular situations that has been agreed to officially by a group of people, a business organization, a government, or a political party. Public procurement can be described as a policy tool by checking the good things which have been formed and used from procurement policy which is public procurement act and other public procurement directives. Public procurement used as “wealth redistribution’ since the government expending much through procurement and public procurement as a policy gives equal opportunity to all eligible firms BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

and persons to participate. As policy is meant to empower the disadvantaged groups such domestic firms, gender, disabled youth and other disadvantaged members of society As policy it is used to stimulate economic activity; protect national industry against foreign competition; improve the competitiveness of certain industrial sectors; and remedy regional disparities. It has also been employed to achieve certain more direct social policy objectives such as to: foster the creation of jobs; promote fair labour conditions; promote the use of local labour as a means to prevent discrimination against minority groups; protect the environment; encourage equality of opportunity between men and women; and promote the increased utilization of the disabled in employment. Therefore Public procurement is described as a policy tool which can also be used in other issues out of procurement since it promote many good things. Principles of Public Procurement I. II.

Need for economy and efficiency in use of public fund s. Providing for the fair and equitable treatment of all suppliers and contractors

III.

Equality of participation

IV.

Integrity

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

V. VI. VII.

Transparency Equity Value for money Pillars of public procurement

Pillars are the basic principles or basic foundation of public procurement. There are five pillar of public procurement such as:i. ii. iii. iv. v.

Transparency. Accountability. Integrity. Fairness. Auditable process.

Economy Economy, means achieving the desired goals at minimum cost, acquiring goods, works, and services that satisfactory quality, works or services completed timely Efficiency Means usage of funds in such manner that maximize the goal. Efficiency leads to savings. When the process of procurement is carried out efficiently project can be completed timely within the budget amount. Red tape and incompetence of public official responsible for

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

procurement causes waste of resources. Thus, efficiency and economy does not only achieve the primary objective Fairness It means treating bidders equally by • Making decision and actions which are unbiased and no preferential treatment. • Tenders considered on the basis of their compliance with the terms of the solicitation documents, • Bidders should have right to challenge the bidding process whenever they feel that they were unfairly treated. Fairness can be realized through: • The use of recognized procurement procedures that permit objective comparison of bids, such as international and national competitive bidding • Government accountability in the administration of those procedures Equality Attained through: Competitive method of procurement Wide advertisement Neutral specifications Simple requirements BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

Integrity It is a requirement of the Public Procurement Act 2011 for public officers concerned with procurement and disposal of assets to be scrupulous honest in dealing tenderers. • Officials responsible are prohibited to receive gratuities or other valuable things to influence tender decisions. • Officials are obliged to declare if they have interest to any bidders Transparency Transparency refers ability of all interested parties to know and understand how the process of procurement is managed. Elements of transparency includes, notice of tender publication, award notification, record-keeping and universal definitions for key procurement terms Promotion of Domestic Bidders Measures for promotion of domestic firms includes defining target group and eligibility, reservations, exclusive and margin of preference, application of tendering securing declaration, splitting of contracts, the use of solicitation document in Kiswahili and timely payments Value for Money The ultimate goal of public procurement is to achieve value for money. It is associated with deployment of resources vis a vis realization of

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

expected output In broader terms it VFM is associated with economy, effectiveness and efficiency of product, services. VFM can be achieved in terms of price, quality, and delivery having regards to prescribed specifications and criteria. Parameters of value for money: Efficiency- no waste of public resources in procurement.  Economy- Optimize use of public scarce resources.  Effectiveness- use of public resources to yield the intended output Benefits of good or efficient public procurement system 

Improve participation and growth of private sector

• It forms an integral party of any good governance process. • Enhancement of the effective use of public financial resources • Improvement of availability, quality reliability and cost of public services. • Encouragement of accountability and responsibility in supply management process The implication of inefficient procurement 

It encourages corruption.

• It leads to delays in delivery of essential public services.

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

•It can result into demotivation of private sector suppliers leading to lack of competition. • It can increase cost of items. •It results into a loss of scarce public financial resources. Similarities and Difference between Public and Private Procurement Both seek to: Employ or hire procurement and supplies professionals and technicians who are registered with PSPTB as required by law.  Use competitive and wisely methods of procurement such as competitive tendering, quotations etc. so that to acquire the best price.  Develop reliable sources of supply.  Spend funds efficiently in procurement in order to achieve their goals. NB: Private procurement main concern is to obtain requirements timely and effectively at best price while public procurement on top of that must ensure procurement is fair, open and transparent.

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

The difference between public and private procurement PUBLIC

MEANS OF

PRIVATE

DISTINGUISHING Is the process of obtaining goods

DEFINITION

Is the process of obtaining goods

works and services done by

works and services done by

government or agents on behalf

private entities in a course of

of government in course of

trading for profit earning

providing services to citizens Public funds or tax-payers money

FUND EXPENDED

and sometimes donors’ fund.

Funds belonging to individual persons or group of persons (shareholders)

Public procurement officers are

ACCOUNTABILITY

Non-public

officers

are

not

accountable to the public for their

accountable to public but to their

decisions.

employers or shareholders

Public officers are guided by

GUIDANCE TO

Non-public officers are guided

public procurement act and its

PERFORMANCE

by organizations’ procurement

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS) regulations

manual of instructions

In full public view (transparency)

CONDUCT OF THE PROCESS

and require public audit

Privacy or not necessary to be conducted in transparent way

BEST WISHES, PREPARED BY ABUBAKARI MRISHO, KPS INSTRUCTOR, CONTACT: 0717 58 14 04, EMAIL: [email protected]

BY ABUBAKARI MRISHO/ O717 58 14 04/ [email protected] KP- PROFESSIONAL SERVICES (KPS)...