Presentation on theme: "INTRODUCTION TO PUBLIC PROCUREMENT"— Presentation transcript:
1 INTRODUCTION TO PUBLIC PROCUREMENT Dr. Fred Mugambi MwirigiJKUAT
2 Content Introduction Definition and Basics of Procurement Importance of ProcurementObjectives of Effective ProcurementMeasurement of Effective Procurement ManagementThe Procurement CycleEvaluation of procurement
3 IntroductionFounded on the Public Procurement and Disposal Act, 2005 and Regulations, 2006Came into force on 1st January, 2007.New Legal and Regulatory framework for procurementContains rules on processes, institutions and enforcement.
4 Basic Tenets of the ActFull autonomy to entities to act within the LawFull oversight by PPOARights for biddersInformation to publicEmphasis on “supply chain”.
5 Definition of Procurement This is the acquisition by purchase, rentals or hire purchase, tenancy or any other contractual means of any type of works, assets, services or goods
6 Importance of Procurement Procurement of goods, works and services in any institution contributes greatly to the success of the institution, depending on how well it is conducted.Operations cannot run if inputs are not procured at the right time, cost, quantity and quality.
7 Objectives of Good Procurement To ensure the acquisition of items or services:in the most cost effective mannerin the right quantitiesat the right qualityfrom the right sourcein timely and right delivery periodat the lowest possible total price
8 Measurement of Good Procurement Total cost incurred Vs price and profit of outputAmount of strain on organizations structures and systemsSpeed of purchaseLoopholes of purchaseCompliance to PPDA and organizational policies and regulations
9 Procurement Cycle Identification of needs/requirement Specification of RequirementChoice of Procurement MethodPreparation of Tender DocumentsTender NoticesReceipts of BidsOpening of Bids
10 Contd. 8. Examination and Evaluation of Bids 9. Tender Adjudication 10 Communication of Tender Committee’s Decision11. Appeals (if any)12. Contract Agreement13. Execution of Contracts14. Receipt of Goods/Services/Works
11 Procurement Cycle Identification of Need Main types of need/requirement- Operational requirement- Capital requirementResponsibility for identification of requirement- Departmental level- Organizations level
12 Identification of needs Contd. Methods/policy of identification of requirement- Objectives of the organization- Profits- Service level- Other factors
13 2. Specification of Requirements involves providing information that the supplier requires in order to reliably meet the user’s expectation.consists of definitive description on the object to be procured.The description can be very simple for simple products but can be extremely complicated and voluminous if it refers to major works to be carried out by a contractor.
14 Contd. Who should provide specifications? the user of the product or servicethe procurement and supply functionother stakeholders
15 3. Preparation of Tender Documents Bidding/source/tender documents contain essentially the specifications for the goods, works or services to be procured; the conditions and instructions to the bidders.They may include- request for quotation- request for proposals
16 Contd.The volume of tender documents varies with type and size of the project.The procurement officer’s main task is to make sure that these documents are coherent and as comprehensive as possible and the truly reflect the intentions of the user; technical; legal; financial and stakeholders.
17 Contd. Particular care must be taken to ensure: Correctness of the terms indicated in the documentsThat the goods/works/services to be provided are described with sufficient clarity and sufficient detail to form the basis for competitive bids.That the criteria to be followed in evaluation bids are disclosed.That the bidding documents conform to the organization regulations and the PPDA
18 4. Choice of Procurement Method Any of the following procurement methods may be used:Restricted tenderingDirect procurementOpen competitive biddingRequest for quotationRequest for proposals.
19 Restricted TenderingThis method is available for large and complex contracts.The method is justified in view of the cost involved in preparing tenders for complex and specialized goods, works or services and the desirability of avoiding tenders from unqualified bidders.
20 Restricted Tendering Process Advertisement is initially placed in the local dailies for bidders to declare their interest and ability to supplyProspective bidders are given standard application forms to complete giving out the necessary dataThose who qualify are then requested to bid on the appropriate bidding documents.
21 Information requested for prequalification Contractors identificationBusiness detailsLegal status and complianceExperience and past performancePersonnelEquipmentFinancial statusPresent commitmentsAny other relevant information on the project
22 Direct Procurement This is a non competitive procurement method . It is only used in cases where no reasonable alternatives exist to dealing with just one bidder.
23 Open Competitive Bidding Involves:1. Advertising- wide publicity- enough time for preparation of bids2. Provision of bidding documents- at reasonable cost- clarification (if required)3. Submission of bid Documents- provision of tender box- no late tenders
24 Contd. 4. Opening of Bids - tendering opening committee - bidders to participate5. Bid Evaluation- technical evaluation- Financial evaluation6. Adjudication of Tender- submission of documents- tender committee deliberation7. Award of Tender- negotiation- notification8. Contract Signing
25 Request for Proposals Used: if the procurement is of services or a combination of goods and services; andif the services to be procured are advisory/ consultancy/training or otherwise of a predominantly intellectual nature
26 Evaluation of goods Largely based on: Price Quantity Quality Timing of delivery
27 Evaluation of Services Methods used include:Quality and Cost Based Selection (QCBS),Fixed Budget Selection (FBS)Least Cost Selection (LCS)Consultants’ Qualifications Selection (CQS)Quality Based Selection (QBS)
28 5. Contract Management Involves: Execution of contract Inspection and quality assuranceFollow up and expeditingHandling, claims, disputes and appealsSettlements (payments)