جمهوری اسلامی افغانستان دافغانستان اسلامی جمهوریت ISLAMIC REPUBLIC OF AFGHANISTAN MINISTRY OF FINANCE PROCUREMENT POLICY DIRECTORATE

AFGHANISTAN Landlocked and mountainous South Asia Heart of Asia Connecting South & East Asia with Central & Western Asia Area: 647,500 Km2 Population: 30 M (2005 est) border countries: China 76 km, Iran 936 km, Pakistan 2,430 km, Tajikistan 1,206 km, Turkmenistan 744 km, Uzbekistan 137 km GPD per Capita: $ 678

PUBLIC PROCUREMENT REFORM  May 2003 –Procurement review carried out and a number of serious constraints were identified Limited procurement capacity at all levels Lack of best International practice based Legal Framework Lack of ownership of procurement No consistency in the structures of the line ministries Lack of adequate Standards in procurement  The main priority/recommendations were as follows: Preparation of public Procurement Regulation Establishment of Procurement Policy Unit Adaption of regulations, SBDs to implement the PPL Capacity Development Program on procurement Institutional Development/arrangements 3

PUBLIC PROCUREMENT REFORM Procurement Policy Unit established August, 2006 policy and professional development, and as a performance monitoring organ in the field of procurement Focusing on Regulatory Framework Institutional Development Capacity Development PMIS (e-GP) Objectives establish and ensure continuity of a transparent, accountable, efficient and effective IT based Public Procurement System in the country, based on sound legal and institutional framework where all the public procuring entities have fully developed capacities to perform their full procurement function. 4

PUBLIC PROCUREMENT REFORM Regulatory Framework Public Procurement Law – October 2005 (amended twice and 3 time under process Rules of Procedures for Public Procurement SBD for Goods SBD for Civil works (small) SBD for Civil Works (Large and Plants) RFP SBD for Non-Consultancy Services SBD for Health Sector SRFQ for Works and Goods Operational Manual for Appeal Review Mechanism Operational Manual for SPC 55 Policy Circulars 5

PUBLIC PROCUREMENT REFORM Capacity Development Since December, 2007 – Training Institute with 15 staff Standard Basic Training – 2 week Standard Intermediate Training – 3 weeks Special/Short Term trainings – 3 to 4 days 25 Procurement Capacity Building Officers (PCBOs) 25 Procurement Controllers in 45 procuring entities 50 Procurement Specialists 6

CAPACITY BUILDING

Institutional Development : This Includes Standardize and unify the Procurement Department Structure Revising the Structure based on volume of work and budget Revising TORs 22 line Ministries have been completed 8

PUBLIC PROCUREMENT REFORM Institutional Development: This Includes Standardize and unify the Procurement Department Structure Revising the Structure based on volume of work and budget Revising TORs 22 line Ministries have been completed

Procurement Management Information System (PMIS) automated functions for communication document management and Procurement Information Enable users to develop monitoring & evaluation skills Support different stake holders & making decisions by providing data and feed back Develop a system of communication between various stake holders on procurement information to ensure a two-way flow of information Institute a mechanism of data analysis & information processing to fast track the implementation of the new procurement Law PUBLIC PROCUREMENT REFORM

PMIS Cont. facilitate compatibility of sharing information in local languages, simplifying the procedures, and reduction of costs in procurement practices. create a website for dissemination of information on public procurement in Afghanistan.  Public Web Portal: To provide the online facility of easy public access to standard procurement documents including: Procurement Law Standard Bidding Documents Appeal and Review PPU Circulars Procurement Rules of Procedures  PPU PMIS Modules: To provide PPU with online services including: Monitoring / Reporting of procurement activities within procurement entities. Preparing the list of Debarred Bidders. Adding new procurement entities. User Registration/Management News Management Training Registration Management

PUBLIC PROCUREMENT REFORM PMIS Cont.  PMIS Modules for Line Ministries: To provide electronic services for Procurement Entities including: Procurement Plan Submission Entering the Procurement Monitoring Data Bidders Registration Contract Awards Bidding Opportunities  Public PMIS Modules: To provide a data dissemination facility by dynamic contents to public users including: List of Registered Bidders List of Debarred Suppliers Bidding Opportunities Contract Awards Registering for Training

DATA FROM PMIS

PERFORMANCE DATA FROM PMIS

PUBLIC PROCUREMENT REFORM Special Procurement Commission (SPC) Established under PPL Unlimited authority under the Law to grant approval for procurement contracts Referred to SPC when beyond the Award Authority thresholds  Members Minister of Finance – Member and Chairman Minister of Justice – Member Minister of Economy – Member 21

PUBLIC PROCUREMENT REFORM Contract Management Office (CMO) Established as per PPL Provides secretariat support to SPC in reviewing the documents 22

APPEAL AND REVIEW MECHANISM Administrative Review Committee Established as per PPL Review bidders’ complains Take Decisions  Members Public and Private Sector 23

NATIONAL PROCUREMENT CONFRERNCE When November 05, 2013 Participants Ministers Deputy Ministers Ambassadors Heads of Donor Agencies Heads of Procurement Agenda Impact of Procurement on Budget Execution and on “on-budget” finance Procurement performance and related data Implementation of Procurement law, Build Capacity to Decentralize Procurement Conference Outcome Synchronise all ministries to execute an IT based public procurement management with “one procurement voice” (law, policies and implementation). Concrete actions by removing unnecessary approval layers, empowering procurement staff, and streamlining procurement performance to establish firm accountability of all funds expended in budget execution affecting procurement to prevent waste, fraud and abuse. Remain within defined roles and responsibilities and act within the confines of the Constitution concerning procurement.

FUTURE PLAN Regulatory & Legal Framework Issuance of SBDs in Pashto Language Simplify Bidding Documents Prepare Procurement Manual Prepare Regulation on PPP Prepare Regulation on Reverse Auction

FUTURE PLAN Capacity Building Strengthen/revise Training Curriculum for Basic and Intermediate Prepare Advance Standard Training Curriculum Develop Professionalized Procurement Module as Diploma courses

FUTURE PLAN Institutional Development All Ministries, independent Directorates and Provinces.

FUTURE PLAN PMIS e-Bid Submission e-Contract Management e-Purchasing Reverse Auction E-Learning

BOTTLENECKS Low level of participation in PMIS by line Ministries Low capacity and National and Particular at Sub-National Level weak ICT infrastructure Resistance to Change No dedicated staff for PMIS data entry Extra steps in the procurement process introduced by ministries that have no basis in law Interference in procurement decisions by senior management Interference by agencies having no mandate Lack of understanding of procurement law among senior management Fear of prosecution by AGO and other investigative bodies Lack of authority of procurement officers No Harmonization of Procurement Guidelines among the Donors Lack of Coordination among the Donors Lack of Power Delegation/Trust Absence of Incentive/Reward Mechanism Lack of Procurement Expertise 29

STEPS TO ADDRESS THE BOTTLENECKS Effective dialogue between MOF, other ministries and key business associations to improve transparency and trust in public procurement Mitigation/reduction of undue influences on contracting officials Determine the best way to synchronize all ministries to execute on public procurement With one procurement voice” (law, policies and implementation) Review procurement thresholds to avoid signature excess Establish viable Procurement Offices within Provincial and Governor’s Offices Determine how to reduce centralization and empower procurement staff Build capacity at sub-national level Devise strategies to organize and energize sub-national markets for goods and services Strengthen and Expand the Capacity Development Program Harmonization of Donor Guidelines and use of Country System Build the Procurement Capacity of the Investigating bodies. Apply reward and punishment mechanism Enhance the Procurement Knowledge among senior management