PUBLIC PROCUREMENT OPERATIONS Dr. Fred Mugambi Mwirigi JKUAT 1

Introduction  The legal frame work of public procurement operations was strengthened with enactment of public procurement and disposal act 2005 which came into operation on 1 st January,  The act and regulations were enacted to assist in operations of public procurement and disposal procedures achieve the following objectives:  Maximum economy and efficiency  Promote competition and ensure that competition are treated fairly 2

Contd. Promote integrity and fairness of the procedures in operation Increase public confidence in operations and procedures Increase transparency and accountability Increase public confidence in procedures of operations Facilitate the promotion of local industries and economic growth. 3

Public procurement operations  Legal operations basis for public procurement procedures must be followed for any action taken. The sources include the following: -Constitution of the republic of Kenya -Public procurement and disposal act Public procurement guidelines -Public procurement circulars and administrative guidelines -Public procurement and disposal general manual -Standard tender documents 4

Public procurement operations cycle Procuring entities are responsible for carrying out procurement procedures and they should be familiar with complete procurement cycle as follows; 5

Public procurement operations cycle i. Preparation of procurement plan ii. Preparation of procurement specifications and initiation of the procurement process iii. Preparation of pre-qualification/tenders/bid documents iv. Advertisement /initiation of bids v. Receiving and opening of bids vi. Evaluation of bids vii. Adjudication and contract award viii. Notification of contract award ix. Negotiations (where applicable) x. Preparation and signing of procurement contract xi. Contract administration xii. Receipt, Inspection, and Acceptance of goods,works, and consulting services. xiii. Storage and inventory management 6

General procurement principles  To achieve better sound procurement practice these principles must be applied regularly in public procurement. i. Strict compliance with law and regulations ii. Ensure you achieve economy and efficiency iii. Promotion of value for money through effective competition and careful procurement planning iv. Balance control and delay v. Separation of authority between procurement initiation, vendor selection, commitment, receipt and acceptance object 7

General procurement principles vi. Promotion of sound public finance management (linkage in PFM) vii. Fairness and non discrimination in invitation, evaluation and award of tenders viii. Observe ethics and avoid corruption ix. Uphold transparency and accountability in procurement and disposal process x. Promotion of health and safety standards as well as environment protection xi. Strict adherence of use of appropriate documents and maintain comprehensive records 8

Procurement planning Procurement planning directly links the procurement function to the budget preparation. Procurement operations must be adequately planned with realistic times taken into account for preparation of procurement requirement. It is the responsibility of procurement unit to assist each end user department in preparation of departmental plan. 9

Procurement planning cont.. Proper procurement plan will assist finance department in forecasting for cash needs and make necessary projections. Procurement plan is also an internal control tool. It is the first level of commitment control. 10

Contents of procurement annual plan The annual procurement plan must contain the following facts: 1. Detailed breakdown of goods, works, services and consultancies required. 2. Scheduled planned delivery time frame. 3. Justification of procurement in a single or multi- year arrangement. 4. Indication of what items shall be aggregated for procurement as a single package( justifications of economies of scale) 5. Indications of what items shall be divided into lots. 11

Contents of procurement annual plan. Cont.. 6. Estimate of the value of each package of goods, services, works, consulting and design required. 7. An indication of the rules applicable to procurement where public procurement and disposal act is not applied. 8. An indication of the anticipated procurement method for each procurement requirement. 9. Indication whether procurement will be done by procuring entity, specialized procurement unit, any agency designated to procure common-use items or any other body. 12

Contents of procurement annual plan. Cont An indication of the warehouse requirements for storing the planned procurement. 11. An indication of self life for any goods that may be perishable or degradable. 12. An indication of the resources available for managing the procurement work load. 13. Details of any commitment or planned procurement expenditure under existing multi-year contract. 13

Contract Administration and Responsibilities For each contract entered into, the procuring entity must designate a member staff or team of staff responsible for administering the contract. Example, Ensure quality and quantity specified has been supplied. The Contract administrator is responsible for: 1. Monitoring the performance of contractor 2. Ensure contractor submits all required documents 14

Contract administrator is responsible for: (cont..) 3. Ensuring procurement entity meets all its payment and other obligations in time 4. Ensuring that there is adequate cost, quality, and time control 5. preparing any required contract variations or change orders and obtain all required approval. Such variations must have justifications done in written and supporting evidence. 6. Managing any handover or acceptance procedures. 15

cont.. 7. Making recommendations for contract termination and managing termination process. 8. Ensuring that the contract is complete prior to closing the contract file including handover procedures and retention payment 9. Ensure all contracts administration records are complete up-to-date 10. Ensuring that the contractor and procuring entity act in accordance to provisions of the contract. 11. Discharge performance guarantee where required. 16

Variations of contracts operations In accordance with section 47 (b) of the procurement law and the regulations any variation of a contract shall be effective and only if : 1. The price variation is based on the prevailing consumer price index obtained from Central Bureau of Statistics or monthly inflation rate issued by Central Bank of Kenya. 2. The quantity variation for goods and services does not exceed 10% of original contract quantity. 17

cont.. 3. The quantity variation for works does not exceed 15% of the original contract quantity. 4. The price or quantity variation is to executed within the period of contract. 5. Contract variation categories are; -Price Variables. -Optional specification variations. -Obligatory specification variation. 18

Thank you 19