1. New Trends in Government Procurement
Presented at the ZSPA International Conference and Master Class
15 – 17 June 2016
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2. Outline of the Presentation
General Considerations
Public Procurement: An Overview
Public Procurement Reforms
The New Reform Agenda
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3. General Considerations
Why does Public Procurement matter?
Public Procurement is one of the most important economic factors in Zambia: Accounts for an estimated 15% of the GDP
Government procurement is perceived to be the major source of corruption
The need to apply principles of public procurement
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4. Public Procurement: An Overview
What does government procure?
Government procures goods and services from third parties (private sector). The rationale for buying from third parties is well-known.
The use of markets to source goods and services drives cost efficiencies and stimulates innovation.
Where government outsources complex services, risk transfer may also be a motivation.
Third parties have expertise that can help government deliver value-for-money public services and wider policy objectives.
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5. What does government procure?
The types of goods and services procured by government are diverse.
On one end of the spectrum, there are products that can be acquired ‘off-the-shelf’ commoditised items such as toner where there is limited product differentiation.
On the other, government procures highly specialised goods – such as welfare programmes or rehabilitation services – where it is likely to act as the only buyer.
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6. What does government procure?
IT hardware
Mobile phones
Office equipment
Energy and utilities
Construction equipment
Consultancy
Internet Service
Facilities management
Construction services
Work Programme
Rehabilitation
Military aircraft and ships
Highly commoditised Highly Unique
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7. How does the procurement process work?
To get the most out of suppliers, procurements need to be tailored to the specificities of the market in question.
Different procurement methods are available to government.
The methods are tailored to promote competition in procurement processes.
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8. How does the procurement process work?
Write
Specifications
TOR and SOW
Evaluate Offers
Prepare
Solicitation
Documents
Seek, Clarify
and Close
Offers
Award Contract
Manage the
Contract
Choose a Procurement Method
Identify Needs
Negotiate the Contract
Evaluate the Procurement
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9. Who does the procuring?
There are over 500 procuring entities (PE’S) in Zambia.
One of the major challenges being faced in public procurement is poor recordkeeping.
The poor record keeping in most PE’s has resulted in
Lack of comprehensive statistics on the value of goods, services and works procured and on the key indicators under procurement process.
This is exacerbated by the limited use of information and communication technology (ICT).
The absence of robust data on government procurement constrains accountability.
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10. Overview of public procurement reforms in Zambia
1969: Public Finance (Control and Management) Act, The Act established:
Central Supply and Tender Board
Provincial Tender Boards
1982: Zambia National Tender Board Act
Zambia National Tender Board (ZNTB) as regulatory body
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11. Overview of public procurement reforms in Zambia
1996: ZNTB authorized and implemented the restructuring of the secretariat with a view to making it more responsive.
ZNTB started implementing the Public Sector Procurement Reform Programme under the Financial and Legal Management Upgrading Programme (FILMUP) financed by the International Development Association (IDA).
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12. The FILMUP programme was aimed at:
Administrative strengthening of ZNTB;
Recruitment and training of procurement specialists;
Decentralising procurement;
Providing the necessary office equipment and vehicles; and
Enhancing procurement procedures.
The FILMUP programme came to an end in 2000.
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13. Overview of public procurement reforms in Zambia
2000: ZNTB started undertaking other reform activities under the first phase of the Public Sector Capacity Building Project (PSCAP) funded by the IDA. The PSCAP was meant to continue some of the activities started under FILMUP
2008: Public Procurement Act (PPA). PPA established Zambia Public Procurement Authority
2011: Statutory Instrument No. 63 of 2011 (The Public Procurement Regulations, 2011)
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14. Overview of public procurement reforms in Zambia
One of the objectives of preparing a new law on public procurement was adaptation to international instruments on public procurement (COMESA Directives, UNCITRAL Model Law on Procurement, World Bank Procurement Guidelines, etc.).
Public Procurement Act No. 12 of 2008
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15. Factors leading to reform of Zambia’s public procurement system
No.
Factor 1
The Country Procurement Assessment Review (CPAR) undertaken by the Government and the World Bank in 2002 which revealed weaknesses and omissions in the current Zambia National Tender Board Act and Tender Regulations 2
The decision by the Government to enhance transparency and accountability and the Zero Tolerance to Corruption policy 3
Government policy to decentralise operations 4
COMESA Directive on Procurement which required members states to reform their procurement legal frameworks so as to conform to the UNCITRAL Model Law on Procurement. 5
The enactment of the Citizens Economic Empowerment Act.
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16. The new reform agenda
Despite the recent reform agenda, government procurement is still too often bureaucratic, lengthy and opaque.
The fundamental challenge is that:
Public Procurement still seen by government as a regulatory function rather than an opportunity to deliver value-for-money public services.
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17. The new reform agenda
To deliver better-value public services, there is need to change our mindset.
Resource and attention need to be pushed away from the procurement process, to the areas where true value can be added: pre-market engagement and contract management.
Focus on the beginning and end of the procurement cycle –that is a greater emphasis on outcomes and shaping procurement markets more effectively.
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18. The new reform agenda
The digital agenda – which delivers faster and cheaper procurements than traditional models – could be a way to achieve value-for-money for a considerable proportion of government expenditure.
ZPPA, starting from July 2017, will be introducing electronic government procurement on 6 Pilot cites.
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19. The new reform agenda
E-procurement aims to simplify the buying procedure, speed up procurement and engender competition through transparency
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20. Benefits of e-procurement
Improved Governance
Transparency of public procurement
Less opportunity for fraud & corruption
Efficiency Gains
Competitive prices & reduced transaction costs
Procurement management based on data
Economic Development
Redistribution of savings
Private sector activation & infrastructure development
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21. Benefits of e-procurement
Better access to government market
E-procurement creates greater opportunities for the business community to sell their goods and services to public agencies.
E-procurement drive value for money by lowering barriers to entry and increasing competition.
Public procurement monitoring
enhances monitoring and compliance to regulations
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22. Other Future Developments
Framework Agreements
A contract that establishes terms and conditions under which subsequent contracts will be placed
Does not commit the purchaser to purchase
Requires the supplier to supply in accordance  with the terms defined within the scope of the  contract
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23. Other Future Developments
Open Contracting
Increased disclosure and
Multi-stakeholder participation in public contracting at all stages of the contracting (procurement) cycle, from planning to implementation.
Open Contracting Goals are:
To ensure that investments are aligned with the public interest;
To ensure that public resources are managed efficiently;
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24. Benefits of Framework Agreements
Reduced administration and costs
Competitive pricing (aggregation of demand)
Assured quality
Legal protection against breach of contract
Assured delivery of goods
Planned supplier stock levels
Continuity of supply
Long-term working relationships
Improved flexibility and cooperation
Value for money
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25. Benefits of Open Contracting
Enhance transparency in public procurement
Increase Availability of Information
Encourage Civic Participation
Improve Accountability and Integrity in Government
Increase Participation in Public Procurement
Achieve sustainable Open Public Procurement Data for Analysis
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26. Conclusion
These new mechanisms are at the core of the new trends and changes being introduced in Public Sector Procurement. 
There is therefore need for review of procurement skills, identifying gaps that need to be addressed in view of an increasing focus on e-procurement. Capacity building and training are important in this regard.
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27. Conclusion
The ZPPA has responded to the challenge of reforming the country’s procurement system and made improvements.
ZPPA is committed to establishing and embedding appropriate procurement policy and best practice in order to ensure fair and efficient procurement practices.
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28. Thank for your attention
THE END
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