Essay: Public Procurement Regulatory Authority

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EXECUTIVE SUMMARY
The main purpose of this research is to examine the facts revolving around if the Federal PPRA & Provincial name sake Authorities work in tandem; Rules/regulations on many left over areas like Contract Management, Auction, Monitoring & evaluation and Inspection can also be framed uniformly. Many provisions such as Procurement Committee, Grievance Redressal mechanism, Black listing and Contract administration are required to be brought in line.
Public Procurement Regulatory Authority ordinance 2002 enforced by Federal Government and the Sindh Public Procurement Act 2009 followed by Rules & Regulations/guidelines have been practiced by Public Servants, Government departments and Contractors/ Consultants. While following these set of rules there is a need for improvement as well as harmonization so that certain hindrances and difficulties could be removed. These Rules and regulations are dynamic & progressive in nature hence can be improved & harmonized keeping in view the best practices. Before framing their own public procurement law and rules, Sindh government began to follow the Federal Government’s Public Procurement Authority Ordinance, 2002 and Federal Public Procurement Rules 2004.
New Rules were framed which were though very detailed but were somewhat stricter in nature.
The new laws were better in terms of few changes such as addition of functions:
1. Management of capacity building activities;
2. Provision of a dispute resolution mechanism;
3. A board of directors with Private members
4. Inclusion of district governments and
5. Public private partnership being brought in the domain of the authority.
There are many areas where detailed procedures/ Regulations are still required; such as Auctions, Regrouping & splitting, Blacklisting of Contractors, procedures of forfeiture of bid security, post qualification, Pre-qualification, rate contract, variations & amendments in contracts Inspection, M&E, Contract management and Contract Administration. The reform process started from 1990’s has yet to bear fruits. Quick formation of guidelines & rules depend on leading role from PPRA. Presently these Authorities are busy in outpacing each other and introducing e-Procurement, Public Procurement Performance Management System and certification requirements for Procurement staff. All of them have agreed to National Procurement Strategy which advocates harmonization of Procurement regimes.
The harmonization of rules, evolution of regulations & Guidelines further explaining the rules and capacity building exercise for professional should start for efficient service delivery for poor masses of this country through Public Sector. There need to be a marked difference in Procurement solutions today as compared to the days of Manual & GFR.
GLOSSARY OF TERMS
PPRA : Public Procurement Regulatory Authority
SPPRA : Sindh Public Procurement Regulatory Authority
KPPPRA : KP Public Procurement Regulatory Authority
BPPRA : Baluchistan Public Procurement Regulatory Authority
PPR : Public Procurement Rules
SPPR : Sindh Public Procurement Rules
M&E : Monitoring & Evaluation
HEC : Higher Education Commission
PSQCA : Pakistan Standards & Quality Control Authority
ICB : International Competitive Bidding
NCB : National Competitive Bidding
RFQs : Request for Quotation
QCBS : Quality & Cost Based Selection
LCS : Least Cost Selection Method
QBS : Quality Based Selection
DSM : Direct Selection Method
CQS : Consultant’s Qualifications Selection
UNCITRAL : United Nations Commission on International Trade Law
B&R Code : Building & Roads Code
GFR : General Financial Rules
NPS : National Procurement Strategy
RFP : Request for Quotation
NIT : Notice Inviting Tender
EOI : Expression of Interest
APP : Annual Procurement Plan
PC : Procurement Committee
GCC : General Conditions of Contract
CRC : Complaint Redressal Committee
DRAP : Drug Regulatory Authority of Pakistan

Table of Contents
PREFACE i
EXECUTIVE SUMMARY iii
GLOSSARY OF TERMS v
INTRODUCTION 1
Research Methodology: 2
Statement of Problem 2
Scope of Study: 3
Hypothesis 3
SECTION – I 4
Brief Summary 4
1.1 Situation Analysis; 4
1.2 Definition of Public Procurement: 4
.1.4 Principles of Public Procurement: 7
1.5 Stake Holders in Public Procurement: 8
1.7 Road Map of Reforms: 10
1.8 Procurement Planning: 11
1.9 Procurement Committee: 11
1.10 Record Keeping 12
SECTION – II 13
STATUS OF RULES 13
2.1 Transparency through Publication: 13
2.2 Open Competitive Bidding: 13
2.3 Bid opening and evaluation: 14
2.4 Award of contract: 14
2.5 Grievances/complaints: 15
2.6 Blacklisting: 15
2.7 Effective Control Systems: 16
2.8 Degree of access to information/transparency: 16
2.9 Accountability: 17
1.10 Variation and Repeat Orders. 17
SECTION – III 19
Analysis 19
3.1 Analysis of Responses: 19
SECTION IV 23
Analysis on the basis of Comparison 23
4.1 Public Procurement Rules 2004 with Sindh Public Procurement Rules 2010: 23
4.2 Baluchistan Public Procurement Rules 2014 with KP Public Procurement of Goods, Works and Services Rules, 2014: 25
CONCLUSION 27
RECOMMENDATIONS: 28
BIBLIOGRAPHY 29
ANNEXURE – I 30
EXISTING LEGAL FRAMEWORK IN PAKISTAN 30
Annexure-II 31
Questionnaire 31
APPENDIX-I 32
Comparison of Public Procurement Rules at Federal and 32
Sindh Levels 32
APPENDIX-II 63
COMPARISON OF PUBLIC PROCUREMENT RULES OF BALOCHISTAN AND KPK 63

INTRODUCTION
Public Procurement is the procurement of Goods, Services and works made on behalf of any Government organization. It accounts for around 15% of the World’s GDP and approximately 50% of the regular Budget, involving Tax Payers money; hence the Public Servants are expected to carry out this exercise efficiently, transparently and honestly. Regulatory framework of Public Procurement has been progressively established worldwide to promote the standards of Transparency, value for money & fairness and to rule out corruption from the system.
The United Nations Commission on International Trade Law (UNCITRAL) was established by the United Nations General Assembly by its Resolution 2205 (XXI) of 17 December 1966 “to promote the progressive harmonization and unification of international trade law”.
In 1994 UNCITRAL Model Law on Procurement of Goods, Construction and Services was framed which was amended in 2011. The 1994 text was recognized as an important international benchmark in procurement law reform. The principles and main procedures from the 1994 text have not been changed. The Model Law on Public Procurement contains procedures and principles aimed at achieving value for money and avoiding abuses in the procurement process. The text promotes objectivity, fairness, participation, competition and integrity towards these goals. Transparency is also a key principle, allowing visible compliance with the procedures and principles to be confirmed .
Pakistan also promulgated the Public Procurement Ordinance in 2002 and framed Public Procurement Rules in 2004 at the insistence of donor agencies. All four Provinces followed the lead from Federal Government and have periodically enforced their own Public Procurement Acts & rules. These Rules are broadly based on a mother Law which is the UNCITRAL model Law of Public Procurement. It contains procedures and principles to get best value for money and to avoid abuses of the procurement process. These rules promote Transparency, fairness, and competition and also the principles for visible compliance of procedures.
Prior to establishment of Public Procurement Regulatory Authority (PPRA), public procurement was governed under the West Pakistan B & R code, General Financial Rules & delegation of Power rules, Pakistan Engineering Council guidelines and the Purchase Manual. During 1990s, the significance of public procurement increased due to substantial volume of amount involved hence the taxpayers and other stakeholders’ (business, media, civil society, donors & international organizations) demanded monitoring and accountability in this area of governance. At the same time, there was a growing realization to improve efficiency and economy in spending, bridge the credibility gap and meet international standards to fulfill the expectations of investors etc. Establishment of five PPRAs has thus helped the government to regulate its procurement and achieve its goals.
Research Methodology:
This research study is based on experience of working in SPPRA, review of material available on websites, Literature review, Consultations and Interviews with SPPRA staff & officers and with field officers & contractors. A questionnaire was also devised for selected respondents. The target respondents were those officers who have worked in PPRA for a considerable period of time. Questionnaire was circulated to 20 such officers from Sindh, Baluchistan, Federal PPRA, KP PPRA & Punjab PPRA. Fourteen responses were retrieved and tabulated to assist in research outcomes. In addition to above PPR Ordinance and Rules were compared with SPP Act & Rules and improvements are suggested for future.
Statement of Problem
The Government of Sindh established the Sindh Public Procurement Regulatory Authority to strengthen the foundations of a responsive, accountable system of governance. But the provisions of Act and Rules are not same and the practitioners have to keep in constant touch with these provisions for compliance. Many provisions such as Procurement Committee, Grievance Redressal mechanism, Black listing and Contract administration are required to be brought in line. If the Federal PPRA & Provincial name sake Authorities work in tandem; Rules/regulations on many left over areas like Contract Management, Auction, Monitoring & evaluation and Inspection can also be framed uniformly. Though separate legal frame works can operate but in case of Food Authorities of Provinces as well as medicines and Education standards in HEC Federal as well as Provincial Governments are working in close coordination for harmonization of legal framework.
Scope of Study:
Public Procurement Regulatory Authority ordinance 2002 enforced by Federal Government and the Sindh Public Procurement Act 2009 followed by Rules & Regulations/guidelines have been practiced by Public Servants, Government departments and Contractors/ Consultants. While following these set of rules there is a need for improvement as well as harmonization so that certain hindrances and difficulties could be removed. These Rules and regulations are dynamic & progressive in nature hence can be improved & harmonized keeping in view the best practices.
Hypothesis

Provincial Public Procurement Laws are in harmony with Federal Public Procurement Laws or otherwise.

SECTION – I
Brief Summary
1.1 Situation Analysis;
A National Procurement Strategy (NPS) (2013-16) was firmed up & issued by Federal PPRA and agreed by all provincial PPRAs of Pakistan. Its first goal was to develop a frame work for public procurement to achieve harmonization of procurement laws, rules and procedures including nomenclatures. In order to achieve this goal NPS proposes harmonization of legal frame work for procurement .
Practically PPRAs are not autonomous enough to control the decision making process of the Authorities. Government can give policy directions to the Authorities & finally amend rules & regulations. There are many areas where detailed procedures/ Regulations are still required; such as Auctions, Regrouping & splitting, Blacklisting of Contractors, procedures of forfeiture of bid security, post qualification, Pre-qualification, rate contract, variations & amendments in contracts Inspection, M&E, Contract management and Contract Administration.
1.2 Definition of Public Procurement:
‘Public Procurement means acquisition of goods, services or construction of any works financed wholly or partly out of the public fund, including projects of public private partnership, unless excluded otherwise by government’ – SPP Act 2009
Public Procurement can be divided into three broad categories:
(a) Goods
(b) Works; and
(c) Services (including consulting services)

The selection of the method of Procurement shall depend upon the nature of assignment, type and volume of Procurement. It will be determined in case of Services prior to issuance of Request for Proposal. Procurement of Goods & works are made through open competitive bidding whereas in case of Procurement of Services various methods can be employed.
1.3 Procurement Cycle:
The procurement cycle follows various steps from identifying a definite requirement or need of the organization to the final step of award of the contract.

In the above picture, planning, documentation, Pre-qualification, Bid Evaluation, GRM, Contract Award and Management are the steps in a typical Procurement cycle. Following diagram shows a 9 steps process of Procurement taken from World Bank site. The process starts with need assessment, provision of Budget, selection of method of Procurement, management of Bidding process and execution of contract.

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