MILODA ACADEMY OF FINANCIAL STUDIES

DIPLOMA IN PUBLIC PROCUREMENT AND CONTRACT ADMINISTRATION

INDIVIDUAL TAKE HOME ASSIGNMENT – 01

2ND INTAKE – 2017

MODULE 1: ESSENCE OF PUBLIC PROCUREMENT

TOPIC:

a. When it comes to procurement process in organizations, it is observed that certain

procedures are not properly applied or followed. Reviewing the National Procurement
Guidelines, Manuals and Supplements, identify those areas, clauses and stipulations that
are not being followed or ignored in the public sector procurement. Explain.

b. What are the remedial measures that you may suggest to overcome the issued identified in
order to improve 1st Class Public Procurement Systems in Sri Lanka? Discuss.

In a developed or developing country, public procurement practitioners have and will face always
many challenges. Each country has its own economic, social, cultural and political environment,
and each country’s public procurement practitioners face different types of challenges, or the same
types of challenges but at different levels from their counterparts in other countries. Public
procurement is an important function due to the sheer magnitude of procurement outlays has a
great impact on the economy and needs to be well managed. Indeed, in all countries in the world,
estimates of the financial activities of government procurement managers are believed to be in the
order of 10% – 30 % of GNP (Callendar & Mathews, 2000).

Further, a government must ensure that the development efforts across all sectors are evenly
balanced and distributed to all sectors of the society. Successful achievement of these objectives
can be made through a speedy, transparent and effective process of Public Procurement, the
process by which public authorities, such as government departments, corporations or local
authorities, purchase work, goods or services. For this end, the availability of a set of procurement
guidelines, and manuals which includes the processes to be followed by the government
institutions, corporations and local authorities under different funding agencies, public funds and
external funds, is a vital factor.

The Department of Public Finance and National Procurement Agency issue (/issued) Guidelines
on Government Procurement Procedures, Manuals and supplements to these guidelines and
manuals. NPA issued the Government Procurement Guidelines in 2006 along with its Manual to
enhance the transparency of the government procurement process and to minimize delays and to
obtain financially the most advantageous and qualitatively the best services and supplies for nation
(National Procurement Agency, 2006).

GOVERNMENT PROCUREMENT GUIDELINES 2006: GOODS AND

WORKS
1.1 GENERAL

According to the cadre of certain government institutions or corporation there are less no of
Technical personals who can be contribute their inputs for the benefit of the Procurement Process.
Due to this deficiency, certain officials who are in the positions that he or she can considerably
influence the Procurement Process are still be appointed as the chairpersons of Technical
Evaluation Committees. Guideline 1.4.3 of Government Procurement Guidelines 2006 states that
the officials shall declare that they shall remain without a conflict of interest throughout the
process. Should such a compromising situation arise, the official shall declare his/her interest and
disassociate himself/herself from the process (National Procurement Agency, 2006). For example,
the Head of the Engineering Function of an institution may appoint as the Chairperson of a TEC,
and it is noted that most of the procurements handled by that TEC are implemented by the
Engineering Function. Thus, Head of the Engineering Function is the person who initiates such
procurement, prepare Bills of Quantities (BOQs), Specifications, make expert advice on the
selection of the suitable builder, carry-out the construction works and certify the payments etc.
Hence, it is directly related to “Conflict of Interest”.

In such situations, it is advisable to appoint some other officer who will not involve in to the
Procurement to be considered and if the PE does not have any officer within the institution, then
appoint a person outside the PE. Further, if an officer in such capacity was appointed as the
chairperson of any TEC under which a procurement activity that he positively involve in to that
process, then that officer must himself refuse such appointment giving reasons.

1.2 INSTITUTIONS, PROCUREMENT COMMITTEES AND THEIR FUNCTIONS

A PE can call Bids after the PC determination of type and nature of Bidding and contract document
to be used and approval of the appropriate approving authority. But in certain circumstances it is
observed that the PE has prepared the Bidding Document and decided on the suitable method of
Procurement and called Bids without following the standard Procurement Procedure without a
justifiable reason. After opening of Bids only, it is being referred to the approval of the relevant
PC. Since, the PC/TEC has no resort to recall which will eliminate the competitiveness of the
Bidders those who have already quoted, they have to reasonably justify the entire procurement
process and grants its approval.
1.3 PROCUREMENT METHODS

There are several Methods of Procurement that has been accepted by the Government of Sri Lanka
to procure goods, works and services. International/National Competitive Bidding, Limited
National/International Bidding, Shopping, Direct Contracting, Repeat Orders, Force Account and
Emergency Procurement are some of the Procurement Methods listed in Government Procurement
Guidelines 2006.

In the shopping Procedure the selection is based on comparison of price Quotations obtained from
several invited bidders (National Procurement Agency, 2006). Certain government institutions
award the goods, works or services contracts after calling bids from several parties but evaluating
a single offer received. Further, most organizations obtain hand quotations though there is no such
accepted procedure. In such exceptional circumstances it is advisable to obtain sealed quotations
with public bid opening after hand delivery of the Request for Quotations (RFQ) to the prospective
Bidders. Certain institutions practices to obtain of fax/email quotations in which maintaining the
confidentiality is difficult. If PE decides to obtain fax/email quotations it is recommended to follow
adequate security measures. In the case of fax quotations, it has to be informed the bidders along
with the RFQ that before sending the fax quotation relevant returning officer of PE should be
informed in early so that the returning officer of PE should make personal presence on the receive
of the fax and signed the fax, enclose in a sealed envelope and put into the Tender Box before the
Time of Closing of Bids. All the email addresses and faxes used for such communication has to
be official emails/faxes.

Direct Contracting is a Procurement Method that can be used to procure Goods or Works or
Services from a single supplier source (National Procurement Agency, 2006). But, some
organizations implement this method for procuring Goods or Works or Services that can be
procured from several supplier sources. Exploring available sources of suppliers from the market
before adopting this type of procurement method through a survey conducted over printed
telephone directory of internet is recommended.

Orders placed with the original supplier over a short period of time for the supply of the same
Gods is considered as repeat orders (National Procurement Agency, 2006). But PEs adopt this
method of procurement, to repeat orders placed with the original supplier over a short period of
time to continue Works or Services of the same Contract. The recommended method in such
circumstance to carry out some balance works of the already awarded Works Contract is to
consider that as Additional/Extra Works of the Project to be implemented under Variation Orders,
but still adequate budgetary provisions must be available.

Emergency procurement can be implemented in exceptional circumstances, such as manmade or

natural disasters, to meet unforeseen social obligations and such other similar situations which
shall be determined and declared by the GoSL as being an emergency situation which warrants
Procurements under this category. But, it evident that certain institutions have adopt emergency
procurement to procure Goods, or Works or Services which

1.4
1.5

Citizen has given rights to access to information which is in possession, custody of control of a
public authority by the “Right to Information Act No: 12 of 2016”. Guideline 1.4.1:
Confidentiality states “Parties associated with Procurement Actions, namely, suppliers/contractors
and officials shall ensure that they maintain strict confidentiality throughout the process”(National
Procurement Agency 2006).

“All parties associated with procurement activities shall maintain strict confidentiality
throughout the process”. (Draft Government Procurement Guidelines 2017)

Point of Discussion: How to maintain the Confidentiality of the Procurement Activities under the
rights given to the citizen to access to information which is in the possession, custody of control
of a public authority by the “Right to Information Act No: 12 of 2016” and if the PE has to disclose
such information relate to a Procurement activity up to what extent should the PE disclose those
information without violating the Guideline 1.4.1.

Bibliography
Callendar, G. & Mathews, D., 2000. “Government Purchasing: An Evolving Profession?”, s.l.:
Journal of Public Budgeting, Accounting & Financial Management, 12 (2): 272-290..

National Procurement Agency, 2006. Government Procurement Guidelines 2006: Goods and
Works, s.l.: s.n.