Fixing bottlenecks in public procurement
Md. Giasuddin :
In Bangladesh the goal of public procurement is to purchase the goods and services for the ‘development programmes’ and ‘projects’ for the wellbeing of the people.
Public procurement is guided by the Public Procurement Act, 2006 and Public Procurement Rules, 2008.
Public procurement accounts for large involvement of public funding.
A study of the Planning Ministry showed that in the fiscal year 2001-02, the total expenditure on public procurement was around BDT 19 thousand crore and in the current financial year 2022-23 this expenditure may increase to BDT 2 lakh 21 thousand 500 crore.
The public procurement requires credibility, and the tendering methods emphasize reliability through the inherent democratic practice of selecting a winner by competition.
The more the tendering process is open, the more confidence it will gain in public.
The money spends in public procurement demands a great austerity or ‘value for money’.
The mechanism for implementation of procurement activities requires efficiency which can be attributed by enforcing principles of ‘good governance’ namely, efficiency, economy, transparency, competition and accountability.
In procurement the principles of ‘good governance’ is intertwined with the ‘procurement processing’.
However, the ‘principles of good governance’ are not always followed in processing of the procurements.
The purchasing entities sometimes run procurement indiscriminately by- passing the ‘principles of good governance’.
A few bottlenecks stood in the pathway of implementing the procurement process, resulting in time overrun and the cost escalation of the projects, a vicious cycle obstructed the operation in many recent projects.
The untoward challenges need to be addressed applying Principles of ‘good governance’. Delving into the issue, this article focuses on the following bottlenecks.
Lack of forecasting and need assessment: Forecasting refers to the process of predicting demand for goods or services, assessment of required quantity of goods and services needs to be estimated beforehand of goods to be ordered.
Procurement planning: It denotes the selection of products, sourcing, estimated quantity, budget allocation, adherence to time frame for tender’s advertisement, opening, evaluations, approval, awarding contracts and receiving supplies. Plans need to be revising based on change in demand and time.
Tendency of limiting competition: The Open Tendering Method (OTM) is the preferred method for buying goods and services, instead a tendency often pop-up to use the Direct Procurement (DP) methods which distorts the ‘value for money’ and avoid competition.
Reckless using of quotation methods (RFQ): A purchaser may undertake procurement by means of the RFQ method for readily available, standard off-the-shelf goods with in a threshold value. However, bypassing the OTM and splitting large contract packages into smaller ones is to be avoided.
Technical specification and drawings: A technical specification describes the performance characteristics, functions, product quality, component, measurements, standard, and other technical characteristics that fulfill the need of the purchase. Sometimes, due importance is not given on technical Specifications.
Design change: Most of the time before starting a work, due diligence is not given on design, and often designs are changed in the midway of the project which led money and time waste.
Monitoring: Once procurement plan is prepared the executives are away and busy with other duties as such plans remain unturned for months together. At the eleventh hour drives are taken when success is hard to achieve.
Standard tender document: The purchaser is sometimes unaware of using CPTS’s Standard Tender Documents (STD). This leads to the contract management difficult for the absence of terms and conditions which is written in the STDs.
Skilled manpower: Lack of skilled manpower is another reason.
Besides, the training and workshop facilities are limited resulting poor performance.
Evaluation committees: Lack of interest of Tender Evaluation Committee (TEC) members to participate in the TEC meetings is great. Often they cannot give sufficient time for evaluation purpose as they are engaged with other official business.
Delay in workflow: This is defined as the movement of files for obtaining approval from the authority. Delay in workflow can undermine the objectives.
Lack of professionalism: The personnel working in the procurement sector is not valued properly. As such many potential personnel do not want to retain in the procurement department for long time.
Economy of scale: Just for the sake of decentralization, procurement entities are appointed here and there before considering the ability to perform the procurement responsibilities that led to waste of resources and time.
On the other hand, where centralized procurement can beget economy, it is to be picked up.
Lack of data-base: It is obvious to keep sound data-base for procurement records.
Unfortunately well-equipped data-base is limited in numbers for informed decision-making.
Digital divide: CPTU is working in a limited scale.
Well-versed electronic procurement system has not been introduced throughout the country till to date.
Lead time: The lead time for supplying goods is extremely prolonged in manually operated tenders.
Spend analysis: Cost escalation of packages due to non-supply of goods or services within the stipulated period in the procurement plan is quite high.
As such due to marketing forces and money inflation over time the cost of the contract prices increase.
Lack of flexibility: Emphasis has been given solely in compliance of acts and rules of procurement ignoring managerial perspective, leading to frustrating the objectives of procurement.
Contract management: Once the contract is signed often the purchaser goes lax for overseeing the schedule of supply and most often punitive measures are not taken for delay in supply.
Integrity violation: Debarring list of tenderer is not scrutinize beforehand to detect the non performing tenderers.
Public procurement is a part of the project implementation and the expenditure for goods, works and services through this is quite high.
Therefore, it is necessary to establish ‘good governance’ in public procurement’ at all cost.
The writer, Bir Muktijodhaha, is a procurement consultant.
