Effective Public Procurement as Panacea for Good Governance and Accountability

Presentation at
4-Day Workshop for Ekiti State Legislators on
the Budget Process
by
Egghead ODEWALE
(DG/SA, Bureau of Public Procurement)
Thursday, July 25, 2019
1

PP is use of public funds by the govt through its MDAs & institutions,
on behalf of its citizens, for the acquisition of goods, services and
works with the best quality, &/or right quantity, at the best possible
price, from the right place or source (contractors, suppliers and
service providers), and for the right purpose using the best method(s)
and in line with laid down rules and regulations, following due
process.
Globally, govt is largest consumer in an economy with average
spending of 45~65% of budgets on public procurement amounting
to an approximate 13~17% of GDP. If govt make concerted effort to
procure environmentally- and socially-preferable products and
services, their substantial buying power will drive the delivery of
sustainable development (policies & markets)
3

Parliaments review and approve budgets (S121 of Constitution);
usually in line with the procurement plan of the Procuring Entities, to
ensure that it represents the interest of the people and meet their
immediate needs.
Premised on the above Constitutional responsibility, there is the need
for the body of legislators with this important assignment to
understand the principles of procurement as allowed by the Law and
Regulations of Public Procurement and it’s effect on the procurement
practices in the state.
4

5
ECONOMY
(value for money)
EFFICIENCY
producing result
without delay
FAIRNESS
impartial and
consistent
RELIABILITY
dependable
TRANSPARENCY
maintain rules and
procedures
ACCOUNTABILITY
practitioner are responsible to the
public
ETHICAL
STANDARDS
enforcing and obeying
the rules

• Best unit cost for acquiring specified works, goods or services
needed.
• Balancing between minimum cost and quality.
• Purchase that meets specifications and need
• It is universally known that the best way to achieve minimum unit costs for
the needed and specified quality in public procurement is through open
competition
6

• An efficient procurement system is one that delivers the inputs
in a timely manner to meet specific timelines that have been set
for service delivery.
• When evaluating unit cost, it is not only absolute cost that is
important, the opportunity cost of not providing the services at
the required time is of prime importance and needs to be
factored in the consideration of economy.
• Involves early planning to identify best way to ensure that
goods, works and services are acquired and made available
when they are really needed
7

Fair and equal opportunity to all bidders to compete meaning;
• Equal and simultaneous access to information
• Prospective bidders must be availed the same documentation
• Same conditions for qualification will apply to all
• Criteria for evaluation must be provided as part of the bidding documents
• Evaluation criteria must be applied uniformly to each bid, based on the
information provided in the bid
8

Access to information is the foundation for achieving other procurement
objectives
• It implies:
• rules exist and are known to the public
• the process is open to the scrutiny by the public
• the public has access to all procurement rules, and information except in the
cases where disclosure of information would be detrimental to a bidder or the
procurement process
• there are built-in mechanisms for preventing, detecting, and reporting fraud
and corruption
9

• Means that roles and responsibilities are well defined and shared
• System rewards good performance and sanctions bad performance
• In this regard, there must be checks and balances that ensure:
• Good standards of ethics is in place
• Failures in the system are detected early and corrective measures
are taken in a timely manner
• Participants abide by rules and infractions are sanctioned
10

To Ensure that
Goods and services
needed are
procured with due
attention to
economy and
efficiency
To ensure that public
fund is used to make
purchases needed for
the development of
the state.
To give all qualified
bidders an equal
opportunity to
compete for
contracts.
To encourage
development of local
contractors and
manufacturers and
ensure transparency.
11

• All procurements are subject to:
• Prior review thresholds set by the Client (categorisation)
• Open tendering or competitive bidding as default method
• Others include: Restricted tendering, RFP, RFQ, Single-source or sole
sourcing, Two Stage Tendering and Negotiated Tendering
• All procurements must:
• Be transparent, timely, equitable to ensure accountability
• Achieve value for money
• Promote competition, economy and efficiency
• Be in accordance with the procedures and timeline laid down in the
LAW
12

Thursday, July 25, 2019 Ekiti State Bureau Of Public Procurement 13
Bidding Type Explanation Pros Cons
Open Tendering or
Competitive Bidding
Provide specifications of the work to
several vendors. Each responds with
a bid indicating how much they will
charge if selected
Ø Encourages lower prices
Ø Allows price comparison
Ø Gives more vendors the
opportunity to win your
business
Ø Vendors may
underestimate costs to win
the bid
Ø Oversight of the bidding
process can be a lengthy
process
Selective Tendering or
Restricted Tendering
Limits amount of requests/proposals
submitted (usu. not less than 3)
Ø Saves time and money in
selection process
Ø Selective to find best-suited &
most qualified vendor
Ø Randomised selections
does not bode well for
procurement
Negotiated bid Select a vendor you want to work
with and negotiate the price of the
work (no bidding).
Ø Faster than competitive bidding
Ø More likely to receive realistic
final cost
Ø Doesn’t allow price
comparison
Ø May not receive lowest
cost
Request for Proposal Invitation to vendors to make a
unique and compelling case for their
products/services. It’s a proof of
worth/value for the vendors.
Two-Stage Tendering
Request for Quotations Used for small-valued goods or
services
Ø Least complex method
Ø Less paperwork
Ø Fast
Ø Not suitable for large jobs
with high technicalities
Single-Source or Sole
Sourcing
Non-competitive process adopted to
acquire goods/service from a sole
provider.
Ø Applicable for
emergencies/security
Ø Only one vendor provides the
service/job
Ø Continuation of work not
provided by another vendor
Generally, the type of procurement method you choose to use is highly relative to the conditions of the procurement effort and the type of
work, goods or service being acquired. All procurement methods follow tight legal and regulatory frameworks to ensure all standards are
being met and quality in the selection process exists.

Procurement Principles(cont..)
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} No payment for procurement should be made without “Certificate of
‘No Objection’ to Contract Award” from the Bureau (CONO)
} Supplier, contractor or service provider (Consultant) may be a person,
legal entity or combination of both.
} Bidders must possess:
• Professional and technical expertise
• Financial and infrastructural capability
• Legal capability to enter into a contractEvidence of fulfilment of tax
obligations
} Bidders must not:
• Have any director convicted for any crime anywhere
• Be in receivership or bankruptcy

} Bidders exclusion from bid or tender:
• Verifiable evidence of bribery
• Poor performance on prior contract
• Bidder in receivership/bankruptcy
• Bidders in arrears of tax obligations
• Prior sentence, procurement or financial crime
• Bidder have convicted criminals in its employment
} Transparency:
• All bidders must have access to same information and data at the
same time
• Agreed evaluation criteria shall not be changed in the course of
procurement process
• Persons engaged in any part of procurement process may not bid for
the procurement in question
• Winning bid shall be the lowest evaluated responsive (with regards to
specifications, standard, price, delivery etc) bid.
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I. Oversight the implementation of the
Public Procurement Law by all the arms
of government through the BPP;
II. Oversight the Public Procurement
regulatory agency to ensure that it
implements the law and complies with all
the provisions of the law;
III. Monitor the implementation of all
capital projects in the Appropriation
Act;

IV. Ensure that all procurement of works, goods
and services carried out by MDAs and Extra-
Ministerial Institutions on behalf of the
Government comply with the PPA;
vi. Receive and consider procurement audit
reports and bring erring MDAs to book.
Ekiti State Bureau Of Public Procurement 17

• Regulate & set standards including enforcement of harmonised bidding
process
• Formulate the general policies and guidelines relating to Public Sector
Procurement
• Develop, update and maintain procurement related system-wide
database
• Undertake procurement research and survey in order to determine
information needs & project costing
• Supervise the implementation of established procurement policies
• Monitor the prices of tendered items
• Perform procurement audits
• Undertake the physical monitoring of capital projects
• Document all projects at award and completion stages and publish same
in designated journals

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Economy and Value for Money: Best unit cost for acquiring
specified works, goods or services is achieved.
Efficiency: Public Procurement principles ensures timely
planning and identify best way to acquire goods, works and
services which are made available when they are really
needed.
Fairness in Competition: Fair and equal opportunity is provided
to all bidders competing. Equal and simultaneous access to
information, documentation, conditions for qualification and the
criteria for evaluation as part of the bidding documents are
allowed.

20
Transparency: Access to information and rule is established
amongst competing bidders and process is open.
Local Content: local contractors and manufacturers are
patronized and encouraged.
Reduction in Abandoned Projects: Projects awarded,
following the due process to a competent contractor, have the
tendency of being completed in due time all things being
equal.

Ø Huge reduction in resource wastage.
Ø Uniformity and discipline in public contracting and
procurement processes
Ø Re-orientation of the public sector to accountability,
transparency and value for money in public
procurement.
Ø Integration and re-direction government’s priorities

6-point plan
• Review and reform laws, regulations, guidelines and process of
public procurement in Ekiti State
• Enforce provisions of laws, regulations, guidelines and process of
public procurement in Ekiti State
• Establish the procurement cadre in the public service of Ekiti State
• Adopt and implement e-procurement to enhance public
procurement practice in Ekiti State
• Emphasise training and capacity as integral part of procurement
practice in Ekiti State
• Focus on service orientation and service delivery in the procurement
practice

— The only remedy to poor and self-
centered approach to governance is
effective public procurement process
where value for money, Efficiency,
Fairness, Transparency and
Accountability are of utmost importance.
Thursday, July 25, 2019 Ekiti State Bureau Of Public Procurement
23

An effective public procurement system will entail:
• Strong commitment & political will to ensure that budgeted sums for public
procurement are used for intended purposes;
• Strong political will to fight corruption at all levels of government & within the
MDAs;
• Adequate funding of department/agencies and training of officers involved in
public procurement;
• Ensuring strong accountability from everyone involved in public procurement;
• Ensuring transparency, competitiveness and fairness in the award of government
contracts, mainly through open competitive bidding process, and if any other
method is to be used, they must be reasonably justified.
• Strict adherence to the legal framework for regulation of public procurement;
• Apply public procurement practice to drive economic activities and growth

Not an exact science but a rule-based art which
application must take cognisance of the
circumstances.
Application must be fit for purpose.
Procurement process is conceptually different
from a legal process.
Legal process is rigid and somewhat inflexible
while a procurement process is supposed to be
flexible, constantly adjusting to changing
circumstances dictated by the exigencies of the
service being provided and general public good.
25

Thank You for
Listening
26

QUESTIONS?

Effective Public Procurement as Panacea for Good Governance and Accountability

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