PUBLIC PROCUREMENTPUBLIC PROCUREMENTMANAGEMENT & OVERSIGHT:MANAGEMENT & OVERSIGHT:A Comparative PerspectiveA Comparative Perspective

Public Financial Management Reform ProgramADB Grant 0133-CAM

14 – 16 June 2010

AgendaAgenda Introduction and Workshop Objectives

Overview: Public Procurement◦ Objectives◦ Management of the System◦ Accountability

Comparison of Public Procurement Systems: Fully Developed & Developing- United States of America- Republic of Indonesia- Royal Government of Cambodia

PFM Reform Program: Roadmap of Procurement Assistance to Cambodia

Conclusion

Introduction and Introduction and ObjectivesObjectivesIn December 2004, the Royal

Government of Cambodia, through MEF, desired the establishment of an effective and efficient PFM system with a 10-year planning and implementation period.

As a part of these longer-term reforms, the PFM in Rural Ministries Project, financed by ADB Grant 0133-CAM, aims to strengthen the capabilities of procurement officials the three rural development ministries, MAFF, MRD and MOWRAM

Components: Grant Components: Grant ProgramProgramComponent 1: Improve Public Financial

Management Capacity in Rural Development

Ministries

Component 2: Strengthening Capacity for Internal Auditing

Component 3: Strengthening Debt Management

Component 4: Strengthening the Effectiveness of the National Audit Authority

Workshop Objectives:◦ Compare the public procurement

management systems, and related accountability, of the USA (a developed country) and Indonesia (a developing country) as a reference point for the Royal Government of Cambodia

◦ Commence the process to enhance the

procurement capabilities of officials serving at the three rural ministries. This will be accomplished through a series of capacity building initiatives, this being the first.

◦ Provide: The characteristics of a full-developed, well-

functioning public procurement system; and The initiatives undertaken by the Republic of

Indonesia to reform its procurement system.

Overview of Public Overview of Public ProcurementProcurement

Public vs. Private Procurement

Management of the Public System

Accountability

Public procurement is the use of public funds to acquire needed public goods and services

The primary objective of a fully-developed, well-functioning public procurement system is to acquire these goods and services at fair and reasonable prices. Social objectives; such as to ensure the growth and development of Cambodian suppliers, consultants and other service providers, are secondary objectives.

What is effective management of a country’s public procurement system?

A system that consistently acquires needed public goods and services at fair and reasonable prices is one indicator that it is well-functioning and well-managed.

Another indicator is free and open competition among private sector firms who have confidence in the fairness and integrity of the system

Fraud, waste and abuse will be minimized

Accountability helps to ensure the system is answerable for its actions:

◦Role of Internal Audit: General Inspectorate

◦External Audit: Supreme Audit Institution

◦Other checks and balances: Stakeholders

Comparison of Procurement Comparison of Procurement SystemsSystems

- United States of America

- Republic of Indonesia

USA Public Procurement USA Public Procurement SystemSystem

Public Procurement in the Public Procurement in the USAUSA

The US federal government spends approximately $530 billion annually for a wide range of goods and services

US system is characterized by:◦Centralized planning and policymaking◦Decentralized procurement function

Well, if not overly, managed (checks and balances)

Internal and external accountability checks

Involves all three branches of government

◦ Legislative Branch: enacts laws, such as the Federal Acquisition Regulation (FAR) which was promulgated as United States Code (USC)

◦ Executive Branch: implements laws. The Office of Federal Procurement Policy (OFPP) operates within the Office of Management and Budget

◦ Judicial Branch: interprets laws and regulations

Legislative RoleLegislative Role

Federal Acquisition Regulation (FAR)◦The FAR is the primary regulation for use

by all Federal Executive agencies in their acquisition of supplies and services

◦The FAR became effective on April 1, 1984◦Permits fixed-price, fixed-price incentive

and cost-type and multi-year contracts◦The FAR provides for public participation,

small business set asides and other “socially” desirable objectives

Executive RoleExecutive RoleThe OFPP in the Office of Management

and Budget plays a central role in shaping the policies and practices federal agencies use to acquire needed public goods and services. Similar to Cambodia’s Department of Public Procurement

OFPP was established by Congress in 1974 to provide overall direction for government-wide procurement policies, regulations and procedures and to promote economy, efficiency, and effectiveness in acquisition processes.

Judicial RoleJudicial Role

More than 90% of all bid protests and performance disputes are amicably resolved without judicial intervention

Binding and Non-Binding ArbitrationHierarchy of courts for aggrieved

parties to appeal public procurement actions

Board of Contract AppealsCourt of Claims

Other CharacteristicsOther Characteristics

Stable cadre of well-trained, highly compensated procurement professionals, bound by an enforced code of conduct

Neutral and impartial fora to resolve bid protests and performance disputes

Procurement opportunities are widely-advertised and available in print form and on government websites

Both Pre- and Post- Award Audits

Evolution of the US Evolution of the US SystemSystemProcurement through the 1960’s

◦Fraud, abuse and corruption

Three Key Reforms in the 1970’s◦Cost Accounting Standards Board

(CASB)◦Public Law 87-653 Truth in

Negotiations◦Foreign Corrupt Practices Act of

1977

Public Procurement in Public Procurement in IndonesiaIndonesia

GOI not yet enacted a Public Procurement LawProcurement is governed by adopted decreesMinimal judicial intervention (untrustworthy)BANI Arbitration (also viewed as untrustworthy)Before 1984: highly centralized

◦ Even a typewriter. . .◦ Team 10

From 1984 - 94: relaxed centralization for economic reasons; however competition, transparency & fairness were minimal.

Non-competitive awards to politically connected individuals and corporations were common

Public Procurement Reform Public Procurement Reform (1992 – 1996)(1992 – 1996)Broad-based, longer term reform

initiativeBased in the Coordinating Ministry

for Economic AffairsLed by a senior, well-respected

officialPolitical will for reform (New Order Regime)

Economics supported the reform initiative

GOI initiative that was financially supported by ADB, USAID and WB

Broad-Based Support for Broad-Based Support for ReformReform 14 ministries and 10 state-owned

enterprises (SOEs)

Procurement Review and Policy Analysis Group (PRPAG) formed to:

◦ review and improve the Indonesian government's basic rules, regulations and practices relating to government procurements to improve the efficiency, transparency and openness of the government procurement system;

◦ improve the government’s procurement oversight and management capabilities;

◦ develop standard curricula for government-wide procurement training;

◦ conduct a series of capacity building activities; including workshops, seminars and a training-of trainers (TOT) program, to help ingrain and institutionalize the expected new government procurement decree and implementing regulations into a cohesive, well-functioning Indonesian government procurement system; and

◦ develop a system to disseminate timely and accurate information on government procurement policies, practices, and actions to both the public and private sectors.

Public Procurement ReformPublic Procurement ReformAccomplishmentsAccomplishments

PRPAG drafted a new Presidential Decree in 1 yr

Draft decree was adopted in April 1994PRPAG drafted a comprehensive

implementing Public Procurement ManualGOI’s Oversight and Management Capabilities

were StrengthenedStandard Curricula for Government-wide

Procurement Training was DevelopedAdvertising Procurement Opportunities

Required

Procurement Related to Overall Procurement Related to Overall Financial Management ReformFinancial Management ReformIndonesia’s FMR Commenced in 1998

In April 2001, the Ministry of Finance organized a “Financial Management Reform Committee”

In November 2001, the Committee set forth its “Principles and Strategy” to improve public expenditures management

Law17/03 concerning “State Finances” was enacted on 5 April 2003

Law 01/04 concerning “State Treasury” was enacted on 9 January 2004

Law 10/04 concerning “Law on Legislation” was enacted on 22 June 2004

Law15/04 concerning “Audit on State Finances Accountability” was enacted on 19 July 2004

Law 32/04 on “Regional Governance” and Law 33/04 on the “Fiscal Balance between the Central and Regional Governments” (Decentralization Laws) were enacted on 19 October 2004

Law 15/06 concerning “State Audit Board” was enacted on 30 October 2006

Keys to Indonesia’s FMR Keys to Indonesia’s FMR SuccessSuccessBroad-based involvementConsensus developmentSenior, well-respected Indonesians ledStakeholder consultationsMulti Donor SupportNationwide Dissemination of Newly-

Enacted laws and Newly-Adopted Regulations

Extensive Public Awareness Seminars & Workshops

Hierarchy of Indonesian Hierarchy of Indonesian Laws & RegulationsLaws & Regulations

Based on Law No. 10 of Year 2004

◦1945 Constitution◦Law or Government Reg in Lieu of a Law

◦Government Regulation◦Presidential Regulation◦Regional Regulation

.

.

.

SupremeCourt

SupremeCourt

BPKBPK

State Ministry for Administrative Reform

State Ministry for Administrative Reform

Government Boundaries

1945 Constitution

PresidentPresidentConstitutionalCourt

ConstitutionalCourt

DPDDPD

State Ministry for BUMN

State Ministry for BUMN

RegionalGovernments

Minister

Echelon1 Inspectorate

General

Line UnitsLine Units

Line Units

Central Government

SPI

BUMN

SPISPIBUMNBUMN

SecretarySecretary

GovernorGovernor

Line UnitLine Unit

BawasdaBawasda

DPRDDPRD

Bupati/MayorBupati/Mayor

Line UnitLine Unit

BawasdaBawasda

SecretarySecretary

DPRDDPRD

MoHAMoHA

JudicialCommission

JudicialCommission

MPRMPR DPRDPR

SPI

BUMD

SPISPI

BUMDBUMD

Legend: Ministry and Non Ministry Agency Level

Provincial Level

District

Command

CoordinationAudit Mandate

Audit Institutions

Audit Reporting

BPKPBPKP

Summary ComparisonSummary Comparison

US System Indonesian System

Law Yes NoRegulations Yes YesPre-Award Yes NoPost-Award Yes YesAdvertising Yes YesJudicial Yes NoWritten Opin Yes NoArbitration Yes Yes*Cadre Yes NoGW Training Yes YesAccountable Yes Yes

Cambodia’s Current Public Cambodia’s Current Public Procurement SystemProcurement System

As yet, Royal Government of Cambodia does not have a deeply-rooted public procurement law

The regulatory framework consists of Sub-Decrees and Amendments, easily changeable

Procurements and Privately-financed Build-Own-Operate (BOT) Projects are grouped together

Accordingly, Cambodia may wish to consider expediting the legal and regulatory framework to facilitate the capacity building and institutional development initiatives being undertaken

Cambodia’s Procurement Cambodia’s Procurement Regulatory FrameworkRegulatory Framework Procurement Sub-Decree No. 105 dated October 28, 2006; Procurement Sub Decree dated June 8, 1995; Procurement Sub-Decree No. 14 dated February 26, 2007; Implementing Rules and Regulations Governing Public Procurement

(IRRPP), amended on September 2, 1998; Draft Implementing Rules and Regulations on Public Procurement and

Procurement Manual for Goods, Works and Services (to be approved); Procurement Manuals for Externally Financed Projects/Programs in

Cambodia (Vols. 1-3) dated September 2005; Prakas No. 45 on the Implementation on Deconcentralization for Public

Procurement dated January 31, 2005; Instructive Circular on Procurement Planning Guidelines No. 12 dated

December 7, 2006 Supplementary Instructions of Prakas No. 319 on Rules and Regulations

of Public Procurement dated 31 August 1995

Effectively Three Systems◦Procurements financed by the State

Budget◦Donor-Supported Procurements (SOP/PM)◦Independent Procurement Agent (IPA)

Significant capacity building needsProcurement officials are (or appear

to be) assigned routine administrative work, without decision-making authority (PRC)

Government not yet able to decentralize the procurement function due to capacity deficiencies

MEF awarded contract to Independent Procurement Authority (IPA) to carryout World Bank-financed procurements on behalf of the Government.

At some point in the near future, the ministries will be required to assume these IPA duties (approx 200 procurements/year)

PFM Reform Program: PFM Reform Program: Roadmap of Procurement Roadmap of Procurement Assistance to Royal Government Assistance to Royal Government of Cambodiaof CambodiaFocused on 3 rural development

ministries

Training and capacity building in all procurement related matters under ◦the deconcentrated procurement sub

decrees for procurement under national budget and

◦within the scope of SOPs and PM

On-the-Job (OTJ) TrainingMentoringCoachingNational and International

Procurement Specialists will work with the 3 ministries

Specific objectives on the following slides

Strengthen capacity in procurement planning and monitoring and assisting in preparing the Annual Procurement Plan and the Project Procurement Plan;

Strengthen capacity to monitor and evaluate the performance of the public procurement system;

Clarify lines of accountability within the procurement process, including effective oversight guidelines and identify key internal controls in budget execution

Strengthen the capability to monitor and evaluate procurement progress and conformance procedures and in preparing regular procurement reports to MEF and other agencies;

Update databases on procurement status and use procurement website to post information on procurement processes and contract awards; and

Establish good practices to ensure efficient functioning of the PRCs.

Implementation Structure

Funding AgencyADB

Executing AgencyMinistry of Economy &

Finance

MRD MAFF MOWRAM

Department of Investment & Cooperation

PFM Committee

PFM Reform Secretariat

Economic & Finance Institute

ManilaBank Headquarters

Cambodian Resident Mission

PFM Working Group

PFM Working Group

PFM Working Group

CONSULTANTS

SUB- WORKING GROUPS PFM

Public Procurement ManagementPublic Procurement Management Public Financial Management for Public Financial Management for Rural Development Program Rural Development Program (PFMRP) (PFMRP)

Donor-Assisted ProcurementsDonor-Assisted ProcurementsCarried Out UnderCarried Out Under

SOP/PM ProceduresSOP/PM Procedures

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The Procurement ManualThe Procurement Manual

Policies and procedures for the procurement of goods, works, and consulting services

For Externally Financed Projects / Programs in Cambodia

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Project CycleProject Cycle

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Evaluation 61

Identification

2Preparation

3 Appraisal

4 Loan/Grant Negotiation & Board Approval

5Implementation

PFMRP Procurement PlanPFMRP Procurement Plan

The Procurement plan specifies the following procurement methods

1. International Competitive Bidding (ICB)2. National Competitive Bidding (NCB)3. National and International Shopping (NSH

& IS)4. Selection based on Consultants

Qualifications (CQS)

The training material for the PFMRD project will focus on the above procurement methods

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Economy and EfficiencyEconomy and EfficiencySuitability of the

goods/equipment/services purchased.The useful life.Operating, maintenance and servicing

costs.Availability of after sales service The delivery period.Onward transportation costs.Storage costs.The time taken to procure the goods

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EquityEquityEligible suppliers provided equal

opportunitiesEnsure equitable grounds for

competition A fair basis on which to compete

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Ethical StandardsEthical StandardsCode of Business Ethics

◦No individual shall use his authority or office for personal gain

◦An individual shall seek to maintain and enhance the reputation of the Government

◦Conflict of interests & personal relationships

◦Confidentiality and accuracy of information ◦All shall be treated with fairness and

impartiality ◦No business gifts will be accepted ◦A moral and ethical responsibility to

report any unethical conduct

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Fraud and CorruptionFraud and Corruption“corrupt practice” “fraudulent practice” “collusive practices” “coercive practice”The ADB will cancel the portion of the

Grant/Loan allocated to the contract Declare a consultant or firm ineligible Permit the Government and the WB to

inspect accounts and records

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Conflicts of InterestConflicts of InterestDeclare any potential conflicts of

interest Bidders and consultants with

potential conflict of interest are not eligible

Firms hired for project design, and implementation are not eligible to provide goods, works or services

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Transparency in the Procurement Transparency in the Procurement ProcessProcess

The general procurement notice Specific procurement notices UN Development Business on

line Development Gateway’s dg

Market News Paper of national

circulation (The above requirements are mandatory for

all ICB contracts)56

Procurement Roles and Procurement Roles and ResponsibilitiesResponsibilitiesManual on Standard Operating

Procedures for Foreign Assisted Projects MEF will undertake an oversight roleMEF representative on the Procurement

CommitteeFor EAs as provided in the

project/grant agreement Financial limits at which decisions can

be determined at the start of each project

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Project Management Units Project Management Units A Project Management Unit

(PMU) with the delegated authority to implement the project

The PMU acts as the focal point for project implementation

It undertakes all of the core procurement activities required for the project

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Procurement Responsibilities Procurement Responsibilities

Project Director◦Approves and signs contracts, invoices

and important procurement documents ◦A member of the procurement

committee◦Overall responsibility for ensuring that

the ADB and the Government’s Procurement Guidelines are followed

◦Ensures that all mandatory reports are issued on time

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Procurement Responsibilities/ …Procurement Responsibilities/ …Cont.Cont.Project Manager

◦ Approves and signs contracts, invoices and procurement documents below an agreed threshold

◦ A member of procurement committee◦ The primary contact for all formal

communications relating to procurement

◦ Ensures that all procurement monitoring and reporting is undertaken in a timely and efficient manner

◦ Leads all negotiations ◦ Chairs and supervises all bid openings

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Procurement Responsibilities/ …Procurement Responsibilities/ …ContContSenior Administrative Officer

◦ Assists the Procurement Officer to draft the overall project procurement plan

◦ Assists the Procurement Officer in the monthly updating of the overall project procurement plan

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Procurement Responsibilities/ …Procurement Responsibilities/ …ContContChief Financial Officer 

◦ Supervises the management of all financial transactions and payments

◦ As a member of the procurement committee, undertakes financial pre or post qualification review

◦ Attends bid openings, verifies and records the bid securities that may be required

◦ Receives and arranges for the safe keeping of all bid securities

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Procurement Responsibilities/ …Procurement Responsibilities/ …Cont.Cont.Technical Officer 

◦ Drafting, or supervising the drafting of, all specifications, scopes of work and terms of reference

◦ Assisting the Procurement Officer in selecting the appropriate evaluative criteria, special conditions of contract and contractual performance indicators

◦ Manage and administer the implementation of contracts

◦ Monitors and evaluates progress and performance of technical staff, consultants, and contractors

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Procurement Responsibilities/ …Procurement Responsibilities/ …ContContProcurement Officer

◦ Drafting and updating the project’s general procurement notice (GPN)

◦ Quantify the goods works and services required ◦ Group the goods works and services required into

packages ◦ Preparing the overall project procurement plan ◦ Update the overall project procurement plan each

month ◦ Drafting specific bidding documents ◦ Prepare and issue through the Project Manager

Specific Procurement notices◦ Submit the documents through the Project

Manager to the WB

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Procurement Procurement Responsibilities/..Cont.Responsibilities/..Cont.Procurement Officer◦ Distribute copies of the Invitation for Bids to all

relevant firms ◦ Distribute the bidding documents ◦ Respond to all clarification requests received ◦ Ensure that the venue for bid opening is adequate

and that logistical arrangements are in place◦ Receive all bids and proposals ensuring their

secure storage ◦ Undertake the public opening of bids ◦ Review and pass all bid securities to the Financial

Officer at bid opening◦ Undertake preliminary evaluation of all bids and

proposals ◦ Facilitate the technical evaluation of all bids and

proposals received65

Procurement Responsibilities/ …Procurement Responsibilities/ …ContContProcurement Officer◦Seek clarifications to bids and proposals as

required to complete the evaluation ◦Draft the Bid Evaluation Report for review ◦Respond to queries raised on the evaluation

report from oversight agencies or the ADB◦Prepare draft contracts◦Ensure that the relevant oversight agencies

are provided with copies of contacts◦ Issue the notification of award◦Draft the documentary requirement for any

letter of credit ◦Monitor suppliers/contractors/consultants

performance against the contract 66

Procurement Responsibilities/ …Procurement Responsibilities/ …ContContProcurement Officer

◦Review all payment requests received ◦Ensure that either the performance

security or retention monies are in place to adequately protect the Government

◦Ensure that all performance securities and retention monies are returned to the supplier or contractor upon the satisfactory completion of their contractual obligations

◦Act as The Secretary to the Procurement Committee

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The Procurement The Procurement CommitteeCommitteeReview the scope of each

procurement package prior to commencement

Review all Bidding Documents (BD) and Requests for Proposals (RFP)

Attend and supervise the public opening of bids and proposals

Review evaluation and approve evaluation reports for goods and works

Individually and independently undertake the evaluation of proposals

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Procurement Committee Procurement Committee Formation and ThresholdsFormation and Thresholds

Committee on minor procurement◦ review and approve all goods up to the

value of US$ 25,000 ◦ review and approve all works contracts up

to to the value of US$ 50,000◦ Review and approve all service contracts up

to the value of US$ 5,000.Chaired by the Project Manager and

include the Project Technical Officer and a representative of MEF

69

Procurement Committee Procurement Committee Formation and ThresholdsFormation and ThresholdsGeneral committee on procurement

◦ Review and approve all goods ranging in value: US$ 25,000 - 500,000

◦ Review and approve all works contracts to the value: US$ 50,000 - 3,000,000

◦ Review and approve all service contracts from US$ 5,000 - 500,000

◦ Individually and independently undertake the evaluation of all contract proposals

70

Procurement Committee Procurement Committee Formation and ThresholdsFormation and ThresholdsGeneral Committee on Procurement

◦Chaired by the Project Director. The members will be the Project Manager, one representative from the EA (and not a member of the PMU) and one or two representatives from MEF at the discretion of MEF.

◦In the event that MEF only designates one representative for a particular meeting the Project Financial Officer will be invited to become a Committee member for that meeting.

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Procurement Committee Procurement Committee Formation and ThresholdsFormation and ThresholdsMajor Committee on Procurement

◦ review and approve all goods above the threshold value : US$ 500,000

◦ review and approve all works above the threshold value : US$ 3,000,000

◦ Review and approve services above $500,000

◦ Individually and independently undertake the evaluation of all contract proposals above the threshold value

72

Procurement Committee Procurement Committee Formation and ThresholdsFormation and ThresholdsMajor Committee on Procurement

◦Chaired by the Head of the EA or a duly authorized representative

◦Project Director ◦One representative appointed by the

head of the EA ◦Two representatives from the MEF

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Procurement Committee Procurement Committee Formation and ThresholdsFormation and ThresholdsThe Project Director or MEF may

invite any number of observers to the meetings of each Procurement Committee meeting

In the event that authority or approval is required by a Committee member from his/her parent organization, the Chair of the Committee will set a deadline for obtaining such approval

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Methods of Procurement Methods of Procurement The Procurement of GoodsThe Procurement of Civil WorksThe Procurement of Consulting

Services

75

Methods of Procurement, Methods of Procurement, GoodsGoods

International Competitive Bidding (ICB)

Limited International Bidding (LIB)

National Competitive Bidding (NCB)

Shopping (NS or IS - either national or international)

Direct Contracting (DC)

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Methods of Procurement, Methods of Procurement, GoodsGoodsInternational Competitive Bidding (ICB)

◦In most cases the preferred method;◦Must adopt the ADB’s standard documents; ◦Used when the value is above US$100,000;◦Provides a wide range of choices from

competing suppliers; ◦Provides the suppliers (or potential suppliers)

adequate, fair and equal opportunity; ◦Advertised both nationally and internationally

77

Methods of Procurement, Methods of Procurement, GoodsGoods

Limited International Bidding◦ Identical to ICB, the same standard

document of the World Bank is used but no advertising

◦ The goods or equipment is highly specialized and there are only a limited number of suppliers

◦ The items are proprietary ◦ For an urgent repeat order

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Methods of Procurement, Methods of Procurement, GoodsGoodsNational Competitive Bidding

◦Value is below US$100,000 or as stated in the Loan/Grant Agreement

◦Advertised nationally ◦All suppliers both foreign and national are

eligible to bid ◦No domestic preference is applicable ◦Standard National Competitive Bidding

document issued by MEF◦Use of this document for NCB is mandatory

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Methods of Procurement, Methods of Procurement, GoodsGoodsShopping (International and

National) ◦For values below US$ 20,000◦Compares the priced quotations ◦Above US$5,000 will be advertised ◦Quotations are sealed and opened in

public◦Used for off the shelf items, when

standardization is important and exceptional circumstances as approved by MEF/ADB

◦Uses standard bidding documents issued by MEF

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Methods of Procurement, Methods of Procurement, GoodsGoods

Direct Contracting (DC)◦Should be used as little as possible ◦No competition◦For procurement of less than $500◦The contract is negotiated ◦May be used in exceptional cases

with the prior approval of MEF/WB

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Methods of Procurement, Methods of Procurement, WorksWorksInternational Competitive Bidding (ICB)

◦In most cases the most appropriate method ◦Used when the value is above US$300,000◦Must use the WB’s standard bidding

documents◦Provides a wide range of choices from

competing contractors ◦Provides the contractors adequate, fair and

equal opportunity ◦Advertised both nationally and internationally ◦Open to all who purchase the bidding

document

82

Methods of Procurement, Methods of Procurement, WorksWorks

Limited International Bidding◦Identical to ICB, the same standard

document of the ADB is used but no advertising

◦The works are highly specialized and there are only a limited number of contractors

◦The works are proprietary ◦For an urgent repeat order

83

Methods of Procurement, Methods of Procurement, WorksWorksNational Competitive Bidding

◦Value is below US$300,000◦Advertised nationally ◦All contractors both foreign and national

are eligible to bid ◦No domestic preference is applicable ◦Standard National Competitive Bidding

document ◦Use of this document for NCB is mandatory

84

Methods of Procurement, Methods of Procurement, WorksWorksShopping (International and

National) ◦For values below US$ 20,000◦Compares the priced quotations ◦Above US$5,000 it will be advertised ◦Quotations are sealed and opened in

public◦Used for off the shelf items, when

standardization is important and exceptional circumstances as approved by MEF/ADB

◦Uses standard documents issued by MEF

85

Methods of Procurement, Methods of Procurement, WorksWorks

Direct Contracting (DC)◦Should be used as little as possible ◦No competition◦Only when specifically allowed under

the projects Loan/Grant agreement◦May be used in exceptional cases

with the prior approval of MEF/ADB

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Methods of Procurement, Methods of Procurement, WorksWorksForce Account

◦ Government’s own workforce, equipment and resources are used

◦ The quantities of works can be defined in advance

◦ Works are small and at scattered locations

◦ There is a natural disaster or similar emergency needing immediate attention

◦ Has the endorsement of the MEF/ADB

87

Methods of Procurement, Methods of Procurement, ServicesServices

All service procurement with the exception of single source must be advertised nationally. Service procurements above $100,000 must be advertised internationally

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Thank You!