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History of the Public Procurement Act

PUBLIC PROCUREMENT BILL

MEMORANDUM

Government embarked upon an exercise to reform the Public Procurement System in 1996 as an integral part of a wider Public Financial Management Reform Programme (PUFMARP).The exercise was to improve the overall public financial management in the country.

The reform exercise identified shortcoming and organizational weaknesses inherent in the country’s procurement system. These include the absence of a comprehensive public procurement policy and the lack of a comprehensive legal regime to safeguard the integrity of the public procurement system. Others are the absence of a central body with the requisite capability, technical expertise and competence to develop a coherent public procurement policy.

Rules and regulations are required to guide, direct, train as well as adequately monitor public procurement. Furthermore, the absence of clearly defined roles and responsibilities of individual procurement entities is a problem. There is no independent appeals process with power to address complaints from aggrieved bidders and provide corrective remedies. The lack of a clearly defined authority to allow procurement entities to undertake the procurement of goods, works and services with funds appropriated to them weakened the system and also needs to be addressed.

The absence of authority to dispose of public assets and the fact that there is no procurement auditing function by independent government officials or their appointed agents to ensure efficient accountability is also an omission in the present set up.

In order to eliminate the various shortcomings and organizational weaknesses in the public procurement process, it is considered desirable to enact a comprehensive procurement law. This is to be supported with standard tender documents. Appropriate administrative and institutional arrangements are to be made with an oversight body to superintend the public procurement system.

The new structure will promote the use public procurement as a tool for national development. It will harmonise the application of procurement related rules with International conventions and treaties. It is expected to foster competition, efficiency, transparency and accountability in the public procurement process. There will be equal access for any citizen to participate in the public procurement process.

This bill provides for a comprehensive public procurement system and establishes the Public Procurement Board. The Bill takes into account the country’s decentralization policy and local industry development and is divided into nine Parts.

Part 1 of the Bill establishes the Public Procurement Board. The Board is the central body for policy formulation on procurement with oversight responsibility for the process. The composition of the Board is eleven (clause 4) with a Chairperson nominated by the President. The private sector is represented on the Board by four persons, including a woman, who have experience in procurement. The Vice-Chairperson is elected from among these four persons. Included in the functions of the Board (clause 3) is the publication of a monthly Procurement Bulletin. Training is an important function of the Board. The Board also has investigative powers among others. A Chief Executive heads the Secretariat (clause 9).

Part 11 of the Bill is on procurement structures and provides for the administrative and institutional arrangements for procurement. The Bill applies to the procurement of goods, works and services financed in whole or in part from public funds unless Cabinet decides otherwise (clause 14). The responsibilities of a procurement entity are stated in clause 15. Each entity is to have a tender committee (clause 17) to ensure compliance with the Act. Tender Review Boards have been established in clause 19 to provide concurrent approvals for recommendations for contract award made by tender committees.

Part 111 deals with procurement rules. The qualifications of tenderers have been spelt out in detail in clause 21. The pre-qualification proceedings are stated in clause 22. Other matters relate to participation by suppliers, contractors and consultants and the record of procurement proceedings in clauses 24 and 27. A procurement entity may reject a tender, proposal or quotation at any time prior to acceptance on economic grounds (clause 28)

Part 1V of the Bill is on methods of procurement. This may be by competitive tendering clause 34, by two stage tendering, restrictive tendering or single source tendering clause 35-40, procedures for each type are stipulated. A procurement entity may also request for quotations (clause 41)

Part V is on tendering procedures. It is divided into three Sub- Parts on the invitation of tenders and applications to prequalify, the submission of tenders and the evaluation and comparison of tenders. Provision is made for national competitive tendering and international competitive tendering (43 and 44). A procurement entity may grant of preference in clause 59.


Part V1 deals with the methods and procedures to procure consultants. A notice of invitation of interest is to be prepared and candidates shortlisted. Direct invitation for economic and efficiency reasons is permitted in certain circumstances with the approval of the Board (clause 65). The criteria for the evaluation of proposals is spelt in clause 68. The evaluation of proposals is to be carried out in two stages; first the quality and then the cost (clause 73).
Selection procedure depends on whether price is or is not a factor (clauses 74 and 75). Under clause 76 confidentiality is to be respected.

Part VII is on review. Clause 77 establishes the right to review which any supplier, contractor, or consultant has. There are however some exclusions to the right. In the first instance complaints are to be submitted to the head of procurement entity (clause 78). Administrative review by the Board follows in certain circumstances (clause79)

Part VIII is on the disposal of stores and equipment. A Board of Survey is to be convened by the head of an entity in clause 82.This Board of Survey will make recommendations about the best method of disposing of obsolete or surplus stores, plant and equipment. The disposal may be by transfer, sale by public tender, sale by public auction or destruction.

The miscellaneous Part 1X contains provisions on code of conduct, investigation by the Board, statutory audits, offences and the review of threshold levels amongst others.

Finally, the Bill revokes the District Tender Board Regulations,1995 (L.I.1606) and repeals the Ghana National Procurement Agency Decree 1976 (SMCD 55) and the Ghana Supply Commission Law, 1990 (PNDCL 245)both of which are now spent.

HON. YAW OSAFO-MAAFO MP
MINISTER FOR FINANCE

Date: 19 TH FEBRUARY ,2003

 

 

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