Public procurement process needs complete overhaul | Sunday Observer

Public procurement process needs complete overhaul

P. Algama and Nihal  Wickremasuriya
P. Algama and Nihal Wickremasuriya

Public procurement in Sri Lanka needs a complete overhaul primarily with the transition from the manual administration of procurement to electronic procurement (e-procurement) to create an efficient and accountable public procurement service in the country.

Public procurement experts who have been advocating transition from manual to e-procurement said the transition is long overdue. However, the change will bring about transparency, accountability, and better use of public funds for infrastructure development in the country.

The lobby for a revision in the public procurement guidelines have received a deaf ear from policymakers who are hell bent on making a fast buck by encouraging unsolicited proposals for bids. Experts said the delay in implementing changes to the public procurement system has resulted in the colossal waste of public funds which could have been used to provide sound infrastructure facilities to the public.

The need to improve public sector governance has bee a pressing need to achieve long term economic goals. Improvement in the public procurement system has been greater since the end of the conflict that boosted the need for rapid infrastructure development in the country. However, manual administration of procurement time consuming and costly exercise which leads to lack of transparency and irregularities. Verite Reaserch in a report to be launched soon on public procurement has underscored the need to bring about the transition from manual to e-procurement to ensure better use of public funds to provide a high quality service to the public. Its research highlights shortcomings that hinders sound n public procurement in the country.

Difficulty in accessing information related to procurement, such as tender opportunities and contract awards, high transaction costs of bidding on businesses and government agencies, including costs associated with preparing and submitting bids, manual administration of procurement which is time-consuming and labour intensive and anti-competitive practices in the procurement market that lead to corruption such as accepting unsolicited proposals for projects.

Public procurement is a key instrument through which governments deliver important social and economic goods to citizens. Public goods range from large scale infrastructure development to consumables, such as fertilisers and pharmaceuticals. Verite Research reveals independent oversight over procurement is weak and that and suppliers possess limited means to challenge unfair or corrupt practices. It notes that the absence of strong institutional safeguards against such practices, public procurement has offered fertile grounds for corruption. A spokesman for Verite Research said strengthening public procurement in Sri Lanka requires enhancing its efficiency, cost-effectiveness and competitiveness. “In this regard e-government procurement (E-GP)could be considered a viable solution,” he said .

E-GP refers to the application of electronic systems to the public procurement process. It could be designed to handle all aspects of the procurement process such as publication of tenders, transfer of bid documents, bid submission, bid evaluation, and contract awards. Advanced E-GP systems can undertake online evaluation of bids and e-payments.

Department of Public Finance Director General P. Algama said it is high time that the country implements an e-procurement system that would enhance transparency, competitiveness, save time, cost and minimize irregularities in the bidding process for mega development projects. “The Public Finance Department with the support of USAID has completed the e-procurement guideline readiness assessment report and the next step is to have an IT system operated on a pilot basis with key ministries,” Algama said. He said there has to be a detailed guideline on e-procurement and added that a Cabinet paper has been prepared to seek approval for the implementation of the e-procurement system by the National Procurement Commission (NPC).

The NPC was set along with other independent commissions towards the end of 2015. Members of the Commission were nominated by the Constitutional Council and appointed by the president under the 19th Amendment to the Constitution for period of three years However, the Commission has not been able to carry out its task expeditiously due to the dearth of expertise in public procurement. As a result it has been n slow to initiate action to revise the Government Procurement Guidelines - 2006 and bring about the transition from manual to e- procurement. NPC Chairman Nihal Wickremasuriya said the Commission has sought the assistance of the Asian Development Bank (ADB) which has deployed a consultant to access the situation and provide a way forward for implementation of e-procurement.

“We expect the report by mid this year. However the process of change will take time as public institutions ready for the transition. We need to start from scratch with experts in the IT field and employees who are computer savvy,” Wickramasuriya said. Many countries are head of Sri Lanka in implementing e-procurement. Bangladesh and India conduct electronic public procurements. ‘Various countries practice e-procurement according to its preparedness. The public sector unlike the private sector is not ready for the new technology,” Wickramasuriya said. He said the Commission is unable to carry out its daily activities due to the lack of expertise who cannot be attracted for paltry salaries. “We cannot give a timeline for the first phase of implementation of the e-procurement program in the country until the preliminary requirements are addressed,” Wickramasuriya said. The 2006 Guidelines are aimed at enhancing transparency in the government procurement process to minimize delays and to secure the best services and supplies for the country.

Part two of the1998 guidelines is on public-private partnerships arrangements for infrastructure development such as roads, airports and hospitals.

“The Public Finance Department commenced revising the 2006 Guideline in 2014 and consultations are continuing. The Department is also working with the World Bank and USAID to revise the 1998 Part two Guidelines. We hope to complete the consultations within two months,” Algama said.

He said the fundamental principles such as accountability, transparency, equal treatment of bidders are aimed at achieving value for money which does not mean the lowest price for goods and services . Value for money must ensure quality and durability. “E-procurement will help minimize manipulation of bids due to less involvement of people and thereby reduce cost, time and enhance competitiveness and transparency,” Algama said.

E- procurement enables cost-savings for government agencies and suppliers, enhances competitiveness by with more opportunities for participation in tenders and reduces opportunities for discretionary actions.