Beruflich Dokumente
Kultur Dokumente
Certificate Program
in Public Procurement
(CPPP)
i
Certificate Program in Public Procurement (CPPP)
This courseware is the supplementary self-study material developed for the Certificate
Program in Public Procurement to be delivered as a MOOC (Massive Open Online Course) at
www.procurementlearning.org. The South Asia Regional Procurement Services of the World
Bank has developed this course with consultants support and through extensive
consultations with academic and management training institutes in India. For the purpose,
these institutes have also formed a Charter for Public Procurement Studies (CPSS) to
promote professionalisation during public procurement in India.
This courseware has been drawn from the detailed course content for the Professional
Diploma in Public Procurement (PDPP) to be delivered by CPSS member institutions, with
support from the World Bank. Its contents may not be used or disclosed without World
Banks authorisation.
ii
Certificate Program in Public Procurement (CPPP)
Philippe Le Hourou
Onno Ruhl
Sector Director
Idah Z. Pswarayi-Riddihough
Sector Manager
Felipe Goya
Task Supervision
Abduljabbar Al-Qathab
Task Team
Girish Bhatnagar
N.K. Mohan Das
Binu Malhotra
Latha Sridhar
Ashwini Bharat
Dr. Raj Agarwal, Prof. Raj Kr. Singh All India Management Association (AIMA),
New Delhi.
Dr. N. N. Sarma
Mr. C. Subbakrishna,
Mr. P P Sengupta
Dr. S. Chaturvedi
Symbiosis
Pune.
Centre
for
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Certificate Program in Public Procurement (CPPP)
Distance
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Certificate Program in Public Procurement (CPPP)
Foreword
World over, public procurement is now recognised as a strategic tool for achieving
development and meeting the social and environmental objectives of Governments, rather
than using it as a tool for compliance of rules and regulations. Significant reforms in
procurement regulations, institutions and systems are being witnessed in many countries,
including the South Asia region. These public procurement reforms are long-term initiatives
and need the involvement of policy makers, judiciary and the civil society. Equally important
are initiatives that focus on building capacities of officials involved in procurement
management. These initiatives need to be addressed in a relatively shorter time with higher
efficiencies and skill up-gradation of the staff involved. Making affordable and quality
learning opportunities for procurement practitioners as well as students who want to pursue a
career in public procurement is a challenge. Particularly so in the South Asia region, where it
is estimated that about 10 million public servants are engaged in public procurement in some
form or the other, as part of their official responsibilities.
In this context and given World Banks own commitment to enhanced use of country
systems and e-procurement, World Banks strategy for capacity building in public procurement
is towards moving for larger systemic efforts. This is to ensure wider availability of
institutionalised learning options for aspiring candidates.
The objective of World Banks procurement capacity building initiatives in the South
Asia region is to support the development of mass scale and affordable e-learning and
blended courses suited to the country systems in the region, in partnership with leading
academic and management training institutions in the region. As the first initiative, World
Bank is supporting the development of a Professional Diploma in Public Procurement (PDPP)
through the Charter for Public Procurement Studies (CPPS) formed by 10 leading
academic and management training institutions in India. CPPS, through its institution
members across the country, will admit, manage, conduct examinations and issue certificates
to candidates registering for the diploma program.
This Certificate Program in Public Procurement (CPPP) is a free precursor of the main
PDPP. CPPP is being offered directly by the World Bank to all aspiring learners in the South
Asia region. It has been a joint effort of the partner institutions, consultants and the World
Bank Task Team. I thank them all for their contributions and efforts.
On behalf of the World Bank, I invite you to take the course at
www.procurementlearning.org. World Bank believes that this is a momentous beginning of a
Capacity Building Program in the South Asia Region. It has the potential to reach a wider
target audience across the world in a cascading expansion.
(Felipe Goya)
Regional Procurement Manager South Asia
The World Bank
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Certificate Program in Public Procurement (CPPP)
Introduction
This Certificate Program in Public Procurement (CPPP) is targeting in-service public
procurement practitioners and aspiring students who want to pursue a career in public
procurement management in the South Asia region. It is the outcome of a two-year-long
research and development effort undertaken by the South Asia Procurement Services of
the World Bank in association with premier academic and management training institutions in
the region. CPPP is integral to a larger Professional Diploma in Public Procurement (PDPP)
and is to be delivered by partner institutions in India and other countries in the region.
The delivery will be through a unique blended learning mode of distance learning, e-learning
and face-to-face training. PDPP is an advanced diploma program to be launched from
1st July 2014 and confirms to international standards.
CPPP content is drawn from 3 modules of the PDPP. It has been is contextualised for a
universal audience and has many relevant examples for South Asian countries. Students
who pass the CPPP will carry credits for these three modules in the main PDPP, when they
join for the paid course through partner institutions. The three modules that have universal
relevance and appeal are (i) Introduction to Procurement and Public Procurement; (ii) Public
Procurement Operations and (iii) Governance Issues in Public Procurement. The objective of
this certificate program is to orient the learner towards the principles of public procurement,
management principles applicable to public procurement, essential operational aspects of
need assessment, procurement planning, bidding, evaluation, and selection and award
process. The certificate program also provides knowledge on governance issues as well as
information on the anti-corruption initiatives in public procurement.
We do hope the CPPP and PDPP will achieve their objectives of developing competencies
in existing and evolving public procurement practices; bringing in attitudinal changes in the
learner towards achieving prudence, transparency, fairness and equality; inculcating ethical
standards and developing more professionalism; and highlighting Quality, Value for Money
and Green Issues while undertaking procurement with public funds.
The program development process has been personally enlightening for me. I hope
CPPP will achieve the expected learning outcomes for the candidates in that they will
understand the role and strategic importance of procurement, comprehend management
concepts and principles, and acquire skills in preparing bid documents, evaluating and
negotiating bids, awarding of contracts, experiencing international best practices in public
procurement, and understanding global markets.
I look forward to the effective use of these learning opportunities by in-service
professionals as well as students who are interested in development management.
Abduljabbar Al-Qathab
Lead Procurement Specialist and Head, India Procurement Team
World Bank, India
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Certificate Program in Public Procurement (CPPP)
Table of Contents
TO
PUBLIC PROCUREMENT
AND ITS
STRATEGIC ROLE
IN
1.1
1.2
1.3
1.4
1.5
1.6
1.7
How is Procurement in Public Sector Different from that in Private Sector? ..... 5
1.8
1.9
UNIT 2
AND
TECHNIQUES RELATING
TO
RIGHT TIME
AND
PLACE
AND
RIGHT QUANTITY .. 12
AND
TECHNIQUES RELATING
TO
ix
Certificate Program in Public Procurement (CPPP)
UNIT 2
Introduction ......................................................................................... 28
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
OF
BIDS ............................................................................................. 34
OF
CONTRACT ............................................................................................. 39
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Certificate Program in Public Procurement (CPPP)
UNIT 3
3.2
3.3
3.4
3.5
3.6
3.7
3.8
Values to Ethics and Laws From Beliefs to Behaviour and Punishment ........ 54
1.2
1.3
UNIT 2
Corruption ............................................................................................ 62
2.2
2.3
2.3.2
2.3.3
2.3.4
2.3.5
2.3.6
2.3.7
Control/Enforcement ................................................................... 65
2.3.8
xi
Certificate Program in Public Procurement (CPPP)
2.4
2.5
e-Governance ............................................................................. 69
2.5.2
e-Procurement ............................................................................ 69
2.5.3
e-Payment.................................................................................. 70
xii
Certificate Program in Public Procurement (CPPP)
MODULE 1
Introduction to
Procurement and
Public Procurement
1
Introduction to Procurement and Public Procurement
Unit 1
LEARNING OUTCOMES
AFTER STUDYING THIS UNIT, YOU WILL BE ABLE TO:
Define procurement and describe its scope, role and
strategic importance to an organisation
Define public procurement and describe its scope, role
and strategic importance to the government and society
Describe the 5 basic aims of procurement called 5 Rs of
procurement
Describe the seven principles that differentiate public
procurement from private sector procurement
Describe the resultant limitations faced by public
procurement
1.1
consultancy
and
non-consultancy
services;
outsourced business processes; transportation,
logistics and so on. They also include intangibles
like intellectual property, artwork, technology
transfer and goodwill, among others.
Role of Procurement in
Organisational
Objectives
2
Certificate Program in Public Procurement (CPPP)
1.2
Strategic Importance of
Procurement in the
Organisation
1.3
1.4
Role of Public
Procurement in an
Organisation
Strategic Importance of
Public Procurement for
the Government and
Society
Defining Public
Procurement
Public procurement refers to
procurement of external
resources needed by the
central or state governments
as well as entities under
their control.
http://www.cuts-citee.org
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2011/03/28/000333037_20110328002252/
Rendered/PDF/584440ESW0Whit1oFinal0Bhutan0Report.pdf
http://www.lcgbangladesh.org/aidgov/2003-WB-Country%20Procurement%20Assessment%20Report.pdf
3
Introduction to Procurement and Public Procurement
1.5
Public Procurement as
an Integral Part of Public
Financial Management
System
4
Certificate Program in Public Procurement (CPPP)
1.6
Basic Aims of
Procurement the 5 Rs
of Procurement
i) Right Quality
Procurement aims at the required quality
for the purpose, available in the market,
rather than the best quality, since that may
have adverse cost, technical, maintenance
and operational implications. Therefore,
procurement tries to get just the right
quality that will suit the needs no more
and no less.
1.7
How is Procurement in
Public Sector Different
from that in Private
Sector?
5
Introduction to Procurement and Public Procurement
v)
ii) Responsiveness
Principle:
Public
procurement is obliged to be responsive to
the aspirations of its many stakeholders.
For example, the stakeholders are citizens,
taxpayers, electorate, elected officials,
management, procurement officers and so
on. They may have different objectives,
which may well be conflicting.
6
Certificate Program in Public Procurement (CPPP)
Remember!
A framework of rules and
regulations, under which
Public Procurement has to
function, becomes the
determining characteristic of
public procurement.
1.9
Limitations in Public
Procurement
1.8
7
Introduction to Procurement and Public Procurement
REVIEW OF KEYWORDS
CONCEPTS
Because
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
1.
2.
3.
4.
5.
6.
7.
8.
9.
AND
Economical,
efficient
and
quicker
procurement can strategically help an
organisation in the pursuit of its objectives
8
Certificate Program in Public Procurement (CPPP)
Unit 2
LEARNING OUTCOMES
AFTER STUDYING THIS UNIT, YOU WILL BE ABLE TO:
Imbibe the essence of management concepts and techniques
related to Right Price in Procurement like Value for Money
(VfM), Value Analysis
Imbibe the essence of Just-In-Time (JIT) that is related to
Right Time and Place and Right Quantity in Procurement
Imbibe the essence of management concepts and techniques
related to Right Quality in Procurement like Total Quality
Management (TQM), Quality Circles, Six Sigma and so on
Acquaint yourself with the essence of Game Theory that is
related to Right Source in Procurement
Management
Concepts and
Techniques Relating
to Right Price
2.1
9
Introduction to Procurement and Public Procurement
2.2
2.3
10
Certificate Program in Public Procurement (CPPP)
Remember!
2.4
Potential
suppliers
performance history
and
experience
11
Introduction to Procurement and Public Procurement
Definition
Just-in-Time is defined as
an inventory control
philosophy, whose goal is
to maintain just enough
material in just the right
place at just the right time
to make just the right
amount of product.
Management
Concepts and
Techniques Relating
to Right Time and
Place and Right
Quantity
Just-In-Time (JIT)
2.5
12
Certificate Program in Public Procurement (CPPP)
Management
Concepts and
Techniques Relating
to Right Quality
2.6
Total Quality
Management (TQM)
Managing
supplier
quality:
Quality
concepts must extend to a companys
suppliers
Continuous improvement
Employee empowerment
Use of quality tools
Product design
Process management
Managing supplier quality
13
Introduction to Procurement and Public Procurement
Remember!
To achieve Six Sigma, a
process must not produce
more than 3.4 defects per
million opportunities for
non-conformance.
2.7
Six Sigma (6 )
A measure of the variations in a set of data from its mean. The more spread apart the data from the mean, the higher the
deviation. Standard deviation is calculated as the square root of such variances.
14
Certificate Program in Public Procurement (CPPP)
Management
Concepts and
Techniques Relating
to Right Source
Game Theory
2.8
Game Theory
Game Theory deals with any
problem in which each
players strategy depends on
what the other players do. An
optimal strategy is a sequence
of moves that results in the
best outcome.
Theories of Competition:
Game Theory
15
Introduction to Procurement and Public Procurement
16
Certificate Program in Public Procurement (CPPP)
REVIEW OF KEYWORDS
CONCEPTS
AND
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
Just-in-Time
is an inventory control
philosophy, whose goal is to maintain just
enough material in just the right place at
just the right time to make just the right
amount of product. The essence of JIT
purchasing is to purchase materials that are
just-in-time for consumption
1.
2.
3.
4.
5.
6.
7.
17
Introduction to Procurement and Public Procurement
8.
18
Certificate Program in Public Procurement (CPPP)
MODULE 4
Public Procurement
Operations
19
Public Procurement Operations
Unit 1
LEARNING OUTCOMES
AFTER STUDYING THIS UNIT, YOU WILL BE ABLE TO:
Describe the process of need assessment of requirement
Describe the various types of specifications
Describe the process of procurement planning
Describe the ABC categorisation of requirements
1.1
1.2
Introduction to
Procurement Operations
Planning for
Procurement
20
Certificate Program in Public Procurement (CPPP)
a) Need Assessment
b) Developing Specifications
v)
1.3
Need Assessment
1.4
ii)
Developing
Specifications
21
Public Procurement Operations
Attention!
Specifications for
procurement should be so
developed that
they provide a level-playing
field to all prospective
bidders.
ii)
Proprietary Specifications
ii)
and
Performance
Proprietary Specifications
Patents or Intellectual Property Rights to
some specifications are owned by only one
organisation (Proprietary Firm). These are
available only with the proprietary firm and
are protected by the intellectual property
rights. Hence, proprietary specifications are
22
Certificate Program in Public Procurement (CPPP)
Remember!
In public procurement, over
specifying, or specifying
something that will greatly
restrict competition, is a
common problem that often
attracts criticism.
External Technical
Standards
and
Performance
23
Public Procurement Operations
1.5
Developing Procurement
Plans
Points to Ponder
Advance procurement planning
is essential for evolving
appropriate procurement
strategies to achieve the larger
goals of procurement.
Procurement plans should also
have an interface with
budgetary allocations.
24
Certificate Program in Public Procurement (CPPP)
ii)
iii)
plan
at
Procurement objectives
ii)
25
Public Procurement Operations
C
Category
Items
inventory/
procurement will typically contain
items that are 50% of total items but
account for next 5% (96% - 100%) of
total value.
Normally buffer levels, permitted inventory
levels and types/modes of procurement are
decided based on such categorisation. A
one-time exercise may be done for common
items by procurement department and for
local items by the units concerned to
categorise items in such categories.
REVIEW OF KEYWORDS
CONCEPTS
AND
A
Category
Items
inventory/
procurement will typically contain
26
Certificate Program in Public Procurement (CPPP)
Specifications:
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
1.
followed
by
the
2.
3.
4.
International
Organisation
for
Standardisation (ISO): The International
Organisation for Standardisation, known as
ISO, is an international standard-setting
body composed of representatives from
various bodies of national standards
27
Public Procurement Operations
Unit 2
LEARNING OUTCOMES
AFTER STUDYING THIS UNIT, YOU WILL BE ABLE TO:
Describe and prepare bid documents
Describe the process of receiving and opening of bids
Describe the process of bid evaluation
Describe the process of negotiations
Describe the process of award of contract
Preparing Bid
Documents
2.2
2.1
Introduction
Standard Bidding
Documents (SBD)
are
Form
for
Performance
28
Certificate Program in Public Procurement (CPPP)
Mandatory!
Bid Documents should be
framed keeping in mind the
special requirements of the
procurement, taking care that
instructions/directives
contained in the Procurement
Policy are not violated and
approval of the Competitive
Authority is taken.
Instructions
Bid Validity
The minimum period for which the bid
should remain valid for acceptance is
specified in the bid documents. It could
be for example 90 days in case of single
bid tender system and 120 days in case of
two-bid system from the date of submission
of offer. A bid valid for shorter period
can be rejected, as being non-responsive.
In exceptional circumstances, the consent
of the bidder may be requested, in writing
for an extension to the period of bid
validity. The bid security provided should
also be suitably extended. A bidder
accepting the request and granting
extension should not be permitted to
modify his bid.
Qualification/Eligibility Criteria
Qualification or eligibility criteria should be
stipulated in the bid documents. The bidder
has to ensure that he provides convincing
proof of having fulfilled these criteria.
to
Agents of Supplier
One agent cannot represent two suppliers
or quote on their behalf in a particular
bid enquiry. One manufacturer can also
29
Public Procurement Operations
Remember!
2.3
Securities to be
Submitted by Bidders
Performance Security
To ensure due performance of the contract,
Performance
Security
(also
called
Performance Bank Guarantee PBG or
Security Deposit SD) should be obtained
from the successful bidder who has been
awarded the contract irrespective of its
registration status. Bank guarantee must be
verified from the issuing bank. Performance
security should be specified as a percentage
of the value of the contract (say 10%).
Performance security may be furnished in
specified form (as account payee demand
draft or bank guarantee from a scheduled
commercial bank in an acceptable form).
30
Certificate Program in Public Procurement (CPPP)
Publication, Receipt
and Opening of Bids
2.4
Publication of Bids
2.5
Clarification of Bidding
Documents
31
Public Procurement Operations
Important Info!
The purchaser, prior to the
date of submission of bids may
modify bid documents by
amendments.
However, these modifications
should be notified in writing
to all prospective bidders.
2.8
2.6
Amendment of Bidding
Documents
2.9
2.7
Pre-Bid Conference
Modification; Alteration
and Withdrawal of Bids
32
Certificate Program in Public Procurement (CPPP)
2.10
Procedures to be followed
during Bid Opening
Alterations/overwriting/use of whitener/
columns left unfilled in bids, if any, made by the
bidders, should be initialled with date and time
and numbered by the officials opening the bids to
make it clear that such alterations were present
on the bids at the time of opening. Wherever any
erasing or cutting is observed, the substituted
words should also be encircled and initialled with
date and time to make clear that such erasing/
striking of the original entry was present on the
bid at the time of opening.
Attention!
No bid is rejected by the Bid
Opening Committee at the bid
opening stage.
2.11
Late Bids
33
Public Procurement Operations
Evaluation of Bids
2.12
Introduction to Bid
Evaluation
2.13
Preliminary Examination
34
Certificate Program in Public Procurement (CPPP)
eligible
as
per
2.16
2.14
2.17
Minor Discrepancy/
Infirmity/Irregularity/
Non-Conformity
Evaluation of Bids in
Different Systems of
Bids
Two-Stage
Bidding:
Prequalification
Bidding (PQB) is the first stage of a two stage
bidding procedure for selection of competent
qualified bidders by using a Prequalification
Criterion (PQC), prior to the issue of the
Invitations to Tender to pre-qualified bidders
from first stage of bidding for the Procurement in
the second stage of bidding. Evaluation in PQB
stage should be strictly done as per the criteria
prescribed. In case relaxation is considered
necessary, re-tendering may be done. PQC
credentials and data called should be verified
(except in cases where the offer does not meet
the specified PQC criteria, as per credentials
submitted by the Bidder himself). Decision of the
PQB shall be conveyed to the successful as well as
unsuccessful bidders. Reasons for disqualification
of unsuccessful bidder(s) should also be
communicated to them. RFP is only issued to
qualified bidders.
2.15
Two-Stage Bidding
Clarification of Bids
Stage 1
Pre-Qualification
Bidding
35
Public Procurement Operations
Stage 2
Invitations to
Tender
2.18
Evaluation of Price
Aspects
Two-Bid
(Envelope)
System:
In
procurement of technically complex and critical
requirements, the bidders are asked to bifurcate
their quotations in two separately sealed parts
first part, called the Techno-Commercial Bid,
containing the relevant technical details of their
offer with reference to the specification and allied
technical details incorporated in the tender
enquiry documents indicating confirmation to
technical and commercial conditions and, in the
second part, called the Financial Bid, the price
quotation along with other allied issues.
36
Certificate Program in Public Procurement (CPPP)
2.19
Reasonableness of
Prices
i) Price evaluation
The following are the various methods
in which a price can be analysed for
Estimated Rate in the indent or for
Reasonableness of Rates in the Bid:
i)
ii)
37
Public Procurement Operations
Hard Facts
Selection of contractors by
negotiation should be an
exception, rather than a rule.
It may be resorted to only in
exceptional circumstances
like when:
Procurement is on
proprietary basis
There are only limited
sources of supply
There is a suspicion of
cartel formation
2.20
Negotiations
38
Certificate Program in Public Procurement (CPPP)
Award of Contract
2.22
2.23
Parallel Contracts
Award of Contract
2.21
Variation of Quantities at
the Time of Award
Recommendations for
Award of Contract
39
Public Procurement Operations
2.24
2.25
Signing of Agreement/
Issue of Supply Order
2.26
Performance Security
40
Certificate Program in Public Procurement (CPPP)
Two-Bid
2.27
(Envelope) System: In
procurement of technically complex
and critical requirements, bids are
called in two separately sealed
parts. The first part, called the
Techno-Commercial Bid, contains the
relevant technical details. The second
part, called the Financial Bid, includes
the price quotation along with
other allied issues. Techno-commercial
bids are evaluated first to short list
the technically qualified bidders.
Financial bids of only such short
listed bidders are opened and evaluated
Acknowledgement of
Contract by Successful
Bidder and Execution
2.28
Rejection of Bids
REVIEW OF KEYWORDS
CONCEPTS
AND
41
Public Procurement Operations
Successful Bidder
Acknowledgement
of Contract
Successful Bidder and Execution
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
1.
2.
EMD
v) Performance Security
3.
Distinguish
between
the
provisions
regarding the following in the SBD:
I.
IV.
V.
Pre-Bid Conference
Receipt and Custody of Bids
Bid Opening
Evaluation of Bids: This consists of the
Preliminary Examination
Clarification of Bids
Evaluation of Bids
5.
6.
Negotiations
Clarification of Bids
4.
following steps:
NIT
by
42
Certificate Program in Public Procurement (CPPP)
Unit 3
3.1
Organisation of Public
Procurement
Operations
43
Public Procurement Operations
3.2
Procurement Agencies
i) Requirements
department
of
more
than
one
Factoid
Centralised procurement of
common use items and services
across all Public Procurement
agencies leads to:
Improved procurement
outcomes
Better utilisation of
resources
Greater purchasing leverage
44
Certificate Program in Public Procurement (CPPP)
3.3
a.
b.
c.
Roles, Responsibilities
and Delegation of
Procurement Powers
45
Public Procurement Operations
3.4
Head/Executives
of
Procurement
Organisation in HQ or Field Unit
i)
Committees: Many
Committees Play a Key
Role in Procurement
Operations
i)
Remember!
Many committees play a
key role in Procurement
Operations.
Tender Committees
46
Certificate Program in Public Procurement (CPPP)
3.5
47
Public Procurement Operations
T i.e. Day-1
Indent Approval
T+ 1 week
T+ 2 week
T+ 4 week
Procurement Operation
3.6
B+2 weeks
B+6 weeks
B+8 weeks
B+ 9 weeks
TC Recommendations Preparation
B+10 week
B+12 week
B+13 week
Procurement Number
Mode/Method of Procurement
all
other
the
48
Certificate Program in Public Procurement (CPPP)
Attention!
3.7
Procurement Key
Performance Indices
(PKPI) and Management
Reporting
Besides
the
above,
the
purchase
organisation should maintain all the records of
issue, receipt, opening, evaluation of tenders,
award of contracts i.e. all pre-order and post-order
records in chronological order and the files
be kept in an identified place and should
be retrievable for scrutiny whenever needed
without wastage of time. The records of
complaint
handling,
correspondences
with
clients, consultants, banks and vendors, among
others, also should be kept separately and should
be retrievable.
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Public Procurement Operations
3.8
Information Technology
in Procurement
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Certificate Program in Public Procurement (CPPP)
of
e-procurement
REVIEW OF KEYWORDS
CONCEPTS
AND
include
Procurement
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Public Procurement Operations
3.
4.
5.
6.
7.
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
1.
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Certificate Program in Public Procurement (CPPP)
MODULE 6
Public Procurement
and Good
Governance
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Public Procurement and Good Governance
Unit 1
LEARNING OUTCOMES
AFTER STUDYING THIS UNIT, YOU WILL BE ABLE TO:
Describe the graded concepts from Values; Morals;
Integrity; Ethics; Codes and Laws
Describe the governance issues in Public Procurement
Describe the governance risks in the various stages of
procurement
1.1
constitute integrity. Ethics and Codes are wellfounded standards of right and wrong that
prescribe what individuals ought to do, usually in
terms of rights, obligations, benefits to society,
fairness, or specific values. Thus, integrity, ethics
and codes are values and morals in action.
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Certificate Program in Public Procurement (CPPP)
beliefs to behaviour
generality to specifics.
and
punishment,
and
1.2
Governance Issues in
Public Procurement
Remember!
Purchasing agencies, as well as
bidders, suppliers, contractors
and consultants involved in
public procurement contracts,
should observe the highest
standard of ethics, both during
procurement and execution of
the contracts.
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Public Procurement and Good Governance
1.3
Specifications
and
terms
of
reference are made to favour a special
supplier or contractor and not to
properly address the need identified;
Unknown specifications:
procurement
where
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Certificate Program in Public Procurement (CPPP)
In such
technical
Attention!
There are different risks
that public procurement
faces, which need to be
addressed to ensure good
governance.
Packaging
and
bundling
of
requirement is done to avoid open
competition or reduce competition
When
short-lists
are
used,
companies bribe to be included or to
gain access to them
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Public Procurement and Good Governance
Involvement
of
agents
in
international contracts: Purchases
should preferably be made directly
from the manufacturers. Either the
agent on behalf of the foreign
principal or the foreign principal
itself can directly bid in a tender,
but not both. Further, an agent
participating in a tender on behalf of
one manufacturer, should not be
allowed to quote on behalf of another
manufacturer along with the first
manufacturer in a subsequent/parallel
tender for the same item
Pre-qualification
criteria:
Prequalification bidding has potential of
getting misused or being applied
without considering the restrictive
nature of competition. Pre-qualification
criteria should be relevant to the
quality requirements and should
neither be very stringent nor very lax
to restrict/facilitate the entry of
bidders. These criteria should be
clear, unambiguous, exhaustive and
yet specific. In addition, there should
be fair competition
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Certificate Program in Public Procurement (CPPP)
Subcontractors
and
partners,
chosen in a non-transparent way, are
unaccountable or are used to
channellise bribes
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Public Procurement and Good Governance
Ethics:
v) Market
allocation:
Competitors
carve up the market and agree not
to give competitive bids for certain
customers or in certain geographic
areas.
REVIEW OF KEYWORDS
CONCEPTS
Fraudulent
Practice:
It
means
a
misrepresentation or omission of facts,
directly or indirectly, at any stage, in order
to influence a procurement process or the
execution of a contract
AND
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Certificate Program in Public Procurement (CPPP)
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
1.
2.
3.
4.
Governance
Anti-Competitive
Practices:
Anticompetitive practices like bid rigging,
collusion or formation of cartels when
bidders, who would otherwise be expected
to compete, secretly conspire to frustrate
the buyers attempts to get value-for-money
in a bidding process
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Public Procurement and Good Governance
Unit 2
LEARNING OUTCOMES
AFTER STUDYING THIS UNIT, YOU WILL BE ABLE TO:
Describe the important CVC Guidelines
Describe the various types of anti-competitive behaviours
and how to checkmate them
Describe how to leverage Information Technology as a
tool to reduce corruption
2.1
Corruption
2.2
Negative Impact of
Corruption on
Society
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Certificate Program in Public Procurement (CPPP)
2.3
Prevention of Corruption
2.3.1
2.3.2
Transparency Systems
In a Nutshell
Corruption discourages people
from working together for the
common good. Frustration and
general apathy, thereby, result
in a weak civil society.
Demanding and paying bribes
becomes the tradition.
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Public Procurement and Good Governance
2.3.4
2.3.5
make
2.3.3
interest
Grievance Redressal
Framework Against Arbitrary
Exercise of Powers by Public
Servants
disclosure/asset
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Certificate Program in Public Procurement (CPPP)
2.3.7
Remember!
2.3.6
Control/Enforcement
Corporate Ethical
Commitment Against
Corruption
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Public Procurement and Good Governance
Lanka)
Anti-Corruption
Commissions
have been created by enacting suitable
legislations to carry out investigations
and prosecutions in case of Corruption.
Such organisations are known as National
Accountability Bureau in Pakistan (created
under National Accountability Ordinance,
1999). In India and Afghanistan these are
called Central Vigilance Commission. These
agencies inquire or cause an inquiry or
investigation to be made either on a
reference made by the Government or on its
own volition. It reviews the progress of
penal actions or prosecutions ordered by it
after such investigations. Most of these
agencies also carry out preventive checks
and system audits. There is provision of
placement of an annual report of such anticorruption agencies in the Parliament. In
many countries, such agencies are hampered
in their fight against corruption, since they
do not have authority of police to arrest,
seize properties or enforce compliance
from non-government agencies. Such tasks
are normally carried out by special police
bureaus as Criminal Investigation Bureau
(CBI) in India.
e) NGOs, Media and Civil Society: NonGovernment Organisations, Media and Civil
(CVO)
in
CEOs
and
Heads
of
procurement
Organisations
have
the
primary
responsibility for maintenance of purity,
integrity and efficiency in their respective
organisations. These authorities are assisted
by an officer called the Chief Vigilance
Officer (CVO) in the discharge of vigilance
functions. The CVO acts as a special
assistant/advisor to the chief executive and
reports directly to him in all matters
relating to vigilance. As the head of the
Vigilance Division of the organisation
concerned, he serves as a link between his
organisation and the Anti-Corruption
Commission. The functions of CVOs can be
broadly divided into: (i) Preventive
vigilance; (ii) Punitive vigilance; and
(iii) Surveillance and detection.
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Certificate Program in Public Procurement (CPPP)
2.3.8
2.4
Fighting Anti-Competitive
Practices
2.4.1
Checkmating Anti-Competitive
Practices
Buyers should carry out need assessment and procurement planning phase
67
Public Procurement and Good Governance
during
which
the
choices
of
specifications choices are made with
an eye on market characteristics, likely
level of competition and procurement
risks involved.
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Certificate Program in Public Procurement (CPPP)
2.5
Leveraging Technology
2.5.1
e-Governance
2.5.2
e-Procurement
69
Public Procurement and Good Governance
Remember!
Industry consultants may have
established working
relationships with individual
bidders. Therefore, they should
not be hired to conduct the
tendering process.
REVIEW OF KEYWORDS
CONCEPTS
Minimise
delays
and
human
capriciousness in tender processing:
Dilatory tactics are an important weapon
in the hands of corrupt officials.
e-Procurement helps in drastically cutting
procurement delays. Due to the automated
process, the chances of human errors
(deliberate or otherwise) are obviated. The
evaluation summary is automated and in
reverse auction, even evaluation is
automated, thus reducing human element.
2.5.3
AND
e-Payment
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Certificate Program in Public Procurement (CPPP)
Anti-Competitive
Practices
requires devising procurement strategies to
deny any advantage to bidders contemplating
anti-competitive behaviour
4.
5.
6.
7.
8.
Fighting
e-Payment:
SELF-ASSESSMENT QUESTIONS
AND EXPERIENTIAL EXERCISES
1.
2.
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Public Procurement and Good Governance