PUBLIC PROCUREMENT ACT, 2003

(ACT 663)

Presented by:Ing. Richard QuaynorCSIR-BRRI

PUBLIC PROCUREMENT ACT, 2003This is an Act to Provide for Public

ProcurementEstablish Public Procurement BoardMake Administrative and Institutional

Arrangements for ProcurementStipulate Tendering Procedures

THE LAW THEREFORE ESTABLISHES THE PUBLIC PROCUREMENT BOARD TO GIVE EFFECT TO THESE PROVISIONS

PUBLIC PROCUREMENT BOARD SEC.1There Shall be Established by this Act, a

Body to be known as the Public Procurement Board referred to in this Act as the Board [S1(1)]

Object of the BoardTo harmonise the processesSecure Judicious, Economic and Efficient use of state resources and ensure that Procurement is carried out in a Fair, Transparent and Non-discriminatory manner.

FUNCTIONS OF THE PROCUREMENT BOARD SEC.3In furtherance of the object of the Board shall perform the following functions:

• Make proposals for the formulation of policies S3(a)• Ensure policy implementation and human resource

development S3(b)• Publish a monthly procurement bulletin… S3(g)• Advise government on issues relating to public

procurement 3(l)• Maintain a database of suppliers, contractors and

consultants 3(p)• Investigate and debar tenderers who have seriously

neglected their obligations under a public contract, have provided false information or offered inducements (3q)

• Hold annual forum for consultation on Public Procurement and other issues and ..

PROCUREMENT STRUCTURESHead of Entity Tender Committee Tender Evaluation Panel Tender Review Board Procurement Units

PROCUREMENT STRUCTURES CONT’D

Procurement Entity:Definition

Any unit or individual that has recourse to the use of Public funds is a Procurement Entity. Entity Types Regional Coordinating Council MMDA’s ; State Owned Enterprises Public Universities, Schools and Colleges Hospitals and Health Institutions Bank of Ghana and Financial Institutions

PROCUREMENT STRUCTURES (Cont’d)Head of Entity:

The Head of the Entity is more or less the Principal Account Holder (PAH) as stated under Section 74 in the Financial Administration Act, 2003 (Act 654).

CMA/Ministries/SOEs Sector Minister;

Regional Coordinating Regional Minister; Council

District Assemblies District Chief

Executive

Schools and Colleges Headmasters ETC

EXAMPLES OF ENTITY HEADS

PROCUREMENT STRUCTURES (Cont’d)

Head of EntityKey Functions of PAH

Ensures that the provisions of the Act are complied with; Is held accountable should a contract be awarded in a

manner that is inconsistent with the Act; Makes decisions in a corporate manner .

Each Procurement Entity is expected to establish a

Tender Committee as set out in schedule 1 of the

Act 663.

ENTITY TENDER COMMITTEE (S 17)

ENTITY TENDER COMMITTEE (Cont’d)

Composition of Tender Committee for a Ministry:

• Chairman – A Minister/Chief Executive Officer Members

• Members – Head of Finance / Head of Accounts Division

• A Representative of the Ministry of Justice

• Three other Heads of Divisions or Departments

• Two Members of Parliament

• Secretary: The Officer Heading the Procurement Unit

Key Functions of Entity Tender Committee:plans and quarterly reviews procurement plans,

- meet at least once in every quarter,ensures correlation between policies and

procurement plans of the entity,

Key Functions of Entity Tender Committee (cont’d)awards contracts, publishes awards,

manages contracts, takes delivery, monitors performance of suppliers and

contractors.

Tender Evaluation PanelWhat is a Tender Evaluation Panel?Specialists appointed as and when required to review and make

recommendation for contract award, using specified and previously published criteria in the tender documents for evaluation.

• The specialists need not be in house.

TENDER REVIEW BOARDS (S20)Entity Tender Review Boards shall be established

at 4 levels : (Sect 20 & schedule 2)

Central Tender Review Board;

Ministerial Tender Review Boards;

Regional Tender Review Boards;

District Tender Review Boards.

Key Functions:►review the activities at each step of the procurement cycle ►give concurrent approval ►furnish the Board with reports in a prescribed format;►review decisions of heads of entities in respect of a complaint.

PROCUREMENT RULESProcurement Planning (S21)

Qualification of Tenderers (S22)

Prequalification Proceedings (S23)

Participation in Procurement Proceedings (S25)

Record of Procurement Proceedings (S 28),

Rejection of Tenders, Proposals and Quotations

(S 29)

Public notice of contract awards (S 31)

Inducements from Contractors, Suppliers and

Consultants (S 32)

PROCUREMENT RULES (Cont’d)• Procurement Planning S 21

A procurement entity shall prepare a procurement plan to support its approved Budget and the Plan shall indicate: (a) capture on-going contract packages and

financial commitments,(b) package new contracts,(c) estimate cost for each package,(d) determine the procurement methods, and(e) determine processing steps and times.

A Procurement Entity shall submit to its Tender Committee not later than 1 month to the end of the financial year the procurement plan for the ensuing year for approval.

eg. Procurement Plan for 2010 should be ready by November 2009

PROCUREMENT RULES (Cont’d)• After budget approval and at quarterly

intervals, each procurement entity shall submit an update of the procurement plan to its Tender Committee.

• The procurement entity MUST send to the Tender Review Board, procurement notices for contracts and procurement plans above the thresholds stipulated in Schedule 3 for publication in the Public Procurement Bulletin.

• SHALL not divide a procurement order into parts or lower the value of a procurement order to avoid the application of the procedures for public procurement in this Act

QUALIFICATION OF TENDERERS (S 22)• Tenderers must possess:Professional and Technical qualifications and

competenceFinancial ResourcesEquipment and other physical facilitiesManagerial capability, reliability and experienceCompetent personnel

• Must have fulfilled all tax obligations • False declarations are not permitted

Ways of verifying QualificationPre-qualification

ClassificationExpression of InterestRecord of Performance

Procurement rulesPrequalification Proceedings (Sect. 23)Entities are allowed to prequalify tenderers.The rule is essentially to remove redundancies in

the process in terms of time and effort of evaluation but not to limit competition.

Participation in procurement proceedings shall be on a

REJECTION OF TENDERS PROPOSALS AND QUOTATIONS (S 29)

• Allowed any time prior to acceptance • The grounds should have been previously

stated in the document.• Tenderers must be informed immediately of

the rejection• Record must be kept of the rejectionInducement from Contractors, Suppliers

and Consultants• The tenders of participants who make or accept

to make an offer of inducement shall be rejectedThe offering and the acceptance to offer compromise the sanctity of the process

• It is an offence under this Law.

Methods of Procurement

Pre-Qualification International Competitive Bidding National Competitive Tender Restricted Tendering Price Quotation Single Source Procurement and Selection Advertisements for Expression of Interest for

Consulting Services in Local Newspapers Least-Cost Selection Selection based on Consultant’s Qualification. Single Source-Selection

Tender Procedure

National Competitive Tendering (S 44) Used when procurement entity decides that only domestic tenderers may submit tenders

(Schedule 3)

International Competitive Tender (S 45) Used when effective competition calls for

inclusion of foreign firms in the tender process (Schedule 3)

TENDERING PROCEDURES cont’dProvision of Tender Documents (S 49)

• Appropriate Standard Tender Documents provided in

Schedule 4 must be used.

• Changes can be introduced only through tender or contract data sheets, or through special conditions of contract and not by introducing changes in the standard tender documents.

Submission of Tenders (S 53)The Procurement Entity shall, (a) fix the place for, and a specific date and time

as the deadline for the submission of tenders; and(b) allow tenderers at least six weeks to prepare

their tenders for international competitive tendering.

TENDERING PROCEDURES cont’dSubmission of Tenders (S 53) cont’d• The time for preparation of tenders under national

competitive tendering procedures shall not exceed four weeks.

Opening of Tenders (Sec 56)  Tenders shall be opened

(1)At the time specified in the tender documents as the deadline for the submission of tenders or at the deadline specified in any extension of the deadline

(2)The time for opening of the tenders shall be the same as the deadline for receipt of tenders or promptly after that deadline.

TENDERING PROCEDURES cont’dOpening of Tenders (Sec 56) (3) A supplier or contractor who has submitted a

tender or a representative of that supplier or contractor, shall be permitted by the procurement entity to be present at the opening of tenders.

Evaluation of Tenders (Sec 59)The procurement entity shall evaluate and compare

the tenders that have been accepted in order to ascertain the successful tender in accordance with the procedures and criteria set out in the invitation (tender) documents.

No criterion shall be used that has not been set out in the invitation documents.

TENDERING PROCEDURES cont’d

Evaluation of Tenders (S59 cont’d)The successful tender shall be:(a) the tender with the lowest evaluated tender; and(b) the lowest evaluated tender ascertained on the

basis of criteria specified in the invitation documents.

Margin of Preference S60. Margin of preference may be granted to

domestic contractors or domestically produced goods or for the domestic suppliers of services.

must be reflected in the record of procurement proceedings;

Subject to approval by the Board.

MARGIN OF PREFERENCE GUIDELINES BY THE BOARDGoodsMargins of Preference will be allowed under

National Competitive Tendering as well as International Competitive Tendering.

Eligibility for preference for goods is determined by the sources of the domestic goods and not by the nationality of the Tenderer.

The Nationality of the Tenderer or Supplier is irrelevant, making it clear that the preference is given to the GOODS and not to the Tenderer

To qualify under DOMESTIC GOODS the following conditions should be met:

(a) Where local labour, raw materials and components from within Ghana account for 15 percent or more of the Ex-Works (EXW) price of the product offered.

MARGIN OF PREFERENCE GUIDELINES BY THE BOARD (cont’d)(b) Where imported raw materials or component

constitute the bulk of the inputs and local labour and additional components are required for processing into finished products and the proportion of domestic value added is equal to 10 percent or more of the Ex Works (EXW) price of the product offered.

Goods satisfying Condition (a) will attract a margin of preference of the 20 percent and those meeting Condition (b) will attract 15 percent.

The use of local expertise should be given points ranging from 10 – 15 points during the evaluation of Technical Proposals.

The minimum of 10 points will be awarded where 40 percent of the Key Personnel are Ghanaians. This will apply irrespective a wholly Ghanaian owned firm or a joint

venture led by a foreign forms

RIGHT TO REVIEW (S 78)Any supplier, contractor or consultant that claims

to have suffered loss or injury due to a breach of a duty imposed on the procurement entity by this Act, may seek review.

DISPOSAL OF STORES, PLANT AND EQUIPMENT (S 83)

The head of a procurement entity shall convene a Board of Survey comprising representatives of departments with unserviceable, obsolete or surplus stores, plant and equipment which shall report on the items and subject to a technical report on them, recommend the best method of disposal.

OFFENCES RELATING TO PROCUREMENT (S92)Any person who contravenes any provision of this

Act commits an offence and where no penalty has been provided for the offence, the person is liable on summary conviction to a fine not exceeding 1000 penalty units or a term of imprisonment not exceeding five years or to both.

International Obligations (S 96)Notwithstanding the extent of the application of

this Act to procurement, procurement with international obligations arising from any grant or concessionary loan to the government shall be in accordance with the terms of the grant or loan.

REPEAL AND SAVINGS (S99)The following enactments are revoked or

repealed as appropriate:

(a) The District Tender Board Regulations, 1995 (L.I. 1606);

(b) the Ghana National Procurement Agency Decree, 1976 (S.M.C.D. 55); and

(c) the Ghana Supply Commission Law, 1990 (P.N.D.C.L. 245).

END OF PRESENTATION