Public Procurement Experience of Pakistan

(2ND South Asian Regional Public Procurement Conference)

By Alam Zeb Khan

(Director General)Public Procurement Regulatory Authority

Sequence of Presentation

1. Need for Procurement Reforms in Pakistan

2. Public Procurement Legal Framework of Pakistan

3. Performance of PPRA since its establishment

4. Capacity Building Initiatives of PPRA

5. Reforms Agenda of PPRA

Need for Procurement Reforms in Pakistan

Need for Procurement Reforms in Pakistan

Previous Procurement Regimes

1. General Financial Rules (1951/1979) (Stores etc)

2. Purchase Manual of Deptt of Supplies and Disposals

3. Delegation of Powers to Ministries (Overlapping)

4. Autonomous Bodies had their own Rules

5. Various Circulars of Ministry of Finance

Need for Procurement Reforms in Pakistan

World Bank’s Study of 1997-98In 1997 – 98, the World Bank auditors reviewed 4524 contracts and found deficiencies in 3700 contracts.

Need for Procurement Reforms in Pakistan

Findings of W.B CPA Report 2000

1.Outdated rules and regulations

2.Public procurement suffered from inefficiency, and poor management.

3.Inadequately trained and poorly paid public sector procurement professionals

4.Complicated and non-transparent procurement procedures discouraged sound planning, thorough evaluation

Need for Procurement Reforms in Pakistan

Word Bank Recommendations1. Enacting a public procurement law based on UNCITRAL

Model Law;

2. Creating a small, professionally staffed, independent regulatory agency

3. The regulatory body to be mainly confined to policy, documentation, development of rules, etc.

4. Not to involve in line clearance functions for award of contracts

Public Procurement Legal Framework of Pakistan

Public Procurement Legal Framework of Pakistan

• Pakistan is a Federation consisting of the four federating units; in addition to two other regions:

1. Punjab

2. Sindh,

3. Khyber Pakhtunkhwa

4. Balochistan

5. Azad Jammu and Kashmir

6. Gilgit-Baltistan

Public Procurement Legal Framework of Pakistan

• PPRA Ordinance 2002• Public Procurement Rules 2004• Following Four Regulations issued so far:

1.PPRA Regulations 2008

2.PPRA Regulation 2009

3.Consultancy Services Regulations 2010

4.PPRA Regulation 2011

Public Procurement legal Framework of Pakistan

Composition of the PPRA Board:

(1)Secretary, Finance Division (Chairperson)

(2)Secretary, Ministry of Industries and Production

(3) Secretary, Defence Production Division

(4) Secretary, Ministry of Water and Power

(5) Secretary, Ministry of Housing and Works

(6) Secretary, Ministry of Communications

(7) Three Members from private sector

(8) Managing Director

Public procurement legal framework of Pakistan

• PPRA Ordinance 2002 and the Public procurement Rules 2004 are applicable to all procuring agencies of the Federal Government.

• Open Competitive Bidding is the principle/default method of procurement

• All procurements above the minimum threshold of Rs. 100000 (about US$1000) are advertised.

Performance of PPRA

Performance of PPRA

Administrative setup of PPRA

•PPRA is a very lean organization

•Total number of employees is 50

•8 officers, and 42 staff

•Total budget for current year is Rs. 43M

Performance of PPRA173755 tenders monitored/uploaded on PPRA website during the

Financial Years 2004-2013

Financial Year

OrganizationsTender

Uploaded

Average Daily

Tenders

PP Rules Violations

% Violations

2004-05 255 11905 32 11311 95.01

2005-06 274 17124 47 12782 74.64

2006-07 293 20226 55 13657 67.52

2007-08 295 17078 47 9917 58.07

2008-09 290 17913 49 4720 26.35

2009-10 350 18404 50 3883 21.10

2010-11 385 20880 57 2738 13.11

2011-12 582 24104 66 2506 10.40

2012-13 677 26121 71 5721 21.90

Total 3401 173755 474 67235 38.70

Performance of PPRA

Performance of PPRA

Performance of PPRA• Uploading of PP Rules Violations on PPRA website

started in May 2012.

• Compliance of PP Rules has increased from 1% in May 2012 to 10% at the moment .

• Procurement Plans of 205 Procurement Agencies have been uploaded during the current financial year as against 9 last year.

2012 2013

9 205

Performance of PPRA

Capacity Building Initiatives of PPRA

Capacity Building Initiatives of PPRA

• Training of the Government officials in procurement started in 2006 under a 3 years World Bank Capacity Building Project.

• In 2009, PPRA training activities were formalized through the establishment of National Institute of Procurement (NIP)

• Presently PPRA imparting training through its own resources.

Capacity Building Initiatives of PPRA• 4501 Officials trained in Public Procurement during

the Financial Years 2006-2013.

Financial YearTraining

ProgrammesNo. Participants

2006-07 22 8072007-08 33 9772008-09 32 8812009-10 35 7622010-11 19 3432011-12 19 3262012-13 22 405

Total 182 4501

Capacity building initiatives of PPRA

Learning Management System•Present training capacity of PPRA is 480 per year

•Through development of LMS PPRA will be able to train around 3000 persons per annum, through online/virtual system

Challenges Faced By PPRA

• Shortage of office space.

• Shortage of Human Resource.

• Capacity Building of Human Resource.

• Lack of power to take action on PP Rules Violations.

• Budgetary constraints

Reforms Agenda of PPRA

Reforms Agenda of PPRA

• Advisory Group on Public Procurement (AGPP)

• Preparation of National Procurement Strategy 2013-16

• Revision and improvement of Public Procurement

Rules, 2004

• Improvement and / or preparation of Public Procurement Regulations

Reforms Agenda of PPRA

• Review of the SBD for Civil Works

• Preparation of SBDs for Goods

• Preparation of SBDs for Services

• Procurement Code of Ethic

Reforms Agenda of PPRA

• Establishment of PPRA Monitoring and Evaluation System

• Revamping of the PPRA website

• Development of HR-Pay Role Module

• Accounting Software developed

Reforms Agenda of PPRA

• The PPRA Service Regulations 2013 approved by the PPRA Board on 30th September, 2013

• Market based Pay Package approved by the PPRA Board, subject to fulfilment of certain formalities.

• For financial autonomy, PPRA Financial Regulations/Accounting Procedure at a very advanced stage.

Thanks