Procurement of Works -1 Ghana Shyam Gautam

Presentation Introduction Public Procurement Methods Bid Document & Preparation Provision in Act and Regulations Bidder’s eligibility & qualification Contents of Bid documents Discussion 2

Choice of career and its Consequences….

Introduction Contract and Bid Documents Contract is an offer and an acceptance Contract is an agreement between two or more parties TO DO or NOT TO DO something that is enforceable by law . ( contract Act 1999)

Contract and Bid Documents.. Bid documents provide a bidder to make an responsive cost effective offer to the employer considering: scope and quality of work, Conditions (liability and risks of employer and Bidder) Time for completion, Payment modes etc. Proper bid documents helps an employer to assess all the bidders Bid in equal footing and provides a basis for acceptance of Responsive, qualified and cost effective Bid.

Equal footing ?

Procurement Procurement is acquisition of goods, works or services Procurement can be private or public In Public Procurement goods, works and services are acquisitioned by government bodies, municipalities, state enterprises and private holdings performing public services.

Public Procurement Vs Private Procurement National context Public interest Follow certain guidelines, rules and regulations Time consuming Defined methods Equal opportunities Competition necessary Transparency necessary Involvement of Public expending and Tax Payers money Private Profit oriented Investors’ interest Limitation of rules Procurement is within time limit available No transparency Competition not necessary Some large scale private projects follow public procurement process

Transparency in Procurement Open tender as a general rule Promotion of Competition In Public Procurement very large portion of the national budget is spent for acquisition of works, goods and services Public Procurement is one important activity of governance with high potential for corruption Includes large chunk of money Includes large contracts

Transparency in Procurement… Public Procurement covers 20 to 30% of the gross domestic product 15 to 70% of the budget Is tax payers money The image of any government , particularly in developing world, is largely influenced by the quality and integrity of public procurement.

What is expected in Public Procurement Value for money Transparency of process and decisions Non discrimination of treatment of vendors Accountability of public officials Quality of works, goods and services Integrity in use of public money Support to public policies Responsiveness and efficiency

PROCUREMENT OF WORKS 12 12

Methods of Procurement Selection of Procurement Method (Clause 8 of the Act and clause 20, 22 of the Regulation) International Competitive Bidding National Competitive Bidding Sealed Quotation (upto 2 mln) Direct Procurement (upto 0.5 mln) User’s Group or Beneficiary Community (up to 10 mln) Force Account (take approval from one step up higher authority)

Methods of Procurement Selection of Procurement Method (Clause 8 of the Act and clause 20, 22 of the Regulation) g. Lum sum (up to 20 mln) h. Catlogue shopping i. Limited tendering j. Buy back k. And others procurement in special cases (clause 66 PA, and clause 145 -PPR)

Process/Stages Open Competition May be Carried Out in One or Two Stages (Clause 11 of the Act) Open Competition With Pre-qualification Open Competition Without Pre-qualification

Two Envelope system Two envelope system IS SELECTION OF POTENTIAL BIDDERS from 20 mln Nrs to 1000 bln Nrs CONTRACTS FOR WORKS/ GOODS in NCB Technical and Financial proposal in separate envelope QUALIFICATION IS VERIFIED BASED ON SPECIFIED QUALIFICATION CRITERIA IN BID DOCUMENTS and financial proposal is opened only technically successful bidders

STANDARD BID DOCUMENTS 17 17

Bid Document Tender Notice Instructions to Bidders Bidding Data Sheet Eligible Countries/optional Forms of Bid, Qualification Information, Letter of Acceptance, and Agreement General Condition of Contract Special Conditions of Contract

Bid Document (cont.) Bill of Quantities Security Forms Supplementary Information Invitation for Bids Specifications & Performance Requirements Drawings

Bidder’s Eligibility & Qualification Eligibility: the requirements to be met by the bidders to be eligible to participate in the bidding process Qualification: the requirements to be met by the bidder to qualify to perform the works

WHY BIDDER’S ELIGIBILITY? TO ENSURE EQUAL OPPORTUNITY TO ENSURE FAIR COMPETETION TO ENSURE FOR SELECTION OF GENUINE CONTRACTOR TO PROTECT NATION’S INTEREST

WHY BIDDER’S QUALIFICATION? BIDDER’S DEMONSTRATION TO QUILIFY FOR EXECUTION OF WORKS TO ENSURE THE PROCUREMENT ENTITY FOR COMPLETION OF INTENDED WORKS WITH SPECIFIED QUALITY WITHIN THE COST & THE TIME

THINGS TO BE CONSIDERED: Not allowed to specify any particular class of construction entrepreneur to participate or not to participate, Ensuring that the maximum number of potential bidder are able to participate, Formulation of qualification criteria shall be not to hurdle the competition but to be required level for satisfactory performance of the intended works.

THINGS TO BE CONSIDERED: IF THE QUALIFICATION CRITERIA IS TOO DEMANDING - May Lose Competition - Pay Higher Prices WEAK - Unsatisfactory performance - Failure of Project

PROVISION IN PPA & PPR: ELIGIBILITY Firm Registration Business Registration VAT and PAN Registration Tax Clearance Certificate or Tax Return Submission Evidence Written Declaration about not being ineligible, no conflict of interest, not being punished for a profession or business related offense.

PROVISION IN PPA & PPR: QUALIFICATION Experience [Years of Standing, General, Specific] Capability [AATO, Equipment, Manpower] Resources [Financial] Litigation History

PROVISION IN PPA & PPR: The Employer reserves the Right to assess the Bidders Capabilities and Capacities to execute the Contract satisfactorily before deciding the award of contract.

But PROVISION IN PPA & PPR: A bidder shall have to fulfill the qualification set forth in bidding document in order to win the contract But No qualification requirements shall be prescribed for the procurement of a work less than twenty million Nepalese Rupees in general

PROVISION IN PPA & PPR: Requirement for JOINT VENTURE Form of Agreement shall be signed by all Joint Venture Partners to be legally binding on all partners, One of the JV partner shall be In- Charge and authorized through a Power of Attorney signed by Legally Authorized Signatories from all partners,

Preparation of bidding document Standard bidding documents are prepared by PPMO Public entities change as per their requirements in Bid data Sheet and SCC

Remaining Process (Steps) Bid Invitation Bid submission Bid opening Bid evaluation Contract Award

ANY QUESTIONS ???? THANK YOU