1. 1 PMIG PUBLIC SECTOR PROCUREMENT BEST PRACTICES & LESSONS LEARNED Kevin James Barrie Kroukamp

2. 2 TAU AIM To support the improvement of procurement management as part of the programme management cycle on government programmes in cooperation with the SCM Units / PMU

3. 3 TAU SUPPORT Strategic & Policy level support Operational level support –Advice & mentoring –Support to SCM Units & PMU's Knowledge sharing

4. 4 SUPPLY CHAIN MANAGEMENT Definitions SCM ensures that the right goods / services are delivered to the right place, in the right quantity, with the right quality, at the right cost and at the right time. SCM is the integration of the key business processes of demand, acquisition, logistics and disposal for the provision of goods or services in an effective, efficient and economic manner.

5. 5 PROCUREMENT MANAGEMENT Background DEMAND MANAGEMENT –Knowing what you need, why, when and where ( = procurement business case) ACQUSITION MANAGEMENT –Actually getting what you need from the right supplier / service provider at the right price

6. 6 DEMAND MANAGEMENT Quantify needs & frequency thereof Critical target (delivery) dates Budget determination Expenditure patterns / project cycle Specifications / quality Assumptions & risks Supplier research

7. 7 ACQUISITION MANAGEMENT Sourcing strategy –Procurement legislation –Market / supplier research Bid documentation –Goods –Services –Works Evaluation & Recommendation Adjudication Contracting / Award

8. 8 PROGRAMME OR PROJECT MANAGEMENT Need Assessment Plan Procurement Implement Monitor Review & Evaluate

9. 9 PROGRAMME MANAGEMENT Key factors Governance –Structures –Stakeholder management Project Management –adopting project management principles –Risk, quality, scope, issues Planning and Control –A crucial element - knowing up front what needs to be done Financial / resource management –Knowing budgets & multi-year expenditure requirements –Tracking expenditure –Being "geared up"

10. 10 PROCUREMENT PRINCIPLES & STEPS 1. GENERAL Policy –Rules –Procedures Competition Value for money Fair, open & transparent Quality processes

11. 11 PROCUREMENT PRINCIPLES & STEPS “Getting prepared” 2. Procurement strategy –In programme design 3. Procurement planning –Detailed thinking –Risks & assumptions –Role of other stakeholders –Scheduling activities & resourcing 4. Market research –Suppliers –Service providers 5. Business case (procurement justification) –Be sure that doing the right thing

12. 12 PROCUREMENT PRINCIPLES & STEPS “Getting going” 6. Project Management from start up (PMBOK) 7. Confirming the requirement / need –Input to specification / ToR 8. Supplier selection / targeting –Align to the Specification / ToR 9. Tender documentation –General and standard documentation –Specification / ToR –Schedule of quantities 10. Tender evaluation –Evaluation Committee –Process

13. 13 PROCUREMENT PRINCIPLES & STEPS “Getting it done” 11. Award –Appoint knowing the ToR and Contract 12. Closure –Recording lessons –Confirm procurement objectives met etc 13. Contract Management –Ensuring delivery –Project Management continues …….

14. 14 PROCUREMENT PROBLEM AREAS Procurement management is a common problem across government irrespective of the funding source (i.e. government or donor) and irrespective of the sphere of government. Procurement seen as onerous, inflexible, intimidating, etc Knowledge of the basic procurement principles, practices and procedures (3P’s) is often lacking. Those that may fully understand the procurement 3P's may fail in that they do not fully understand the environment in which they are require to do the procurement e.g. the building or construction environment. There is a need for improved appreciation of the crucial role of procurement in project / programme implementation. Need for strong project management skills (plan, organise (resource), lead and control) and ethical approaches.

15. 15 LESSONS Governance structures –SCM units Need support from Top Management Need “Functional” & procurement staff alignment (… need each other…) –PMU units Resourcing & administration Alignment with SCM Units (…supported by SCM …)

16. 16 LESSONS (CONTINUED) “Seeing the big picture” Planning within the programme or project cycle –Having the end in mind –Timing issues Project & budget alignment –Avoiding canceled projects –Avoiding delayed projects –Avoiding under spend / lost budgets

17. 17 MANAGING CASHFLOWS ACROSS YEARS Infr. Plan update IPMPIPIP IPMP Planned Multi-year Commitments Project Implementation Project Design & Tender Project Implementation Project Design & Tender Planned Multi-year Commitments

18. 18 LESSONS (CONTINUED) “Need for Procurement Experts” Management of the procurement process –Teams are often under resourced –Teams are often under prepared –There is a shortage of standard operating procedures (SOP’s) Understanding of SCM Regulations –Compliance criteria –Evaluation criteria –Processes to follow Tender documentation compilation –Standard Forms – (as appropriate) –Compliance criteria (essential and practical minimum requirements – don’t over do it) –Evaluation criteria – (different between bidders – quality selection) –Quality editing / completion – (quality docs get quality tenders) Launching of tenders –Timing & preparedness issues –Briefing sessions - can add major value to the process – improved understanding !

19. 19 LESSONS (CONTINUED) “Need for Technical support” Identification of needs –Functional / Technical Dept input –Input to Specification / ToR Market analysis –Need good supplier data base or quality supplier short listing –Bidders incorrectly targeted – resultant poor submissions Specifications / ToR's –Mis-interpretation by bidders –Incomparable bids – poor ToR’s yield poor submissions Understanding of risks –Lack of understanding of the environment –Simplification of procurement situations –Assumptions / risks need to be thoroughly understood

20. 20 LESSONS (CONTINUED) “Need for Technical support” Evaluations & recommendations –Appropriate expertise available –Criteria are difficult to use in practical evaluation –Adoption of quality processes ( eg donor processes) –Record keeping (transparency trail) –Stand up to an audit Contract management –Need to ensure that you get what you intended –Maintain control over supplier / service provider

21. 21 SO WHERE TO FROM HERE? PMU –Need Procurement Specialists –Need Project Managers –Need Technical advisors –Need Administration support –Need financial backing Relationship management –Top management buy in –Support from Functional Depts –With Suppliers / Service Providers Firm Strategy & Plans –start early –Spend time on the right things Know the budgets and programme implications

22. 22 BOTTOM LINE! PROCUREMENT IS CHALLENGING Don't under estimate the work required ! Provide for dedicated management !! Manage all the steps and procedures!!! Manage the detail with the big picture in mind