Enacting public procurement law

However, the WB is known to have agreed to accept the cabinet approval for transforming the PPR into a law for releasing the aforesaid DSC. The cabinet, therefore, in its meeting held on November 2 approved in principle the draft Public Procurement Bill seeking to pass the PPR 2003 into law.

Since a number of ministers raised objections to certain provisions of the PPR, a five-member cabinet sub-committee will examine the comments received from the ministries and suggest amendments to "contentious provisions of the draft law" that might hamper or slow down the government activities. The sub-committee is expected to finalise its report by November 20 and forward the same to the law ministry. The draft bill vetted by the law ministry will then be placed before the cabinet to accord its approval for placing it in parliament for enactment into law.

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Now, let us have a look into the contents of the PPR 2003. The PPR formulated on the advice of the WB, came into force on September 30, 2003, the date of notification in the Bangladesh gazette. The salient points of the PPR 2003 are as follows:

• The PPR shall apply to all public procurement made by procuring entities, namely ministries, divisions, government departments or other unit or sub-division thereof, local government agencies and public corporations or other public bodies created by the government, except in the cases where the government decides that it is in the interest of national security or national defence to use a different method, or where the PPR conflict with an obligation of the government under or arising out of an agreement with one or more other countries or with international organisation(s), and in such a case(s) the provisions of that agreement shall prevail.
• Procuring entities must maintain records and documents regarding their public procurement for a minimum period of five years, or for longer periods as required in special cases.
• Tenderers shall not be excluded from participation in public procurement on the basis of nationality, race, or any other criterion.
• Communications between tenderers and procuring entities shall be in writing.
• In order to participate in public procurement, tenderers must qualify by meeting the required criteria which include (a) possessing the necessary professional and technical qualifications and competence; (b) having the legal capacity to enter into the contract; (c) not being insolvent or bankrupt; (d) fulfilling obligations to pay taxes and social security contributions under the relevant national regulations.
• Rejection of all tenders, proposals and quotations by the procuring entities when they are not substantially responsive, or where there is evidence of lack of competition, or where quoted prices substantially exceed the official estimate.
• Observance of the highest standards of ethics by the procuring entities as well as the tenders /suppliers during the implementation of procurement proceedings and the execution of contracts.
• A procuring entity shall use open tendering as the preferred method of procurement for goods and related services, works and physical services. Exceptionally, and only when justified on sound technical and/or economic grounds the head of a procuring entity, which will mean the secretary of a ministry/ divi-sion, the head of a government department/directorate, or the chief executive of an autonomous or semi-autonomous body or corporation, may authorise procurement using restricted tendering method, or direct procurement method or request for quotations method.
• A procuring entity may engage in procurement by two-stage tendering method in the case of large or complex contracts, such as turnkey contracts for process plants or procurement of major computer and communications systems, for which it may be impractical to prepare complete technical specifications in advance and where alternative technical approaches may be available to meet a procuring entity's needs.
• Invitations to pre-qualify and invitations to tender shall be advertised in at least one Bengali-language newspaper and in one English-language newspaper, both of wide daily circulation in the country, and on the central procurement technical unit (CPTU) website located in the implementation monitoring and evaluation division (IMED) of planning ministry for procure-ment exceeding taka one crore and above.
• The tender documents shall follow the format of the standard tender document produced by the CPTU.
• Tenders shall be in writing, signed and submitted in a sealed envelope, to the place(s) and before the deadline stated in the invitation for tender. Tenders received after the deadline for submission shall be returned unopened to the tenderers.
• A procuring entity shall appoint only one tender evaluation committee (TEC) consisting of at least five members, of whom two shall be experienced in procurement and from outside of the procuring entity to open, examine, evaluate and prepare a report with recommendations for award for submission directly to the approving authority as determined in the approval procedure and delegation of financial powers. The TEC shall certify in the evaluation report that "the evaluation has followed the requirements of the regulations, procedures and tender documents, that all facts and information have been correctly reflected in the evaluation report and that no substantial or important information has been omitted."
• The successful tenderer shall be that tenderer with the lowest evaluated tender cost ascertained on the basis of factors affecting the economic value of the tender which have been specified in the tender documents. If there is a tie for the lowest price, the tenderer with the superior past performance shall be selected.
• The successful tenderer shall not be selected through lottery.
• No negotiations shall be held with the lowest or any other tenderer.
• All contract awards of taka one crore and above shall be notified to CPTU for publication on their website.
• A procuring entity may resort to open tendering with international competition when in the absence of domestic capacity, effective competition cannot be obtained unless special efforts are made to attract foreign competition. In such a case(s), the tender documents and the invitation to tender shall be in the English language to be placed in a newspaper of sufficient circulation to attract foreign competition. In addition, a procuring entity may transmit such invitations to embassies and trade representatives of potential supplier countries. Time allowed for submission of tenders shall in no case be less than 42 days.
• Technical specifications shall, to the extent compatible with national requirements, be based on international standards or standards widely used in international trade.
• Requests for proposals (REP) shall be used for procurement of intellectual and professional services. An expression of interest (EOI) shall be advertised in the manner that is similar to procuring goods, works etc. mentioned earlier.
• A procuring entity shall appoint one proposal evaluation committee (PEC) in the manner it appointed the TEC to examine, evaluate and prepare a report with recommendations for award for submission directly to the approving authority following the approved guidelines. The PEC shall furnish in the evaluation report a certificate that is similar to one furnished by the TEC.
• There shall be a standing consultative committee on public procurement consisting of a chairperson and a maximum of eleven other members to aid and advise the government in bringing improvement to the public procurement process and to make recommendations to achieve that objective.
• The PPR 2003 supersede all existing orders/instructions/ directives on the subject by whatsoever name they are called.

Some members of the cabinet including the members in the inner cabinet have reportedly raised objections to the transformation of the PPR into an act. The objections raised by some ministers in the cabinet meeting are: (a) enactment of the PPR into an act would handicap the government and hamper development programmes; (b) transformation of the PPR into an Act would impede emergency purchase of items like food and fertiliser; (c) over-emphasis on open tender for every purchase would stop the possibility of receiving foreign grants and soft loans on the basis of bilateral negotiations; (d) the provision in the PPR for constitution of the TEC with two experts from outside of the procuring entity is already delaying disposal of cases as those experts are not always available for the meetings; (e) only bureaucrats, not politicians would be needed to decide on procurement; (f) the move is a way to legitimise the jobs of foreign consultants in large projects; (g) rules are enough to guide public purchase; and (h) transformation of the PPR into an Act will require the government to go to parliament for bringing even a minor amendment to it.

A closer look into the provisions of the PPR will, however, reveal that care has been taken to meet any eventuality that may arise in purchasing, hiring or obtaining goods, works and services by a procuring entity.

Secondly, transforming the PPR into an act will make it difficult for the executive to make changes according to its own will. The executive will have to go to parliament to make any amendment to the act.

Thirdly, procurement is the major area of corruption in Bangladesh. It is a meeting point of the vested interest groups composed of corrupt political masters, bureaucrats and suppliers. Although it is not a new phenomenon, yet in the recent years it has reached a new height. Our development partners have been very critical about the lack of transparency in our procurement system. We have recently seen how the WB Country Director of Bangladesh openly questioned the non-transparency in the procurement system in power sector.

Further, in the first week of this month, the WB cancelled loans worth TK 6. 8 crore against three projects in health and local government sectors on grounds of corruption and asked the government to refund the money already spent against these loans. The Bank's unprecedented decision followed its investigation that found evidence of inappropriate and collusive bidding practices that violated the procurement norms agreed on between the WB and Bangladesh.

Corruption in our procurement system and in other areas has reached such a height that in Transparency International's corruption perception index (CPI) Bangladesh has been ranked as the most corrupt country for five consecutive years beginning from 2001.

Fourthly, The Daily Star has carried a report which says that "most of the ministers and ruling coalition lawmakers as well as a quarter of bureaucrats do not want the legislation ahead of the next parliamentary election, as it would restrict their authority over projects involving billions of taka."

However, some ministers who are better known for their honesty and integrity have supported enactment of the PPR into law in order to bring transparency in the procurement system.

To conclude, the importance of enactment of a tough law on public procurement system can hardly be over-emphasised. People's expectation is that in the enactment of the law, national interest shall get priority over the interest of the ruling alliance.

M. Abdul Latif Mondal is a former Secretary to the Government