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BENSON TURAMYE Ag. ED, PPDA-UGANDA

PERFORMANCE BEYOND COMPLIANCE IN PUBLIC PROCUREMENT: IS TECHNOLOGY A MAGIC BULLET? A presentation to the 10 th EAPF – Kampala, Uganda. BENSON TURAMYE Ag. ED, PPDA-UGANDA. 1 st November 2017. Video. Presentation outline. Introduction Compliance? Procurement performance?

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BENSON TURAMYE Ag. ED, PPDA-UGANDA

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  1. PERFORMANCE BEYOND COMPLIANCE IN PUBLIC PROCUREMENT: IS TECHNOLOGY A MAGIC BULLET?A presentation to the 10th EAPF – Kampala, Uganda BENSON TURAMYE Ag. ED, PPDA-UGANDA 1st November 2017

  2. Video

  3. Presentation outline • Introduction • Compliance? • Procurement performance? • Relationship between procurement compliance and performance • Role of technology in improving compliance and performance • Conclusion

  4. Presentation ? Understanding the topic: • Globally, governments and other public-funded entities adopt processes to acquire goods, works, and services needed to achieve public projects, this is what is referred to as Public Procurement. • The presentation is to examine to what extent the Procuring Entities focus on the rules and procedures that exist in the procurement laws and bidding documents, and its correlation with procurement outcomes. Then, Can the technology liberate the PDEs to achieve both compliance and performance in their totality?

  5. Introduction • The high focus on compliance to the requirements of public procurement laws by Government Entities may compliment the achievement of value for money of government projects. • A shift change must emphasize moving beyond compliance to performance in order to ensure that Government projects are implemented in cost - effective and efficient manner. • The use of technology in public procurement should enhance performance due to enhanced transparency, efficiency and reduction in costs of doing business with Government.

  6. Compliance? • Compliance in public procurement entails conforming to the requirements of given laws, regulations, standard bidding documents and guidelines. • Focus on compliance by Entities, though critical, should not undermine the performance and the attention to the objectives of the project. • The whole procurement supply chain should therefore be considered to ensure the right outcomes and assess when the outcomes fall short of expectations. • Risks beyond the bid and award stage should be assessed and mitigations identified, since a fully compliant process may not necessarily lead to successful project implementation similar to “a successful operation but the patient dead”.

  7. Compliance • Attention should therefore be paid also to what happens after the contract is awarded, since the technical experts assume that the procurement staff are still monitoring while the procurement staff believe that their responsibility ended with the award. • The procurement law in Uganda allows flexibility in assessing compliance, especially at evaluating eligibility documents. • PPDA tracks system compliance of Entities by assessing how different players fulfilled their roles and responsibilities and processcompliance at all stages of the procurement cycle; right from procurement planning to contract management . • The compliance levels of Entities (system and process) for Financial Years 2015/16 & 2016/17 are indicated in the charts below:

  8. System Compliance rating of Entities

  9. System Compliance Cont’d • Based on the average of the two financial years, Contracts Committees obtained the highest score at 81.7%, CCs were more complaint with their roles and responsibilities while User Departments were less complaint with the lowest score at 67.2%. • The good compliance of Contracts Committees was a depiction of strong oversight to the procurement function in accordance with the PPDA Act and Regulations. • The poor performance of User Departments was attributed to poor contract management, that usually leads to poor performance of contracts.

  10. Process Compliance Rating of Entities

  11. Process Compliance Cont’d • Based on the average of the two financial years, procurement methods obtained the highest score at 90.15% while procurement planning scored the lowest at 64.4%. • The good compliance score under procurement methods was attributed to adherence to the procurement methods within the regulated thresholds. • The poor performance under procurement planning was attributed to inadequate planning which led to conducting procurements outside the procurement plan, and failure to adhere to the planned timelines.

  12. Performance? • Performance in public procurement assesses the outcomes of the procurement process within the right time, cost, quality and quantity and successful accomplishment of projects/contracts. • The following indicators are measured with regard to performance in the PPDA context: • Procure ratio – This measures the ability to provide works, goods or services within the procurement plan timelines (awarded). • Completion ratio – This analyzes the contractual completion time against the actual completion time. • Payment ratio – This assesses the time taken to pay providers against the contractual mandatory 30 days

  13. Performance Cont’d • Competition ratio – This assesses whether 3 or more bids were received per procurement. • Bid responsive rate – This assesses technically responsive bids as a percentage of the total number of bids received. • Plan ratio – This assesses variances between values of the awarded contracts against the cost estimates in the procurement plan. • Procurement budget absorption rate - This assesses the actual value of the procurement spend as a percentage of the total procurement budget. • Cost ratio – This assesses variances between contract award prices and final costs on contract completion. • The performance levels of Entities for Financial Years 2015/16 & 2016/17 are indicated in the chart below:

  14. Procurement Performance of Entities

  15. Procurement Performance cont’d • Based on the average of the two financial years, the cost ratio obtained the highest score at 76% while the procure ratio scored the lowest at 29.7%. • The good performance under the cost ratio was attributed to making payments within the contract award prices upon contract completion. • The poor performance under the procure ratio was attributed to failure to adhere to timelines stipulated in the procurement plan.

  16. Relationship between Compliance and Performance • The drive to achieve 100% compliance may have a positive correlation on efficiency, cost effectiveness and value for money. • But entities often eliminate bidders over minor omissions, which could be clarified on and this accelerates barriers to bidder participation in government tenders. • The study conducted in Ashanti Region in Ghana revealed that compliance with the management systems had a high correlation with the procurement performance, but procurement processes, had a moderate relationship with the level of procurement performance. • Altogether, there was a high level of relationship between the level of compliance with the Public Procurement Act and the level of procurement performance.

  17. Role of Technology in improving Compliance and Performance • In Uganda, electronic procurement is expected commence in July 2018 to replace the existing manual based system. • Benefits of technology include: • Enhance competition and accountability in the procurement process • Increasing transparency in procurement procedures and practices. • Improving efficiency in procurement by minimizing the procurement cycle time through reduced transaction time.  • Maximizing value for money through reduction of costs of conducting procurements/:cost of doing business.

  18. Role of Technology Cont’d • Benefits of technology contn: • Centralized tracking of transactions which enables full reporting on requisitions, items purchased, orders processes and payments made. • Increased access to procurement related information for the general public and the Civil Society Organisations. • Wide Spread Supplier Bases: Because the virtual e-procurement portals are web-based, Entities can search suppliers worldwide, meaning a wider selection of products and services are available to the Entity hence increased competition.

  19. Role of Technology Cont’d • Benefits of technology contd: • Increased productivity: As e-procurement automates the manual procurement processes typically handled by employees, this will free up time for the Procurement staff to participate in strategic procurement functions. • Improved confidentiality. • Promotion of integrity. • Reduced Corruption.

  20. Conclusion • Public procurement regulators majorly remain preoccupied with enforcing compliance to the regulatory framework but with the ever increasing demand for accountability from the general public, the regulators should use compliance to supplement procurement performance so that service delivery is enhanced. • Benefits from the use of technology yield positive gains on both the fronts of compliance and performance and the potential remains enormous with the increased application of technology in public procurement. This must be accompanied by enabling infrastructure and human capital development, especially soft skills.

  21. Thank You! Head Office: UEDCL Towers, Plot 37 Nakasero Road P.O. Box 3925, Kampala Uganda Tel: 256 414 311 100 Fax: 256 414 344 858 or 256 414 250 031 Web: www.ppda.go.ug Email: info@ppda.go.ug ppdauganda @PPDAUganda ‏

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