Public Procurement and Asset Disposal System

1. Public Procurement and Asset Disposal System 19th November 2010 Tshepo Sayed, Economist To be the centre of excellence for public procurement and asset disposal by 2018

2. Presentation outline • Establishment • Factors leading to system review • PPADB Structure • Scope of the PPADB • Functions and principles of the PPADB • Some key features of the system • Objectives, Basis and Process of bidding implementation • Preparation for tender • Organization of the bidding process for procurement • Reservation Policies • Types of bidding and Submission methods • Bid evaluation • Adjudication and award To be the centre of excellence for public procurement and asset disposal by 2018

3. Establishment • PPADB was established through an Act of Parliament: • PPADB CAP 42:08 • Started operation 2nd July 2002. • Previously procurement was regulated through Supplies Regulation • Public procurement and asset disposal reforms began in February 1998. To be the centre of excellence for public procurement and asset disposal by 2018

4. Factors leading to system review • Rapid expansion in volume and complexity of procurements; • Shift in scope away from simple supplies based; • Conflicting bidding practices • Complex contract documentation and specification standards created by externally funded projects; • Lack of citizen empowerment in public procurement; • The need to promote transparency, public accountability,. To be the centre of excellence for public procurement and asset disposal by 2018

5. PPADB Structure To be the centre of excellence for public procurement and asset disposal by 2018

6. Scope of the PPADB • All entities of central government • Procurement of all works, services, supplies or any combination thereof; • Disposal of serviceable and unserviceable: • Does not apply disposal of assets under the scope of PEEPA. • E.g. BTC, Air Botswana, NDB, GEMVAS To be the centre of excellence for public procurement and asset disposal by 2018

7. Functions and principles of the PPADB • Standardisation of procurement items. • Aggregation of P&D activities • Competition between contractors • Value for money • Fair and equitable treatment of all contractors • Accountability and transparency • Integrity, fairness and public confidence • Anti-corruption in P&D To be the centre of excellence for public procurement and asset disposal by 2018

8. Some key features of the system • Contractor registration • Standardised bidding packages • Independent complaints review committee and bid protest mechanism; • Devolution of PP&AD • Special PAD committee • Enforcement of reservation and preference schemes • Code of ethics for registered contractors. To be the centre of excellence for public procurement and asset disposal by 2018

9. Objectives, Basis and Process of bidding implementation • The objective of the bidding is to ensuring the economic efficiency of projects and achieving value for money through competition, fairness and transparency in the process of bidding and selection of suppliers (PPADB Act 2001). • The bidding is conducted on the basis of bidding packages. • The bidding package reflects the entire project or part of the project.. • The bidding process includes: • bid preparation. • organisation of bidding, • bid evaluation, • adjudication and award, • announcement of bid winners, • contract negotiation, • finalization and signing. To be the centre of excellence for public procurement and asset disposal by 2018

10. Preparation for tender • The project-bidding plan is worked out by the PE. • A project bidding plan includes the following: • The division of the project into different bidding packages; • The estimated costs of the bidding packages and financial sources; • Type of tender and the procurement method to be applied to each bidding package; • Type of contract for each bidding package;  • The contract performance duration. To be the centre of excellence for public procurement and asset disposal by 2018

11. Organization of the bidding process for procurement • Identifying the need and selection of appropriate tender method (PPADB); • Compiling bid documents with specifications (PE); • Vetting bid packages (PPADB) • Publishing the tender invitation (PPADB and/or PE); • Receiving and managing bids (PPADB or PE); • Opening bids (PPADB or PE); • Appointment of tender evaluating team (PE); To be the centre of excellence for public procurement and asset disposal by 2018

12. Evaluating and rating bidders (PE); • Submitting recommendations for award (PE); • Adjudication and award (PPADB); • Bidder debriefing (PE); • Contract Implementation (PE). To be the centre of excellence for public procurement and asset disposal by 2018

13. Reservation Policies • Focus on providing value for money • Exploit provisions in the Act on Reserved & Preferential Treatment. -Part VIII of the PPAD Act CAP 42:08 • Section 66- “Pursuant to its economic and social objectives, the Government may from time to time introduce reserved and preferential procurement and asset disposal schemes , which shall be consistent with its external obligations and its stable, market oriented macro economic framework.” - To be the centre of excellence for public procurement and asset disposal by 2018

14. -(a) be targeted and time bound -(b) be phased in and out -(c) be non discriminatory in respect of the targeted group. -(d) be based on competition among eligible contractors. -(e) entail their calculation of cost versus the cost of unrestricted competition. -(f) have clear, quantifiable objectives to be achieved. -(g) entail benchmarks to assess progress To be the centre of excellence for public procurement and asset disposal by 2018

15. Types of bidding • Unrestricted, open or public tender (ODB or OIB): • Unrestricted number of participating bidders. . • Unrestricted tender is the most preferred form to ensure competition. • Restricted tender: • A number of bidders invited to participate, • Usually following pre-qualification: • Only a number of bidders are capable of meeting the requirements of the bidding package; • Sources of capital require the restricted bidding; • More advantageous due to specific situation of bidding package; • Common approach in PPP procurement. To be the centre of excellence for public procurement and asset disposal by 2018

16. Types of bidding (cont’d) • Informal or quotation bidding: • Applicable to procurement valued at under P100 000. • At least 5 different bidders are invited. • Appointed or direct bidding: • Applicable in special cases: • Natural calamities or national security situations, • Change of scope of existing contract, etc. • Proprietary terms limit supplies to single source. • Waiver required for the appointment of direct bidders • Others may include micro-procurement and emergency procurement To be the centre of excellence for public procurement and asset disposal by 2018

17. Who May participate • Bidders licensed / incorporated under relevant Botswana statutes and • Registered with PPADB • Foreign / international bidders may participate in open domestic bidding subject to registration requirements • Open international bidding is however open to all bidders. To be the centre of excellence for public procurement and asset disposal by 2018

18. Submission methods • The one envelope bidding: • Submit bids in a single package of documents • The two envelope bidding: • Submit both technical and financial proposals in separate envelopes simultaneously, e.g. consultancies • The two-phase bidding: • Bidding packages for goods procurement • Construction and installation that require pre-qualification due to technical complexity • Projects executed under turn-key and PPP contracts • This process shall effected in phases To be the centre of excellence for public procurement and asset disposal by 2018

19. This process shall be effected in phases • The first phase: • Bidders submit their preliminary for discussion. • The second phase: • Short-listed bidders from the first phase to submit their official bids. To be the centre of excellence for public procurement and asset disposal by 2018

20. Bid evaluation • Bid evaluated and ranked according to tender requirements. • The bid evaluation is conducted according to the following methods: • Least cost based selection: • Compliance, technical responsiveness and least cost • Quality and cost based selection: • Compliance check, technical evaluation; • Financial bids with minimum qualifying mark opened and evaluated; • Highest combined score usually awarded. • Quality Based Selection (two envelope): • Technical bid compliance, technical bid responsiveness; • Financial bids of best evaluated technical bid opened and evaluated • Negotiations and award. • Fixed budget selection: • Compliance check, technical responsiveness; • Highest ranked bid within budget is recommended for award. To be the centre of excellence for public procurement and asset disposal by 2018

21. Adjudication and award • Approve PE recommendations and award the tender to the recommended • Defer its decision and: • Return the evaluation report to PE for additional information • and /or revision of the evaluation process. • Reject the PE recommendations and: • Return the evaluation report to PE for re-consideration • Appoint an independent evaluation team and, on its sole determination, award the tender to the most compliant bidder; • Not award the tender and advise re-tendering. To be the centre of excellence for public procurement and asset disposal by 2018

22. Dispute Resolution Mechanism • The Board is empowered to act upon: • Complaints by PE’s and DE’s, • contractors, media and • or the public in respect of a procurement or disposal activity. • The Board also sits to seek to resolve • disputes amongst procuring or disposing entities or between such entities and the contractors. • Independent Complaints Review Committee (ICRC) has been est. S 95 to; • Deal with challenges by contractors • Complaints by contractors To be the centre of excellence for public procurement and asset disposal by 2018

23. Dispute Resolution Cont’d • Appeals against disciplinary measures by the Board. • Conflicts between the Board and its employees. • Disputes and resolution of conflicts between- • Procuring and disposing entities, • Such entities and the board or its Committees, • Contractors in respect of interpretation of the Act, • Issues within the scope of the Act • ICRC hears written casesonly after following the review procedures of the Board. To be the centre of excellence for public procurement and asset disposal by 2018

24. Dispute Resolution Cont’d • In hearing the disputes, the ICRC may; • Uphold the decision of the Board. • Reject the decision of the Board and order the PE to:- • Do or redo an action or proceeding • Suspend procurement process • Cancel the procurement proceeding To be the centre of excellence for public procurement and asset disposal by 2018

25. Dispute Resolution Cont’d Matters not subject to the review process; • Selection of a method of procurement • Choice of an evaluation procedure • Rejection of all bids • Decision on an unsolicited offer / bid; and • Decision of Board on International obligations (Reg 4 iii) To be the centre of excellence for public procurement and asset disposal by 2018

26. Board Award decisions per Ministry( 2009/2010) To be the centre of excellence for public procurement and asset disposal by 2018

27. Cont To be the centre of excellence for public procurement and asset disposal by 2018

28. Conclusion • PPADB handles tenders in all areas of works, services and supplies • 60% + of Government budget expended through procurement • PPADB is committed to uphold the principles enshrined in the PPAD Act and of best practice in the conduct of procurement and disposal To be the centre of excellence for public procurement and asset disposal by 2018

29. Thank you • Address queries to: • Executive Chairman • P/Bag 0058 Gaborone • Plot 8913 Maakgadigau Way • Gaborone West Industrial Site • Tel: 3906853 • Fax: 3906822 To be the centre of excellence for public procurement and asset disposal by 2018