Creating Favorable Conditions for the Competitiveness of Companies in East African Community—in Kenya

1. Creating Favorable Conditions for the Competitiveness of Companies in East African Community—in Kenya Joseph Ogachi Council Member Kenya Institute of Supplies Management 1

2. In this presentation.. • Introduction, • Procurement objectives, • Is there competition? • National enablers, • Institutional enablers, • Individual professional enablers, • Where are we going?

3. Government procurement market • In 2011, Government Budget is US$ 14 Billion; • GDP in 2010 was US$ 31 billion; • Procurement spend is approx. 25% of GDP; • Hence, US$ 8 billion of procurement spend in 2010 – market created by government procurement • Government procurement market will expand: • Devolution to County Governments; • Large Vision 2030 Strategy flagship projects; • Emphasis on public private partnerships; • Regional integration: EAC/COMESA; • And focus on specific procurement objectives

4. Procurement Objectives The traditional objectives of public procurement: • Maximizing economy, • Maximizing efficiency, • Promoting competition, • Fairness among bidders, • Increasing transparency, • Increasing accountability, • Increasing public confidence, • Promoting local industry, • Promoting integrity

5. ..procurement objectives • These objectives represent good values; • But, integrity is just one of the nine objectives, • Understandably, procurement corruption gets a lot of focus…for obvious reasons, • At the expense of the other 8 objectives. • It is time procurement professionals changed tact to focus on achieving economic goals; • And provide evidence of results achieved in using the procurement system; • MUST HAVE PROFESSIONAL BUYERS

6. Building capacity to enhance competition • Key players: KISM (capacity/advocacy/ethics), PPOA (regulation/capacity/policy), PPD (policy), academic institutions; • Collaboration: KISM pursues a policy of nationally promoting establishment of appropriate procurement training programs in collaboration with key stakeholders • Currently six (6) local universities offer programs that are recognized by KISM; KISM runs 9 CPD workshops annually, and at least 6 sensitization workshops nationally

7. National Enablers National enablers for healthy competition: • The Ministry of Finance: • Policy formulation and resourcing; • There is need for high level involvement of procurement department in policy formulation. • Public Procurement Oversight Authority Advisory Board: • Should be seen to enable not frustrate professional approach to procurement. • Get procurement professionals in the Board

8. National Enablers • Kenya Institute of Supplies Management: • Register, deregister, train, and CPD of procurement professionals. • Having a professional body ensures professionalism grows in the country; • And all stakeholders appreciate the importance of professionalism in procurement; • There is need for increased focus on procurement professionalism, with a focus on competition. • As a basis of performance based procurement delivery. • 4000 members already and growing.

9. Institutional Enablers? • The idea of separation of duties is a good one; • But does it work in Africa=Silent corruption; • There are 9 committees on procurement: • Tender opening committee • Technical evaluation committee • Financial evaluation committee • Tender committee • Procurement committee • Negotiation committee • Inspection and acceptance committee • Disposal committee • Procurement Oversight Committee • There is no evidence that these committees are effective in supporting competition, and eradicating procurement corruption? • Could 2 committees be just enough?

10. Procurement by Committees • Initially a good idea; became an overkill; • Having 9 committees is too much; • Hampers creativity in procurement; • Spreads the “pie of corruption”; • Hampers procurement professionalism; • Diverts scarce staff resources from productive activities.

11. Procurement Unit Enablers • Right mix of academic AND professionals qualification • Developed a critical mass of experience • Only to do Secretarial duties for Committee • Decision making: No professional opinion • There is a race to the bottom…application of rules with little regard to their implications on the economy, competition, and small business…to meet Constitutional provisions.

12. Procurement Unit Enablers • Procurement units need tools to handle political influence…very important • Complaints about procurement taking too long; • Procurement units have no evidence how long it takes to achieve procurement objectives; • Because there is no reliable performance measurement system; • Hence, there is no evidence of the good work procurement units are doing; • There is need for independent procurement research for informed decision making.

13. Where are we going? • Kenya Procurement is a Constitutional issues; • Calls for fair competition among suppliers; • Procurement to be upfront in implementing second generation procurement reforms; • A focus on performance rather than process; • Empowered procurement professionals • Through their national procurement bodies • Providing procurement professional opinions on all matters procurement

14. Thank You