Enhancing Public Procurement in Pakistan: Challenges and Reforms

1. Public Procurement Experience of Pakistan (2ND South Asian Regional Public Procurement Conference) By Alam Zeb Khan (Director General) Public Procurement Regulatory Authority

2. Sequence of Presentation • Need for Procurement Reforms in Pakistan • Public Procurement Legal Framework of Pakistan • Performance of PPRA since its establishment • Capacity Building Initiatives of PPRA • Reforms Agenda of PPRA

3. Need for Procurement Reforms in Pakistan

4. Need for Procurement Reforms in Pakistan Previous Procurement Regimes • General Financial Rules (1951/1979) (Stores etc) • Purchase Manual of Deptt of Supplies and Disposals • Delegation of Powers to Ministries (Overlapping) • Autonomous Bodies had their own Rules • Various Circulars of Ministry of Finance

5. Need for Procurement Reforms in Pakistan World Bank’s Study of 1997-98 In 1997 – 98, the World Bank auditors reviewed 4524 contracts and found deficiencies in 3700 contracts.

6. Need for Procurement Reforms in Pakistan Findings of W.B CPA Report 2000 • Outdated rules and regulations • Public procurement suffered from inefficiency, and poor management. • Inadequately trained and poorly paid public sector procurement professionals • Complicated and non-transparent procurement procedures discouraged sound planning, thorough evaluation

7. Need for Procurement Reforms in Pakistan Word Bank Recommendations • Enacting a public procurement law based on UNCITRAL Model Law; • Creating a small, professionally staffed, independent regulatory agency • The regulatory body to be mainly confined to policy, documentation, development of rules, etc. • Not to involve in line clearance functions for award of contracts

8. Public Procurement Legal Framework of Pakistan

9. Public Procurement Legal Framework of Pakistan • Pakistan is a Federation consisting of the four federating units; in addition to two other regions: • Punjab • Sindh, • Khyber Pakhtunkhwa • Balochistan • Azad Jammu and Kashmir • Gilgit-Baltistan

10. Public Procurement Legal Framework of Pakistan • PPRA Ordinance 2002 • Public Procurement Rules 2004 • Following Four Regulations issued so far: • PPRA Regulations 2008 • PPRA Regulation 2009 • Consultancy Services Regulations 2010 • PPRA Regulation 2011

11. Public Procurement legal Framework of Pakistan Composition of the PPRA Board: • Secretary, Finance Division (Chairperson) • Secretary, Ministry of Industries and Production (3) Secretary, DefenceProduction Division (4) Secretary, Ministry of Water and Power (5) Secretary, Ministry of Housing and Works (6) Secretary, Ministry of Communications (7) Three Members from private sector (8) Managing Director

12. Public procurement legal framework of Pakistan • PPRA Ordinance 2002 and the Public procurement Rules 2004 are applicable to all procuring agencies of the Federal Government. • Open Competitive Bidding is the principle/default method of procurement • All procurements above the minimum threshold of Rs. 100000 (about US$1000) are advertised.

13. Performance of PPRA

14. Performance of PPRA • Administrative setup of PPRA • PPRA is a very lean organization • Total number of employees is 50 • 8 officers, and 42 staff • Total budget for current year is Rs. 43M

15. Performance of PPRA 173755 tenders monitored/uploaded on PPRA website during the Financial Years 2004-2013

16. Performance of PPRA

17. Performance of PPRA

18. Performance of PPRA • Uploading of PP Rules Violations on PPRA website started in May 2012. • Compliance of PP Rules has increased from 1% in May 2012 to 10% at the moment . • Procurement Plans of 205 Procurement Agencies have been uploaded during the current financial year as against 9 last year.

19. Performance of PPRA

20. Capacity Building Initiatives of PPRA

21. Capacity Building Initiatives of PPRA • Training of the Government officials in procurement started in 2006 under a 3 years World Bank Capacity Building Project. • In 2009, PPRA training activities were formalized through the establishment of National Institute of Procurement (NIP) • Presently PPRA imparting training through its own resources.

22. Capacity Building Initiatives of PPRA • 4501 Officials trained in Public Procurement during the Financial Years 2006-2013.

25. Capacity building initiatives of PPRA Learning Management System • Present training capacity of PPRA is 480 per year • Through development of LMS PPRA will be able to train around 3000 persons per annum, through online/virtual system

26. Challenges Faced By PPRA • Shortage of office space. • Shortage of Human Resource. • Capacity Building of Human Resource. • Lack of power to take action on PP Rules Violations. • Budgetary constraints

27. Reforms Agenda of PPRA

28. Reforms Agenda of PPRA • Advisory Group on Public Procurement (AGPP) • Preparation of National Procurement Strategy 2013-16 • Revision and improvement of Public Procurement Rules, 2004 • Improvement and / or preparation of Public Procurement Regulations

29. Reforms Agenda of PPRA • Review of the SBD for Civil Works • Preparation of SBDs for Goods • Preparation of SBDs for Services • Procurement Code of Ethic

30. Reforms Agenda of PPRA • Establishment of PPRA Monitoring and Evaluation System • Revamping of the PPRA website • Development of HR-Pay Role Module • Accounting Software developed

31. Reforms Agenda of PPRA • The PPRA Service Regulations 2013 approved by the PPRA Board on 30th September, 2013 • Market based Pay Package approved by the PPRA Board, subject to fulfilment of certain formalities. • For financial autonomy, PPRA Financial Regulations/Accounting Procedure at a very advanced stage.

32. Thanks