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Israel Government Procurement Administration, GPA & The Israeli Practice

Israel Government Procurement Administration, GPA & The Israeli Practice. The Accountant General The Procurement Administration Jonathan Bezalel 2013. Percentage from GDP?. 10 – 15%. Public procurement is a key economic activity of governments generating huge financial flows.

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Israel Government Procurement Administration, GPA & The Israeli Practice

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  1. Israel Government Procurement Administration,GPA &The Israeli Practice The Accountant General The Procurement Administration Jonathan Bezalel 2013 www.mr.gov.il

  2. Percentage from GDP? • 10 – 15% • Public procurement is a key economic activity of governments generating huge financial flows • Governments and state-owned enterprises purchase a wide variety of goods, services and works from the private sector Why Procurement? • An effective procurement system plays a strategic role in governments for avoiding mismanagement and waste of public funds www.mr.gov.il

  3. Established on December 2004 • Part of the Ministry of Finance – Accountant General – The Logistic, Procurement and Assets Division. • The government procurement scope is approximately 25 billion NIS. • The scope of procurement done by the Government Procurement Administration amounts to around 14 billion NIS. • Overall there are 300 procurement units constituting an integral part of government ministries. • Approximately 160,000 active suppliers. • Approximately 700,000 procurement activities per year. Government Procurement – General Background www.mr.gov.il

  4. What We do In a nutshell… www.mr.gov.il

  5. What Do We Purchase? www.mr.gov.il

  6. Lack of ability to incentivize market research before publishing a tender. • Lack of ability to locate available procurement opportunities. • False beliefs that online procurement are complex and have no real need. • Insufficient knowledge on the dynamic procurement legislation. • Lack of ability to enforce the SLA on suppliers. • In some government units the procurement, the employee designated with procurement responsibilities has, concurrently, other unrelated responsibilities. Thus his procurement proficiency is derogated. Disadvantage of Decentralized Procurement www.mr.gov.il

  7. Chapter B in the Mandatory Tender Regulations: • Tender with Prequalification Stage – 17C • Tender with Two-Stage Evaluation – 17D • Public Tender with Additional Competitive Process - 17E • Framework Tender – 17F • Automated Tender – 19A • Evolving Automated Tender – 19D • Expedited Automated Tender - 19E How Do We Purchase? www.mr.gov.il

  8. Exemption from Mandatory Tendering: 3 (1) • A contract for a value of no more than NIS 50,000. However, in any consecutive period of 12 months, the ministry may not contract with a particular party, without a tender, pursuant to this paragraph, for a total sum of more than NIS 100,000 How Do We Purchase? www.mr.gov.il

  9. Online Auctions Leadership www.mr.gov.il

  10. Online Auctions Leadership www.mr.gov.il

  11. Online Auctions Leadership www.mr.gov.il

  12. Online Auctions Leadership www.mr.gov.il

  13. GPA Case StudySupplying OfficeMultimedia Products for Government Ministries www.mr.gov.il

  14. The tender was composed of numbers of slots. • “Integration Supplier For “Smart” Rooms Infrastructure” slot. • Two Israeli suppliers were competing in this tender. • Local Production Preference Amendment (LPP): Generally means that the local supplier which his local production components value adds to at least 35% of the overall components value of the product gets a 15% preference in his price offer. Office Multimedia Products Tender– A Case Study www.mr.gov.il

  15. Office Multimedia Products Tender– A Case Study • Problem with the LPP: The regulations addresses a single item while we are facing an integration service composed of multiple items. • OurSolution: We asked each supplier to present an official declaration for each component regarding his local production share. • The new first place qualified the minimum requirement of 35% Israeli Production component and received the 15% price benefit. www.mr.gov.il

  16. Office Multimedia Products Tender– A Case Study • The second place supplier appealed to the Tender Committee claiming that according to the – Mandatory Tenders Law and Regulationsa regulation can not undertake national treaty and referred us to the GPA treaty. • Now we requested proofs that the supplier is qualified to be covered by the GPA. • First GPA Issue: Do we need to check the supplier in general? His products origin? His development center location? www.mr.gov.il

  17. Office Multimedia Products Tender– A Case Study • Second GPA Issue: If components needs to be check – What is the percentage threshold? • Our Solution: We defined GPA qualification the same as we defined Local Production Preference entitlement. • The supplier was given two weeks to come up with the appropriate documents. We saw that his products do not qualify the 35% “GPA” component threshold. • Summary of open GPA issues following our practice: • Which type of document is needed in order to proof GPA entitlement? • What is the percentage threshold needed to qualify for a GPA “protection”? • What determines – country of production? Development base country? www.mr.gov.il

  18. Thank You For Listening!Jonathan@mof.gov.il www.mr.gov.il

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