TI Pakistan

1
TRANSPARENCY INTERNATIONAL - PAKISTANStrives to
make Pakistan a better Country to live in
In the name ofAllahMost Gracious Most Merciful
2
Public Procurement Rules-2004 Implemented in
Sindh Province on 1st November 2006
Presentation in CDGK on 7 January 2007, by Engr.
Syed Adil Gilani, Chairman TRANSPARENCY
INTERNATIONAL PAKISTAN
5-C 3rd Floor, Kh-e-Ittehad,, Defence Housing
Authority Phase VII, Karachi Tele (0092-21)
5390408-9, Fax [phone] email
ti.pakistan_at_gmail.com. Website
www.transparency.org.pk
3

• What does Procurement Means
• Procurement is the engineering term for all
• purchases, supplies, tendering of
  construction
• works, turnkey projects and consultancy
• services.
• PPRA definition of Contractor as contained in
• Public Procurement Rules 2004 clarifies
  this in
• more appropriate manner
• contractor means a person, consultant,
  firm,
• company or an organization who undertakes
  to
• supply goods, services or works

4
GOVERNMENT OF SINDH SERVICES, GENERAL
ADMINISTRATION COORDINATION DEPARTMENT

• Karachi, dated 1 November 2006
• NOTIFICATION
• NO.SO(C-)SGACD/4-80/2006 The Government
  of Sindh is pleased to adopt the Public
  Procurement Regularity Authority (PPRA), Public
  Procurement Rules 2004 with immediate effect and
  till further orders to improve transparency in
  procurement of goods, services and consultancies.
  According!y following guide lines are issued for
  strict compliance by all departments/attached
  departments, autonomous semi autonomous bodies,
  all offices and subordinate offices of the Sindh
  Government, District Governments/TMAs/UCs and all
  establishments associated with Government of
  Sindh.
• a) The Public Procurement Rules 2004 shall have
  overriding effect on all existing Procurement
  Rules, Regulations Manuals, Instructions I
  Orders issued by the Government from time to time
  and shall apply to all departments, District
  Governments, autonomous, semi autonomous
  Organizations I commissions and all offices being
  paid directly and indirectly out of or through
  finances of Govt. of Sindh.
• 
  
  
  Contd

5

• b) All tenders, as required under PPRA, Public
  Procurement Rules 2004 bidding documents,
  processing of bidding documents and final
  decisions taken by the procuring departments I
  officers of Government of Sindh including
  District Governments must be placed on the
  website of the Government of Sindh /
  www.sindh.gov.pk Any violation by any department
  / authority officer in the matter would result in
  invalidation/ cancellation of such tender and
  responsible officer to be proceeded under
  relevant disciplinary laws of the Government of
  Sindh.
• c) The practice of enlisting and registration of
  contractors and suppliers by departments /
  district governments and government agencies I
  semi government agencies authorities is stopped
  with immediate effect and in future all intending
  participants may bid for the tenders and final
  decision may be made by procuring authorities
  after analysis, evaluation and vetting of the
  technical and financial proposals.
• d) The budget of Government of Sindh I Annual
  Development Programs (ADP) including periodical
  releases and periodical utilization progress
  reports must be placed on website of Government
  of Sindh to disseminate the information for
  general public and all stake holders
• FAZAL-U R-REH MAN CHIEF SECRETARY SINDH

6
Integrity Pact

• Procurements exceeding the prescribed limit
  shall be subject to an integrity pact, as
  specified by regulation with approval of
  the Federal Government, between the procuring
  agency and the suppliers or contractors.

7
Integrity Pact

• DECLARATION OF FEES, COMMISSIONS AND BROKERAGE
  ETC.
• PAYABLE BY THE SUPPLIERS/CONTRACTORS OF GOODS,
  SERVICES WORKS
• The Seller/Supplier/Contractor hereby
  declares its intention not to obtain or induce
  the procurement of any contract, right, interest,
  privilege or other obligation or benefit from
  Government of Pakistan or any administrative
  subdivision or agency thereof or any other entity
  owned or controlled by it (GoP) through any
  corrupt business practice.
• Without limiting the generality of the
  foregoing, the Seller/Supplier/Contractor
  represents and warrants that it has fully
  declared the brokerage, commission, fees etc.
  paid or payable to anyone and not given or agreed
  to give and shall not give or agree to give to
  anyone within or outside Pakistan either directly
  or indirectly through any natural or juridical
  person, including its affiliate, agent,
  associate, broker, consultant, director,
  promoter, shareholder, sponsor or subsidiary, any
  commission, gratification, bribe, finders fee or
  kickback, whether described as consultation fee
  or otherwise, with the object of obtaining or
  including the procurement of a contract, right,
  interest, privilege or other obligation or
  benefit in whatsoever form from GoP, except that
  which has been expressly declared pursuant
  hereto.
• The Seller/Supplier/Contractor certifies
  that it has made and will make full disclosure of
  all agreements and arrangements with all persons
  in respect of or related to the transaction with
  GoP and has not taken any action or will not take
  any action to circumvent the above declaration,
  representation or warranty.
• The Seller/Supplier/Contractor accepts
  full responsibility and strict liability for
  making any false declaration, not making full
  disclosure, misrepresenting facts or taking any
  action likely to defeat the purpose of this
  declaration, representation and warranty. It
  agrees that any contract, right, interest,
  privilege or other obligation or benefit obtained
  or procured as aforesaid shall, without prejudice
  to any other right and remedies available to GoP
  under any law, contract or other instrument, be
  voidable at the option of GoP.
• Notwithstanding any rights and remedies
  exercised by GoP in this regard, the
  Seller/Supplier/Contractor agrees to indemnify
  GoP for any loss or damage incurred by it on
  account of its corrupt business practices and
  further pay compensation to GoP in an amount
  equivalent to ten time the sum of any commission,
  gratification, bribe, finders fee or kickback
  given by the Seller/Supplier/Contractor as
  aforesaid for the purpose of obtaining or
  inducing the procurement of any contract, right,
  interest, privilege or other obligation or
  benefit in whatsoever form from GoP.

8

• Public Procurement Rules, 2004 (PPR)
• PPR 2004 has eliminated all discretions in
  procurement process,
• The Vital Rules which have incorporated
  checks and balances in discretion free
  Procurement System are
• Standardization of Procurement Process and tender
  documents, advertise all prequalification or
  tenders over Rs 100,000 thousand on Procuring
  Agency website as well as on the website of
  Government of Sindh www.sindh.gov.pk, and in at
  least one English one Urdu National Daily
  Newspaper, Min 15 days,
• Provide Prequalification Tender Documents to
  bidders which shall include all relevant
  information, including the detailed evaluation
  criteria, Bid award method, Signing of Integrity
  Pact, Rights of bidders for complain on
  evaluation report prior to award, Standard
  Conditions of Contract, Specifications which
  shall allow the widest possible competition and
  shall not favour any single contractor or
  supplier nor put others at a disadvantage, and
  elimination of culture of Gallop/Short Tender etc
  
• 
  
  Contd.

9

• Announcement of the results of bid evaluation in
  the form of a report giving justification for
  acceptance or rejection of bids at least ten days
  prior to the award of procurement contract, and
  bidders are allowed to submit their
  comments/objections within 15 days, and no
  negotiations with the bidder having submitted the
  lowest evaluated responsive bid or with any other
  bidder
• Finalizing of the Evaluation Report after
  examining all complaints,
• Award of all Contracts to Consultants,
  Contractors Suppliers only to the Responsive
  Lowest Evaluated Bidder.
• PEC Procedure to Award the Contract to Top
  Ranking Bidder eliminated
• The Evaluation report and Contract to be made
  public after the Award

10

• LOWEST BIDDER MAY NOT BE
• THE RESPONSIVE LOWEST EVALUATED BIDDER
• The general perception that when the tender is
  opened the Bid which is the lowest at the time of
  Tender Opening is the Lowest Bid and shall be
  awarded the Tender.
• After Tender Opening preliminary checks are
  required to determine the responsiveness of all
  Bids.
• A bid is non-responsive and not to be considered
  for evaluation, if the mandatory requirements are
  not fulfilled by the bidder.
• After the responsiveness check, the evaluation of
  only the Responsive Bids are carried for
  determining the Cost of Bids, which in case of
  Equipment Supply also includes the lifecycle cost
  of the equipment.
• The evaluated tender prices of all Bids thus
  arrived are the responsive evaluated prices, and
  the lowest amongst them is awarded the tender.

THIS PERCEPTION IS WRONG
11
A Tender is to be Rejected if

• It is received after the time and date fixed for
  its receipt,
• Fails to Sign Integrity Pact, It is submitted
  through fax, telex, telegram or e-mail.
• It is not accompanied with Bid Security, It is
  unsigned.
• Its validity is less than specified, It is
  submitted for incomplete Scope of Work, It
  indicates completion date later than specified.
• It indicates that prices quoted are not firm
  during currency of the contract
• except those prices where escalation/adjustment
  s are permitted in the
• Conditions of Contracts.
• It indicates that material to be supplied
  does not meet the eligibility
• requirements.
• It indicates that Bid Prices do not include the
  amount of taxes duties.
• If Bidder refuses to accept the arithmetic
  corrections.
• It is materially and
  substantially different from the
  
• Conditions/ Specifications of Bidding
  Documents.
• It provides Sub-contracting, contrary to
  conditions specified in the Bidding Documents.
• It fails to comply Mile-Stones/critical
  dates specified in Bidding Documents.
• The bidder is not valid license holder of the PEC.

12

• TI Pakistan Time Based Procedure of Routing the
  Tenders Contract Award
• Evaluation
• - Opening Evaluation of tenders 07
  Days
• - Public Declaration of Evaluation Report 10
  Days
• - Finalization of ER
  06 Days
• - Approval of ER by Project
• Award Committee. 02 Days
• - Approval of Award of Contract
• by competent authority 02 Days
• Letter of Award
• Issue of Letter of Award by Department 02 Days
• Total Time 29 DaysSigning of Contract
  Agreement 04-28 Days

13
Definitions

• emergency means natural calamities,
  disasters, accidents, war and operational
  emergency which may give rise to abnormal
  situation requiring prompt and immediate action
  to limit or avoid damage to person, property or
  the environment
• (j) repeat orders means procurement
  of the same commodity from the same source
  without competition and includes enhancement of
  contracts

14
42. Alternative Methods of Procurements

• (a) Petty Purchases
• Procuring agencies may provide
  for petty purchases where the object of the
  procurement is below the financial limit of
  twenty five thousand rupees. Such procurement
  shall be exempt from the requirements of
  bidding or quotation of prices
• Provided that the procuring agencies shall
  ensure that procurement of petty purchases is in
  conformity with the principles of procurement
  prescribed in rule 4

15
(b) Request for Quotations

• A procuring agency shall engage in this
  method of procurement only if the following
  conditions exist, namely-
• (i) The cost of object of procurement is below
  the prescribed limit of one hundred thousand
  rupees
• Provided that the respective Boards of
  Autonomous bodies are authorized to fix an
  appropriate limit for request for quotations
  method of procurement subject to a maximum of
  rupees five hundred thousand which will
  become financial limit under this sub-rule
• (ii) The object of the procurement has standard
  specifications
• (iii) Minimum of three quotations have been
  obtained and
• (iv) The object of the procurement is purchased
  from the supplier offering the lowest price

16
(c) Direct Contracting

• A procuring agency shall only engage
  in direct contracting if the following
  conditions exist, namely-
• (i) The procurement concerns the acquisition of
  spare parts or supplementary services from
  original manufacturer or supplier
• Provided that the same are not available
  from alternative sources
• (ii) Only one manufacturer or supplier exists
  for the required procurement
• Provided that the procuring agencies shall
  specify the appropriate fora, which may authorize
  procurement of proprietary object after due
  diligence and
• 
  
  contd

17
(c) Direct Contracting

• (iii) Where a change of supplier would oblige the
  procuring agency to acquire material having
  different technical specifications or
  characteristics and would result in
  incompatibility or disproportionate technical
  difficulties in operation and maintenance
• Provided that the contract or contracts do
  not exceed three years in duration
• (iv) repeat orders not exceeding fifteen per
  cent of the original procurement
• (v) in case of an emergency
• Provided that the procuring agencies shall
  specify appropriate fora vested with necessary
  authority to declare an emergency
• (vi) when the price of goods, services or
  works is fixed by the government or any other
  authority, agency or body duly authorized by the
  Government, on its behalf, and
• (vii) for purchase of motor cars from
  local original manufacturers or their
  authorized agents at manufacturers price.

18
d) Negotiated Tendering

• A procuring agency may engage in negotiated
  tendering with one or more suppliers or
  contractors with or without prior publication
  of a procurement notification. This procedure
  shall only be used when,-
• (i) the supplies involved are
  manufactured purely for the purpose of
  supporting a specific piece of research or an
  experiment, a study or a particular development
• (ii) for technical or artistic reasons, or
  for reasons connected with protection of
  exclusive rights or intellectual
  property, the supplies may be
  manufactured or delivered only by a particular
  supplier
• (iii) for reasons of extreme urgency brought
  about by events unforeseeable by the procuring
  agency, the time limits laid down for open and
  limited bidding methods cannot be met. The
  circumstances invoked to justify extreme
  urgency must not be attributable to the procuring
  agency
• Provided that any procuring agency desirous of
  using negotiated tendering as a method of
  procurement shall record its reasons and
  justifications in writing for resorting to
  negotiated tendering and shall place the same on
  record.

19
43. On Account Payments

• All procuring agencies shall make prompt
  payments to suppliers and contractors against
  their invoices or running bills within the time
  given in the conditions of the contract, which
  shall not exceed thirty days.

20
48. Redressal of grievances by the
procuring Agency

• (1) The procuring agency shall
  constitute a committee comprising of odd
  number of persons, with proper powers and
  authorizations, to address the complaints of
  bidders that may occur prior to the entry
  into force of the procurement contract.
• (2) Any bidder feeling aggrieved by any act
  of the procuring agency after the submission of
  his bid may lodge a written complaint concerning
  his grievances not later than fifteen days after
  the announcement of the bid evaluation report
  under rule 35.
• (3) The committee shall investigate and
  decide upon the complaint within fifteen days of
  the receipt of the complaint.
• (4) Mere fact of lodging of a complaint
  shall not warrant suspension of the procurement
  process.
• (5) Any bidder not satisfied with the
  decision of the committee of the procuring
  agency may lodge an appeal in the relevant court
  of jurisdiction.

21
50. Mis-procurement

• Any unauthorized breach of these rules shall
  amount to mis-procurement.

22
Blacklisting of suppliers and contractors

• The procuring agencies shall specify a
  mechanism and manner to permanently or
  temporarily bar, from participating in
  their respective procurement proceedings,
  suppliers and contractors who either consistently
  fail to provide satisfactory performances or are
  found to be indulging in corrupt or fraudulent
  practices. Such barring action shall be
  duly publicized and communicated to the
  Authority

23
Beginning of Transparent , Specified
Quality,Most Econimical and Effiicient
Procurement System
in City District Government Karachi