PUBLIC PROCUREMENT OPERATIONS

Dr. Fred Mugambi Mwirigi

JKUAT

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Introduction

The legal frame work of public procurement operations was strengthened with enactment of public procurement and disposal act 2005 which came into operation on 1st January, 2007.

The act and regulations were enacted to assist in operations of public procurement and disposal procedures achieve the following objectives:

Maximum economy and efficiency Promote competition and ensure that

competition are treated fairly

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Contd.

Promote integrity and fairness of the procedures in operation

Increase public confidence in operations and procedures

Increase transparency and accountability Increase public confidence in procedures of

operations Facilitate the promotion of local industries

and economic growth.

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Public procurement operations Legal operations basis for public procurement

procedures must be followed for any action taken. The sources include the following:

-Constitution of the republic of Kenya-Public procurement and disposal act 2005-Public procurement guidelines-Public procurement circulars and administrative

guidelines-Public procurement and disposal general manual-Standard tender documents

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Public procurement operations cycle Procuring entities are responsible for carrying

out procurement procedures and they should be familiar with complete procurement cycle as follows;

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Public procurement operations cyclei. Preparation of procurement planii. Preparation of procurement specifications and initiation

of the procurement processiii. Preparation of pre-qualification/tenders/bid documentsiv. Advertisement /initiation of bidsv. Receiving and opening of bidsvi. Evaluation of bidsvii. Adjudication and contract awardviii. Notification of contract awardix. Negotiations (where applicable)x. Preparation and signing of procurement contractxi. Contract administrationxii. Receipt, Inspection, and Acceptance of goods ,works,

and consulting services.xiii. Storage and inventory management

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General procurement principles To achieve better sound procurement practice these

principles must be applied regularly in public procurement.

i. Strict compliance with law and regulationsii. Ensure you achieve economy and efficiencyiii. Promotion of value for money through effective

competition and careful procurement planningiv. Balance control and delayv. Separation of authority between procurement

initiation, vendor selection, commitment, receipt and acceptance object

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General procurement principlesvi. Promotion of sound public finance management

(linkage in PFM)vii. Fairness and non discrimination in invitation ,

evaluation and award of tendersviii. Observe ethics and avoid corruptionix. Uphold transparency and accountability in

procurement and disposal processx. Promotion of health and safety standards as well as

environment protectionxi. Strict adherence of use of appropriate documents

and maintain comprehensive records

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Procurement planning

• Procurement planning directly links the procurement function to the budget preparation.

• Procurement operations must be adequately planned with realistic times taken into account for preparation of procurement requirement.

• It is the responsibility of procurement unit to assist each end user department in preparation of departmental plan.

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Procurement planning cont.. Proper procurement plan will assist finance

department in forecasting for cash needs and make necessary projections.

Procurement plan is also an internal control tool.

It is the first level of commitment control.

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Contents of procurement annual plan• The annual procurement plan must contain the

following facts:1. Detailed breakdown of goods , works, services and

consultancies required.2. Scheduled planned delivery time frame.3. Justification of procurement in a single or multi-year

arrangement.4. Indication of what items shall be aggregated for

procurement as a single package( justifications of economies of scale)

5. Indications of what items shall be divided into lots.

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Contents of procurement annual plan. Cont..6. Estimate of the value of each package of goods, services, works, consulting and design required.7. An indication of the rules applicable to procurement where public procurement and disposal act is not applied.8. An indication of the anticipated procurement method for each procurement requirement.9. Indication whether procurement will be done by procuring entity, specialized procurement unit, any agency designated to procure common-use items or any other body.

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Contents of procurement annual plan. Cont..10. An indication of the warehouse

requirements for storing the planned procurement.

11. An indication of self life for any goods that may be perishable or degradable.

12. An indication of the resources available for managing the procurement work load.

13. Details of any commitment or planned procurement expenditure under existing multi-year contract.

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Contract Administration and Responsibilities• For each contract entered into, the procuring

entity must designate a member staff or team of staff responsible for administering the contract. Example, Ensure quality and quantity specified has been supplied.

• The Contract administrator is responsible for:

1. Monitoring the performance of contractor

2. Ensure contractor submits all required documents

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Contract administrator is responsible for: (cont..)3. Ensuring procurement entity meets all its

payment and other obligations in time4. Ensuring that there is adequate cost, quality,

and time control5. preparing any required contract variations or

change orders and obtain all required approval. Such variations must have justifications done in written and supporting evidence.

6. Managing any handover or acceptance procedures.

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cont..

7. Making recommendations for contract termination and managing termination process.

8. Ensuring that the contract is complete prior to closing the contract file including handover procedures and retention payment

9. Ensure all contracts administration records are complete up-to-date

10. Ensuring that the contractor and procuring entity act in accordance to provisions of the contract.

11. Discharge performance guarantee where required.

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Variations of contracts operations• In accordance with section 47 (b) of the

procurement law and the regulations any variation of a contract shall be effective and only if :

1. The price variation is based on the prevailing consumer price index obtained from Central Bureau of Statistics or monthly inflation rate issued by Central Bank of Kenya.

2. The quantity variation for goods and services does not exceed 10% of original contract quantity.

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cont..

3. The quantity variation for works does not exceed 15% of the original contract quantity.

4. The price or quantity variation is to executed within the period of contract.

5. Contract variation categories are;

-Price Variables.

-Optional specification variations.

-Obligatory specification variation.

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Thank you

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