This outlines the trends in government procurement systems

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1
New Trends in Government
Procurement
Presented at the ZSPA International
Conference and Master Class
15 – 17 June 2016

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Outline of the Presentation
 General Considerations
 Public Procurement: An Overview
 Public Procurement Reforms
 The New Reform Agenda

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General Considerations
 Why does Public Procurement matter?
 Public Procurement is one of the most important
economic factors in Zambia: Accounts for an
estimated 15% of the GDP
 Government procurement is perceived to be the
major source of corruption
 The need to apply principles of public
procurement

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Public Procurement: An Overview
 What does government procure?
 Government procures goods and services from
third parties (private sector). The rationale for
buying from third parties is well-known.
 The use of markets to source goods and services drives
cost efficiencies and stimulates innovation.
 Where government outsources complex services, risk
transfer may also be a motivation.
 Third parties have expertise that can help government
deliver value-for-money public services and wider policy
objectives.

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What does government procure?
 The types of goods and services procured by
government are diverse.
 On one end of the spectrum, there are products that
can be acquired ‘off-the-shelf’ commoditised items
such as toner where there is limited product
differentiation.
 On the other, government procures highly specialised
goods – such as welfare programmes or rehabilitation
services – where it is likely to act as the only buyer.

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What does government procure?
• IT hardware
• Mobile phones
• Office equipment
• Energy and utilities
• Construction equipment
•Consultancy
•Internet Service
•Facilities management
•Construction services
• Work Programme
• Rehabilitation
• Military aircraft
and ships
Highly commoditised Highly Unique

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 To get the most out of suppliers,
procurements need to be tailored to the
specificities of the market in question.
 Different procurement methods are available
to government.
 The methods are tailored to promote
competition in procurement processes.
How does the procurement process
work?

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How does the procurement process work?
Write
Specifications
TOR and SOW
Evaluate Offers
Prepare
Solicitation
Documents
Seek, Clarify
and Close
Offers
Award Contract
Manage the
Contract
Choose a
Procurement Method
Identify Needs
Negotiate the
Contract
Evaluate the Procurement

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 There are over 500 procuring entities (PE’S) in Zambia.
 One of the major challenges being faced in public
procurement is poor recordkeeping.
 The poor record keeping in most PE’s has resulted in
 Lack of comprehensive statistics on the value of goods, services
and works procured and on the key indicators under procurement
process.
 This is exacerbated by the limited use of information and
communication technology (ICT).
 The absence of robust data on government procurement
constrains accountability.
Who does the procuring?

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 1969: Public Finance (Control and
Management) Act, 1969. The Act
established:
 Central Supply and Tender Board
 Provincial Tender Boards
 1982: Zambia National Tender Board Act
 Zambia National Tender Board (ZNTB) as
regulatory body
Overview of public procurement reforms in
Zambia

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 1996: ZNTB authorized and implemented the
restructuring of the secretariat with a view to
making it more responsive.
 ZNTB started implementing the Public Sector
Procurement Reform Programme under the
Financial and Legal Management Upgrading
Programme (FILMUP) financed by the
International Development Association (IDA).
Overview of public procurement reforms in
Zambia

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 The FILMUP programme was aimed at:
 Administrative strengthening of ZNTB;
 Recruitment and training of procurement specialists;
 Decentralising procurement;
 Providing the necessary office equipment and
vehicles; and
 Enhancing procurement procedures.
 The FILMUP programme came to an end in
2000.

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Overview of public procurement reforms in
Zambia
 2000: ZNTB started undertaking other reform
activities under the first phase of the Public Sector
Capacity Building Project (PSCAP) funded by the
IDA. The PSCAP was meant to continue some of
the activities started under FILMUP
 2008: Public Procurement Act (PPA). PPA
established Zambia Public Procurement Authority
 2011: Statutory Instrument No. 63 of 2011 (The
Public Procurement Regulations, 2011)

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Overview of public procurement reforms
in Zambia
 One of the objectives of preparing a new law on public
procurement was adaptation to international instruments
on public procurement (COMESA Directives, UNCITRAL
Model Law on Procurement, World Bank Procurement
Guidelines, etc.).
Public
Procurement
Act No. 12 of
2008

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Factors leading to reform of Zambia’s
public procurement system
No. Factor
1
The Country Procurement Assessment Review (CPAR) undertaken by the
Government and the World Bank in 2002 which revealed weaknesses and
omissions in the current Zambia National Tender Board Act and Tender
Regulations
2
The decision by the Government to enhance transparency and accountability
and the Zero Tolerance to Corruption policy
3 Government policy to decentralise operations
4
COMESA Directive on Procurement which required members states to
reform their procurement legal frameworks so as to conform to the
UNCITRAL Model Law on Procurement.
5 The enactment of the Citizens Economic Empowerment Act.

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The new reform agenda
 Despite the recent reform agenda,
government procurement is still too often
bureaucratic, lengthy and opaque.
 The fundamental challenge is that:
 Public Procurement still seen by government as a
regulatory function rather than an opportunity to
deliver value-for-money public services.

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 To deliver better-value public services, there is need
to change our mindset.
 Resource and attention need to be pushed away
from the procurement process, to the areas where
true value can be added: pre-market engagement
and contract management.
 Focus on the beginning and end of the procurement
cycle –that is a greater emphasis on outcomes and
shaping procurement markets more effectively.
The new reform agenda

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 The digital agenda – which delivers faster
and cheaper procurements than traditional
models – could be a way to achieve value-
for-money for a considerable proportion of
government expenditure.
 ZPPA, starting from July 2017, will be
introducing electronic government
procurement on 6 Pilot cites.
The new reform agenda

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 E-procurement aims to simplify the buying
procedure, speed up procurement and
engender competition through transparency
The new reform agenda

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 Improved Governance
 Transparency of public procurement
 Less opportunity for fraud & corruption
 Efficiency Gains
 Competitive prices & reduced transaction costs
 Procurement management based on data
 Economic Development
 Redistribution of savings
 Private sector activation & infrastructure development
Benefits of e-procurement

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 Better access to government market
 E-procurement creates greater opportunities for
the business community to sell their goods and
services to public agencies.
 E-procurement drive value for money by lowering
barriers to entry and increasing competition.
 Public procurement monitoring
 enhances monitoring and compliance to
regulations
Benefits of e-procurement

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Other Future Developments
 Framework Agreements
 A contract that establishes terms and conditions
under which subsequent contracts will be placed
 Does not commit the purchaser to purchase
 Requires the supplier to supply in accordance
with the terms defined within the scope of the
contract

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Other Future Developments
 Open Contracting
 Increased disclosure and
 Multi-stakeholder participation in public contracting at
all stages of the contracting (procurement) cycle, from
planning to implementation.
 Open Contracting Goals are:
 To ensure that investments are aligned with the public
interest;
 To ensure that public resources are managed
efficiently;

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Benefits of Framework Agreements
 Reduced administration and costs
 Competitive pricing (aggregation of demand)
 Assured quality
 Legal protection against breach of contract
 Assured delivery of goods
 Planned supplier stock levels
 Continuity of supply
 Long-term working relationships
 Improved flexibility and cooperation
 Value for money

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Benefits of Open Contracting
 Enhance transparency in public procurement
 Increase Availability of Information
 Encourage Civic Participation
 Improve Accountability and Integrity in
Government
 Increase Participation in Public Procurement
 Achieve sustainable Open Public Procurement
Data for Analysis

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 These new mechanisms are at the core of the
new trends and changes being introduced in
Public Sector Procurement.
 There is therefore need for review of
procurement skills, identifying gaps that need to
be addressed in view of an increasing focus on
e-procurement. Capacity building and training
are important in this regard.
Conclusion

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Conclusion
 The ZPPA has responded to the challenge of
reforming the country’s procurement system
and made improvements.
 ZPPA is committed to establishing and
embedding appropriate procurement policy
and best practice in order to ensure fair and
efficient procurement practices.

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Thank for your attention
 THE END