Urgent Need of Procurement Management Information System (PMIS) For Improving Public Procurements

Consulting Engineer PDE, Rural Access Improvement and Decentralization Project (RAIDP) District Technical Office, Surkhet dhakal.shreeram@gmail.com

Shree Ram Dhakal

1. Background
Sound Public Procurement Policies and Practices are among the essential elements of good governance. Good practices reduce cost and produce timely results in efficient manner. Poor practices lead to wastage and delays and often become the cause of allegations in corruption and government inefficiencies. It is governments duty to take measures to ensure adequate principles and practices are followed in public works and services. Sufficient regulatory provisions have been made; meanwhile sufficient threats and weep holes have been identified along with in our procurement practices. Prevailing Public Procurement Act 2063, along with previous FAR had, has adopted the competitive bidding process for procuring works, goods and services. It is aimed to acquire the reasonable standard of delivery in the least cost through capable deliverer/supplier. Despite such provision, current practices have not attained sufficient satisfactory result as aimed in the regulatory provisions. It has been a big challenge for every public authority to get the reasonable standard of delivery. Manipulations are often found both from contracting parties during bid preparation as well as procuring authority during the evaluation process. During bidding process major alterations the bidders make is the faulty information about the work experience, financial turnover, faulty equipment and manpower capability information. It is often observed that the bidders have a wide tendency to make fake documents to show that they meet the qualifying criteria mentioned in the bidding documents. Likewise, during evaluation process

public authoritarians have often found to have vested interest to make certain bidder successful prejudicially and alterations in the posted documents of bidders have taken place with motive of unethical financial gain. All such unfair practices have made the procurement practices unfaithful and government works and services ineffective compared to their objectives. So, there is urgent need of adopting a smart system which minimizes the chances of alteration and manipulation before, during and after bidding process. To make procurements efficient and unaltered, Procurement Management Information System (PMIS) can be a smart remedy in reducing inefficiencies, manipulations and fraud & corruption during tendering and contract execution.

2. What is PMIS?
Procurement Management Information System (PMIS) is a smart system which collects, stores and synthesizes the procurement related information all over the country. It is an online based central and integrated data management system concerning to the procurement activities. PMIS uses centrally updated data warehouse to track, record and verify the procurement history and current capabilities of the contracting parties viz. contractors/suppliers/ consultants. During bidding, bid evaluation and contract execution PMIS serves as necessary source of transformation of authentic information and bridges between the bidders and procuring authority. PPMO can be an appropriate authority to undertake the central data management system.

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4, 2013 pp 209-213

3. Components of PMIS and Registration

Components of PMIS are more similar to that of e-submission system being adopted till date. The difference lies in the continuous receiving and updating of the capabilities and procurement information by PMIS unlike to e-submission system. Following are the component units of PMIS. a. Central Data server- a data warehouse b. Online Service Package c. System Members i. System administrator, say PPMO ii. Procuring Authorities iii. Bidding Parties i.e. contractors/ suppliers/consultants iv. Scheduled Banks

system by certifying their procurement needs by the government departments with authorized lettering. iii. Registration of contractors/suppliers/consultant s: - Registration of bidding parties in PMIS should be managed in such a way that they are bound to enter in the PMIS by written request with supporting documents rightly after they are registered in the firm/company registration authority. At the time of registration the current capabilities i.e. Manpower, equipments, financial resources and other technical capabilities should be registered along with. iv. Registration of Scheduled Banks: Registration of Banks takes place on demand to the system by bidding parties (for presenting bid charge amount, bid security guaranty or performance guaranty during bidding process) or by procuring authorities (during payments). b. Electronic Bidding Invitation of bids, quotations, RFPs etc should be called officially through electronic bidding process. For doing so every procuring authority should keep online based centralized service package/software. Preparation of bid documents can be simplified by already prepared templates by administrator where necessary entries can be made pertaining to the unique details of that contract. Posting of bid notice to the system automatically generates email notification to every members registered to the system.

4. Work Flow Steps in PMIS

Work flow of adopting PMIS should take in the following sequential order. a. Registration of Users Registration of different users should follow different methods. Adequate review and verification should be done prior to the registration since the users are made authorized, with designated powers according to the type of user, to participate in the public procurement by registering them in the system. Registration of users takes place with following hierarchical order. i. Registration of System administrator:- This is a single entity type of user. PPMO (or any central authority) is a single and one time registration process. ii. Registration of Procuring Authorities:- All the procuring entities should enter into the

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4, 2013 pp 209-213

On receiving the notification, bidders can prepare his bid by providing his necessary entries of item rates and other required customization to the provided bid template. Also the bidding parties have to manage the appropriate bank to issue bid security guaranty which too, gets submitted through online in the PMIS system along with the bid. There is no need to mention the experience information, manpower and equipment capabilities and financial turnover etc. by the bidders on their own as these things are automatically stored and updated continuously in the system. Bidding by that time only indicates the willingness of the particular bidder. c. Bid Opening and Evaluation Opening of bid will not be a big deal after going online system of PMIS as there is no chance of manipulations and alterations as like in case of hard copy submission. So, it follows a regular office day process. Bidding period can also be reduced as online system gives a reduced effort on bid preparation. After opening of bids on the specified date and time, it can be automated in the PMIS system to send the abstract details of submitted bids to all the bidders as bid opening checklist (muchulka as we say). After opening of bids evaluation of the bid takes place. This section in the system is only accessible from the terminal of procuring authority (the buyer). Through this section the buyer generates the checklist of Requirement Details of the contract as indicated in the bid document already prepared and also the detail capability of the bidders though the PMIS central data warehouse. On comparison of both, system automatically indicates the eligible and ineligible bidders. After generating the Comparative Chart of proposed item rates in the BOQ provided by the eligible bidders

along with the bid document template, Lowest Eligible Bidder is easily determined. The case of responsive and non responsive bidders can be omitted by filtering during the bidding process i.e. not allowing the non-responsive bids for particular contract during bidding. d. Contract Award and Monitoring After evaluation of bid, contract is awarded to the successful bidder through the system. Going through the contract award terminal by the buyer, contract agreement template document already created in the system is modified and customized in the required field only (i.e name and ID of contract, SCC, Priced BOQ, time of execution, milestones etc) which gets entered in the data warehouse. It can be utilized by the system for real-time tracking of contract. By the help of set data in the system (or say in the contract document) PMIS regulated and notifies the necessary information like milestones, time frame, guaranty times, and progress and suggests action to the concerned party. Mandatory actions cannot be modified or altered by none of the registered users (neither buyer nor the administrator). For example, if the milestone provisioned in the contract is not achieved, it suggests charging Liquidated Damage as in the contract document and it has to be done by the buyer otherwise payment order by the system does not proceed. Hence the chance of manipulations in the contract execution is highly reduced. e. Payments and Completion of Contract During or on completion of contract execution series of payment shall be released. The payments can be released to the contracting parties upon the billing of

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4, 2013 pp 209-213

executing works through the billing section of the PMIS accessible only to the buyer. Payment can be issued through the scheduled banks upon the online request order through the system. On completion of works or services, completion report is prepared with contract execution details and final payment is released.

5. Advantages of PMIS over Traditional

System
Adoption of PMIS can make vast difference in the current procurement practices. There is very little or no chance of manipulations during the bidding process as well as contract execution. Following are some of the advantages. i. During bidding process, bidders cannot present the fake information of experience, turnover and equipment as in the current hard copy submission system since tracked factual data are given by the system server. ii. One equipment, manpower or vehicles allocated by bidder for particular contract in the bid can be made used for that contract only making unable to allocate for other contracts. iii. Opening and evaluation of bids is highly simplified work in PMIS. There is no chance of manipulations and alterations in the documents by evaluation team. Chance of unethical processing is reduced. iv. PMIS timely informs and alarms about the milestones, critical activities and time frames which we often forget during contract execution in our present practice. v. Every detail of all ongoing as well as completed contracts is tracked by the system server enabling the generation of status of contracts overally, particular to a contract or particular record of a contracting party. Helps in taking necessary action.

f.

Updating the Contract Execution Report

Since every action is preceded through the online based software package of PMIS connected to the central server it is gets automatically saved to server. On termination of contract, summary of contract execution, milestones, progress record, billing information and payment history is recorded by the system removing the other tracking histories. Compilation of such executive summaries of all contracts handled by a particular contracting party, yearly work experience and financial turnover can be easily generated by the system. Turnover Report of all the registered contracting parties can be published in the system in the yearly basis. Such reports are usable for future bidding actions and contract management. g. Updating the Increased Capability of Bidders The system should support the update of the increased capability of bidding parties. Increment in the resources, manpower, equipment and other capital assets etc should be updated with written request by the contracting parties on verification of the requested update with supporting documents (i.e. purchase receipt and departmental registration slip etc.) by the system administrator.

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vi. Since PMIS eliminated major alterations, it greatly reduces the cases of fraud and corruption as procurement is the major source of corruption.

6. Current Challenges of Adopting PMIS

Every new starts faces some challenges. Adoption of PMIS too, will not be free from hindrances and obstacles at its start. Following are our challenges to go for adopting PMIS in public procurements. i. Reluctance of public authorities and political circle to adopt a smart and alteration free system. ii. PMIS is fully online based. Lack of continuous electricity supply and internet connections every places of country. iii. Limitation of proper level of computer skills among public personnels and contracting parties. iv. Proper mechanism of data encryption in online system should be established. v. Without clearly stating in the procurement act and until detail regulations and guidelines to go for an online based system is made, it is difficult to adopt PMIS.

corruption; a properly controlled, dynamic and smart system in our procurement practice is urgently needed. Procurement Management Information System plays a vital role in curbing corruption eliminating the chances of manipulations. PMIS does not make the procurement different but makes it proceed differently. The reduced effort, lesser chances in alterations, elimination of unhealthy competition, reduction in chances of undue benefits are the results PMIS provides. Many of the countries in the world including Bangladesh, whom we used to call a major country of procurement mishmash in South Asia, has already gone for complete online based procurement system. So, its our time to leap into a prosperous and mechanized country through procurement reforms and good-governance. Its a crucial time that PPMO is undertaking the process of replacing of the current Public Procurement Act with a new one and is a better instance to quest for an efficient and smart system. The recent budget speech of FY 2070 has too, proclaimed its commitment for electronic government procurement i.e. e-GP system, which should be advocated to make happened in real. References i. World Bank Country Procurement Assessment Report (October 2002) ii. Asian Development Bank, Curbing Corruption in Public Procurement in Asia and the Pacific, Progress and Challenges in 25 Countries,2006 iii. E-GP Guidelines of Government of Peoples Republic of Bangladesh, 2009 iv. E-procurement Portal of DoLIDAR, Nepal,<https://www.edolidar.gov.np>

7. Emerging from the Challenges and

Way Forward
Despite a nos. of limitations and reluctance in our current system, we are bound to correct them as we are, now or then, bound to rise from our misery. Its only we and our generation to make our environment a better place. If we sought for a dynamic and well mechanized system in our governance, the result is efficient service delivery with a lesser operation cost. Since procurement sector is a major area of

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4, 2013 pp 209-213