Public Procurement Made Simple

Auhor:

Saikou Saidyjeng (MBA International Business)

Senior Procurement Officer, University of The Gambia, Kanifing

Chapter 1: Conceptual Framework of Procurement

Definition and Meaning of Procurement

In its barest form, procurement is viewed as the process by which organizations acquire goods,
works and services (Avotri, 2012).

Procurement is the act of acquiring goods, services or works from an external source, often via a
tendering or bid process. We need to elaborate on two important words in this definition viz;
process and acquire.

By process, the connotation is that organizations have to follow systematic and logical steps in
the acquisition of materials. In other words, for organizations to acquire goods, works and/or
services, they must get involved in the procurement cycle. Avotri (2012) stated that the
procurement cycle “essentially entails planning, starting with needs assessment through needs
preparation, inviting offers, contractor selection, awarding contracts, executing and managing
contracts, as well as final accounting and auditing”.

Secondly, the acquisition aspect in the definition above may have several meanings. Hence
organizations may acquire goods, works and services in different ways. These include
purchasing or buying, hiring, leasing or any other contractual means by which suppliers are
asked to provide goods, works and/or services to the entity.

Procurement applies the science and art of external resource and supply management through a
body of knowledge interpreted by competent practitioners and professionals. Procurement
includes activities and events before and after the signing of a contract as well as the general
management activities associated with a range of contracts ( Kidd, 2013):

1. Pre-contract activities such as planning, need identification and analysis, and sourcing,

2. Post-contract activities such as contract management, supply chain management and disposal,
and

3. General activities such as corporate governance, supplier relationship management, risk

management and regulatory compliance.

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Types of Procurement

On the basis of the sector in which procurement operates or serves, it can be divided into three
main types:

Public Sector Procurement: Where goods, services and or works are acquired for the operation
of government, it is normally referred to as Public Procurement. The goal here is to enable
government to provide services for the public. Public procurement is carried out within a specific
legal framework underpinned by certain principles aimed at making the fulfillment of public
procurement requirements competitively available to qualified firms and individuals in a
transparent and nondiscriminatory manner based on pre-established selection criteria.

Thus the main of public sector procurement is to provide the necessary requirements for the
operation of government and, specifically, public services to the citizenry.

Private Sector Procurement: Unlike Public procurement, Private sector procurement is the
process of acquiring goods and services to satisfy the needs of a particular private entity (usually
a business, for profit or not). It is a known fact that businesses need some goods and services for
their own operations needed for a business to operate (example are goods such as stationary,
furniture, office equipment, etc.), and some to use in the production of goods and/or services
meant for their customers and consumers (example finished products like papers, computers,
mobile phones). Acquiring these goods and services usually falls under the domain of private
sector procurement.

Project Procurement: According to Jorge Lynch, this is also a process used to acquire goods and
services, but what distinguishes project procurement from other forms of procurement are the
series of procurement activities carried out during the execution of a project, some
interdependent and some not. Project objectives are predetermined primarily in the project
proposal, and there are a corresponding set of procurement activities undertaken in accordance
with the project procurement plan over a period of time to achieve the project objectives.

Project procurement is dependent on the objectives and goals of the project which it supports. It
is a fundamental part of project management because it is crucial to the success of the project
that procurement activities are appropriately planned and executed; hence, project procurement
planning and strategy development are vital to the implementation and successful outcome of a
project.

For our purposes project procurement will be classified, based on the sector served, as public
sector project procurement and private sector project procurement.

a. Public Sector Project Procurement: Public sector project procurement supports projects
funded and developed to meet the objectives of government, including the provision of
public goods and services to the population. These public sector projects (building of

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 roads, bridges, dams, electric power plants, hospitals, schools, ferries, etc.) can be donor
funded, government funded, a combination of both, or funded through public private or
public-public partnerships; however, regardless of their funding arrangement, their
distinguishing factor is that the purpose these projects serve is entirely public.
b. Private Sector Project Procurement: Private sector project procurement focuses on
procurement activities that satisfy the requirements of projects done for private sector
entities, such as small, medium or large businesses and corporations, and which are
primarily profit-making in nature given that their main objective is the monetary benefit
of the owners or shareholders of the business.

Key Terms in Procurement

Active Contract Files: These are records of the entire procurement proceedings that are still open
and with the contract still in progress. Maintenance, retention and disposal of procurement and
contract records are governed by the public procurement legal and regulatory framework or other
relevant law.

Advance Payment: It is a payment to a supplier, contractor or services provider done prior to the
commencement of the contract. It is requested by the selected bidder and needs a bank guarantee
or bond. The amount is dependent on the agreement between the parties and/or any limitations
set in the public procurement legal and regulatory framework.

Advance Payment Guarantee: A bond or bank guarantee the supplier, contractor or service
provider is required to provider to the client as a security so that the client is able to recover the
advance payment in the event of the bidder’s default.

Approval or Approving Authority (see also Tender Board): The authority to approve all
procurement actions, and documents produced throughout the procurement process including
contract negotiations, award and those actions and documents generated during the contract
administration process. Depending on the public procurement legal framework, approval
authority may be delegated to a tender board.

Bid (same as Offer, Proposal, Quotation and Tender): A response from a supplier, contractor or
service provider to a solicitation request that, if recommended for award, would bind the
supplier, contractor or service provider to perform in accordance with the contract.

Bid Opening: The opening and public reading of all bids received, at a designated date and time
stipulated in the solicitation documents. The bid opening event is a formal process where bidders
are invited to attend, the bids prices are read out and bids are examined for compliance with the
submission requirements of the solicitation documents.

Bid Security: A monetary assurance guaranteed by a bank or other third party that (i) if the
bidder withdraws his bid prior to the end of the bid validity period or, (ii) refuses to sign the

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contract if selected, the bidder will automatically forfeit the bid security amount to the client.
The bid security guarantee is determined and stipulated by the client, including the bank from
which the bid security guarantee is issued.

Bidding Documents: The same as Tender Documents and Solicitation Documents. A set of
documents issued by the procuring entity, inviting offers (bids, proposals or quotations) for the
selection of suppliers, contractors or service providers to fulfill specific requirements.

Buyer: Buyer refers to an individual making purchases on behalf of an entity. It can also refer to
the entity itself that is responsible for the purchases. A procuring entity is essentially a buyer, and
the procurement specialist working for the procuring entity are also considered buyers, so the
meaning of the term buyer depends on the context within which it is used.

Civil Works Procurement: One of the principal public procurement categories, besides goods and
services. Its principal characteristic is the construction and renovation of infrastructure. The
contract is usually undertaken by firm because a team of individuals is needed to complete the
required tasks.

Client: One of the parties to the contract. The one with the requirement that needs to be fulfilled.
Also called: “employer”, “buyer” or “purchaser”.

Consulting Services: A procurement category focusing on the hiring of firms or individuals to

provide services that are primarily intellectual in nature. Studies, training, advice, etc.

Contract Administration: The surveillance, monitoring and reporting of the performance of

suppliers, contractors and service providers for compliance with the terms and conditions of a
contract from the point at which the contract is signed up until it is either terminated or
completed on the date specified in the original contract or by way of a variation (amendment) to
the contract.

Contract Closeout: The process undertaken to confirm and ensure that all deliverables and
payments under a contract have been made and that all the records on file are complete. This
action is also taken to make the specific procurement record inactive and ready for electronic
and/or physical storage. The storage of completed procurement records should be done
preferably ones they have been audited.

Contract Commencement: Is the same as the effective date of the contract; the date on which the
contractor, supplier or services provider is obliged to begin work on the contract.

Contract Completion: The date all deliverables under a contract must be satisfied. The date
agreed in the contract is the one reflected in the initial contract or the one superseded through an
amendment to the original contract completion date. The successful completion of the contract
marks the end of the agreement between the parties, unless the defects liability, guarantee or
warranty period is still in effect.

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Contract Signing : Marks the date of entry into force of a contract, making it legally binding
between the parties to the contract.

Contract Suspension: The cessation of all activities under the contract resulting from unforeseen
events, breach of the contract terms and conditions or mutual agreement between the parties to
the contract. This cessation may be temporary, leading to the resumption of contract execution
leading to contract completion or may lead to the eventual termination of the contract for default,
convenience or due to Force Majeure.

Contract Termination: The permanent cessation of work under a contract resulting from
unforeseen events, breach of the contract terms and conditions or mutual agreement between the
parties to the contract.

Debriefing: An oral or written report to bidders that were not awarded the contract. Depending
on the procurement legal framework, this report is done after the conclusion of a procurement
process, and it should inform bidders of the details of the evaluation of their bids or proposals.
This report should identify the strengths and weaknesses of the bids or proposals. It is also issued
upon request.

Defects Liability: Is the legal responsibility that a contractor has to repair and/or cover the cost of
any defects found in a completed or renovated infrastructure works. This responsibility last only
for a period of time stipulated in the contract.

Defects Liability Guarantee: A sum of money belonging to the contractor, usually ten percent of
the contract value, that is retained by the client, or is replaced with a bank guarantee for the same
amount, which the client has the right to use if the contractor fails to repair any damages found in
the completed or renovated infrastructure during the defects liability period as stipulated in the
contract.

Defects Liability Period: The time frame in which the contractor of a completed or renovated
infrastructure works has the responsibility to repair or cover the cost of any defects discovered in
the infrastructure. This period is stipulated in the contract and can be a year or more. The defects
liability guarantee is retained by the client for the duration of the defects liability period.

Force Majeure: An unforeseen event or condition that is not caused by, or could not be prevented
by any of the parties to the contract, but which resulted in delay or suspension of execution of the
contract. A Force Majeure event could lead to the termination of the contract, but would not be
considered breach of contract by either party.

Goods: One of the principal procurement categories. Any physical item or a combination of an
item with a service where the item is the principle product being procured. An example is the
procurement of furniture or vehicles, where on the one hand there is need for assembling and

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installing the furniture, and on the other periodic servicing, repair and/or maintenance of the
vehicles.

Inactive Contract Files: Records of contracts that have reached their contract completion date,
have been terminated, or the period in which they are to remain active has already passed. The
period of time a contract records can remain active or inactive is determined either by the
procurement legal and regulatory framework or other government regulation. Once contracts
reach the end of their active life, they are usually kept in storage for another stipulated period of
time; however, they could also be kept electronically, almost indefinitely.

Infrastructure Works: One of the main procurement categories that exclusively deal with
construction, refurbishment, demolition and rebuilding of infrastructure. This includes:
buildings, bridges, roads, utilities, etc. (see also Works).

Kickoff Meeting: A meeting scheduled to take place soon after the contract is signed and before
contract commencement, where the parties to the contract meet to introduce the principal
representatives on each side and to discuss details of contract execution, including other issues
pertaining to the contract deliverables.

Mobilization: The period of time between the signing of the contract and the contract
commencement date. This period is given to the contractor to begin executing the contract scope
of work.

Parties: Those involved in the signing of the contract and having rights and responsibilities
towards each other. The Parties comprise, on the one hand, the client, and on the other the
supplier, contractor or service provider.

Performance Security: A sum of money retained from payments to a contractor, supplier or

service provider, or provided to the client in advance by way of a bank guarantee that is
acceptable to the client. The sum of the performance guarantee is usually 10 percent of the
contract value and is returned to the contractor supplier or service provider at the end of the
satisfactory completion of the contract. The conditions under which the client can retain of the
performance security are detailed in the contract and in the performance security (bank)
guarantee.

Post-qualification: The process of verifying all statements made in the selected bidder’s offer in
order to determine compliance with legal, financial and technical requirements of the solicitation
documents.

Pre-qualification: An assessment, made before inviting bids or proposals, of the level of

experience and capacity of firms expressing interest in undertaking a particular contract. Upon
conclusion of the pre-qualification process, bids or proposals are solicited only for firms
shortlisted as a result of the pre-qualification exercise.

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Procurement Categories: There are three main procurement categories: Goods, Services and
Works. Under goods suppliers provide commodities (supplies and/or equipment). Services are
consulting and non-consulting services and works are for rehabilitation, repair or construction of
infrastructure.

Procurement Entity: An appointed public body engaged and responsible for the purchasing and
awarding contracts for goods, services and works. Same as Procuring Entity.

Procurement Lead-time: The timeframe from the issuing and/or publication of the solicitation
documents to the point at which the contract is signed by the parties.

Procurement Legal and Regulatory Framework: Comprises all laws, regulations and guidelines
that govern the management and practice of public procurement.

Procurement Method: Procedures used to procure goods, services and works. Some methods are
competitive; others, non-competitive. There is a preference for using competitive procurement
methods.

Procurement Principles: The primary values that govern the management of public procurement.
They also guide the conduct of public procurement practitioners and other actors and
stakeholders involved in the public procurement process.

Procurement Requisition: A formal request to begin procurement proceedings to fulfill a specific

procurement requirement.

Public Procurement: The purchasing of goods services and works with public funds to support
government operations and/or provide public goods and services.

Requesting Entity: The entity for which a specific procurement action is being carried out. It is
the same as the enduser.

Scope of Services: Describes the services required and that need to be carried out in order to
fulfill the contract requirements.

Scope of Work: Describes the works required and that need to be carried out in order to fulfill
the contract requirement. Similar to the scope of services.

Selected Bidder: Bidder recommended for contract award as a result of the evaluation of bids
received in response to an invitation for bids.

Selected Consultant: Consultant firm or individual recommended for contract award of as a

result of the evaluation of proposals or applications received in response to a request for offers.

Services: One of the primary procurement categories that deal with all types of consultant and
non-consultant services.

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Service Provider: Firm or individual engaged the client to fulfill a service requirement
(consultant or non-consultant).

Subcontractor: A firm or other entity engaged by the selected bidder to carryout a portion of the
contract requirement. A sub-contractor is usually responsible only to the contractor that signed
the contract with the client. Also called sub-consultant when referring to firms contracted by the
selected consultant to fulfill part of a consultancy requirement.

Supplier: The entity with which the client reaches an agreement to fulfill a requirement for goods
and/or services, on a one-off basis or over a definite or indefinite period.

Technical Specifications: Describes the details of the required good and/or related services in a
contract in such as manner that the contractor, supplier or services provider can easily understand
and determine their capability to fulfill the requirement.

Tender Board: An entity created by law to oversee the public procurement process and to ensure
that all public procurement activities are carried out in accordance with the public procurement
principles and legal and regulatory framework.

Tender Box: A receptacle or container used for receiving tenders (bids/proposals). The use of the
tender box for receiving tender submissions is dependent on the legal and regulatory framework
stipulations. There a two types of tender boxes: electronic and physical.

Terms of Reference: A document describing the details of a requirement for consultant services.
It includes, as a minimum, the background and objectives of the assignment, tasks to be
completed, personnel requirement and qualifications, and duration and location of the
assignment.

Chapter 2: The Concept of Public Procurement

Meaning and Scope of Public Procurement

The GPPA Act, 2014 (Part I (2)) defined procurement or public procurement “as the acquisition
by any means, of goods, works, services or consultancy services, funded in whole or in part by
public funds”.

The main reason why procurement is "public" is because all of the goods, services and
construction works referred to are acquired with funds obtained through payment of taxes and/or
grants and loans to the country, or fees paid for public goods and services.Public procurement
thus refers to the acquisition of goods, services and works by a procuring entity using public
funds.

Public procurement is the phrase generally used now to refer to this activity in the English
language in the EU since it is the phrase used in EU legislation. However, other systems use
different terminology to cover the same concept – for example, the World Trade Organization
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system refers to “government procurement” and the US system, generally, to government
contracts or public contracts.

When we refer to public procurement we are assuming a process whereby the goods, works and
services in question are being acquired from another party through market mechanisms. We are
referring to the regulatory measures used in a system in which those supplying the government
are free in law to choose whether or not to contract with the government, and we are considering
the processes that apply in choosing a contracting partner in that context. This may not apply, or
may apply only to a limited degree in a centrally-planned economy, for example.

Goal and Benefits of Effective Public Procurement System

According to Jorge Lynch, the goal of public procurement is to award timely and cost-effective
contracts to qualified contractors, suppliers and service providers for the provision of goods,
work and services to support government and public services operations, in accordance with
principles and procedures established in the public procurement rules.

The following goals can be listed for public’s procurement system:

• Satisfying the customer in terms of cost, quality, quantity and timeliness of the delivered
product or service.

• Conducting business meant to benefit the public with integrity, fairness, and openness.

• Encouraging small and medium size enterprises.

• Improvements in social and economic capacity in a country, including providing opportunities

for local small enterprises and individuals to participate in an economic manner as suppliers,
contractors and subcontractors in public procurement.

As captured in gcc.gm Procurement Manual, Government procurement affects many different

elements of society. First are the procurement officers with the responsibility to buy what is
necessary to perform designated missions for the country. Others include:

• Internal Government customers requiring material support (e.g. roads, hospitals, desks and
educational supplies, etc) depend on the procuring entity so they can accomplish their jobs.

• The national and international business communities of actual or potential suppliers to

government entities are affected by public procurement.

• The largest interest group is the general public, who benefit from procurement made by
Government procurement professionals.

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All these elements of society have a vested interest in making sure public procurement serves
them well. Their questions are best answered when public expenditures are made through a
procurement system that is economical, rational and fair.

Because public procurement represents the bulk of procurement activities within most countries,
it can have a profound effect on the overall national economic development, and standard
practices of business communities within its national boundaries and globally.

Public Procurement Categories

It is common - including for the purpose of laws on public procurement - to divide procurement
into three categories, which is useful to set out in order to illustrate the diversity of types of
procurement transactions:

In Public Procurement there are generally three procurement categories: goods, works and
services.

Goods are physical products purchased or manufactured on request. There is usually an element
of service involved, such as when the agreement is for the purchase of goods to be assembled
and/or installed. However, the extent of the service provided is directly related to acceptance of
the goods purchased. Typical examples of goods are: office supplies and equipment, furniture, IT
equipment, books, vehicles, medical supplies and other commodities.

Works are related to civil works; this includes new construction of structures of all kinds
(buildings, highways, bridges, etc), renovations, extensions, and repairs. This category can also
include, water and sanitation, transportation and electrical plant infrastructure.

Services are classified as consulting services and non-consulting services. In some cases, they are
simply classified as services because of the difficulty, at times, in clearly determining the
difference. The distinguishing factor between the two, however, is the degree of importance of
the measurable physical output of the requirement.

Consulting services are usually intellectual in nature and are considered technical services the
output of which is not equipment intensive. Advisory and project related services are typical
consulting services; which includes: feasibility studies, project management, engineering
services, finance and accounting services, training and development, to mention a few.

Non-consulting services, on the other hand, usually involve the use of equipment and specific
methodologies to achieve their objectives. Some typical examples of non-consulting services are:
equipment maintenance and repair, operation and maintenance services, utility management,
installation and maintenance services, surveys and field investigations, and similar.

Goods and works are usually provided by firms, but consulting and non-consulting services are
generally provided by firms as well as individuals.

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Spending Nature of Public Procurement

Several authors have empirically explored the spending nature of public procurement. Most of
them came to the conclusion that public procurement expenditures are huge. Let us have a
rundown of some of these studies.

It has been reported by Badaso( 2014), citing Roodhooft and Abbeele, (2006), that public bodies
have always been big purchasers, dealing with huge budgets. Public procurement is increasingly
recognized as vital in the delivery of services in developing countries, as well as represents a
large proportion of total expenditure. Several examples have been cited to illustrate this high
expenditure nature of procurement in public institutions. It has been reported that public
procurement accounts for 15-20% of global GDP, and therefore public procurement represents a
substantial portion of the EU economy and the economies of many countries around the world.
Public procurement commitments under the World Trade Organization’s Agreement on Public
Procurement (GPA) have been estimated at around EUR 1.3 trillion (European Commission
website 2016). In 2012, the size of the government procurement markets ranged from nearly
23% of GDP in the Netherlands to 8% in Switzerland. Public procurement expenditures in GDP
terms are particularly high in Finland (18%), Sweden (16 %), Japan (16%), Denmark and France
(15%). In the US, government procurement spending accounts for nearly 11% and in Canada for
14% of GDP (http://trade.ec.europa.eu).

Going by the submission of Roos (2012), Public procurement represents an estimated 15% of the
Gross Domestic Product (GDP) in Organization for Economic Co-operation and Development
(OECD) countries and up to 25% of GDP in developing countries and procurement is
increasingly seen as a powerful public policy tool to bring about major environmental and social
benefits (OECD 2011c; ADB 2011).

As public procurement accounts for a substantial portion of the taxpayers’ money, governments
are expected to carry it out efficiently and with high standards of conduct in order to ensure high
quality of service delivery and safeguard the public interest. Hence there is the twin need for
accountability and transparency, (Hui et al; 2011) as a result of the colossal amount of money
involved in government procurement and the fact that such money comes from the public.

In most countries public procurement accounts for a significant proportion of Gross Domestic
Product - around 10-15% in many European countries. The proportion is much higher in many
developing countries - often up to 25%. In countries making the transition from centrally planned
to market economies these figures can be even higher.

Brief Historical Evolution of Public Procurement in The Gambia

In the First Republic of The Gambia (1965-1994), it was Chapter 6 of The Gambia Financial
Instructions (1989) which regulated public procurement in the country. The aim was to ensure
that taxpayers money were used to the benefit of the Government. This was to be achieved

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through relying on general principles of local preferences and control of individual actions
through Major and Minor Tender Boards. The Finance Ministry was very central in this case as it
was the overseeing body (Wittig and Jeng, 2005).

One of the features of the now defunct procurement system was the issue of preference of local
goods and services. The earlier rules made provisions for a general preference for suitable goods
purchased or manufactured in The Gambia over imported goods. Contracts for services and
works awarded to local contractors or overseas contractors established locally and employing
Gambian staff also enjoyed a general preference provided their work was satisfactory and their
prices reasonable (Wittig and Jeng, 2005).

Another central issue in the procurement system of the First Republic was the central role played
by the Tender Boards. According to Wittig and Jeng (2005) there were two tender boards; a
Major Tender Board and a Minor Tender Board. Each had a different role to play in the
procurement system. On the one hand, a Major Tender Board was mandated to review all
Government contracts for the procurement or disposal of goods, services and works where the
estimated cost or benefit exceeded D100, 000 (about $10,000 at the time). In this way, the Major
Tender Board made sure that the general principles were followed and the then policies were
considered in larger contracts. On the other hand, a Minor Tender Board reviewed all
Government contracts in excess of D10, 000 with an upper limit of not more than D100, 000
(Wittig and Jeng, 2005).

The Tender Boards were composed of different members, and had both permanent and temporal
members. The Permanent Secretary, Ministry of Finance and Trade was the chair of both Tender
Boards. Other permanent members were the Ministry of Economic Planning and Industrial
Development, the Solicitor General, the Director of Technical Services, and the Accountant
General. Other Accounting Officers and specialists could attend when necessary for the matter
under consideration (Wittig and Jeng, 2005).

The rational for these rules was to ensure that Government Departments, projects and quasi
government agencies were in compliance with Financial Instructions. The Tender Boards met
regularly with their findings reported to the Minister of Finance, and in certain cases, placed
before the Cabinet for final approval (Wittig and Jeng, 2005).

The old procurement system also required the development of a list of Approved Suppliers and
Contractors. The list was kept and reviewed annually to remove defunct names from the list.
The Permanent Secretary, Ministry of Finance had to approve applications from new suppliers.
Secondly, building contractors could be included on the list only on the recommendation of the
Director of Technical Services (Wittig and Jeng, 2005).

There was also the issue of different monetary thresholds applied by the Tender Boards in the
award of contracts. In this case, when the estimated cost did not exceed D10,000 an Accounting
Officer could order goods, services and works from a vendor on the list of Approved Suppliers

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and Contractors, and Accounting Officers were to make all purchases in recognition of free and
fair competitive bidding, and as such not unduly favor any selected supplier(s).The Minor
Tender Board was required to solicit at least three quotations from the list of Approved Suppliers
and Contractors and then placed an order with the lowest offeror.

Transactions in excess of D100, 000 required the use of sealed tenders with tenders opened in the
presence of the Major Tender Board. Therefore, it acted also as a bid-opening body. The Major
Tender Board then recommended the award of the contract (Wittig and Jeng, 2005).

In addition to these tender boards, a Ministry Tender could be constituted on a temporal basis.
This was so when The Ministry of Finance was required to support a major project. The Ministry
Tender Board had representation from both the Ministry of Finance and the Accountant General
and had the same powers and limits as the Major Tender Boards with its findings reported to the
Minister of Finance (Wittig and Jeng, 2005).

Details of the proceedings of all meetings of the Tender Boards were documented, including
particulars of tenders examined and decisions reached. The information was not widely available
to the tenderers or the general public (Wittig and Jeng, 2005).

One can see that the old procurement system was a centralized one as the system shows that the
Ministry of Finance, and not the Gambia Government entities, was making all major decisions in
procurement ranging for acceptance, rejection of tenders and other pertinent and procurement
relevant matters (Wittig and Jeng, 2005).

Secondly, the main focus of the old system was on only financial controls (Wittig and Jeng,
2005). We may therefore add that such a system was froth with lot of shortcomings and
weaknesses.

Reviews by the World Bank pointed out the real need for improvements so as to obtain full value
for the money expended. Having realized the significant amounts involved in Government
procurements (over 500 million Dalasi) and the inadequacy of the aforementioned mechanism to
properly address public procurement in The Gambia, the Government of the Second Republic
made concerted efforts to dismantle and overhaul the system and subsequently put in place a new
one that conformed to the dictates of the modern times. In doing so, the aims of Government
have been summarized as (Wittig and Jeng, 2005):

- Regulating public procurement in the country with a view to ensure transparency,

accountability, fairness and professionalism in the entire public procurement process;

- Harmonization of public procurement practices in the country to internationally accepted

standards and at the same time in conformity with those of the country’s donor partners;

- Enhancing development of small and medium local enterprises and at the same time
ensuring value-for-money on all government procurements; and

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 - Building and maintaining a professional procurement workforce.

Currently, the apex of the legal mechanism of public procurement in The Gambia is The Gambia
Public Procurement Act (2001).It was The International Trade Center team of national and
international consultants who developed the Act. The Act was passed by the National Assembly
on December 24, 2001, assented to by the President on February 1, 2002 and published in The
Gambia Gazette No. 3 of February 11, 2002. It was amended in 2014.

The Gambia Public Procurement Act(2001, amended 2014) has outlined a number of objectives
with regards to government procurement in The Gambia. The Act seeks to provide a system for
ensuring: -

(a) Transparent, efficient and economic public procurement;

(b) Accountability in public procurement;

(c) A fair opportunity to all prospective suppliers of goods, works and consultancy services; the
prevention of fraud, corruption and other malpractices in public procurement; and

(d) Improvements in social and economic capacity in The Gambia, including providing
opportunities for local small enterprises and individuals to participate in an economic manner as
suppliers, contractors and subcontractors in public procurement.

In addition to the Act, the following documents and instruments are the backbone for the
management and regulation of public procurement in the country: The GPPA Regulations, 2003,
The GPPA Instructions,2003, Bidding Document for Goods, Bidding Document for Complex
Works, Bidding Document for Consultancy Services, and GPPA Reporting Forms.

At the institutional level, the Act established the Gambia Public Procurement Authority with the
mandate to regulate and manage the procurement activities of public institutions in the country.

Chapter 3: Building Blocks of Public Procurement

Public Procurement Legal Framework

Public procurement is governed by the procurement legal framework, which is a law or

regulation (or part of a law or regulation) that is sanctioned by the judicial system of a particular
country. An example is the Gambia Public Procurement Act (2001, amended 2014).This sets the
rules for the management of public procurement.

The procurement legal framework is usually further developed into policies and procedures,
procurement and contract administration manuals and guidelines, including standard solicitation
documents that are used to call for offers from contractors, suppliers and service providers.

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The language of public procurement policies, procedures, guidelines, manuals and standard
solicitation documents must align with what is established in the public procurement legal
framework. Adherence to the public procurement law is obligatory; any infraction is punishable
by law. For example, in The Gambia non-adherence to the law can be met by a fine D1,
000,000.00 levied on the defaulting public institution.

The procurement legal and institutional frameworks (procurement rules) govern everything from
the identificationof a requirement through to the closing out of a contract; sometimes including
disposal, reutilization and destruction of goods.

Institutional Structure of Public Procurement

The legal framework of public procurement in some countries usually makes provision for an
institutional arrangement. Common institutions usually identified by the law are:

Procurement Authorities and Tender Boards

Depending on the legal framework, the procurement authority is the public entity that approves
procurement actions, and documents produced throughout the procurement process including
contract negotiations, award and those actions and documents generated during the contract
administration process.

A tender board is an entity created by law to oversee the public procurement process and to
ensure that all public procurement activities are carried out in accordance with the public
procurement rules.

Depending on the law, there could be several types of tender boards: departmental, ministerial
and cabinet, each responsible for handling procurement actions at certain monetary value
thresholds.

Some tender boards have similar functions as a procuring entity. Others only oversee and
approve actions taken by the procuring entity and evaluation panels at various stages in the
procurement process.

Procurement Entity

This is an appointed public body engaged and responsible for the purchasing and awarding
contracts for goods, services and works. The entity usually has its trained procurement personnel
for carrying out its procurement function. It is recommended by the GPPA Act Section (51)
through (52) that a specialized procurement unit be established and staffed with personnel that
are well trained concerning public procurement. Their qualifications should meet the
requirements that are established in accordance with guidelines issued by the GPPA.

The procurement function cannot work in isolation- it must work with other functions that make
up the organization. It is always best to work as a team. The membership of procurement teams
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may vary with the type of procurement. For example, the team responsible for procuring the
construction of a bridge might consist of members from a consulting architectural-engineering
firm, from the engineering department, from accounting, from the long term planning group,
from the transportation department, from the legal department, and of course, one or more
representatives from the procurement group. Team members should be empowered to make
decisions within their area of expertise and responsibility.

Public Procurement Principles

Procurement principles are one of the foundations of public procurement and should be
addressed in the public procurement rules. They govern the management of public procurement,
and also set the framework for a code of conduct for public procurement practitioners and all
other officials directly or indirectly associated with the public procurement process.

Transparency, integrity, economy, openness, fairness, competition and accountability are some
of the fundamental principles of public procurement. They are briefly discussed below.

1. Transparency: Transparency in public procurement is important. Information on the public

procurement process must be made available to all public procurement stakeholders:
contractors, suppliers, service providers, and the public at large, unless there are valid and
legal reasons for keeping certain information confidential. Examples of confidential
information are: proprietary information belonging to companies or individuals
participating in the solicitation process, and certain military and defense-related
procurements, to mention a few.

When a public procurement requirement is announced, electronically, through press release, the
internet, and other venues, the announcement must include sufficient details for interested
contractors, suppliers and service providers to determine if they are qualified to compete. The
solicitation documents, particularly, must be available at a reasonable price, if not free of charge.

After reading the solicitation documents, interested contractors, suppliers and service providers
should also be able to determine: the nature of the requirement and its scope, the closing date for
submission of offers or information, the evaluation and selection criteria, how and where offers
should be submitted, the number of copies to be submitted, and point of contact for additional
information and response to queries (clarifications), the deadline for submission of queries , the
schedule of pre-bid meetings and site visits (if applicable), and any other pertinent details.

Additionally, if there is a change to the solicitation documents, all stakeholders should be

notified using the same publications that were used for the initial notification, so interested
contractors, suppliers or service providers can take necessary and timely actions to comply with
the change.

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 2. Integrity: In public procurement integrity is twofold. There is the integrity of the
procurement process, and that of public procurement practitioners.

Integrity of the Public Procurement Process: Integrity is essentially reliability. Bidders, and all
other stakeholders, must be able to rely on any information disseminated by the procuring entity,
formally or informally. The integrity of the procurement process assures confidence in the public
procurement system. When solicitation documents are made publicly available, the information
they contain must be dependable and free of ambiguities or bias.

When reviewing solicitation documents, prospective bidders should be able to determine if they
are qualified to undertake the assignment. They also should be able to assess the need for
association with other bidders and the type of association they would need to form given their
qualifications and the requirements of the assignment.

Bidders should have a clear understanding of the requirement, and know how they will be
evaluated. Evaluation and selection criteria must be clearly stated in the solicitation documents.
These criteria should remain unchanged unless there is need to modify them. If modification is
required, the solicitation documents should be amended, published and made available to all
prospective bidders.

Any changes in the offer submission date, should allow bidders sufficient time to adjust their
offers accordingly to meet the new submission deadline.

Integrity of Public Procurement Practitioners: Practitioners working within procuring entities,

and other government officials involved in the public procurement process, must display
personal and professional integrity.Ideally there shouldn’t be any inconsistency between the two.

Public servants involved in the public procurement process should, at all times, be perceived as
honest, trustworthy, responsible and reliable. They must always keep the purpose of the
procurement requirement in mind, and strive to ensure that they responsibly manage public
procurement as mandated by the public procurement rules.

3. Economy: Synonymous with efficiency, value for money, and commercially reasonable
price, the principle of economy emphasizes the need to manage public funds with care and
due diligence so that prices paid for goods, services and works are acceptable and
represent good value for the public funds expended on them.

Everyone associated with the public procurement process or directly responsible for facilitating
the acquisition of goods and services with public funds, should strive to avoid fraud, waste and
abuse of public resources; whether it is the result of over specifications of required goods, paying
unreasonably high prices for substandard goods, collusion with other bidders, or other forms of
unacceptable practices.

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 4. Openness: Public procurement requirements should be open to all qualified organizations
and individuals. The public should also have access to information pertaining to public
procurement requirements.

However, access to public procurement information is not absolute because of issues such as:

Confidential and proprietary information belonging to organizations and individuals participating

in process should not be available publicly, and the extent of their disclosure should be detailed
in the procurement rules or other relevant regulation.

There are also procurement methods, such as restricted or selective bidding, that limit the
availability of solicitation documents to only those firms meeting certain qualifications.

The request for quotations (or shopping), and direct contracting (sole source) also present certain
limitations on competition given that the request for offers is limited to a certain number and
type of organizations or individuals.

The evaluation of offers received is always kept confidential until the evaluation panel reaches a
final conclusion and after the evaluation report is cleared by a designated approving authority.
This would be defined in the procurement rules.

Most defense procurements are confidential, restricting relevant information to a “need-to-know”

basis only.

Except for confidential defense procurements, the results of the public procurement process
should be published and made available on relevant websites. In addition, public procurement
information (except for confidential/proprietary information) should be open to all on a restricted
access basis.

5. Fairness: There are different interpretations of fairness in public procurement, so rather

than define fairness as treating all bidders equally, better to mention how fairness is
achieved in public procurement. To achieve fairness in the public procurement process:

• Decision–making and actions must be unbiased, and no preferential treatment should be

extended to individuals or organizations given that public procurement activities are undertaken
with public funds.

• All offers must be considered on the basis of their compliance with the stipulations of the
solicitation documents, and offers should not be rejected for reasons other than those specifically
stated in the solicitation documents and the procurement rules.

• A contract should only be signed with the supplier, contractor or service provider whose offer
is compliant and best responds to the objectives of the requirement in terms of technical
capability and price.

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• Suppliers, contractors or service providers should have the right to challenge the procurement
process whenever they feel they were unfairly treated or that the procuring entity failed to carry
out the procurement process in accordance with the public procurement rules. Such challenges
must be based on the solicitation documents and/or the public procurement rules.

6. Competition: The public procurement process should not be manipulated for the benefit of
any organization or individual. Given that public procurement is funded primarily with tax
payers’ money, all eligible organizations and individuals should be allowed to participate
by submitting offers in response to a specific requirement for which they are qualified.

Public procurement requirements should be widely disseminated to increase the chances of a

good market response, leading to the award of competitively-priced contracts.

Despite this principle, not all contracts are awarded using a competitive process because this
sometimes depends on the urgency of need and the resulting procurement method used to fulfill
a specific requirement. Nonetheless, the use of non-competitive procurement methods, although
justified under certain conditions, should be kept to a minimum.

7. Accountability: Accountability in public procurement means that anyone involved in the

procurement process is responsible for their actions and decisions with respect to the
public procurement process.

As public servants, procurement practitioners, and others involved in the public procurement
process, are accountable and exposed to sanctions as a remedy for any behavior that contravenes
the public procurement rules. Practitioners also have an obligation to report and/or answer to a
designated oversight entity, and the public, on the consequences of your actions and decisions.

Ethics in Public Procurement

Experience shows that professionals in purchasing may be held to higher standards of ethical
conduct than people in other professions. Despite this some do not even know what is expected
of them. It is therefore important that employees are adequately educated in such matters so that
it does not lead to serious consequences like breach of codes of conduct.

The demand for ethical behavior in organizations in general and public procurement in particular
is forcing procurement managers to find ways of managing for ethical behavior

Within the broader context of organizations, procurement managers have several methods
available for managing ethical behavior in procurement. These methods include codes of ethics,
policy guidelines, decision procedures, standards of ethical performance, disciplinary procedures
for unethical behavior, ethics training, and peer reporting of unethical behavior.

Codes of ethics are written statements describing behavior prohibited by an entity because it
believes the behavior is unethical. Sources of such Codes include industry associations,

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professional associations, or individual organizations. Behaviors most commonly prohibited in
public procurement include kickbacks, illegal political payments, collusion, bid rigging,
inappropriate gifts, and conflicts of interest.

Public Procurement managers can also develop or change policies to improve the ethical culture
in the procurement activities of their organizations. Policies are written and usually available to
all procurement actors. Some typical areas covered by organizational policies are the
procurement professionals’ ethical responsibilities, rights, and work environment quality.

Decision procedures detailed the composition of the decision-making group responsible for
procurement and the scope of information the group will use for decision making. Such
procedures aim to change the procurement team’s decision processes to include more
information about a decision‘s ethical effects. For example, a decision-making group for locating
or procuring a new plant could include community members and employees affected by the
plant‘s design. Information procedures for new product decisions could require a fresh review of
negative test results before a final decision.

Public organizations can also develop ethics performance standards in their procurement, which
then become part of the organization‘s performance appraisal process for the procurement
personnel. Such standards prescribe required behavior consistent with existing law on public
procurement and discretionary behavior according to the organization‘s ethics policies. For
example, an ethical standard for conflict of interest might say that all procurement actors in an
organization shall sign a declaration form (e.g.GPPA Form 012) during procurement
proceedings.

Recently, interest in employee ethics training in general has grown. This can be fed into the
procurement related activities of public institutions. The goal here is to help the organization and
the procurement personnel avoid governmental and societal sanctions by preventing unethical
and illegal behavior in procurement actions. During training, employees can discuss a code of
ethics, organizational procedures for reporting unethical behavior, ethical frameworks based on
ethics theories, and case studies showing ethical and unethical decisions in public procurement.
Another view of ethics training and education is the assumption that it can change a person‘s
basic character including the person‘s capacities for ethical sensitivity, ethical reasoning, ethical
conduct, and ethical leadership. Such capacities can be the target of development in both
university education and organizational training programs.

Furthermore, procuring entities in the public arena can rely on peer reporting of unethical
behavior to persuade practicing procurement professionals to comply with an organization‘s
procurement ethical guidelines. Peer reporting refers to coworkers reports of perceived unethical
behavior. This is a kind of whistle blowing directed at someone with whom a person works.
However, a whistle blower can often experience strong social pressure to overlook the unethical
behavior. Therefore, top management support for whistle blowers can offset such social pressure.

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Managers can encourage peer reporting by specifying it as a desired behavior in the
organization‘s procurement code of ethics. Another way to encourage peer reporting is to ensure
that unethical behavior by one person will have a negative effect on many others. For example,
an organization might punish an entire group of workers for one member‘s unethical act.

The Public Procurement Cycle

The Procurement Cycle begins with the identification of a need and ends with the award of a
contract. The intention with this definition is to simplify the procurement cycle and put it into
context by excluding any elements that does not fall within this specific function. In some
definitions, even elements of inventory control and logistics management are considered part of
the procurement cycle, but they actually take place during Contract Administration.

So, in line with the above, the steps in the public procurement process are those listed below:

1. Requirement identification: The first step in the public procurement process is to identify
requirements. All procurement requirements begin with the perception of a need.

The need to cross a body of water, for example, could create a requirement to build a bridge, a
ferry, or other transportation systems. At this stage it is necessary to clearly define the need, and
this may be done by way of a study to determine the best mode to cross the body of water (given
the present situation and forecasted future need), then the type of bridge to be constructed, or a
comparative cost/benefit analysis to determine the best solution between a bridge and other
alternatives.

The study should include if the need can be satisfied in-house or contracted out, quantification of
the initial budgetary estimate, and an idea of the procurement lead-time.

The conformation of the study team should be multidisciplinary in order to address the different
questions to be answered to facilitate a comprehensive understanding of the need so as to clearly
define the actual requirement.

The role of procurement practitioners at this stage is primarily to estimate the procurement lead
time given the most appropriate procurement method that would be suitable for such a
requirement.

Of course, the perceived need is not always as complex as in the example above. There are also
needs for goods and services, and those should also undergo an analysis to clearly define
requirements.

At the end of the requirements definition stage, a clear determination of the terms of reference,
technical specifications or statement of work (depending on the procurement category) should be
possible, including an estimate of the budget, and, most importantly, the procurement lead-time.

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This requirement definition analysis is essential not only for new procurement requirements, and
project initiation and concept development, but also for requirements needed for maintaining
existing operations.

The proper description of the procurement requirement is essential to beginning the procurement
process. If done correctly, it avoids disappointments and waste of resources resulting from
purchasing goods and services that fail to fulfill the purpose intended because of improperly
prepared technical specifications or terms of reference.

1. Defining Requirements for Civil Works Procurement

When defining requirements for civil works procurement, the following are 12 questions to
consider:

1. What is required: a new construction, renovation or repair?

2. Why?

3. Where?

4. Is there in-house capacity to undertake the requirement or does it need to be contracted out?

5. Do we have design and engineering capability in-house?

6. Do we want the design and supervision done by one entity or by separate entities?

7. Who will develop the technical specifications, drawings and bill of quantities?

8. When does the requirement need to be satisfied?

9. What is the procurement lead-time?

10. How much funding is required?

11. Are there sufficient funds available?

12. Are there qualified contractors available in the market?

2. Defining Requirements for Services Procurement

When defining requirements for the procurement of services, the following are 19 questions to
consider:

1. What type of service do we need?

2. Why is the service needed?

3. When?

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4. What are the details of the service required?

5. Who can best describe the service required?

6. Who can provide the service?

7. Has the service been required before? If so, how was the requirement satisfied?

8. Can it be provided in-house?

9. Is external expertise needed to assist with the definition of the requirement and with the
evaluation, selection and contract administration?

10. Is there local expertise available to provide the required service or is there a need for
international expertise?

11. Is the service expected to be one-off or continuous?

12. What is the expected duration of the service?

13. If, outsourced, what’s the procurement lead-time?

14. What is the budget?

15. Are there funds available?

16. Are there budgetary constraints to obtaining the service?

17. What procurement method is best suited to for soliciting this type of service?

18. What type of contract would be most appropriate for this type of service?

19. What entity would be responsible for contract administration?

3. Defining Requirements for Goods Procurement

When defining requirements for the procurement of goods, the following are 20 questions to
consider:

1. What do we need?

2. Why?

3. How many?

4. When?

5. What quality?

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6. For stock or immediate use?

7. If for stock, do we have sufficient storage space?

8. Where?

9. Can we get the goods from another government entity?

10. If not, can we make them?

11. Who will make them?

12. Do we buy them?

13. Have we bought them before?

14. Any known sources?

15. What’s the cost?

16. Are there funds available?

17. Any funding constraints?

18. Do we have the technical specifications?

19. If not, who will prepare them?

20. How long will it take to get the goods (procurement lead-time)?

2. Determining procurement method: In public procurement, the decision to use a particular

procurement method must be based on the stipulations of the procurement rules. There are two
broad types of procurement methods in the public procurement arena, namely competitive and
non-completive methods.

Competitive Procurement Methods

1. Open Tendering

Open tendering is the preferred competitive public procurement method used for acquiring
goods, services and infrastructure works. It is executed in accordance with established
procedures set out in the procurement guidelines and detailed in the standard bidding documents.

Open tendering is also known as open competitive bidding, open competition or open
solicitation, and the procurement notices used to call for bids for these requirements are
identified as: Invitation for Bids or Invitation to Tender.

The fundamental requirements of open tendering are that they should:

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 Be open to all qualified and interested bidders,

Be advertised locally (and internationally, when required),

Have objective qualifications criteria,

Have neutral and clear technical specifications,

Have clear and objective evaluation criteria, and

Be awarded to the least-cost provider, without contract negotiations.

It is presumed that this procurement method fosters effective competition and adds value for
money; however, there are arguments to the contrary given that the open tendering method is
associated lengthy timeframe for completion of the procurement action.

2. Restricted Tendering

Restricted tendering is a procurement method that limits the request for tenders to a select
number of suppliers, contractors or service providers. This method of procurement is also called:
Limited Bidding and Selective Tendering.

Although considered a competitive procurement method, competition is limited to only firms

shortlisted or invited by the procuring entity.

A process should be in place for arriving at the number and specific firms that will be invited;
that number however is dependent on the stipulations of the public procurement legal
framework.

Any decision to use the Restricted Tendering procurement method must conform to the policies
and procedures governing the procurement system.

A basic characteristic of this method is that competition is confined to a certain number of firms
either because only a few firms are qualified to fulfill the specific type of requirement, or certain
conditions warrant the use of a limited number of firms in order to reduce the time and cost of
the selection process.

3. Request for Proposals

The Request for Proposal (RFP) is a two envelope procurement method that can be used for
goods, services or works. It is used when suppliers, contractors or services providers are
expected to propose a specific solution (methodology and workplan) to fulfilling a specific
requirement.

Firms are required to submit technical and financial proposals in two separate envelopes. The
technical proposal is evaluated first and ranked according to pre-established evaluation criteria,

25
and only the financial proposals of those firms that achieved the minimum qualifying mark
(score), indicated in the RFP, are opened and evaluated.

The following are examples of the selection procedures for consulting services that use the RFP
procurement method:

(i) Quality and cost-based selection (QCBS), (ii) Quality based selection (QBS), (iii) Fixed
budget selection (FBS), and (iv) Least-cost selection (LCS).

4. Two-Stage Tendering

Two-stage tendering is similar to the request for proposals because the technical and financial
proposals are submitted separately, but one before the other, rather than simultaneously. A key
feature of this procurement method is that the submission of proposals takes place in two stages.
Another, that bidders can assist in defining the technical requirement and the scope of work.

Non-Competitive Procurement Methods

1. Single Sourcing

Acquiring goods, services and construction works from only one source is referred to as: sole-
source procurement, single-source procurement, sole-source selection, direct procurement,
among others. This is clearly a non-competitive procurement method, and it should be used only
under exceptional circumstances, namely:

• for emergency situations;

• when only one firm or individual is qualified to fulfill the requirement;

• for the continuation of previous work, or additional work, that cannot be acquired from another
firm or individual due to patent, compatibility issues, or exclusive rights;

• the use of this method represents a clear advantage over the use of a competitive method;

• the total cost is within the threshold set for this method of procurement;

• for the procurement of related items that are available only from one source;

• for other situations contemplated in the procurement legal and regulatory framework.

The use of this method should be preceded by a rigorous approval process.

2. Request for Quotations

The request for quotations is a procurement method that is used for small value procurements of
readily available off-the-shelf goods, small value construction works, or small value services
procurements.

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This procurement method is also known as invitation to quote and shopping, and it does not
require the preparation of tender documents to the same extent as open tendering, request for
proposals or two-stage tendering.

The invitations are not complex, and this method is considered non-competitive because the
procuring entity determines which contractors, suppliers or service providers to request
quotations from as long as a minimum of three are invited.

This procurement method is used under conditions stipulated in the procurement legal and
regulatory framework and, accordingly, can be requested in writing: email, fax, courier, but not
telephonically. Sometimes there are limitations set on the period of time and frequency within
which this method can be used for the procurement of similar goods, work or services. This is to
prevent the procuring entity from splitting requirements in order for them to fall within the
threshold level where the request for quotation method can be applied.

Quotations received in response to a request for quotation should be first evaluated to determine
compliance with the technical specifications or scope of work of the requirement and also for
compliance with administrative requirements of the request for quotations. Only after the
administrative and technical compliance determination, a price comparison is made between
firms found to be compliant, and then a purchase order is signed with the bidder submitting the
lowest price quotation within the stipulated delivery or completion date.

3. Procurement planning: Procurement planning is the process of deciding what to buy, when
and from what source. During the procurement planning process the procurement method is
assigned and the expectations for fulfillment of procurement requirements determined. For
example, under Section 30 of the Act, Procurement Planning is required of every Procuring
Organization in The Gambia. The purpose of procurement planning is to achieve maximum
value for public expenditure and the other objectives set out in Section 3 of the Act, and in
accordance with applicable budgetary procedures. The plan must be provided to the GPPA
describing the extent, timing and purposes of the projected requirements.

The Procurement Plan is important because:

1. It lists all requirements expected to be procured over a period of time.

2. From it the procurement schedule is developed, which establishes the timelines for carrying
out each step in the procurement process up to contract award and the fulfillment of the
requirement.

3. It allows for the consolidation of similar requirements under one contract or the division of a
requirement into several contract packages for economies of scale.

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4. From the number of requirements on the procurement plan, the procuring entity can
determine beforehand any need for additional staffing, including external assistance for the
purpose of completing all procurement requirements listed on the procurement plan.

5. It allows for the monitoring of the procuring process to determine how actual performance
compares with planned activities, and thus to alert the pertinent departments and adjust the
procurement plan accordingly.

6. It enhances the transparency and predictability of the procurement process.

4. Procurement requisition processing: Once the procurement plan is prepared and approved,
the requesting entities should begin submitting their requirements accordingly to the procuring
unit for processing. When a procurement requisition is submitted, the first step in processing the
request for procurement action is to determine exactly what is required. Again, the procurement
unit should examine the procurement request for compliance with the public procurement law
and/or regulations. In the event of non-compliance, the procurement request shall be sent back
promptly and directly to the user body for the appropriate modifications.

5. Solicitation documents preparation and publication: Upon receipt of an approved

procurement requisition, and after reviewing the technical specifications or terms of reference for
completeness, the procuring entity is in a position to begin preparing the solicitation documents;
otherwise, the procuring entity needs to establish contact with the requesting entity in order to
get any missing information to complete the technical specifications or terms of reference before
they can begin preparing the solicitation documents.

Solicitation documents are prepared from a template called standard bidding or tender
documents, and information specific to the particular requirement, such as observed below, is
used to complete the solicitation documents.

Assuming that the requirement is on the procurement plan, pertinent information needs to be
obtained and agreed with the requesting entity prior to completing the solicitation documents.

When completing solicitation documents, it’s important to:

• Have clear technical specifications or terms of reference

• Decide on the need for pre-bid or pre-proposal conference and/or site visit

• Determine if the requirement is for international or local competitive bidding

• Determine due date for request for clarifications on the solicitation documents,

• Decide on the deadline for submission of bids or proposals

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• Obtain the name, address, phone number and email address of the client’s authorized point of
contact for information on the requirement

• Determine bid/proposal validity period

• Determine need for bid security and/or performance security

• Determine bid/proposal evaluation criteria

• Identify and select evaluation panel members and observers

• Determine bid/proposal opening date

Once the solicitation documents are complete and approved, a procurement notice is prepared
and posted to approved websites and internet portals, and also published in local and (if
necessary) international newspapers.

6. Pre-bid/proposal meeting and site visit: Pre-bid meetings are gatherings scheduled after an
invitation for bids or request for proposals is advertised. They are called pre-bid meetings
because they are pertinent to procurement of goods, non-consultant services and works. When
they are scheduled for consulting services, they are called pre-proposal meetings. These
meetings, also called conferences, are scheduled during the preparation of the solicitation
documents (invitation for bids or request for proposals) and the date, time and venue are
mentioned in these documents so that all prospective bidders and consultants can become aware
of them.

The objective of pre-bid meetings is to explain the details of the solicitation documents to
interested bidders. Prospective bidders are permitted to request clarifications on the invitation for
bids or request for proposals by a stipulated date, and the pre-bid meeting is held within that
period. Site visits are more important for works procurement, and its meant to introduced the
potential bidders to the location where the proposed work is to be carried out. After the site visit
and/or pre-bid meeting, the following could result: The selection process continues to the
opening date and time as planned, The submission date is extended by addendum to give bidders
a reasonable amount of time to submit their bids/proposals (especially if there are changes to the
solicitation documents), or The requirement is altogether cancelled.

7. Bid/proposal submission and opening: Assuming that the process continues as expected,
receiving and opening offers (bids/proposals) is the next step.

The date, time and place for receiving offers, including the manner in which they should be
marked and sealed, must be clearly stated in the solicitation documents. It is the bidders’
responsibility to ensure that their offers are submitted at the correct place, date and time. The
entity receiving the bids or proposals, as stipulated in the solicitation documents, must ensure
that the package(s) in which the offers are received are dated and time-stamped and placed in a

29
secured area prior to the day of the public opening event. The procuring entity should also keep a
list of the offers received by name of bidder, date and time the offer was received, and the
number of packages received for each.

The opening of offers should take place immediately after they are received. This should also be
stipulated in the solicitation documents. Once the offers are received, those received on time
should be publicly opened at the place and time stipulated in the solicitation documents.

Offers received late are usually returned unopened to the respective bidders. When considering
the rejection of a late offer, it is important to be guided by the language used in the solicitation
documents, because this language will determine if there is any flexibility in accepting late
documents. For instance, if it is stated in the solicitation documents that late offers “may” be
rejected, then a rejection of late offers would depend on the circumstances that caused the
document to be submitted late and on the approving authority’s willingness to accept the offer(s)
received late. In contrast, if the solicitation documents state that late offers “shall” or “will” be
rejected, then offers received late cannot be accepted for evaluation purposes regardless of the
reasons why they were received late.

It’s important to note that the reason for late reception of offers is not always the result of
negligence on the part of the bidder. It could be for reasons beyond their control, so if the
solicitation documents permit a decision to be made on the acceptance or rejection of a late offer,
then the acceptance of a late submission would be determined only by the approving authority.
Preferably, though, such need for decision should be anticipated and regulated in order to avoid
arbitrary actions on the part of the approving authority.

As mentioned above, offers should be opened soon after they are received, ideally on the same
day. If this is not possible, they should be opened the next day. The opening of offers is a formal
process and the details of the event should be recorded in the minutes of the opening event. The
opening of offers is also a public event, were bidders are requested to attend, and the public at
large should be permitted to witness the event, if they so desire.

At the opening event, offers received are examined to determine if they are compliant with the
instructions of the solicitation documents. A checklist is used for this purpose. As a common
practice, the names of the firms submitting offers are listed on a board for all present at the
opening event to see, and the price of each offer (depending on the procurement method) is also
placed on the same list. In cases where the technical proposals are evaluated first, the financial
offer is not read out until the results of the technical evaluation are known. Then the respective
bidders are invited to attend the public opening of their financial offers.

At the public opening of offers, discussions should be limited to clarifying the names of the
bidders, if there are confusions; but bidders should not be permitted to discuss or clarify the
content of their offers, because at that stage the offer has already been received and bidders
should not be allowed to changed their bids after the closing date and time of submission;

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furthermore, it’s up to the evaluation panel to determine the need for clarification and to request
the same, through the procuring entity, from the respective bidder(s).

The rejection or acceptance of an offer should not be addressed at the public opening event.

Although a summary examination of the offer submission package is done at the opening event
to determine compliance with the requirements of the solicitation documents, the preliminary
and detailed examination of the offers received should be left for the Evaluation Panel to
complete during the evaluation process.

8. Bid/proposal evaluation: Before beginning the evaluation of offers (bids/proposals) received,

an evaluation panel should be formed and approved. Ideally, procurement practitioners should
advise, oversee the evaluation process and assist with the drafting of the evaluation report, but
they should not be members of the evaluation panel. Procurement practitioners cannot be
expected to be technical experts on all requirements, but to have an in-depth knowledge of the
procurement aspect of the requirement; additionally, it is healthy to practice separation of
functions in order to prevent any one entity or individual from exercising control over the entire
procurement process.

Membership of the evaluation panel should be determined based on the qualifications of each
prospective member. Evaluation panel members should preferably have knowledge and related
experience, and at least one member should have participated in the drafting of the terms of
reference or technical specifications and/or other technical documents required for inclusion in
the solicitation documents. The number of evaluation panel members should be at least three,
excluding any observers and technical experts invited as advisors on the technical aspects of the
requirement.

Although an initial review of the offers received is done at the bid opening event, a preliminary
examination of the offers is done at the beginning of the evaluation process to determine, the
responsiveness of the offers to the solicitation documents. After that, a detailed examination is
done only of the offers that complied with (were responsive to) the requirements of the
solicitation documents.

In the case of solicitations for goods and works procurement, after confirming compliance with
the technical requirements, a comparison of the proposed price is made, and the offer that is
technically compliant, and with the lowest evaluated bid price, is the one that is recommended
for contract award.

When evaluating consultants, individuals or firms, the technical qualifications are also initially
assessed. For individual consultant selection, once the technical qualifications are determined,
the consultant obtaining the highest technical score above the minimum technical qualifying
mark is requested to submit a financial offer and to negotiate a contract.

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In the case of consulting firms, depending on the procurement method, the selection could be
similar to that of individual consultants (as indicated above) or the final selection could be
determined by scoring and assigning weights to both the technical and financial evaluation. The
highest ranked consultant resulting from the sum of the combined technical and financial scores
would be recommended for invitation to negotiate the contract.

The result of the bid or proposal evaluation process is dependent on the procurement method and
the procedures for determining the selected supplier, contractor or service provider that will be
recommended for negotiations and/or contract award.

9. Contract award recommendation: At the conclusion of the evaluation process, the evaluation
panel must both recommend and justify (i) either the rejection of all offers, (ii) proceeding with
contract negotiations, or (iii) contract award. The evaluation panel’s recommendation is made to
the approving authority.

10. Contract negotiations: Contracts for goods and works procurement are not usually
negotiated, except under exceptional circumstances, depending on the complexity of the
requirement. Complex requirements for supply, installation and commissioning may be better
procured through negotiations with the highest technically qualified firm, as determined by the
results of the evaluation of their technical proposals. Similarly, under works procurement, design
and build requirements may also need to be negotiated.

In the case of consulting services, there are consulting firms and individual consultants.
Contracts for these two categories of consultants are negotiated slightly differently.

For individual consultants, after the technical evaluation, the highest ranked consultant is invited
to submit a financial offer and to negotiate the terms of the contract. If for some reason an
agreement isn’t reached, the next highest ranked consultant may be invited, depending on the
procedures, to submit a financial offer and to contract negotiations. The focus of the negotiations
should be to reach an agreement on the Terms of Reference of the assignment, with minor
modifications if necessary. Price negotiations should be kept to a minimum and should only take
place if the financial offer is considered unreasonable based on documentary and/or historical
evidence.

Negotiations with consulting firms are dependent on the procurement method used. Based on the
procurement method, final selection will be determined either by:

(i) the sum of the weighted average of the technical and financial proposals (quality and cost
based selection),

(ii) the lowest proposed price among the technically qualified consultants (least cost selection),

(iii) the reasonableness of the financial offer of the highest ranked consultant (selection based on
qualifications, similar to the selection of individual consultants), or

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(iv) the lowest proposed price among the technically qualified consultants within a stipulated
budget (fixed budget selection).

In the first instance, the financial offer cannot be negotiated because it would be unfair to the
other firms that participated in the process, because the price was a determining factor in the
overall combined score that led to the selection of the consultant. Thus, only the technical
aspects of the proposal can be negotiated. The focus of the negotiations should be on resolving
weaknesses observed in the selected consultant’s technical proposal and reaching agreement on
the terms and conditions of the contract.

Price cannot be a negotiating point in the second instance because the selection was price-based.

In the third instance, given that the price was not a determining factor in the final selection of the
consultant, but rather the highest technical score, the price can be negotiated if found
unreasonably high.

11. Contract Award (signing): Marks the date of entry into force of a contract, making it legally
binding between the parties to the contract.

Chapter 4: Bid Challenge and Review Process

Once a decision has been made to award the contract, before signing the contract all participating
bidders need to be informed of the intent to award. This requirement is governed by, and should
be clearly stipulated in, the public procurement rules.

During the period stipulated for the intent to award, bidders having any claims related to the
procurement process, and feel that they were or may be affected by the way the procurement
process was carried out, are permitted to challenge the procurement process by submitting a
formal claim to the procuring entity for presentation to an appointed independent procurement
review body.

The procurement review committee will review the claim and decide on its merit, and the results
could be to reject the claim. In this case, the procurement process will continue and the contract
awarded as intended. If the procurement review committee accepts the claim for further review,
this could lead to suspending and restarting the procurement process, compensating the
aggrieved bidder or taking other actions stipulated in the procedures governing the procurement
review process.

The procurement review process has certain limitations. There are time limitations on the
submission of a claim. To be acceptable, a claim must be submitted within a certain number of
days after a particular event takes place or should have taken place (ten days in the case of The
Gambia). The procurement review process is also intended to handle claims related to the
procurement process and if it was carried out according to procedures; as a result, claims of

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fraud, waste, and abuse should not be addressed in the procurement review process, unless
clearly stipulated in the procurement rules.

Chapter 5: Challenges/Delays in Public Procurement Process

The public procurement process is often delayed for different reasons. Such delays may damage
the Procuring Entity’s reputation and are a waste of scarce public resources; additionally,
contracts are not awarded on time and this results in poor delivery of public goods and services.

The following are 8 common causes of delay in the public procurement process and what you
can do to avoid them:

1. Delay in Preparing Technical Specifications, Scope of Work or Terms of Reference

Technical specifications, scope of work, and terms of reference are documents that describe what
is needed, and should be clear enough to avoid confusing suppliers, contractors, service
providers or the evaluation panel.

They are also needed to prepare the solicitation (bidding/tender) documents. And if they are not
completed ahead of schedule, the procurement process is delayed before it even starts.

The reason for delay is usually due to lack of expertise in preparing these documents, or not
realizing the extent of the information and research that may be needed to complete them.

Sometimes special expertise is needed to prepare the technical specifications, scope of work and
terms of reference. If this is not taken into consideration, a huge delay is the result because of the
period of time it may take to find or hire such a person.

To overcome this, it’s important not to overlook the need for special technical expertise to assist
with the development of technical specifications, scope of work and terms of reference. Getting
such expertise, if not readily available, may involve having to hire a person or team. This in itself
may result in a procurement process which also needs to be taken into consideration to ensure
hiring the needed expertise and getting the documents prepared in order to start the procurement
process on time.

2. Failure to Start the Procurement Process on Time

This is a very common delay. You have an approved procurement plan and you have developed
a procurement schedule, but it has been overlooked or not taken into consideration, so the
procurement process begins later than intended.

To resolve this, it’s important to stay informed of the deadlines on the procurement schedule,
especially the start date of the procurement process. You can use an electronic calendar, such as
the Google or MS Outlook calendars, to set reminders of important dates on the procurement
schedule.

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3. Extension of Bid or Proposal Submission Date

The bid or proposal submission period may need extending, causing delay in awarding the
contract. Some of the reasons are:

Mistakes in the solicitation (bid or proposal) documents

Prospective bidders request more time for submission and it is granted

Poor response to invitation for bids or call for proposals

Unforeseen event such as natural disaster, emergency situation, mass demonstrations, etc.

Request for clarification results in an amendment to the solicitation documents, which requires
an extension of submission period for bidders to take the amendment into account in their bids or
proposals

It is difficult to plan for possible extensions of the bid or proposal submission date. But to avoid
or reduce some of the instances mentioned, you must prepare a comprehensive solicitation
document and make submission periods long enough to allow bidders ample time for bid
preparation.

4. Delay in Opening Bids or Proposals Received

Bids and proposals have a set deadline for submission. If they are submitted late they should be
rejected, unless the procurement rules or the solicitation documents state otherwise.

The opening of bids and proposals is usually a public event that should take place immediately
after the submission date and time. Bidders often hand-in their bids or proposals on the date of
submission and wait to attend the opening.

Unless the delay is caused by a catastrophic or other event that is not within the control of the
Procuring Entity, it should be avoided at all cost because the integrity of the procurement process
and the Procuring Entity are important to earning prospective bidders’ trust.

5. Delay in Starting or Finishing the Evaluation Process

The Procuring Entity organizes the evaluation process, but bids and proposals are evaluated by
an independent panel of three or more individuals. So the duration of the evaluation process is
not under the control of the Procuring Entity.

Sometimes one or more members are not available to start the evaluation process, and when it is
started, they may be unreliable in their availability to continue due to other commitments.

A possible solution is to ensure personnel assigned as evaluation panel members are temporarily
relieved from other duties so they can focus exclusively on the evaluation process.

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It’s also important, when seeking evaluation panel members, to ensure they are available and
committed to the evaluation schedule to avoid delaying contract award.

Another solution may be to hire independent panel members and ensure they meet the agreed
evaluation deadline.

6. Delays during the Approval Process

Approval is required at various stages in the procurement process. It depends on the monetary
value and complexity of the procurement requirement, and is stipulated in the procurement rules.

The approving authority may be different levels of tender boards such as central, ministerial and
departmental.

This is a common cause of delay because tender boards usually have specific dates on which
they convene, so procurements need to be scheduled accordingly in order to avoid delaying the
process.

If the tender board meeting is cancelled or they don’t have enough time to address all issues,
approvals are delayed until the next tender board meeting.

When procurements are donor funded, there may be need for donor approval at different stages
of the procurement process.

Delays caused by tender boards and donors are difficult to control. So they need to be anticipated
and considered during procurement planning and scheduling.

7. Delay in Contract Negotiations

Not all contracts are negotiated. Generally, goods and works contracts are awarded without
negotiations because once bidders meet the administrative and technical requirements, the
contract is awarded based on lowest reasonable price.

For more complex goods and works requirements, there may be negotiations before contract
award. This has to be determined during procurement planning and scheduling, and clearly
reflected in the solicitation documents.

For consulting services, there is usually negotiations prior to contract award. Negotiation is used
to come to an agreement on issues related to methodology, personnel, and slight changes in the
scope of work. Rates may be discussed if found unreasonable, but if the price is a factor in
determining the winning firm, it would be unfair to other bidders to adjust rates.

Delays result if negotiations take longer than anticipated. The duration of contract negotiations is
beyond the control of the Procuring Entity, so it should be conservatively determined during
procurement planning and scheduling.

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8. A Contractor, Supplier or Service Provider Challenges the Procurement Process

Contractors, suppliers and service providers are allowed to formally challenge the procurement
process if they have evidence or reason to believe the Procuring Entity failed to comply with the
procurement rules or if they feel they were unfairly treated or affected by the manner in which
the procurement process was carried out.

This delay is also difficult to avoid. To reduce the possibility, it’s important to prepare
solicitation documents that are clear and comprehensive and to ensure the procurement rules and
stipulations of the solicitation documents are followed.

Above all, effort must be made to build trust in, and create a positive impression of, the
Procuring Entity, procurement officers and anyone directly or indirectly involved in the public
procurement process.

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