A look into the Public Procurement Act

It is a meeting point of the vested interest groups composed of corrupt political masters, public officers and suppliers/contractors. Analysts are of the opinion that corruption in procurement, both local and international, in the public sector has largely contributed to Bangladesh's being rated, by the Berlin-based Transparency International (TI), as the most corrupt country in the world for five consecutive years starting from 2001.

Bangladesh inherited a "Purchase Manual" that was absolutely inadequate for guiding procurement in the large public sector. The pervasive corruption in public sector procurement, in the absence of a comprehensive legal document to guide procurement, and the insistence of the development partners, in particular the World Bank (WB), for such a comprehensive legal document led to the formulation of the "Public Procurement Regulations (PPR) 2003" that came into force from September 30 of the same year.

Soon it was found that, since the PPR was not an act of parliament, it could be easily amended by the executive to meet the party/alliance interests. This led the WB to request the government to transform the PPR into Public Procurement Act (PPA) which would make it difficult for the executive to make changes according to its own sweet will. The WB even tagged the transformation of the PPR into PPA for releasing the Development Support Credit (DSC).

In the cabinet meeting held on November 2, 2005 some powerful members of the cabinet objected to the inclusion of certain provisions of the PPR into the draft law. Anyhow, the cabinet approved, in principle, the proposal for transforming the PPR into PPA on the condition that a cabinet sub-committee would examine, and suggest amendments to, certain contentious provisions of the draft law.

The revised draft law, approved by the cabinet on February 20, and vetted by the parliamentary standing committee on the planning ministry, was passed by the parliament on July 2. The president assented to it on July 6, to make it an act of parliament.

Now, let us take a look at the major changes that have been brought into the PPA, and see whether these changes would bring improvement in the PPR to make public sector procurement more transparent or not:

• The PPR provided for a standing consultative committee on public procurement (CCPP) composed of not more than twelve members, including the chairman, appointed by the government from amongst experts and specialists in procurement for a period not exceeding two years, to aid and advise the government in bringing improvement to the public procurement process, and make recommendations to achieve that objective. The PPA has abolished the CCPP. This has deprived the government of the expert opinions and recommendations needed to improve the procurement system.
• The PPA has made the advertisements inviting tenders more transparent.
• A limited tender process can be followed only if it is found logical on technical and economic grounds. For the sake of convenience, a procuring entity can split a particular purchase into several packages on approval of the appropriate authority. Earlier, the procuring entity could bypass scrutiny while dividing a single purchase into several small packages.
• The lottery provision has been omitted and negotiation has largely been cancelled.
• The PPR provided that tenders would be opened in the presence of the members of the tender evaluation committee (TEC). The PPA has provided for a separate tender opening committee (TOC) composed of a member of the TEC and such other persons as may be necessary. Experience has shown that it is hardly possible to ensure attendance of all the members of the TEC for the opening of the tenders on the scheduled date and time. The TOC is expected to ease the opening of tenders on the scheduled date and time.
• The PPR provided that a procuring entity would appoint only one TEC consisting of at least five members, of whom two should be experienced in procurement and from outside of the procuring entity, to open, examine, evaluate, and prepare a report with recommendations, following the prescribed guidelines for evaluation, for submission directly to the appropriate approving authority. Although the PPA has empowered a procuring entity to constitute only one TEC to evaluate its tenders, the formation of the TEC will not be possible till the framing of rules that will determine the number of members in the TEC, and prescribe its responsibilities and methodology of work. It would have been better if the PPA could determine the maximum number of members, including the chairman of the TEC, indicate the criteria for their nomination, and prescribe the responsibilities and methodology of work of the TEC. This is because of the fact that rules are made by the executive and it can, at any time, amend the rule relating to the composition, functions etc. of the TEC, to meet party interests.
• The PPA has provided for formation of one or more review panels comprising of: (a) persons who have been legal professionals; (b) persons who have technical expertise in purchasing or obtaining of goods, works and intellectual and professional services; and (c) persons who have expertise in management and procurement, for reviewing and giving the final decision on appeals in which the administrative authority fails to give a decision within a reasonable period of time, or in cases where the tenderer is not satisfied with the decision of the administrative authority. No person in the service of the republic shall be eligible for inclusion in a review panel. Such a review panel(s) may lead to disposal of appeals in a fair manner.
• The PPA has the provision of making public purchases following the procedure for direct purchase, or any other method in case of emergencies or catastrophe, or in public interest, on the recommendations of the cabinet committee on economic affairs. This is apparently all right provided exceptions do not become the rule.
• The PPA has provided that if an officer commits any irregularities he will be charged under the Government Servants (Discipline and Appeal) Rules, 1985 or under Prevention of Corruption Act, 1947.
• The PPR shall remain in force till the framing of rules under the PPA, which shall come into force on such date as the government may, by notification in the official gazette, specify. It may be mentioned that rules are framed for the elaboration of the provisions of act(s). It may be difficult to find an instance where operation of an act of parliament has been stayed until the framing of rules thereunder. The alliance government has less than two months to hand over power to the caretaker government. So, there is little, or no, possibility of framing rules under the PPA during the remaining days of the alliance government. This means that the making the PPA effective has become uncertain.

A closer look into the PPA reveals that it is an improvement upon the PPR. There is, therefore, an immediate need to take all necessary measures to make the PPA effective in order to check the last moment rush for approval of irregular procurement proposals on political considerations.

M. Abdul Latif Mondal is a former Secretary to the government.