Compliance of PPR 2008 : a study on LGED based on KPIs

Abstract

Transparency, efficiency, accountability, competitiveness, equitable treatment and free & fair competition are essential to be ensured in the procurement using public funds. In Bangladesh, these could not be ensured earlier due to a lack of proper rules and regulation. To streamline the public procurement activities, the Government of the People’s Republic of Bangladesh has enacted Public Procurement Act (PPA) 2006 and thereafter issued Public Procurement Rules (PPR) 2008. Since then government agencies are bound to abide by the Act and Rules very strictly in their procurement activities. The Central Procurement Technical Unit (CPTU) of the Implementation Monitoring and Evaluation Division (IMED) is continually monitoring the compliance of PPA 2006 and PPR 2008 by the target agencies in the light of 45 predetermined Key Performance Indicators (KPI). Among the four target agencies, LGED is the largest in terms of budget allocation against the projects in the Annual Development Programme (ADP). It is generally said that a total of 80% of ADP allocation are spent for procurement of goods, works and services which are administered by PPR 2008. Thus, it seems to be a good consideration to have a look at the compliance issues of PPR 2008 in LGED’s procurement activities. The research has been designed under the questions if LGED is following PPR 2008 completely or not; and if not, then the causes behind that. The main objectives of the present study are to find out the extent of compliance of PPR 2008 by LEGD and to find out the gap of compliance and scope of improvement for implementation. The related literatures and reports, particularly from LGED and SRGB, have been thoroughly reviewed before conducting the main research work. The key findings of these reports have been compared and analyzed which helped to draw important conclusion of the study. A questionnaire survey was carried out to collect primary data from different stakeholders related to procurement activities of LGED. For in-depth study on the compliance issues of PPR 2008, eight different projects were studied carefully to collect the qualitative data too. In addition to survey, key informant interviews have been conducted to get the perceptions of few senior officers of LGED and IMED. The study result shows a clear adherence to the rules of PPR 2008 in LGED in carrying out most of the compliance related KPIs. The individual consultant’s reports as well as SRGB’s report also show a clear indication of compliance of PPR 2008 by LGED. Among the 11 different compliance issues, it has been revealed that respondents replied in an overall positive manner as satisfactory against 7 issues. For other 4 issues namely submission of report by the TEC, imposition of liquidated damage, days taken to release payment, and interest for delayed payment are not satisfactory and a clear improvement is required in these areas. Also, the perceptions of the respondents regarding the issue of releasing payment need to investigate more cautiously as there are ambiguity among the findings of present study, individual consultant’s reports and SRGB’s report. However, the scenario is more or less similar in other target agencies For improvement of these situations, four specific recommendations have been drawn. These are (i) to induce a mechanism for ensuring that TER is directly submitted to the contract approving authority as per Rule 36(3) of PPR 2008, (ii) to ensure the timely payment to the contractors, tender should be floated only after availability of sufficient fund, (iii) a liquidated damage clause and (iv) payment of interest in case of delayed payment should be considered carefully to protect the interests of both the parties.