Procurement effectiveness in Local Government Engineering Department (LGED) under IDA and GoB funded projects

Abstract

In 1999, WB and ADB conducted joint review of the country portfolio procurement performance and prepared an action plan for government on public procurement. The World Bank in agreement with the Government of Bangladesh (GoB) has prepared the Country Procurement Assessment Report (CPAR) in 2002 and identified several deficiencies in the procurement system of the GoB. As per recommendations of the CPAR, the GoB established a procurement policy unit within the Implementation, Monitoring and Evaluation Division (IMED) under planning ministry. GoB then issued “The Public Procurement Regulations 2003” in September 2003 for streamlining the process and to ensure unified procurement systems for government’s departments as well as autonomous, semi-autonomous bodies and corporations. In July’ 2006 GoB then enacted “The Public Procurement Act, 2006” (PPA 2006) and consequently in January’ 2008 issued “The Public Procurement Rules, 2008” (PPR 2008) to ensure transparency and accountability in the procurement of goods, works and services using public funds. On the other hand, the world bank guidelines are used for the procurement under IDA financed project. The objectives of the research was to study the effectiveness of the procurement course of actions in LGED under IDA and GoB funded projects as well as to find out the factors affecting procurement management systems and to suggest for further enhancement of the procurement process. The methodology of this research was a combination of literature review, questionnaire survey, key informants interview and secondary data collection from project offices. The major literatures that reviewed are world bank procurement guidelines, PPA 2006, PPR 2008, website documents, different procurement journals and reports. The questionnaire survey data were collected from 30 different levels LGED officials as well as from 8 contractors and 2 consultants. The major findings in this research are; Tender Notices floated as per Rule 61 (4) of PPR 2008 keeping sufficient time for the preparation and submission of tenders from the date of advertisement on the basis of official estimated costs. 93% and 87% of TER approved within specified timeframe for GoB funded IRIDP project and IDA financed RTIP II project respectively. The main reasons for time extension is due to fund flow crisis, shortage of labour, price hike of construction materials and natural calamities delay works. The main causes for contract variation are scope of work change, faulty estimate preparation and design variation. Barriers for proper contract implementation are; lack of commitment both PEs and contractors, lack of knowledge on procurement processing for the PE’s staffs, massive tender documents, lack of Procurement Effectiveness in LGED Page vi training and development, political influences, lack of knowledge of the contractors and their staffs, attitudal problems, fund flow crisis and so on related issues. 100% respondents commented that introduction of e-procurement system increased efficiency and decreased malpractices in the procurement process. It is observed that IDA financed RTIP II project is better performing than GoB funded IRIDP project because of better fund flow, extensive monitoring & supervision systems, application of donor’s compliances and so on related issues. Major suggestions provided by the researcher for effective implementation of the procurement process are; Publication of user friendly simplified tender documents, Strict applications of the procurement rules and regulations, Estimate should be prepared more cautiously to avoid variation order preparation, Time extension should be discouraged by applying liquidated damages, Ensuring training and development both for PE’s staffs as well as for contractor’s concern personnel for adapting them in effective procurement practices, Ensuring governance and internal control for making it more effective, Introducing reward system for better performance and punishment for poor performance for effective implementation of the contracts, Ensuring extensive use of e-procurement systems to increase efficiency, transparency and quick processing.