Return to GVPedia

Thursday 28 August 2014

PPOA

When The Public Procurement and Disposal Act, 2005, came into being, the Public Procurement Oversight Authority (PPOA) conducted two baseline surveys in 2007 to determine the state of the public procurement system.

Contact

Public Procurement Oversight Authority, Kenya

Ensuring Fidelity to Spending Procedures

First, it conducted a study of the public procurement situation using the Methodology of Assessment Procurement Systems from the Organisation for Economic Co-operation and Development – Development Assistance Committee (OECD-DAC).

 

Out of a maximum aggregate of 158 marks of the Baseline Indicators, Kenya scored 104 marks, equivalent to an overall achievement level of 66%. This could also be viewed as the global positioning of the results of the public procurement reforms in Kenya.

 

Secondly, PPOA in conjunction with the Kenya National Bureau of Statistics, conducted a Baseline Survey on Procurement of Common-User Items by Public Entities. PPOA introduced a Price Reference Guide on pilot basis and found that pilot entities using the Guide were able to save 40% of costs.

 

The OECD-DAC Methodology of Assessment of Procurement Systems was based on four pillars:-

 

Pillar I: Legislative and Regulatory Framework

The Pillar assessed the existence, availability, quality and use of the legal and regulatory framework from the highest level (Act and Regulations) down to the more detailed operational procedures, guidelines, model tender documents, and standard conditions of contract. Key strengths noted included a sound legal framework in place. PPOA developed standard tender documents for goods, works and services.

 

Open tenders accounted for an almost equivalent though slightly higher proportion of the total procurement spend than restricted tenders, followed by quotations. Thus placing open tenders somewhat closer to its intended status as the default procurement method. Despite these findings, assessment confirmed the trend of relying excessively on procurements through RFQs.

 

PPOA developed the Public Procurement General Manual and the Public Procurement Users Guide to simplify application of the Procurement Law. It further developed eight other sector-specific procurement manuals in Insurance, Project Management, Health, Schools and Colleges, ICT, Procurement Records, Non-Intellectual Services, and Works. PPOA also embarked on reviewing all the Standard Tender Documents.

 

Pillar II: Institutional Framework and Management Capacity

This pillar assessed how the procurement system as defined by the legal and regulatory framework was operating through the institutions and management systems and practice in the public sector. The findings of the assessment pointed to the key assets of the institutional framework and management capacity in Kenya.

 

It emerged that the legal framework supports integration of procurement planning in the budget formulation process; PPOA had been established as the authoritative public procurement oversight body; and procedures for performance evaluation were in place.

 

PPOA issued circulars to all procuring entities on formats for procurement planning and the statutory reporting requirements. It also launched its official website www. ppoa.go.ke to enable all stakeholders to electronically and easily access all procurement information and documents. The portal, www.tenders.go.ke was started to advertise all tenders at an electronic onestop shop.

 

PPOA also conducted a county-wide campaign to sensitize all stakeholders on the public procurement law and has successfully conducted Annual Public Procurement Stakeholders Consultative Forums since 2007, to improve the public procurement and disposal system.

 

Pillar III: Procurement operations and market practices

Having assessed the legal/regulatoryand institutional systems guiding publicprocurement system, Pillar III looked athow these systems operated at the levelof the implementation as well as on theprocurement market in Kenya.

 

Based on the assessment findings, several strengths were identified: procurement decision making authority was fully delegatable; steps had been taken towards developing a professional procurement workforce; dialogue between government and private sector on matters of procurement was considered open and constructive.

 

To address existing weaknesses PPOA introduced the Market Price Index, updated periodically to assist accounting officers make informed decisions and to counter the menace of overpricing.

 

Recently, PPOA launched the web-based Market Price Index to inform on the regional and national market prices. PPOA also trained over 2,800 youth organisations; 239 procuring entities, several SMEs; and sponsored the training of procurement officers in both short and long-term courses to build their professional capacity. To ease the tender security requirements

 

PPOA in consultation with the Insurance Regulatory Authority issued a list of approved insurance companies to issue bid bonds.

 

Pillar IV: Integrity and Transparency of the Public Procurement System

The integrity and transparency of a public procurement system relied on a number of control mechanisms, including an effective control and audit system, an efficient appeals mechanism, a comprehensive information sharing system enabling interested stakeholders to conduct social audit, and effective ethics and anticorruption measures. Without such control mechanisms, flaws in the procurement system would not be detected and addressed.

 

The fourth pillar of the assessment therefore measured the existence of adequate control systems and related practices. The assessment identified a number of factors, which had contributed positively to strengthening the control systems of Kenya’s procurement systems.

 

The study found that Kenya had a sound internal audit mechanism established and complied with; and a well-functioning and independent complaints review and appeals mechanism.

 

PPOA has embarked on a rigorous drive to address weaknesses by enforcing Public Procurement Laws through procurement assessments and audits; developing an E-procurement framework to increase transparency and efficiency in the procurement system and developing an internal procurement performance monitoring tool (IPPMT).

 

Also, PPOA introduced a monthly publication of all public procurement contract awards in the daily newspapers of nation-wide circulation and developed a Code of Ethics to be observed by all participants of the public procurement and disposal process.

 

All in all, the state of public procurement in Kenya is vibrantly moving towards increasing value for the Kenyan tax-payers’ money and still going strong in facilitating economic growth and attainment of Vision 2030 goals.