Public Procurement As An Imperative for Good Governance

Public Procurement As An Imperative for Good Governance & Sustainable Development: Implementation Challenges & Lessons A Paper Presented At The Public Procurement Conference 2015 organised by the Edo State Public Procurement Agency By: Engr. Akin Onimole General Manager/CEO Lagos State Public Procurement Agency

Key Issues to Consider: ◦ Relationship between Public Procurement, Good Governance & Sustainable Development ◦ Components of an Effective Public Procurement System ◦ Implementation Strategy adopted by the Lagos PPA ◦ Challenges & Lessons Learnt ◦ Recommendations

Public Procurement ◦ The Acquisition by any means of goods, works or services by the Government (Edo PPA Law 2012) ◦ Acquisition is the conceptualisation, initiation, design, development, test, contracting, production, deployment, logistics support, modification and disposal of weapons and other systems, supplies or services (including construction) to satisfy the US dept of Defence needs, intended for use in or in support of military missions. (US Defence Acquisition University)

Good Governance (ref: UNDP) Governance is generally taken to mean the exercise of economic, political and administrative power or authority to manage a country’s resources and affairs at all levels; • The goal of governance initiatives should be to develop capacities that are needed to realize development that gives priority to the poor, advances women, sustains the environment and creates needed opportunities for employment and other livelihoods. • Good governance has become a conceptual platform of interest on which most nations performances are judged. • It is a key part of any development strategy and it has become widely accepted within the development policy community in recent times •

Sustainable Development which meets the needs of the present without compromising the ability of future generation (Agenda Environment Economy Society 3 Pillars of Sustainable Development 21 of Rio Declaration, 1992)

Why Need for an Efficient Procmt Mgt System (PMS) 1. Earth Resources are fast diminishing Political Goal ØWorld Population by 2050 : 9 PMS Social Goal Economic Goal Billion ØNumber of ‘dead zones’ in the oceans & coastal areas has doubled since the 1960 s due to fertilizer run-offs (yet 70% of world population depends largely on sea foods) ØBy 2025, 2/3 of the world’s population could face serious water shortage problem (Less than 1% of world’s water available for drinking etc)

Why Need for an Efficient Procmt Mgt System (PMS) 2. Increasing Agitation for Accountability & Transparency. Political Goal ØMajor PMS Social Goal Economic Goal condition for accessing foreign aid and foreign direct investment ØCreation of EFCC and Due Process Office were part of the financial reforms that earned the Federal Government debt cancellation

Why Need for an Efficient Procmt Mgt System (PMS) 3. Public Procurement Budget is often 60– 70 % of total Government Expenditure (savings Political Goal from wastages & poor procurement system can help Govt achieve more) PMS Social Goal Economic Goal

1. 1 Components of Effective Public Procurement System

Component Description or Function Legal Framework Procurement Law that clearly define responsibilities of procuring entities, contractors and suppliers. Policy Effective and consistent national policies and standards to be followed by all procuring entities including arbitration procedures. Institutional framework A well defined structure for conducting procurement that minimizes subjective decisions and politicization. Professional Procurement Cadre Procuring entities staffed with well trained procurement professional and recognized as such under the Civil Service scheme and regulations. Resources Procuring entities supported with adequate budgets, standard documents and operational manuals for effective service delivery. Fraud Preventions Clear laws applicable to procurement officials, contractors/ suppliers or service providers and other relevant stakeholders who breach any part

Standard Model of Good Procurement Practice

UNCITRAL MODEL (United Nations Commission on International Trade Law) ØIssued in 1994 as Model Law on Procurement of Goods, Construction & Services ØAimed at assisting National Governments seeking to introduce or reform public procurement legislation ØAdopted by most Nations with some elements of domestication (e. g Nigeria (BPP, Lagos, Edo)

Objectives of the UNCITRAL Model Maximizing economy and efficiency in procurement Fostering and encouraging participation of suppliers and contractors in procurement proceedings Promoting competition among suppliers and contractors for the supply of goods, construction or services Providing for the fair and equitable treatment of all suppliers and contractors Promoting the integrity, fairness and public confidence in the procurement process and Achieving transparency in the procedures relating to procurement.

Implementation Strategy by the Lagos State Public Procurement Agency Thursday, March 15, 2018 14

Establishment of PPA in April 02, 2012 with takeoff staff deployed over time.

State-wide Sensitisation Sensitization of about 5000 Stakeholders including State EXCO members, Accounting Officers, Directors, Contractors/ Consultants, Professional Bodies and Key Officers in LGAs and LCDAs.

Conversion, Training and Deployment of Procurement Officers to MDAs. ØSelection criteria includes: Remaining years in service, qualification, age and position below GL 15) (to date there about 240 Officers in the Procmt Cadre Service-wide. Deployment based on spend category of MDA) Capacity Building

Publications and Circulars issued to enhance implementation of the Procurement Law. 1. Handbook on FAQs 2. Basic Guidelines for the Implementation of Procurement Law 3. Quarterly Publication of Procurement Journal 4. Publication of the State Tenders Journal 5. Launching of an Interactive PPA Website (www. lagosppa. gov. ng) 6. Regular State-wide circulars for proper information dissemination and clarifications PPA Publications & Circulars

Other Activities Observer at the State Tenders Board Sessions during the Transition Period Monthly Meetings/Seminar with the Procurement Officers’ cadre as part of capacity building strategy Participated in the Setting-up of the Procurement Planning Committees and Ministerial / Parastatals Tenders Boards Initiated the Annual Contractors / Consultants Forum Regular engagement with State EXCO & Body of Permanent Secretaries

Challenges & Lessons Learnt

Challenges Solutions/Lessons Inadequate number of experienced Procurement Experts to occupy strategic positions in the Agency to support the GM Experienced staff trained under World Bank-assisted projects were seconded on ad-hoc basis to handle reviews and give professional supports to officers Inadequate Budget to support the operations of the Agency especially in hiring consultants to offer expert/independent opinions (where necessary) and to train about 240 State Procurement Officers Technical Supports were offered by UK-Df. ID through their relevant programmes in Lagos. However, the First Line Budgetary Provision for the Agency has really helped in planning

Challenges Deliberate Effort to frustrate Procurement Officers through non-provision of offices and working tools Issue of certification by CIPSMN Incentives Conversion through self-seeking motives (e. g from Teaching Service, Traffic wardens) Solutions / Lessons Continuous engagement with relevant authorities (The fact that the GM is not a career Civil Servant helped to enhance his independence 3 -year moratorium granted by Ho. S/Civil Service Commission Sponsorship to Conferences & trainings based on dedication to duty Strict adherence to conversion criteria and rejection of application from some specific cadres

Recommendations for Edo PPA Engage a qualified professional as CEO of the Agency, if possible, a non-civil servant to ensure independence. If Edo State Govt plans to convert to Procmt cadre instead of recruiting, limit conversion to between GL 8 – 12, except if there are tested and experienced professionals in the system Establish a monitoring and reward system to incentivise and shield officers from fraud and political pressure

RECOMMENDATIONS contd If possible, engage completely new and experienced staff for the Agency. If not, ensure that staff deployed are stationed there for a minimum of 4 years to prevent high staff turnover Make adequate Provision for Capacity Building of Agency staff, Procmt Officers, Board Members and Accounting Officers. (First line charge budget recommended). You may consider collaboration with PPRI (Futo), Ibadan Business School etc. CIPSMN Factor

RECOMMENDATIONS contd Adopt Modern Technology (e. g Use of formularised Excel Sheet to prepare Procmt Plans). Lagos is already introducing P 2 P module on Oracle Platform. Factor in Sustainable Development and Innovation Procurement into your system. (You may need to engage a specialist Consultant for this) Study your existing Procurement System and adapt as long as its acceptable best practice Ensure regular engagement with Contractors & Suppliers

Comparative Analysis of some African Countries Procmt System

Parameters Ghana Public Procurement Liberia Public Procurement Tanzania Public Procurement Uganda Public Procurement Nigeria Public Procurement Lagos State Experience Enactment of Public Procurement Law Enacted in 2003. Enacted in 2008 Enacted in 2001 Enacted in 2003 Enacted in 2007 Enacted in 2011 Constitution of Yes Board/ Council Yes, called Yes Board of Commissioner s which report to the Legislative. Yes No Yes Establishment of Regulatory Agency Yes with CEO as the Head Yes with Executive CEO as the Director as the Head Yes with Executive Director as the Head Yes with Director. General as the Head Yes with General Manager as the Head Organizational Structure Yes Yes Yes

References 1. United Nations: Economic and Social Council Paper (Page 3) – Committee of Experts on Public Administration (Fifth Session) 27 -31, March 2006. 2. Sustainable Public Procurement: A new approach to Good Governance by A. B Adjei (Page 2) 3. Lecture Note on Sustainable Development at University of Turin – Alenka Burja, DG Environment, European Commission Thursday, March 15, 2018 28

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