A.D.P.

I Prasanna
SLAS-1, B.Sc. [sp], M.Sc. [mgt], Dip [Pub Ad], Dippca,
CISMM

National Institute of Labour Studies

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Outline of the session

1) Evolution of exchange system

2) Define Public Procurement
3) Legal Provisions / Sources on Public Procurement
4) Public Procurement-related Guidelines and Manuals
5) Public Procurement Principles
6) Ethics in Procurement
7) Importance of Sound Procurement System
8) Institutions, Procurement Committee, Bid Evaluation Committee,
Acceptance Committee and Functions
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Exchange Systems

A. Purchasing Management
B. Supply Management
C. Warehouse Management
D. Logistics Management
E. Procurement Management
F. Supply Chain Management (Network Management)
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Purchasing Management

“ A business activity directed to securing the materials,

supplies, and equipment received in the operation of an
organization.”- Westing & Fine

• It’ is an exchange of money for a particular good or

service
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Logistics Management

“Logistics is the process of planning, implementing, and

controlling the efficient, cost-effective flow and storage of
raw materials, in-process inventory, finished goods, and
related information from the point of origin to the end of
consumption to conform to customer requirements.
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Supply Chain Management

SCM is the integration and transformation of all

activities and goods from associated raw materials that
flow through the end user and information through
improved supply chain relationships to achieve a
sustainable competitive advantage.
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Supply Chain Management

Supply chain management is a set of approaches utilized to

efficiently integrate suppliers, manufacturers,
warehouses, and stores, so that merchandise is produced
and distributed in the right quantities, to the right locations,
and at the right time, to minimize system-wide costs while
satisfying service-level requirements
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Relationship Between Purchasing and SCM

Purchasing is the process of getting the goods and services

to your organizational needs, while

• Supply chain management transforms those goods into

products and distributes them to customers as efficiently as
possible.
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What is Public Procurement

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What is Public Procurement

Public procurement is the use of public funds by the government

through its Ministries, Departments, Provincial Councils, Local
Authorities, Statutory Bodies, and other Agencies, on behalf of its
citizens for the acquisition of goods, services and works with the
best quality, and/or right quantity, at the best price, from the
right place or source (contractors, suppliers and service providers),
and for the right purpose using the best method(s) and in accordance
with rules and regulations, following due process.
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What is Public Procurement

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Objective of Public Procurement

The essence of public procurement is to maximize value

for money, which manifests in enhanced human
welfare and improved economic growth and effective
procurement management in the public sector as a
vehicle for attaining social, political and economic
objectives
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Procurement Categories
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Legal Provisions / Sources on Public Procurement

1. Constitution of the Socialist Republic of Sri Lanka [Article 156 c

2. Act/ Ordinance/Statutes

3. Bi- Laws

4. Financial Regulation/ Provincial Financial Regulation

5. Procurement Guidelines/ Manuals

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Legal Provisions / Sources on Public Procurement cont.

6. Supplements

7. Circulars

8. Public Policies

9. Standard Bidding Documents

10. BSR/ CSR/HSR

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Public Procurement-related Guidelines and Manuals

▸ Guidelines and Manual for Goods, Works, and Non-Consulting Services-2024

▸ Guideline for Selection and Employment of Consultancy Services and

Manual - 2007

▸ Guideline for Public, Private Partnership (PPP)

▸ Guide to Project Management & Contract Management

▸ Guideline for Pharmaceuticals & Medical Devices of a Consumable Nature
▸ Bidders Guide
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Standard Bidding Documents

GOSL Funded Work Contract [ICTAD/CIDA Publication]

▪ SBD/01- Medium Contracts – 10m- 100m
▪ SBD/02- Major Contracts - more than 100m
▪ SBD/03- Minor Contracts - less than 10m
▪ SBD/04- Design & Build Contracts-
SBD _Goods approved by NPA
▪ Foreign Funded Projects
▪ Have to use a set of SBDs, introduced by funding agencies
▪ ADB, WB, JBIC/JICA
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Examples for Public Procurement related Acts

▪ Public Finance Act

▪ Arbitration NO. 11 OF 1995
▪ Construction Industry Development Act, No. 33 of 2014
▪ Public Contracts (No. 3 of 1987)
▪ Provincial Council Act
▪ Inland Revenue Act/ Regulations
▪ Import Export Control Act/ Regulations
▪ Customs Ordinance/ Regulations
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Examples for Public Procurement related Acts cont.

▪ Local Government Act/Ordinance[ Municipal Council,

Urban Council, Pradeshiya Sabha

▪ Public Procurement Act [Drafting Stage]

▪ Public Private Partnership Act [Approval Stage]
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Associated Procedure to the Public Procurement

▪ Tender procedure [ sales, lease, rental..]

▪ Public Asset Disposal procedure [Auction, Tender..]
▪ Divestiture procedure [Selection of TA, Investor]
▪ Public-Private Partnership projects
▪ Stores Management
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Principles of Public Procurement

Principles of Public Procurement mainly emphasize Value for

Money [ VFM]
Primary Principles Other Principles
Economy Transparency
Efficiency Integrity
Effectiveness Fairness
Equity Openness
Cost Effectiveness
Competitiveness
Accountability
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Ethics in Procurement

Parties associated with the Procurement Process including officials,

members of the Procurement Committees, Bid Evaluation Committees,
Acceptance Committees, and Variation Review Committees as well as
bidders, contractors, service providers, suppliers, any sub-contractors,
any agents; consultants, and any of their personnel should observe the
highest standards of ethics during the Procurement Process and
execution of such contracts.
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Ethics in Procurement cont.

▪ Confidentiality රහස්‍යභාවය

▪ Prohibited Practices -
- Corrupt Practice. දූෂණ ක්‍රියාව
- Fraudulent Practice. වංචනික ක්‍රියාව
- Collusive Practice. දුස්‍්ස්‍න්ධානීය ක්‍රියාව
- Coercive Practice. ප්‍රරරෝධක ක්‍රියාව
- Obstructive Practice. අවහිරකාරී ක්‍රියා
▪ Conflict of Interest බැඳියාවන් පිළිබඳ ඝට්ඨනය
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Prohibited Practices

▸ Corrupt Practice දූෂණ ක්‍රියාව

“Corrupt Practice” means the offering, giving, receiving, or soliciting, directly

or indirectly, anything of value to influence improperly the actions of another
party;

▸ Fraudulent Practice වංචනික ක්‍රියාව

“Fraudulent Practice” means any act or omission, including a

misrepresentation, that knowingly or recklessly misleads, or attempts to mislead,
a party to obtain a financial or other benefit
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Prohibited Practices cont.

▸ c) Collusive Practice දුස්සන්ධානීය ක්‍රියාව

“Collusive Practice” means an arrangement between two or more

parties designed to achieve an improper purpose, including improperly
influencing another party's actions. Improper purpose would consist of
any attempt to influence competition and/or the price
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Prohibited Practices cont.

▸ Coercive Practice ප්‍රර ෝධක ක්‍රියාව

“Coercive Practice” means impairing or harming, or threatening to impair

or harm, directly or indirectly, any party or the property of the party to
influence the actions of a party improperly;
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Prohibited Practices cont.

▸ Obstructive Practice අවහි කාරී ක්‍රියා

“Obstructive actions” means destruction of facts/documents, submission

of false/false information, alteration, amendment and/or concealment in a

manner that interferes with the procurement process.

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Conflict of Interest

Conflict of Interest” means any situation where the personal or

business interests of any person in a Public Procurement
transaction would adversely affect the interests of a Procuring Entity in
achieving economy, efficiency, effectiveness, transparency, fairness,
integrity, and equal treatment of bidders or consultants.
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Sound Procurement System ?

▪ Maximizing economy, efficiency, effectiveness, equity, and Value

for Money;
▪ Adhering to laws, rules, regulations, international obligations,
prescribed standards, and specifications;
▪ Fair, equal, and maximum opportunity for interested parties to
participate in Procurement;
▪ Expeditious execution of Works, delivery of Goods, provision of
Services, and completion of Information Systems;
▪ Ensuring transparency and consistency;
▪ Sustainable Public Procurement (SPP); and
▪ Retaining confidentiality of information.
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Institutions, Procurement Committee and Functions

▸ Procurement Committee
▸ Technical Evaluation Committee/Bid Evaluation Committee
▸ Bid Opening Committee
▸ Approving Authority
▸ Consultants
▸ Procuring Entity[PE]
▸ Procurement Management Division
▸ Chief Accounting Officer, Accounting Officer
▸ Acceptance Committee
▸ Variation Review Committee
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PROCUREMENT COMMITTEES

❑ High-Level Procurement Committee [HLPC]

Standing High-Level Procurement Committee [SHLPC]

❑ Ministry Procurement Committee [MPC]

❑ Department Procurement Committee [DPC]

❑ Project Procurement Committee [PPC]

❑ Regional Procurement Committee [RPC]

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AUTHORITY LIMITS OF PROCUREMENT COMMITTEE

Authority GOSL Funded Project Foreign Funded Project

LKR Mn LKR Mn

High-Level Procurement Committee More than 750 More than 1500

[ SCAPC/ CAPC]
Ministry Procurement Up to 750 Up to 1500
Committee[MPC
Department Procurement Committee[ Up to 400 Up to 800
DPC]
Project Procurement Committee Up to 400 Up to 400
[PPC]
Regional Procurement Committee [ Up to 50 Up to 100
RPC]
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DEVIATION OF AUTHORITY LIMITS

▪ Provincial Councils

▪ Local Authority
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AUTHORITY LIMITS OF PROCUREMENT COMMITTEE
[Provincial Council]
Authority GOSL Funded Foreign Funded
Project LKR Mn Project
LKR Mn

Provincial High Level Procurement Committee

Chief Secretary Level Procurement Committee

Ministry Procurement Committee [Provincial]

Department Procurement Committee [Provincial]

Project Procurement Committee [ Provincial]

Regional Procurement Committee [Provincial]

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Procurement Committees cont.

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Procurement Committees cont.

▪ Non-member Secretary,
▪ Alternative member participation
▪ PC for minor contracts to MPC, DPC, and PPC
▪ A reporting system for the performance of officers
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BID EVALUATION COMMITTEE [BEC]

▪ Appointing a BEC is mandatory only for the procurements

under the (HLPC) and (SHLPC).

▪ BECs for MPC, DPC, PPC, and RPC may be appointed by

the appointing authorities
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BID EVALUATION COMMITTEE [BEC] cont

❑ High-level Bid Evaluation Committee

Standing High-Level Bid Evaluation Committee

❑ Ministry Technical Evaluation Committee

❑ Department Technical Evaluation Committee
❑ Project Technical Evaluation Committee
❑ Regional Technical Evaluation Committee
39
RESPONSIBILITIES & DUTIES OF PC

▸ Ensure that funds are available

▸ Determine the procurement method, dates of advertising,
closing, and opening bids
▸ Agreeing with BEC on bidding and contract document
▸ Request clarification from BEC
▸ Reviewing evaluation report and recommendation of BEC
▸ Negotiation
▸ Final decision on awarding
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Standing Cabinet Appointed Procurement
Committee[CAPC]
In exceptional circumstances where it could justify that handling particular procurement/s by
a normal CAPC shall not ensure the efficiency, effectiveness, and Value for Money (VFM
Appointment of a SCAPC may be justified where;
▪ Items/commodities need to be purchased very frequently, without significant changes
in specifications, and are of the same nature;
▪ Expeditious processing of procurement is necessary due to volatile market situations
which warrants speedy decisions to ensure VFM and uninterrupted supply/service;
▪ Bids/proposals have a very short validity period, due to the fluctuation of market
prices frequently;
▪ Security consideration warrants;
▪ A project contains a large number of bid/proposal packages spread over a long period
and handling all by one PC would allow members to specialize in the procurement of
such goods/commodities; an
▪ Supplies are immediately required to avoid acute shortages in the market.
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RESPONSIBILITIES & DUTIES OF BEC

▸ Submit recommendation and clarification

▸ Approve specification
▸ Approve ,review bidding documents
▸ Negotiation if directed by PC
▸ If need, Get external consultancy
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RESPONSIBILITIES OF BOC
[Appointed by PE with the concurrence of PC]

▸ Bids opened in presence of bidder or representative

▸ Should not reject any bids receive on or before deadline of
submission of bids
▸ Originals should be opened, copy shall not be opened
▸ Should readout followings,
▸ Names, bid amounts, bid security, discounts, withdrawals
▸ Get attendance
▸ Prepare bid opening reports
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Responsibilities of Procuring Entity

The head of the institutions together with the assistance of the

consultants and other relevant staff who are involved in
procurement decision-making and handling shall be responsible
for the following activities listed:

1. Pre-Procurement Process

2. Procurement Process

3.Post Procurement Process

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Procurement Management Division [PMD]

▪ CPO/SPO/PO shall assist CAO/AO during the entire

procurement process including procurement management

➢ Chief Procurement Officer (CPO)

➢ Senior Procurement Officer (SPO)
➢ Procurement Officer (PO)
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Chief Accounting Officer [CAO]and Accounting Officer[AO]

▪ Responsibility for Procurement Actions shall be vested with the

Chief Accounting Officer (CAO) and the Accounting Officer
(AO) of Government Institutions
▪ Making pre-procurement arrangements and contract execution
▪ Establishment of a Procurement Management Division
▪ Appointing and monitoring relevant Committees such as PCs,
BECs, ACs, VRCs and PACs
▪ Ensuring procurements are carried out as per the procurement
plans
…………………………..etc.
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Approving Authority

Authority Approving Authority

High-Level Procurement Committee [CAPC] Cabinet of Ministers

Ministry Procurement Committee [MPC] CAO

Department Procurement Committee [DPC] CAO

Project Procurement Committee [PPC] CAO

Regional Procurement Committee [RPC] AO

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Acceptance Committee (AC);

▪ The Acceptance Committee is authorized to accept Goods, Works, and

Services on behalf of the Employer or Purchaser of the Procuring
Entity. In Works contracts, despite the functioning of this committee,
the role of the Engineer as provided in the relevant contract/agreement
shall remain unchanged;
▪ AC shall independently check and accept the delivered Goods, Works
and Services, in compliance with the requirements of the
contract/purchase order inclusive of its technical and functional
requirements with due consideration of the quality, quantity, cost, and
time and also the documentary evidence for the ownership in terms of
the awarded contract.
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CONSULTANTS

A variety of legally and financially autonomous Public

and Private Entities, Joint Ventures, or Individuals (not

engaged by the PE as an employee) that provide services

of an Advisory or Professional Nature.

“ Thank you…