Question Tag: Public Procurement

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  • 8 Marks

PSAF – Nov 2016 – L2 – Q2a – Public Procurement.

Explain the stages involved in the national competitive tendering process for public procurement.

Competitive tendering is a method of public procurement that seeks tenders from all potential suppliers or contractors to achieve value for money in public procurement. Competitive tendering is carried out in accordance with the competitive tendering procedures under the public procurement law.

Required: Explain FOUR procedures involved in carrying out national competitive tendering for the procurement of goods, services, and works. (6 marks)

Stages of national competitive tendering procedure are:

i) Invitation of tenders and prequalification
Preparation of standard tender document in accordance with PPA requirements.
Preparation of invitation document containing all relevant information required by the Public Procurement Law.
Advertisement in national newspapers or other approved media for the supply of goods, services, or works (GSWs). Tenderers should be given at least two weeks to prepare and submit their tenders.

ii) Submission of tenders
All tenders shall be deposited in the designated locked tender box until the tender opening.
The Tender Document will provide clear instructions on the marking, sealing, and submission of tenders.
The closing date and time for submission of tenders must be determined in advance and stated in the Tender Document.
The tenderer submitting a tender should receive a receipt showing the date and time of delivery.
A tender submitted after the deadline should be returned to the tenderer unopened.
The tenderer may submit a tender security together with the tender document when required by the entity.

iii) Evaluation and Comparison
Opening of tenders: Tender opening shall commence immediately after the close of tenders.
A Tender Opening Panel shall consist of at least 3 persons, including a member of the Entity Tender Committee.
Minutes of the tender opening proceedings should be duly written.
Examination of tenders: Tenders should be examined to ensure they meet the requirements of the tender document.
A tender is responsive if it conforms to the requirements of the tender invitation documents.
A tender should not be accepted if:
The supplier is not qualified to tender.
The tender is not responsive.
The supplier refuses to correct minor indicated errors.
There is evidence of inducement from the supplier.
Evaluation of tenders:
The head of the Procurement Entity shall constitute an Evaluation Panel consisting of at least three persons with the required expertise to conduct the evaluation.
Procurement Entities must evaluate tenders solely on the basis of the information provided in the tenders.
Responsive tenders should be evaluated based on criteria set in the tender invitation document.
The Tender Evaluation Panel will prepare an evaluation report for submission to the Tender Committee.
The evaluation report should be prepared using the standard format for the evaluation of goods.
The appropriate review authority will review the evaluation report and recommendations.
The approval process should be a ‘One stop’ only, i.e., concurrent approvals must be obtained.

iv) Contract Offer
Following approval from the relevant review body, the contract will be awarded to the tenderer who submitted the lowest evaluated tender.
Before contacting the tenderer, a formal commitment of the required funds against the budget of the Procurement Entity must be approved.
Notice of the tender award shall be promptly issued to the successful tenderer. The successful tenderer shall confirm in writing the acceptance of the tender award and submit the appropriate Performance Security (if required).
The tenderer shall be invited to sign the contract. If impractical, the contract can be signed remotely, with signed copies returned to the Procurement Entity.
Failure to confirm acceptance, submit Performance Security, or sign the contract may annul the award, and the next lowest evaluated tenderer may be considered.

  • 4 Marks

PSAF – Nov 2016 – L2 – Q4a – Public Procurement

Discuss four benefits for an MDA of following due process in public procurement.

Discuss FOUR benefits that an MDA will derive if it follows the due process in public procurement.
(4 marks)

Benefits of Due Process in Public Procurement
i) The entity will safeguard its public funds and assets
ii) It will improve its system of fiscal management through more efficient and effective use of public monies.
iii) It will enhance transparency and accountability in its management and
procurement processes.
iv) It will be able to build public confidence in its financial activities.
v) It will practice efficient use of resources through competitive bidding and value for money.
vi) It will improve its financial planning system.
(4 points for 4 marks)

  • 20 Marks

PSAF – May 2021 – L2 – Q4 – Public Procurement

Outline the composition of the Public Procurement Board as per the Public Procurement (Amendment) Act, 2016.

a) A Procurement Board is established under the Provision of the Public Procurement (Amendment) Act, 2016 (Act 914) with the prime objective of harmonizing the process of Public Procurement in Public Services.

Required:
Outline the Composition of the Public Procurement Board. (4 marks)

b) The Entity Committee of the Social Department intends to acquire the following items:
i) 100 Pickups for offices at the department at the cost of GH¢120,000 each.
ii) Hire a Consultant to train Staff at all its units across the country for a period of 5 weeks at a cost of GH¢6,500,000.
iii) Undertake the construction of offices at a Value of GH¢13,700,000.
iv) Procure 20 Laptops at the cost of GH¢2,400 each.

Required:
Explain the appropriate Procurement methods that should be used to award these contracts (i – iv). (6 marks)

c) Fiscal constraints experienced by countries have resulted in developing new and innovative approaches to the provision and financing of public infrastructure and services. Public-Private Partnership (PPP) framework reflects the Government’s desire to improve the quality, cost-effectiveness, and timely provision of public infrastructure and services in Ghana.

Required:
i) Distinguish between Public Partnership and Public-Private Partnership. (2.5 marks)
ii) Explain FIVE (5) reasons why you would discourage the Government from embarking on Public-Private Partnership. (7.5 marks)

a)

Composition of the Public Procurement Board:
The Public Procurement Board, established under the Public Procurement (Amendment) Act, 2016 (Act 914), consists of the following members:

  1. A Chairperson who is experienced in public procurement.
  2. Four persons from the public sector, including:
    • A representative of the Attorney General.
    • Three others nominated by the Minister, one of whom must be a woman. All should have experience in public procurement and be familiar with governmental and multilateral agency procurement procedures.
  3. Three persons from the private sector, experienced in procurement, with at least one of them being a woman.
  4. The Chief Executive Officer of the Procurement Authority.

b)

Appropriate Procurement Methods:
i) 100 Pickups (GH¢120,000 each, total GH¢12,000,000):

  • Procurement Method: International Competitive Tendering
  • Explanation: The contract value exceeds GH¢10,000,000, which requires International Competitive Tendering as per the Fifth Schedule of the Public Procurement Amendment Act, 2016 (Act 914).

ii) Consultant for Staff Training (GH¢6,500,000):

  • Procurement Method: International Competitive Tendering
  • Explanation: The service contract value exceeds GH¢5,000,000, necessitating International Competitive Tendering according to the Fifth Schedule of the Public Procurement Amendment Act, 2016 (Act 914).

iii) Construction of Offices (GH¢13,700,000):

  • Procurement Method: National Competitive Tendering
  • Explanation: The contract value for works falls between GH¢200,000 and GH¢15,000,000, thus requiring National Competitive Tendering as per the Fifth Schedule of the Public Procurement Amendment Act, 2016 (Act 914).

iv) 20 Laptops (GH¢2,400 each, total GH¢48,000):

  • Procurement Method: Request for Quotation
  • Explanation: The contract value is up to GH¢100,000, making Request for Quotation the appropriate procurement method under the Fifth Schedule of the Public Procurement Amendment Act, 2016 (Act 914).

c)
i) Distinguish between Public Partnership and Public-Private Partnership (PPP):

  • Public Partnership: A collaboration between two or more public sector organizations or between a public sector organization and a non-profit organization to provide services or infrastructure, often with a focus on transferring technical skills and expertise.
  • Public-Private Partnership (PPP): A contractual arrangement between a public entity and a private sector party, with an explicit agreement on shared objectives to produce public infrastructure and services that are traditionally provided by the public sector. This typically involves the private sector financing, building, and operating the project for a specified period.

ii) Reasons to Discourage Public-Private Partnership (PPP):

  1. Cost Considerations: PPPs often involve higher costs due to additional expenses like transaction and financing costs, which may not be offset by efficiency gains.
  2. Complexity and Risk: PPP projects are complex and involve significant risks, such as unforeseen events or changes in policy that can lead to project failures or require renegotiation.
  3. Limited Private Sector Interest: Some projects may not attract private sector interest due to high risks or insufficient returns, making PPPs unfeasible.
  4. Impact on Public Sector Employment: Transferring operations to the private sector can lead to concerns among public sector employees, including job security and changes in working conditions.
  5. Long-Term Government Responsibility: Despite the involvement of the private sector, the government remains ultimately accountable for the quality and delivery of public services, which requires retaining sufficient expertise to manage and monitor PPP contracts effectively.
  • 20 Marks

PSAF – Nov 2020 – L2 – Q4 – Public Procurement | International public sector accounting standards

Explain principles of public procurement and risks associated with procurement in Ghana's public sector. Discuss service concession arrangements under IPSAS 32.

a) Using public money to procure goods, works, and services to provide public services is a frequent but complicated decision of the Head of Procurement entities. It is required that such decisions should go through due process to attain value for money for the public. The Public Procurement laws are embodiments of core principles that govern the entire process. Procurement entities are therefore entreated to promote and secure these core principles in the conduct of public procurements. Non-compliance with these principles embedded in the law increases the risk associated with public procurement.

Required:

i) Explain SIX (6) general principles of public procurement that an officer in charge of procurement of goods, services, and works should consider in line with the Public Procurement Act 2016 (Amendment) Act 914. (6 marks)

ii) Discuss FOUR (4) risks associated with public procurement in the Ghanaian Public Sector. (4 marks)

b) IPSAS 32: Service Concession Arrangements: Grantor establishes the accounting and reporting requirements for the grantor in a service concession arrangement. In these kinds of arrangements, the grantor is a public sector entity. Service Concession arrangements in the public sector are characterized by binding arrangements that involve private sector participation in the development, financing, operation, and/or maintenance of assets used to provide public services. IPSAS 32’s intention is to create symmetry with IFRIC 12: Service Concession Arrangements on relevant accounting issues (that is, liabilities, revenue, and expenses) from the grantor’s point of view.

Required:
i) State and Explain TWO (2) conditions under which a grantor can recognize a Service Concession Asset. (4 marks)

ii) Explain any THREE (3) pieces of information that the grantor shall present and disclose in its Financial Statements. (6 marks)

a) Principles of Public Procurement:

i) General Principles:

  1. Competition: Opening procurement opportunities to all potential suppliers and contractors encourages competition, ensuring value for money. Competitive tendering should be the preferred option.
  2. Accountability: The procurement entity and the head of procurement are accountable to the public for their procurement decisions and must provide explanations for their actions.
  3. Transparency: The procurement process should be transparent, from the invitation to tender to the evaluation and selection of suppliers. This transparency ensures public trust and fairness.
  4. Fairness/Non-Discrimination: All potential suppliers should be treated fairly, with no discrimination based on gender, party affiliation, ethnicity, or religion. Only price and quality should be the deciding factors.
  5. Economy: The procurement process should aim to reduce costs while achieving the desired outcomes, ensuring that public funds are used efficiently.
  6. Efficiency: The procurement process should be conducted efficiently to achieve the intended procurement objectives without unnecessary delays or costs.

(6 marks)

ii) Risks Associated with Public Procurement:

  1. Overvaluation of Procurement Contracts: There’s a high risk of contracts being overvalued for personal gain, leading to waste of public resources.
  2. Procurement of Inferior Goods and Services: There is a risk of public entities procuring substandard goods and services that do not meet the required specifications, often due to corruption or incompetence.
  3. Conflict of Interest: Heads of entities and procurement officers might award contracts to companies they have personal interests in, compromising the integrity of the procurement process.
  4. Fake Procurement: There is a risk of payments being made for goods and services that were never procured, with the proceeds being misappropriated.

(4 marks)

b) Service Concession Arrangements (IPSAS 32):

i) Conditions for Recognizing a Service Concession Asset:

  1. Control of Services: The grantor must control or regulate the services that the operator must provide with the asset, including who receives the services and the prices charged.
  2. Control of Residual Interest: The grantor must control any significant residual interest in the asset at the end of the service concession arrangement term, through ownership, beneficial entitlement, or otherwise.

(4 marks)

ii) Information to be Disclosed in Financial Statements:

  1. Description of the Arrangement: A comprehensive description of the service concession arrangement, including significant terms that may affect future cash flows, should be disclosed.
  2. Nature and Extent of Rights and Obligations: This includes the rights to use specified assets, receive specified services, or receive specified assets at the end of the arrangement, as well as any obligations to provide the operator with access to assets or revenue-generating opportunities.
  3. Changes in the Arrangement: Any changes in the service concession arrangement during the reporting period should be disclosed, including the impact on the financial position and performance of the grantor.
  • 4 Marks

PSAF – May 2016 – L2 – Q3e – Public procurement

This question addresses the procedures established by Local Authorities to control revenue.

Revenue control describes the various checks put in place to ensure that all moneys due are received and accounted for.

Required: Explain FOUR procedures established by Local Authorities to control revenue.

The Local Authorities control revenue through the following procedures:

  • Ensuring revenues are administered in compliance with relevant laws.
  • Maintaining a rating system to identify and regularly revise rateable persons and properties.
  • Ensuring that revenue collected is adequately protected while in custody and promptly deposited in bank accounts.
  • Ensuring all revenue received or receivable is properly recorded in the appropriate books of account.
  • Ensuring that there is a rating system in place to ensure that the Assembly’s rateable
    persons and properties within the Assembly area are identified and that a
    valuation list is maintained and revised regularly in accordance with Section
    96 (8) of the Local Government Act.
  • Ensuring that adequate procedures and operational systems are in place to capture all
    such public revenues;
  • Revenue Officers are required to prepare and sign Daily Collections
    Summaries (DCS);
  • Based on the DCS, revenue officers are required to prepare pay-in-slips and
    pay revenue collections intact into the District Assembly’s designated Bank
    Accounts.
  • 6 Marks

PSAF – Nov 2019 – L2 – Q4a – Public Procurement

Explain the procedure for disposing of vehicles under the Public Procurement Act.

In the recent Auditor General’s Report, your organization has been indicted for mismanagement of public assets contrary to public financial management rules. The auditors found that three (3) Toyota vehicles which have no service potential to the entity (all exceeding 12 years in age) are left at the mercy of the weather without disposing them. At the Public Accounts Committee hearing, members were unhappy with the development and recommended that the entity disposes of the assets immediately in accordance with the provisions of the Public Procurement Act, 2003 (Act 663) as amended by the Public Procurement Amendment Act, 2016 (Act 914). Unfortunately, the Head of the entity seems not to have any clue of how this should be done.

Required:

Write a memo to the Head of the Entity explaining the procedures involved in disposing of the vehicles under the Public Procurement Act 2003 as amended.
(6 marks)

a) Under the Public Procurement Act 2016, the authority to dispose of the vehicle and the procedure used are very important.
The procedures involved are as follows:

  • Establish a Board of Survey
    The authority to dispose of is vested in a Board of Survey. Head of procurement entity shall convene a board of survey comprising representative of the departments with vehicle, unserviceable, obsolete or surplus stores, plant and equipment which shall report on the items and subject to a technical report from them, recommend the best method of disposal after the officer in charge has completed the board of survey form.
  • Approval of Board of Survey’s recommendation
    The board of survey’s recommendation shall be approved by the head of procurement entity and the items shall be disposed of as approved. Note that for items that become unserviceable for reasons other than wear and tear, disposal guidelines issued by the Board of procurement authority. However, in the case of the vehicles, they become unserviceable due to wear and tear so this rule does not apply.
  • Procedures for disposal
    Procedure should be carried out based on the recommendations of the Board of Survey. The procedures approved under the Procurement Act 2016 include:

    • Transfer to government department or other public institution with or without financial adjustment.
      When this procedure is recommended by the BOS, the entity will enter into agreement with another public sector entity to transfer the vehicle to them for a charge or no charge to the receiving entity. However, in the case in question, this method may not be appropriate since the vehicle is completely out of service and giving it to another entity may cause a financial burden to public purse.
    • Sale by public tender to the highest bidder, subject to reserve price.
      When this option is recommended, the entity has to arrange for a public tender and invite tenders for the sale of the vehicle. Under sale by public tender the services of auctioneer is not required.
    • Sale by public auction, subject to reserve price.
      Here a professional Auctioneer in good standing should be appointed by the entity to carry out the disposal on its behalf.
    • Destruction, dumping or burying as appropriate
      Only appropriate when the vehicle has not use at all.

(Award 1 mark for any correct point raised to maximum of 6 points = ( 6 marks)

  • 5 Marks

PSAF – Nov 2017 – L2 – Q2d – Public Procurement

Identify and explain circumstances under which public entities can use private sector procurement practices.

The Ministry of Information has proposed in its annual procurement plan for 2015 to procure some of its goods, works, and services using established private sector or commercial practices permitted by the Public Financial Management (PFM) regulations and laws.

Required:

i) Identify TWO circumstances under which the Ministry can use established private sector or commercial practices to procure goods, works, and services under their budget. (2 marks)

ii) Explain TWO advantages of using established private sector or commercial practices to procure goods, works, and services by a public sector institution. (3 marks)

d) The following circumstances are required for a Procurement Entity to use commercial practices:

  • The procurement entity must be legally and financially autonomous and must operate under commercial law.
  • The existence of the procurement entity must be beyond contention that public sector procurement procedures are not suitable, considering the strategic nature of the procurement.

(2 points for 2 marks)

Advantages of using established private sector or commercial practices:

  • Ensures value for money.
  • Provide competition and transparency to the extent possible.

(2 points for 3 marks)

  • 5 Marks

PSAF – Nov 2017 – L2 – Q2b – Public Procurement

Recommend steps required for disposing of unneeded stores identified in an audit by the Ministry of Public Works.

The Ministry of Public Works has in a recent audit report identified that the majority of their stores (including vehicles) are no more needed and must be disposed of.

Required: Recommend FIVE steps required to be followed by the Ministry to dispose of their stores. (5 marks)

b) Steps to be followed when Disposing of stores:

i) Identify the item of store or equipment to be disposed off.

ii) Head of department convenes a Board of Survey (BOS) to make a technical assessment of the store or equipment to be disposed of and make a recommendation in a report to the head. Head of department based on BOS report seeks approval from the appropriate quarters (e.g., minister).

iii) The disposal process is initiated based on the method approved for use (transfer to other government institutions, public tender, or public auction).

iv) The stores and vehicles are valued by an approved and reputable public or private professional agency with the requisite technical knowledge.

v) In case of public auction, the following procedures are followed: a. The stores and vehicles are valued by an approved and reputable public or private professional agency with the requisite technical knowledge. b. The valuation report is submitted to the office of the President and head of the Agency. c. The value submitted is used as the selling price (bargaining benchmark) to the public auction. d. A date for auction is agreed with the head of the agency or department. e. An advertisement is placed in the national newspapers for the date and place of the auction and the items to be auctioned. f. On the auction day, the highest bidder above the benchmark wins.

(5 points for 5 marks)

  • 6 Marks

PSAF – Nov 2017 – L2 – Q2c – Public Procurement

Explain circumstances where competitive tendering may not be appropriate and suggest alternative procurement methods.

The District Chief Executive (DCE) of Coaltar District Assembly on his appointment has no knowledge in public financial management, including public procurement. Prior to his appointment, he was an ardent listener of the proceedings of the Public Accounts Committee (PAC) of Parliament, and he realized that most heads of departments were often blamed for not using the competitive tendering process in procurement.

On assumption of office, he gave a strong directive that all procurements in the Assembly should go through a competitive tendering process and that not even a pesewa purchase should take place outside this directive. He insisted that public procurement should produce value for money.

Required:
As the District Finance Officer (DFO) of Coaltar District Assembly,
i) Write a memorandum to the new District Chief Executive explaining THREE circumstances under which the directive will not be appropriate. (3 marks)
ii) Suggest any other THREE methods of procurement that may be appropriate and lawful in the absence of a competitive tendering process. (3 marks)

MEMO

DATE: xx/xx/xx
TO: District Chief Executive
FROM: District Finance Officer
SUBJECT: Re-Directives on Procurement Methods in the Assembly

I write to you some concerns I have about your new directive on public procurement in the assembly. I agree that competitive tendering ensures value for public moneys through competition and fairness. The Procurement Act 663 also emphasizes the importance of the competitive tendering in securing judicious use of public resources in public procurement. However, the current directive will not be appropriate in all circumstances.

i) Circumstances under which competitive tendering will not be appropriate:

  • Diseconomy in procurement where cost incurred in procurement far exceeds the value of the goods, services, and works procured. This is normally the case with low-value goods and services in which case alternative method will have been appropriate.
  • Impracticability of the directive where there is only one or few supplier or contractor for the goods, services, and works.
  • Where there is a time constraint due to urgency or catastrophic event, competitive tendering may cause undue delay.
  • Competitive tendering will not be appropriate when national security is at stake.
  • It is also not appropriate when it is not feasible for the procurement entity to formulate detailed specifications for the goods, services or works.

(Any 3 points for 3 marks)

ii) Other methods allowed by the Procurement Act in absence of competitive tendering include:

  • Two-stage tendering
  • Restricted tendering
  • Single sourcing
  • Request for quotation

Thank you.

(Any 3 points for 3 marks)

  • 10 Marks

PSAF – Mar 2023 – L2 – Q4a – Public procurement

Outlines the functions of the Entity Tender Review Committee and discusses the procedure for reviewing its decisions.

Section 20F (7) of the Procurement Act 2003, (Act 663) as amended with (Act 914), provides for the functions of an Entity Tender Review Committee.

Required:
i) Outline FOUR (4) functions of an Entity Tender Review Committee.
(6 marks)

ii) Discuss the basis and the procedure for a review of an Entity Tender Review Committee’s decision.
(4 marks)

 

i) Functions of an Entity Tender Review Committee:

  1. Review of Procurement Activities: The Entity Tender Review Committee reviews the activities at each step of the procurement cycle leading to the selection of the lowest evaluated bid or best offer by the procurement entity in relation to the particular procurement under consideration, ensuring compliance with the Procurement Act, its operating instructions, and guidelines.
  2. Concurrent Approval: The Committee gives concurrent approval or otherwise to enable the procurement entity to continue with the procurement process.
  3. Participation in Procurement Forums: The Entity Tender Review Committee participates in public procurement forums to provide oversight and ensure transparency in the procurement process.
  4. Review of Decisions: The Committee reviews decisions made by the heads of entities in respect of complaints raised by tenderers, ensuring fairness and adherence to procurement rules.

(6 marks evenly spread using ticks)

ii) Review of an Entity Tender Review Committee’s Decision:

A procurement entity or tenderer aggrieved by the decision of an Entity Tender Review Committee may apply to the Public Procurement Authority (PPA) for a review of the decision. The PPA will take appropriate action and determine the grievance in accordance with section 80(3) or as it considers appropriate.

If the aggrieved party is dissatisfied with the decision of the PPA, they may seek redress in court. The review process is intended to ensure that procurement decisions are fair, transparent, and in line with established laws and regulations.

(4 marks)

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