PROCUREMENT PROCEDURE MANUAL Final Version.doc

[pic]
FEDERAL REPUBLIC OF NIGERIA PROCUREMENT PROCEDURES MANUAL For PUBLIC PROCUREMENT In NIGERIA BUREAU OF PUBLIC PROCUREMENT (BPP) SECOND EDITION
JANUARY 2011 USE OF THE PROCUREMENT PROCEDURES MANUAL The policies on public procurement are defined in the relevant laws
and regulations governing procurement in Nigeria. This manual provides
procurement guidance or direction to all Federal Ministries, extra-
ministerial offices, departments, agencies, parastatals, corporations and
all other public entities set up by the Constitution or Act of the National
Assembly and/or whose funding derives from the Federation Accounts, their
own internally generated revenue, the Federation share of the Consolidated
Revenue Fund and special allocations in the federal budget whatever form
this may take or being entities outside of the foregoing description,
derive at least 35% of the funds appropriated or proposed to be
appropriated for any type of procurement described in the Public
Procurement Act. The Public Procurement Act 2007- Section 15 The Manual is intended to give advice and assistance to procurement
staff to help them carry out their procurement responsibilities, and
explains in more detail how specific aspects of procurement should be
handled in line with the policies referred to above. It is a source of "how-
to" information about the tasks and elements that comprise the procurement
process. The Manual begins in Chapter I with a review of policy and
institutional aspects of procurement that have broad applicability and
about which questions arise most frequently. Subsequent chapters deal with
procurement implementation and contract administration. Where necessary,
topics are cross-referenced to other relevant sections of the Manual and
the Public Procurement Act to enable a clearer understanding of the topics
in issue.
ABBREVIATIONS and ACRONYMS APG Advance Payment Guarantee
Bureau Bureau of Public Procurement
CQ Consultants Qualification (Selection Method)
DPO Due Process Office
GPN General Procurement Notice
ICB/ICT International Competitive Bidding/Tendering
IFB/IFT Invitation for Bid / Tender
IS International Shopping
LCS Least Cost Selection
MTB Ministerial Tenders Board
NCT National Competitive Tendering
NCB National Competitive Bidding
LIB Limited International Bidding
DC Direct Contracting
FA Force Account
NS National Shopping
QBS Quality Based Selection
QCBS Quality, Cost Based Selection
REoI Request for Expression of Interest
SFB Selection under Fixed Budget
SPN Special Procurement Notice
STD Standard Tender Document
SBD Standard Bidding Document
Background 1.1 The Manual recognizes that sound public procurement policies and
practices are one of the essential elements of good governance. Good
practices reduce costs and produce timely results; poor practices lead to
waste and delays and are often the cause of allegations of corruption and
government inefficiency. 1.2 Before describing, step-by-step, how public procurement should be
planned and implemented, it is appropriate to establish at the outset why
this topic is worthy of attention. This inquiry can be fruitfully addressed
by approaching it from three linked perspectives: (a) What constitutes sound public procurement i.e. what are its
distinguishing characteristics? (b) Why is it so important? (c) Why should its achievement and maintenance be a priority concern
for Government and major stakeholders?
What Is Good Public Procurement? What Does It Look Like? 2.1 The principal hallmarks of proficient public procurement are: · Economy; · Efficiency; · Fairness; · Reliability; · Transparency; and · Accountability and Ethical Standards. 2.1.1 Economy: Procurement is a purchasing activity whose purpose is
to give the purchaser best value for money. For complex purchases, value
may imply more than just price, for example, since quality issues also need
to be addressed. Moreover, lowest initial price may not equate to lowest
cost over the operating life of the item procured. But the basic point is
the same: the ultimate purpose of sound procurement is to obtain maximum
value for money. 2.1.2 Efficiency: The best public procurement is simple and swift,
producing positive results without protracted delays. In addition,
efficiency implies practicality, especially in terms of compatibility with
the administrative resources and professional capabilities of the
purchasing entity and its procurement personnel. 2.1.3 Fairness: Good procurement is impartial, consistent, and
therefore reliable. It offers all interested contractors, suppliers and
consultants a level playing field on which to compete and thereby, directly
expands the purchaser's options and opportunities.
2.1.4 Transparency: Good procurement establishes and then maintains
rules and procedures that are accessible and unambiguous. It is not only
fair, but it is seen to be fair. 2.1.5 Accountability and Ethical Standards: Good procurement holds
its practitioners responsible for enforcing and obeying the rules. It makes
them subject to challenge and to sanction, if appropriate, for neglecting
or bending those rules. Accountability is at once a key inducement to
individual and institutional probity, a key deterrent to collusion and
corruption, and a key prerequisite for procurement credibility. A sound procurement system is one that combines all the above
elements. The desired impact is to inspire the confidence and willingness-
to-compete of well-qualified vendors. This directly and concretely benefits
the purchasing entity and its constituents, responsive contractors and
suppliers, and donor agencies providing project finance. Conversely, a procurement system that fails to take the above
elements stimulates hesitation to compete, submission of inflated tenders
containing a risk premium, or submission of deflated tenders followed by
delayed or defective performance. Other direct results include collusion in
bribery by frustrated or unscrupulous vendors and purchasing entities, bad
value for those entities and their constituents, and betrayal and abuse of
the public trust for personal gain. In sum, proficient public procurement is not difficult to describe in
principle or to distinguish from its antithesis in practice. But it does
require varied professional and technical know-how to establish, as well as
discipline and determination to administer.
Why Is Sound Public Procurement So Important? 3.1 Public procurement is the process by which governments buy inputs
for vital public-sector investments. Those investments, both in physical
infrastructure and in strengthened institutional and human capacities, lay
foundations for national development. In procurement terms, those inputs
are generally grouped into three categories: . Civil works - for example, bridges and buildings, highways and
basic physical infrastructure; . Goods - typically equipment, material and supplies,
commodities, textbooks, medical supplies; and . Services - expert advice and training, as well as such things
as building maintenance, computer programming, etc. 3.2 The quality, timeliness, suitability and affordability of those
procured inputs can largely determine whether the public investments will
succeed or fail. So the beneficial impact and contribution of the input,
particularly in the case of technical assistance services, can exceed their
direct costs. Yet procurement costs can be substantial, consuming scarce
resources of tightly constrained government budgets. Often the required
funding must be borrowed. Moreover, the process also consumes scarce
skilled public-sector human resources. It takes time, not merely for
procurement planning and contracting but also for contract supervision and
execution. And much of this process is highly visible, as well as
controversial; exposing public sector executives and civil servants to
scrutiny and second-guessing for procurement choices they made deferred or
discarded. 3.3 There are five basic concerns that govern procurement policies: . To ensure that goods and services needed are procured with due
attention to economy and efficiency; . To ensure that public fund is used to buy only those goods and
services needed for national development; . To give all qualified bidders an equal opportunity to compete
for contracts; . To encourage development of local contractors and
manufacturers; and . To ensure that the procurement process is transparent. 3.4 The procurement policies and procedures contained in this Manual
have been designed to promote fairness and equal treatment. SECTION I - PROCUREMENT POLICY AND INSTITUTIONAL TOPICS
Why Is Sound Public Procurement So Important? 4.1 The Bureau of Public Procurement has established general policies
and guidelines relating to public sector procurement, and for supervising