Transcript Document

PMIG
PUBLIC SECTOR PROCUREMENT
BEST PRACTICES & LESSONS
LEARNED
Kevin James
Barrie Kroukamp
1
TAU AIM
To support the improvement of
procurement management as part of
the programme management cycle on
government programmes in
cooperation with the SCM Units / PMU
2
TAU SUPPORT
• Strategic & Policy level support
• Operational level support
– Advice & mentoring
– Support to SCM Units & PMU's
• Knowledge sharing
3
SUPPLY CHAIN MANAGEMENT
Definitions
• SCM ensures that the right goods / services
are delivered to the right place, in the right
quantity, with the right quality, at the right
cost and at the right time.
• SCM is the integration of the key business
processes of demand, acquisition, logistics
and disposal for the provision of goods or
services in an effective, efficient and
economic manner.
4
PROCUREMENT MANAGEMENT
Background
• DEMAND MANAGEMENT
– Knowing what you need, why, when and
where ( = procurement business case)
• ACQUSITION MANAGEMENT
– Actually getting what you need from the right
supplier / service provider at the right price
5
DEMAND MANAGEMENT
•
•
•
•
•
•
•
Quantify needs & frequency thereof
Critical target (delivery) dates
Budget determination
Expenditure patterns / project cycle
Specifications / quality
Assumptions & risks
Supplier research
6
ACQUISITION MANAGEMENT
• Sourcing strategy
– Procurement legislation
– Market / supplier research
• Bid documentation
– Goods
– Services
– Works
• Evaluation & Recommendation
• Adjudication
• Contracting / Award
7
PROGRAMME OR PROJECT
MANAGEMENT
Need Assessment
Plan
Review & Evaluate
Procurement
Monitor
Implement
8
PROGRAMME MANAGEMENT
Key factors
• Governance
– Structures
– Stakeholder management
• Project Management
– adopting project management principles
– Risk, quality, scope, issues
• Planning and Control
– A crucial element - knowing up front what needs to be done
• Financial / resource management
– Knowing budgets & multi-year expenditure requirements
– Tracking expenditure
– Being "geared up"
9
PROCUREMENT PRINCIPLES & STEPS
1. GENERAL
• Policy
–
–
•
•
•
•
Rules
Procedures
Competition
Value for money
Fair, open & transparent
Quality processes
10
PROCUREMENT PRINCIPLES & STEPS
“Getting prepared”
2. Procurement strategy
– In programme design
3. Procurement planning
–
–
–
–
Detailed thinking
Risks & assumptions
Role of other stakeholders
Scheduling activities & resourcing
4. Market research
–
–
Suppliers
Service providers
5. Business case (procurement justification)
–
Be sure that doing the right thing
11
PROCUREMENT PRINCIPLES & STEPS
“Getting going”
6. Project Management from start up (PMBOK)
7. Confirming the requirement / need
– Input to specification / ToR
8. Supplier selection / targeting
– Align to the Specification / ToR
9. Tender documentation
– General and standard documentation
– Specification / ToR
– Schedule of quantities
10. Tender evaluation
–
–
Evaluation Committee
Process
12
PROCUREMENT PRINCIPLES & STEPS
“Getting it done”
11. Award
–
Appoint knowing the ToR and Contract
12. Closure
–
–
Recording lessons
Confirm procurement objectives met etc
13. Contract Management
–
–
Ensuring delivery
Project Management continues …….
13
PROCUREMENT PROBLEM AREAS
•
Procurement management is a common problem across government irrespective of
the funding source (i.e. government or donor) and irrespective of the sphere of
government.
•
Procurement seen as onerous, inflexible, intimidating, etc
•
Knowledge of the basic procurement principles, practices and procedures (3P’s) is
often lacking.
•
Those that may fully understand the procurement 3P's may fail in that they do not
fully understand the environment in which they are require to do the procurement e.g.
the building or construction environment.
•
There is a need for improved appreciation of the crucial role of procurement in project
/ programme implementation.
•
Need for strong project management skills (plan, organise (resource), lead and
control) and ethical approaches.
14
LESSONS
• Governance structures
– SCM units
• Need support from Top Management
• Need “Functional” & procurement staff alignment (… need each other…)
– PMU units
• Resourcing & administration
• Alignment with SCM Units (…supported by SCM …)
15
LESSONS (CONTINUED)
“Seeing the big picture”
• Planning within the programme or
project cycle
–
–
Having the end in mind
Timing issues
• Project & budget alignment
–
–
–
Avoiding canceled projects
Avoiding delayed projects
Avoiding under spend / lost budgets
16
MANAGING CASHFLOWS ACROSS YEARS
Project
Implementation
Planned Multi-year
Commitments
Project Design
& Tender
Project
Implementation
Planned Multi-year
Commitments
Project
Implementation
Project Design &
Tender
IPMP
IPIP
Infr. Plan
update
IPMP
IPIP
17
LESSONS (CONTINUED)
“Need for Procurement Experts”
• Management of the procurement process
–
–
–
Teams are often under resourced
Teams are often under prepared
There is a shortage of standard operating procedures (SOP’s)
• Understanding of SCM Regulations
–
–
–
Compliance criteria
Evaluation criteria
Processes to follow
• Tender documentation compilation
–
–
–
–
Standard Forms – (as appropriate)
Compliance criteria (essential and practical minimum requirements – don’t over do it)
Evaluation criteria – (different between bidders – quality selection)
Quality editing / completion – (quality docs get quality tenders)
• Launching of tenders
–
–
Timing & preparedness issues
Briefing sessions - can add major value to the process – improved understanding !
18
LESSONS (CONTINUED)
“Need for Technical support”
• Identification of needs
– Functional / Technical Dept input
– Input to Specification / ToR
• Market analysis
– Need good supplier data base or quality supplier short listing
– Bidders incorrectly targeted – resultant poor submissions
• Specifications / ToR's
–
–
Mis-interpretation by bidders
Incomparable bids – poor ToR’s yield poor submissions
• Understanding of risks
– Lack of understanding of the environment
– Simplification of procurement situations
– Assumptions / risks need to be thoroughly understood
19
LESSONS (CONTINUED)
“Need for Technical support”
• Evaluations & recommendations
–
–
–
–
–
Appropriate expertise available
Criteria are difficult to use in practical evaluation
Adoption of quality processes ( eg donor processes)
Record keeping (transparency trail)
Stand up to an audit
• Contract management
–
–
Need to ensure that you get what you intended
Maintain control over supplier / service provider
20
SO WHERE TO FROM HERE?
• PMU
–
–
–
–
–
Need Procurement Specialists
Need Project Managers
Need Technical advisors
Need Administration support
Need financial backing
• Relationship management
– Top management buy in
– Support from Functional Depts
– With Suppliers / Service Providers
• Firm Strategy & Plans
– start early
– Spend time on the right things
• Know the budgets and programme implications
21
BOTTOM LINE!
PROCUREMENT IS CHALLENGING
• Don't under estimate the work required !
• Provide for dedicated management !!
• Manage all the steps and procedures!!!
Manage the detail with the big picture in mind
22