PMIG PUBLIC SECTOR PROCUREMENT

1. BEST PRACTICES & LESSONS LEARNED Kevin James Barrie Kroukamp PMIGPUBLIC SECTOR PROCUREMENT

2. To support the improvement of procurement management as part of the programme management cycle on government programmes in cooperation with the SCM Units / PMU TAU AIM

3. Strategic & Policy level support Operational level support Advice & mentoring Support to SCM Units & PMU's Knowledge sharing TAU SUPPORT

4. 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 thekey business processes of demand, acquisition, logistics and disposal for the provision of goods or services in an effective, efficient and economic manner. SUPPLY CHAIN MANAGEMENTDefinitions

5. DEMAND MANAGEMENT Knowing what you need, why, when and where ( = procurement business case) ACQUSITION MANAGEMENT Actuallygetting what you need from the right supplier / service provider at the right price PROCUREMENT MANAGEMENTBackground

6. Quantify needs & frequency thereof Critical target (delivery) dates Budget determination Expenditure patterns / project cycle Specifications / quality Assumptions & risks Supplier research DEMAND MANAGEMENT

7. Sourcing strategy Procurement legislation Market / supplier research Bid documentation Goods Services Works Evaluation & Recommendation Adjudication Contracting / Award ACQUISITION MANAGEMENT

8. PROGRAMME OR PROJECT MANAGEMENT Need Assessment Plan Review & Evaluate Procurement Monitor Implement

9. 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" PROGRAMME MANAGEMENTKey factors

10. 1. GENERAL Policy Rules Procedures Competition Value for money Fair, open & transparent Quality processes PROCUREMENT PRINCIPLES & STEPS

11. 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 PROCUREMENT PRINCIPLES & STEPS“Getting prepared”

12. 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 PROCUREMENT PRINCIPLES & STEPS“Getting going”

13. 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 ……. PROCUREMENT PRINCIPLES & STEPS“Getting it done”

14. 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 forimproved 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. PROCUREMENT PROBLEM AREAS

15. 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 …) LESSONS

16. 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 LESSONS (CONTINUED)“Seeing the big picture”

17. 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

18. 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 ! LESSONS (CONTINUED)“Need for Procurement Experts”

19. 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 LESSONS (CONTINUED)“Need for Technical support”

20. 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 LESSONS (CONTINUED)“Need for Technical support”

21. 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 SO WHERE TO FROM HERE?

22. 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 BOTTOM LINE!