Public Procurement and Disposal

of Public Assets Authority

Contract Management in Uganda:

Addressing Key Factors and
Recommendations for Success"

March 2022
 PRESENTATION OUTLINE

 Background

 Objectives of the study

 Factors and Implications affecting Contract
Management

 Recommendations

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 BACKGROUND

A significant portion of GoU Annual Budget is spent

through public procurement processes
Government of Uganda has carried out reforms since 2003
to better manage public procurement. These include;
 Legal - PPDA Act 2003 and regulations)
 Institutional (establishing PPDA and;
 Decentralizing procurement to entities)
In particular, PPDA (Contracts) Regulations 2014 were
enacted to regulate contract management and improve
achievement of procurement outcomes.
 BACKGROUND

 Inefficiencies in contract management have remained

significant, leading to poor procurement outcomes
 The PPDA performance report for FY 2021/22 shows that
only 52% of contracts were completed within the original
contract time and 50% of the procurements by value were
implemented according to the planned contract value.
 A poorly performing public procurement system
increases the risk to the service delivery.

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 BACKGROUND
 With support from the World Bank Executed Trust Fund, the
Authority commissioned a study on the factors affecting
contract management in Uganda, with a view of proposing
interventions that can strengthen the contract management
function in Entities.
 Objectives of the study
o Identify the gaps in the procurement cycle that affect
contract management;
o Identify any areas outside the procurement cycle that have
an implication on contract management;
o Make recommendations on interventions to strengthen the
contract management function in public procurement;
BACKGROUND – Uganda’s Procurement Cycle
 FINDINGS

Why do many Contracts perform poorly In

Uganda?

What are those factors in Uganda that are

responsible for poor Contract performance?
 Factors & Implications

Factors Implication
Unrealistic Cost  Variation in scope and contract
Estimates resulting from value to fit budget or
inadequate market identification of additional
surveys and feasibility funding
studies  Delayed execution of project as
additional funding is sourced

Incomplete/Inadequate  Significant numbers of requests

Specifications: arising for clarifications from bidders
from capacity gaps in  Changes in technical design
PDEs during construction leading to
cost variations and delays in
execution
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 Factors & Implications

Factors Implication
Unplanned  Incurring extra costs as a result
Procurements: signing of litigation and interest on
contracts that were not delayed payments to providers.
included in their  Delayed Commencement of
procurement plans Procurement Processes/
completion of works
Unrealistic  Stringent requirements limit
qualification criteria competition
 Weak requirements result in
weak contractors leading to sub-
standard and shoddy works

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 Factors & Implications

Factors Implication
Inadequate due Diligence  Unqualified bidders are
during Evaluation: awarded contracts resulting
Contractors misrepresent in poor contract performance,
their experience abandoned or incomplete
works

Delays in obtaining the  Affects the contract start and

necessary approvals of end dates which delays
contracts by Contracts utilization of proposed
committees and or Solicitor services by intended
General beneficiaries

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 Factors affecting Contract
Implementation


Limited Contract Management Capacity: Thin staffing structures
within Government agencies especially at the LGs. Gaps in knowledge
and understanding of roles at contract management.


Limited Technical and Financial Capacity among Providers:
Contracting of providers without the required capacity to execute
contracts as required.


Lack of Funds for Monitoring and Supervisory Function.
Inadequate Funds allocated to contract management.

Limitations of Hybrid Procurements: The development of technical

requirements managed by the MDAs centrally resulting in weak ownership
compromising supervision and the quality of products delivered.
 Factors affecting Contract
Implementation

Poor Payment Regime; Delayed payments affect timely
delivery of contracts leading to interest or sometimes
litigation.


Gaps in the Regulatory framework on the contract
management function. The procedures in the regulation are
generic and limited and do not take into the account the type
of contract and the complexity

Weak oversight and accountability during contract
management


Corrupt practices: collusion by Government officials and
/or with providers.
 Factors affecting Contract Implementation


Delayed Land Acquisition occasioned by;

 Government’s lack of funds to pay landowners

 Disagreements on the valuation of land by the Project Affected persons
 Land ownership wrangles


Changes in Design: leading to price escalation on account of
increased quantities and extension of time.


Force Majeure: unforeseeable circumstances that prevent a
Contractor from fulfilling their obligations under the contract.


Predictability and reliability of contract financing, particularly
for multi-year contracts leading to delayed payments.
 RECOMMENDATIONS

 Find a lasting and sustainable mechanisms to ensure timely

clearance of payment request on contracts and eliminate
payment of arrears and interest.
 Strengthen accountability for results of contract
management. Conduct annual assessments on contract
performance and the results should be used to hold the
Accounting officers accountable.
 Citizens /CSOs participation and engagement in holding
PDEs accountable for services delivered.
 Enforce penalty clauses that are included in the PPDA Act
to improve performance of contracts.
 RECOMMENDATIONS


Issue guidance to all PDEs on cost estimation for supervision
and monitoring by Contract Managers and include them in
the work plan.

Design specific training programmes for all key stakeholders
on contract management.

Develop contract management manuals taking into account
the peculiarities of each category

Address all land acquisition issues and compensation issues
before the commencement of the procurements.
 RECOMMENDATIONS


Develop online materials and tutorials for capacity building for PDEs covering
conduct of market surveys, costing of contracts, preparation of specifications for goods, works
and services and development of solicitation documents and methods for conducting due
diligence.


Address Staffing gaps in PDEs to ensure PDEs have adequate in-house experts

 Work with professional bodies to provide expert advice to PDEs during

development of specifications/solicit /obtain professional technical expert advice
on the development of technical specifications.
 
 Recommendations to the Contract
Management Framework
 Review contract regulations to provide for handling "complex,
specialized, and high-value" contracts
 Strengthen supervision and oversight to assess contract
implementation, appraise the performance of the Provider
and Entity..
 Improving contract financing through capacity building on
financial management aspects, cash flow management and
spending forecasts to inform annual budget and medium-term
allocation processes.
 Review of contract management tools to include benchmarks
on quality to be achieved, the performance areas and
actions/tasks to be executed by the contract manager based.
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 Recommendations for Capacity
Building Programme
 Work with professional bodies e.g. UIPE and global
institutions eg FIDIC to provide contract management
training for civil works

 Compile and share good practice technical specifications

from PDEs who have consistently acquired functional
durable goods

 Collaborate with training institutions, develop and

commence short courses on contract management for
different categories. Trainings should be conducted before
one is appointed a contract manager
Public Procurement and Disposal
of Public Assets Authority

Head Office:
5th Floor, UEDCL Towers, Plot 37 Nakasero Road
P.O. Box 3925, Kampala Uganda
Tel: 256 414 311 100
Web: www.ppda.go.ug
Email: info@ppda.go.ug
Connect: www.facebook.com/ppdauganda