PROCUREMENT IN
PUBLIC SECTOR (LOG
222)
• Ms. Zainabu Libuhi
• Department of Procurement and Logistics Management
• School of Business
• Mzumbe University
• E-mail: zainabu.libuhi@mu.ac.tz
• Cell: +255655848582
Procurement – A general understanding
Procurement refers to all activities involved in identification, acquisition and receipt
of goods, works and services required by an organization.
The Public Procurement System is a function of government that involves
using its resources (public funds) to obtain goods, works and services to meet
the needs of the government as it carries out its responsibilities to the
citizens.
The World Bank (2004) defines public procurement as purchasing, hiring or obtaining
by any other contractual means of goods, works and services by a public entity using
public funds.
Procurement Categories
Procurement categories refer to the different types or classifications of
goods, services, and works that organizations acquire through procurement
processes. These categories help in organizing and managing procurement
activities efficiently. The specific categories may vary depending on the
industry, sector, and the nature of the organization's operations. Here are
some common procurement categories:
Procurement Categories
1. Goods:
Physical, tangible products that organizations purchase for various purposes. This category
may include raw materials, finished products, equipment, machinery, office supplies, and
other physical items.
Procurement Categories cont…
2.Services:
Intangible offerings provided by individuals, companies, or organizations to meet specific
needs. Service procurement categories can encompass a wide range of services such as
consulting, IT services, maintenance, legal services, cleaning, and transportation.
Procurement Categories cont..
3.Works (Construction or Infrastructure Projects):
Projects related to the construction, renovation, or maintenance of physical infrastructure.
This category includes civil engineering projects, building construction, roadworks, and
other construction-related activities.
Objectives of Public Procurement
The need for economy and efficiency use of public
fund and implementation of projects including
provision of related goods and services.
To meet the best interest of the public authority by
giving all eligible suppliers, contractors/ service
providers equal opportunities to compete in providing
goods, executing works or provision of services.
Objectives of Public Procurement
To encouraging development of local
national manufacturing, construction and
service industries.
To promote equality and fairness in the public procurement process: This
objective seeks to give all an equal chance to participate in the procurement
process.
Elimination of corruption in public procurement: The main problem in procurement is
corruption and fraud.
The goal of public procurement
The goal of public procurement is to award timely and cost-effective
contracts to qualified contractors, suppliers and service providers for the
provision of goods, works and services to support government and public
services operations, in accordance with the principles and procedures
established in the governing public procurement rules.
Benefits of an Efficient Public Procurement
Enhances the effective use of public financial resources.
Improves participation by and growth of the private sector.
Is an integral part of any Good Governance process
Facilitates smooth operations of activities to the pulic entities.
The Implications of Inefficient Procurement
Encourage corruptions
Inefficiency can lead to delays in the delivery of essential public
services
De-motivation of private sector suppliers leading to lack of
competition.
An increase in the cost of items
PROCUREMENT CYCLE
Basic Public Procurement Principles
Principles of Public Procurement
All public officers involved in procurement shall thus, be guided by the
following principles;-
- Professionalism
- Transparency
- Value for Money
- Accountability
- Competitiveness
- Fairness
- Ethical Approach
What is Professionalism?
It is the discipline whereby educated, experienced and responsible
procurement officers make informed decisions regarding purchase
operations
Professionalism depends on the staffing, knowledge, skills and
capabilities of the human resources and on controls in the system
that influences human behavior
The increasing importance of procurement suggests that well trained
and professionally qualified personnel should be employed to
manage the process
What is Transparency?
It refers to the extent to which procurement stakeholders can access the information
about the entire process by which procurement made by the procuring entity is
conducted, contract awarded and managed by the respective entity
In public procurement, transparency means procurement rules are publicized as the
basis for procurement decisions prior to their actual, and more importantly the same
rules apply to all bidders
What is Value for Money?
Means the maximum benefit from goods, works or services
procured with the resources available worth the cost incurred;”
It is the optimum combination of whole-life cost and quality to
meet the customers requirements.
It is the comparison between the perceived use value of goods,
works or services and the cost/price paid for
What is Accountability?
It is the process of holding an individual(s) or an organization
fully responsible for all aspects of the procurement process over
which they exert authority.
It strengthens the perception of transparency and fairness.
It reduces the incidence of corruption and malpractices
What is Competitiveness?
Actively encouraging more suppliers’ participation in the bidding
process through advertising, sourcing reviews, prequalification
etc.
Potential for cost savings.
Increase the potential supplier base.
Greater awareness of new developments.
What is Fairness?
Showing consideration and impartiality in all stages of the procurement process,
especially demonstrating equality in bid evaluations.
Development of mutual trust
Creates and maintains respect and goodwill (image) of the entity
What is Ethical Approach?
Exemplary approach to all procurement processes that cannot be
questioned or criticized. ‘Integrity’ as the quality of having strong moral
principles
Integrity in public procurement means public resources linked to public
procurement are used in accordance with the intended purposes
Maintaining a high level of integrity is necessary to prevent fraud,
corruption and other unethical practices as procurement function is
vulnerable to unethical behavior
REVIEW/DISCUSSION QUESTIONS
1) Assume that you have been invited in a conference of procurement experts from both
public and private sector organizations. The conference organizers have specifically
requested you to lead a session on “Does public procurement really differ from
private procurement?”
Discuss the differences between the two ( if any)
The end
Thank you.
