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The Accountant General
The Procurement AdministrationJonathan Bezalel
2013
*Israel Government Procurement Administration,GPA &The Israeli Practice
www.mr.gov.il
*Why Procurement?
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Percentage from GDP?
10 – 15% Public procurement is a key economic activity of
governments generating huge financial flows
Governments and state-owned enterprises purchase a wide variety of goods, services and works from the private sector
An effective procurement system plays a strategic role in governments for avoiding mismanagement and waste of public funds
*Government Procurement – General Background
Established on December 2004 Part of the Ministry of Finance – Accountant
General – The Logistic, Procurement and Assets Division.
The government procurement scope is approximately 25 billion NIS.
The scope of procurement done by the Government Procurement Administration amounts to around 14 billion NIS.
Overall there are 300 procurement units constituting an integral part of government ministries.
Approximately 160,000 active suppliers. Approximately 700,000 procurement activities
per year.
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*What We do In a nutshell…
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Increase the awareness of the private sector for
government tenders
Set preconditions and service
agreements for the supply of products and
services for the government ministries
Write the tender documents
Attend to the government units
and entities
Procurement and
Logistic
Control & supervise over
suppliersBackup: Electronic
catalogs, ministries
feedback, reports on ministries usage scope,
quality control of products and
services
Market System
Characterization of government
ministries’ needsResearch on the
usage of products and services
Tender characterization: research and map
potential suppliers and the
competition potential
Choose the optimal tender
which will maximize the
government returns
Research & Instruction
Signing the suppliers into the
procurement system
Publish and maintain the
catalog
Receive and send products and services in response to
orders
Suppliers
*What Do We Purchase?
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Technology19%
Cellular Communica-
tion17%
Security services
6%
Servers6%Furniture and office
equipment4%
Social Activities7%
Vehicles14%
Heating Fuels9%
Car Fuels13%
Other6%
+ 6,000 Million HR Tenders
*Disadvantage of Decentralized Procurement
Lack of ability to incentivize market research before publishing a tender.
Lack of ability to locate available procurement opportunities.
False beliefs that online procurement are complex and have no real need.
Insufficient knowledge on the dynamic procurement legislation.
Lack of ability to enforce the SLA on suppliers. In some government units the procurement,
the employee designated with procurement responsibilities has, concurrently, other unrelated responsibilities. Thus his procurement proficiency is derogated.
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*How Do We Purchase?
Chapter B in the Mandatory Tender Regulations: Tender with Prequalification Stage – 17C Tender with Two-Stage Evaluation – 17D Public Tender with Additional Competitive Process - 17E Framework Tender – 17F Automated Tender – 19A Evolving Automated Tender – 19D Expedited Automated Tender - 19E
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*How Do We Purchase?
Exemption from Mandatory Tendering: 3 (1) A contract for a value of no more than NIS 50,000.
However, in any consecutive period of 12 months, the ministry may not contract with a particular party, without a tender, pursuant to this paragraph, for a total sum of more than NIS 100,000
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*Online Auctions Leadership
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*Online Auctions Leadership
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*Online Auctions Leadership
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*Online Auctions Leadership
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*GPA Case Study
Supplying Office Multimedia Products for Government Ministries
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*Office Multimedia Products Tender– A Case Study The tender was composed of numbers of slots. “Integration Supplier For “Smart” Rooms Infrastructure”
slot. Two Israeli suppliers were competing in this tender. Local Production Preference Amendment (LPP):
Generally means that the local supplier which his local
production components value adds to at least 35% of the
overall components value of the product gets
a 15% preference in his price offer.
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Problem with the LPP:
The regulations addresses a single item while we are facing
an integration service composed of multiple items. Our Solution:
We asked each supplier to present an official declaration
for each component regarding his local production share. The new first place qualified the minimum requirement of
35% Israeli Production component and received the 15%
price benefit.
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*Office Multimedia Products Tender– A Case Study
The second place supplier appealed to the Tender Committee
claiming that according to the – Mandatory Tenders Law and
Regulations a regulation can not undertake national treaty and
referred us to the GPA treaty.
Now we requested proofs that the supplier is qualified to be
covered by the GPA.
First GPA Issue:
Do we need to check the supplier in general?
His products origin?
His development center location?
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*Office Multimedia Products Tender– A Case Study
Second GPA Issue:
If components needs to be check – What is the percentage threshold?
Our Solution: We defined GPA qualification the same as we defined Local
Production Preference entitlement.
The supplier was given two weeks to come up with the appropriate
documents. We saw that his products do not qualify the 35% “GPA” component
threshold.
Summary of open GPA issues following our practice:
I. Which type of document is needed in order to proof GPA entitlement?
II. What is the percentage threshold needed to qualify for a GPA “protection”?
III. What determines – country of production? Development base country?
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*Office Multimedia Products Tender– A Case Study
