ZHRC/HTI Financial Management Training

Session 6: Public Procurement Environment and Legal Framework in Tanzania

Learning Objectives

• By the end of this session, participants will be able to:• Define procurement• Explain objectives of procurement for procuring

entities• List categories of procurement• Identify principles of procurement in the public sector• Explain legal framework of the different procurement

entities • Describe roles and responsibilities of Public

Procurement Regulatory Authority (PPRA) and procuring entities

What is Procurement?

Definition of Procurement

• Procurement is the process of buying goods, works and services to satisfy the identified needs

• Buying, purchasing, renting, leasing or otherwise acquiring any goods, works or services by a procuring entity spending public funds on behalf of a Ministry, Department, Agency or Local Government or public body (PPA, 2004)

Importance of Procurement

• Procurement is an important function as it enables an organization to acquire the goods and services needed to fulfill its objectives

Legal Guidelines for Procurement

1.Public Procurement Regulations, 2005

• Procurement of Goods, Works, Non-Consultancy Services

• Disposal of Public Assets by Tender

• Selection and Employment of Consultants

2.The Public Procurement Act 21 of 2004

Procurement in Procuring Entities

• The overall responsibility for procurement process rests with the Accounting Officer or Chief Executive Officer

• Act requires each Procuring Entity to establish a Tender Board for procurement

• Tender Boards have power to award procurement contracts

Objectives of Procurement

• To provide procuring entities with a flow of goods, services and works to meet its needs

• To reduce costs through more efficient and effective purchasing by buying appropriately to obtain “value for money”

Categories of Procurement

• Works

• Supplies

• Non-Consultancy Services

• Consultancy Services

Principles of Public Procurement

• Transparency

• Accountability

• Equal treatment/fairness

• Value for money

• Appeal rights

• Integrity

• Competition

Activity in Pairs:

Procurement

Legal Framework for Procurement in Tanzania

The Public Procurement Act, 2004 (1)

• PPA 2004 is applicable to:• All public bodies• Non-public bodies that receive or use public

funds• Defense and National Security Organs for

non-restricted items.• PPA 2004 repeals No.3 of 2001

The Public Procurement Act, 2004 (2)

• Establishes a Public Procurement Regulatory Authority (PPRA) in place of the Central Tender Board

• Decentralises procurement to Procuring Entities with no limits of authority

• Changes the composition of Tender Boards so Accounting Officers are no longer Chairpersons of Tender Boards

• Changes the membership of PPRA to include private sector and professional bodies

Procuring Entities: Who are They?

• Ministries• Government Departments• Autonomous Bodies• Regions• Districts• Parastatal Organisations• Executive Agencies• Local Government Authorities• Tanzanian Foreign & High Commissions

The Public Procurement Regulatory Authority (PPRA)

• The Public Procurement Act of 2004 establishes the PPRA as an autonomous body under the Ministry of Finance and Economic Affairs

• The PPRA replaces the Central Tender Board

Objectives of the Public Procurement Regulatory Authority (PPRA)

• Ensuring the application of fair, competitive, transparent, non-discriminatory and value for money procurement standards and practices

• Harmonization of the procurement policies, systems and practices

• Setting standards for public procurement

• Monitoring of compliance of procuring entities

• Building procurement capacity in Tanzania

Functions of PPRA (1)

• Advise on procurement principals and practices

• Monitor performance of public procurement systems and advise on changes

• Set training standards, competence levels, and certification requirements for procurement experts

• Update and issue tendering documents and forms

Functions of PPRA (2)

• Implement measures to build procurement capacity in Tanzania

• Store and disseminate information on procurement opportunities and tender awards on any relevant information on public procurement in the country

• Facilitate resolution of procurement complaints

Powers of PPRA

• PPRA is given wide powers that include but are not limited to:

• Carrying out investigations for alleged mis-procurement (PPA 2004: Sec. 8 - 16)

• Calling for any documents or information regarding procurement

• Recommending disciplinary actions for those in breach of the Act

Disciplinary Actions (Sec. 17)

• Disciplinary actions include but are not limited to:

• Discipline or suspension of accounting officers and chief executive officers

• Replacement of the head of a Procurement Management Unit, the Chairperson, or any member of a Tender Board

• Temporary transfer of procurement functions to a third party procurement agent

Roles and Responsibilities of the Accounting Officer (1)

• Establish a Tender Board • Appoint members of the Tender Board• Establish a Procurement Management

Unit • Advertise tender opportunities • Appoint the tender evaluation committee • Communicate award decisions

Roles and Responsibilities of Accounting Officer (2)

• Certify availability of funds to support procurement activities

• Sign contracts for procurement activities on behalf of the procuring entity

• Investigate complaints by suppliers, contractors or consultants

• Submitting a copy of complaints and reports of finding to Authority

• Ensuring implementation of awarded contract is in accordance with terms and conditions of award

Composition of the Ministerial Tender Board (Sec. 28)

• Ministerial Tender Board shall consist of:• A Chairperson• Six members• A Secretary

Functions of Tender Board (Sec. 30)

• A Tender Board is responsible for: • Approving tendering and contract documents • Approving procurement and disposal by tender

procedures • Reviewing applications for variations or amendments

to ongoing contracts within its jurisdiction• Adjudication of recommendations from the PMU and

award of contracts• Ensuring best practices are used • Ensuring compliance with the Act• Liaising with the Authority on matters within its

jurisdiction

Procurement Management Unit (Sec. 34) (1)

• In every procuring entity there shall be established a Procurement Management Unit (PMU) staffed to an appropriate level

• PMU shall consist of procurement and other technical specialists together with necessary supporting and administrative staff

Procurement Management Unit (Sec. 34) (2)

• Procuring entities shall: • Identify all those engaged in procurement

within their organizations and identify skills need in each post

• Set out strategies to meet the needs of Procurement Management Units

• PMU shall be headed by a person with sufficient academic qualifications and experience in procurement functions

Functions of Procurement Management Unit (Sec. 35)

• Managing and planning procurement activities except adjudication and the award of contract

• Preparing Tender Documents• Acting as a secretariat to Ministerial Tender

Board• Implementing the decisions of the Ministerial

Tender Board• Recommending procurement procedure• Planning the procurement activities of the

Procuring Entity

Functions of User Departments (Sec. 34) (1)

• User department of a procuring entity shall perform the following functions:

• Assist Procurement Management Unit with procurement and disposal

• Propose technical inputs to statements of requirements

• Assist with technical evaluation of tenders as requested by the PMU

Functions of User Departments (Sec. 34) (2)

• Certify payments to suppliers and consultants

• Report departures from terms and conditions of an awarded contract

• Forward details of contract amendments to PMU for action

• Maintain and archive records of contracts

• Prepare any reports required for submission to Procurement Management Unit, Tender Board or Accounting Officer

Functions of User Departments (Sec. 34) (3)

• Prepare a procurement work plan for submission to PMU, Tender Board or Accounting Officer

• Prepare a work plan for procurement based on approved budget, which shall be submitted to Procurement Management Unit for implementation when required

Evaluation Team (Sec. 37) 

• All evaluations shall be conducted by an evaluation committee, which shall report to PMU

• Membership of evaluation committee shall be recommended by Procurement Management Unit in accordance with the act and approved by Accounting Officer or Chief

• Number of members shall depend on the value and complexity of procurement requirement, but shall be a minimum of three members

Independence of Functions and Powers (Sec. 38)

• Subject to provisions of this Act, the following entities shall act independently in relation to their respective functions and powers:• Accounting Officer or Chief Executive• Tender Board• Procurement Management Unit• User Department• Evaluation Committee

Activity in Pairs:

Procurement Responsibilities

Key Points (1)

Key Points (2)

• Functions of Public Procurement Regulatory Authority (PPRA) include:

• Monitoring performance of public procurement systems

• Setting training standards for procurement experts

• Issuing tender documents