The Place of Procurement in Infrastructural Development and its Sustainability -ONAFOWOTE F. IDOWU – AG. GM - PPA
LAGOS
Lagos City-State as one of the fastest
growing cities in the world
Has a vision of becoming Africa’s Model
Mega City and Global, Economic and
Financial Hub that is Safe, Secure,
Functional and Productive.
To achieve this laudable objective, there
is need to direct investment towards
economic development of Lagos.
Thus, LSDP serves as a veritable platform
providing overall direction for the growth
and development of the State.
It will provide a framework through which
all sectors of the economy can direct
their energies and contribute to the
improvement of the quality of life of
people in the State.
Vision and Mission Statements – The Big Picture
By 2025 Lagos will become
Africa's Model Megacity
and Global, Economic and
Financial Hub that is Safe,
Secure, Functional and
Productive
Achieved by
Poverty Eradication and
Sustainable Economic
Growth through
Infrastructural Renewal and
Development
METROPOLITAN LAGOS
IBILE
VISION TO STRATEGYDEVELOPMENTAL PILLARS STRATEGIC DIRECTION
Pillar 1: Economic
DevelopmentAim: A dynamic, expanding
economy, functional and visually
attractive
Harnessing public and private investment to create a
strong, mixed economy that can provide jobs for all and
create the base for expanding social services and
environmental sustainability
Pillar 2: Infrastructure
DevelopmentAim: An efficient and effective
infrastructure capable of meeting
future needs
Providing efficient power, effective mass transit systems and
other key infrastructures essential to achieve a sound and
growing economy and achieve social progress
Pillar 3: Social Development
and SecurityAim: An educated, skilled, healthy
and secure people
Ensuring a dynamic, progressive social and economic
environment that will result in a well-educated, healthy
people able to fulfill their potential and meet the skill needs
of new industries.
Pillar 4:Sustainable EnvironmentAim: A green, clean and live-able
city that can sustain its complex
natural and man-made
environment
Creating sound systems, regulations and public
participation to maintain a healthy and sustainable
environment that can overcome the environmental deficit
and meet future challenges posed by climate change.
INFRASTRUCTURE
DEVELOPMENT PILLAR
STRATEGIC DIRECTION
Lagos State aims at achieving an efficient and
effective infrastructure capable of meeting future
needs, including increased productivity,
competitiveness, environmental sustainability,
reduced noise pollution, and income inequality as
well as guarantee security and health.
STRATEGIC DIRECTION - CONTD
By 2025 it will have delivered efficient power,
effective mass transit systems and other key
infrastructures essential to achieve a sound, growing
economy and social progress.
Today Lagos State suffers from inadequate and
unreliable infrastructure and this has led to the high
cost of doing business in the State, for example, the
intractable traffic congestion in the Lagos Metropolis
and the associated loss of productivity and valuable
man hours.
PRIORITY AREAS / CURRENT
STATUS
The key priority areas in the Infrastructure Sector are power,
transportation, and water.
They are all, in their present form, deficient and cannot meet the
immediate and future needs of the economy.
FINANCING INFRASTRUCTURE
The financial demands of the Infrastructure Sector are farin excess of the State budget capacity.
LASG will therefore seek innovative ways of engagingother stakeholders in bridging the gap.
Options available to the State include developingstrategic partnerships, increases in charges,improvements in revenue collection strategies, reductionin operating costs, rationalization of service levels anduse of shared services and outsourcing among theservice providers.
One of the key strategies is developing strategicpartnerships through PPPs.
WHY PUBLIC PROCUREMENT
As a state with a development master plan, Lagos State collaborated
with the World Bank in the year 2003 for a broad Public Sector Reform
process to improve Efficiency, Accountability, Transparency and Probity
in the conduct of Government Business and to align with International
Best Practice.
Consequently, the Lagos State Government enacted the Lagos State
Public Procurement Law in October 21, 2011 and the Law became
effective in April 2012.
Background Contd
As part of the strategic plans to achieve the State Developmental
Goals by Y2025, Lagos State Public Procurement Agency was
established in February 2012 with a core mandate to certify all State
procurements prior to, during and after the award of any contract
Procurement Officers’ Cadre was created to carry out procurement
functions in all the MDAs.
PUBLIC PROCUREMENT
VISION:
To be a model regulator
assuring best practices in
Public Procurement
MISSION:
To ensure a transparent,
Competitive, Inclusive,
Sustainable and Value for
Money Public Procurement
System that Supports the
State’s Development Goals
and Engender Public
Confidence
CORE VALUES
Professionalism
Transparency
Competitiveness
Inclusiveness
Value for Money
Background Contd
PPA effectively took over the functions of the defunct State
Tenders Board and State Consultancy Board in April 1st 2014
Procurement Stakeholders
Procurement Stakeholders
End -Users
PE/ Procurement Office
Procurement Agency
Contractors/ Suppliers/
Consultants (Registered)
NGOs/
CSOs/ DevtPartners,
FG, Media
Other
Stakeholders
e.g. CDA, LG
Partnering 4 Development
All the Stakeholders are important in the implementation of Short,
Medium and Long Term Infrastructure Development Strategies to
guarantee sustainability – Synergy is therefore very key
Procurement Definition
General Definition
Procurement refers to thesustainable acquisition anddisposal of goods, works andservices by public bodies/organizations through anefficient, professional,auditable and transparentapproach.
Specific DefinitionProcurement in Lagos StateGovernment entailsstreamlining processes, gettingvalue for money in theacquisition of goods, works orservices in line with themandates of government forthe benefits of the governed inthe State.
Procurement Process
The Procurement Process of acquiring Goods, Works and Services in Lagos State follows the BEST PRACTICE as detailed
below;
Procurement Cycle
Procurement Planning
Tender Documentation
Tender Notice
Tender Harvest
Approval of Contract
Contract Implementation
Tender Evaluation
Contract Signatures
Planning
Needs Assessment
Feasibility Studies
Market Research
Budgetary Allocation
Community Participation
Design specification/ Drawing etc.
Tender Documentation
Preparation of Bidding Documents
Seeking for necessary approvals
Joint review of the
Bidding Documents
Tender Notice
Inviting the prospective bidders to
participate in a bidding process
Request for Quotation
Invitation for Bid
Request for Expression
of Interest/ Proposals
Note: Relevant Media
Tender Harvest
Receipt of offers
Designate an officer to handle the
receipt of bids/ quotes/ proposal
Composition of Bidding Opening
Committee
Preparation for Bids Submission
Preparation of Bid Opening
Composition of Bid Evaluation
Committee
Tender Evaluation
Sensitization of the Bids
Evaluation Committee
Declaration of Conflict of
Interest
Joint review of Pre-determined
Evaluation Criteria
Individual Evaluation of Bids
Collation of Individual Evaluation
of Bids
Preparation of Evaluation Report
Approval for Contract Award
Presentation of EvaluationReport to Tenders’ Board forconcurrence
Seeking relevant approvalse.g. PPA (if prior review)
Types of PPA ApprovalInstruments
1. Certificate of Compliance
2. PPA No-Objection
3. Letter of Confirmation
Contract Formation & Signature
Registration of Letter of Award
Offer of Contract Award
Acceptance of Offer
Payment of statutory fees
MDA Procurement Office liaise withthe Legal Office on ContractualDocuments
Liaise with Ministry of Justice oncontract agreement
Contract Implementation & Management
Nomination of ProjectManager
Work plan (ContractImplementation Plan)
Monitoring of Project
Project Evaluation
Contract Close Out
Complaints, Petitions & Disputes
in Procurement Process
• It is not out of place to have complaints and/ or petitions
from any of the key players in the procurement process
especially from aggrieved bidders who may not be
satisfied with certain decision or action during any of the
bidding process.
• It is also not unlikely to have disputes between the
Procuring Entity and the Contractor/ Supplier/ Service
Provider during or after contract implementation. The
complaint mechanism has been provided for the the
Procurement Law
Why Contracts Fail
Insufficient qualification of contractors
Poor practices in qualifying contractors
Lack of monitoring and remedial actions by
Employer/Engineer/Procurement Officer
Collection of Delay (Liquidated) Damages is
deficient/non existent
Good Practice
Provisions of contract agreement should enforced
Liquidated damages
Interest on delayed payment
Warranty/defect liability requirements
Performance security
Ensure validity throughout contract period
Advance payment guarantee.
Pre Contract Meeting
The pre contract meeting is held by the Employer officials that will be involved in the contract prior to the contract kick off
This meeting is to ensure that there is a clear understanding of their specific responsibilities and restrictions in administering the contract
Issues to be discussed at the meeting include:
authority of officials who will administer the Contract, quality control and testing,
the specific contract deliverable requirements,
special contract provisions,
procedures for monitoring and measuring performance,
contractor invoicing, approval and payment procedures.
Kick off
Kick off meeting should be held before the commencement of the contract
The objective of the meeting is to help the employer and the contractor achieve a clear and mutual understanding of the contract requirements
The meeting also helps the contractor understand the roles and responsibilities of the employers officials who will administer the contract
The following issues should be discussed at the meeting; Organisational structures
Contact names and numbers
Reporting method
Progress meetings
Progress Meetings
Progress meetings at regular intervals should be held to monitor the progress of the contract implementation
Contract implementation progress should be discussed and compared with the contract implementation schedule
Implementation problems are also discussed with a view of solving them
the objective is to ensure that the contract will be completed with requisite quality, on time and within budget
Contract Monitoring and
Supervision
Monitoring and supervision are very essential for successful implementation of any contract
This is to ensure that all the terms of the contract are being implemented as stated in the agreement
For works and installation contracts, all designs, drawings must be reviewed and approved by the Employer
Proper monitoring will ensure that potential sources of disputes are identified and rectified.
Monitoring tools
Project Management and Procurement Process Review by PPA
Change Orders/Variations In spite of best efforts to prepare
complete and error free plans and specifications and to implement contracts in accordance with plans, designs and specifications, quantities are only best estimates
Because field conditions change, errors are made during preparation
As a result of these, revisions to plans and specifications may be required during contract implementation
“Change Orders” will be required to make these revisions
Change Orders (contd)
A “Change Order” can be initiated by both the Employer and
the Contractor
“Change Orders” after being signed by the Contractor and the
Employer become a legally binding document just as the
original contract
Settlement of Disputes
Disputes between the Employer and the Contractor should be resolved as follows
Mutual consultation
Adjudication: if the dispute cannot be resolved by mutual
consultation, the dispute can be referred in writing by either party to the Adjudicator with a copy to the other party
The adjudicator will give its decision in writing to both parties
The decision of the Adjudicator is not final
Settlement of Disputes (contd)
Arbitration:
If either party is dissatisfied with the Adjudicator’s decision or if the Adjudicator fails to give a decision, either party may give notice to the other party of its intention to commence arbitration.
The dispute shall finally be settled by Arbitration
The decision of the Arbitration is final and binding
Contract Closeout
Contract closeout begins when the contract has been physically completed, i.e. all services have been performed and products delivered.
Closeout is completed when all administrative actions have been completed, all disputes settled, and final payment have been made
There is the need to pay more attention to contract closeout. It is as important as contract award and contract monitoring
A checklist of all services, products, etc to be delivered in the contract should be kept in the contract file.
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