Download Creating Favorable Conditions for the Competitiveness of

Creating Favorable
Conditions for the
Competitiveness of
Companies in East African
Community—in Kenya
Joseph Ogachi
Council Member
Kenya Institute of Supplies Management
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In this presentation..
 Introduction,
 Procurement objectives,
 Is there competition?
 National enablers,
 Institutional enablers,
 Individual professional enablers,
 Where are we going?
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Government procurement market
 In 2011, Government Budget is US$ 14 Billion;
 GDP in 2010 was US$ 31 billion;
 Procurement spend is approx. 25% of GDP;
 Hence, US$ 8 billion of procurement spend in 2010 – market
created by government procurement
 Government procurement market will expand:
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Devolution to County Governments;
Large Vision 2030 Strategy flagship projects;
Emphasis on public private partnerships;
Regional integration: EAC/COMESA;
 And focus on specific procurement objectives
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Procurement Objectives
The traditional objectives of public procurement:
1. Maximizing economy,
2. Maximizing efficiency,
3. Promoting competition,
4. Fairness among bidders,
5. Increasing transparency,
6. Increasing accountability,
7. Increasing public confidence,
8. Promoting local industry,
9. Promoting integrity
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..procurement objectives
 These objectives represent good values;
 But, integrity is just one of the nine objectives,
 Understandably, procurement corruption gets a lot of
focus…for obvious reasons,
 At the expense of the other 8 objectives.
 It is time procurement professionals changed tact to
focus on achieving economic goals;
 And provide evidence of results achieved in using the
procurement system;
 MUST HAVE PROFESSIONAL BUYERS
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Building capacity to enhance
competition
 Key players: KISM (capacity/advocacy/ethics), PPOA
(regulation/capacity/policy), PPD (policy), academic
institutions;
 Collaboration: KISM pursues a policy of nationally
promoting establishment of appropriate procurement
training programs in collaboration with key stakeholders
 Currently six (6) local universities offer programs that
are recognized by KISM; KISM runs 9 CPD workshops
annually, and at least 6 sensitization workshops
nationally
11/14/11
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National Enablers
National enablers for healthy competition:
 The Ministry of Finance:
 Policy formulation and resourcing;
 There is need for high level involvement of procurement
department in policy formulation.
 Public Procurement Oversight Authority Advisory Board:
 Should be seen to enable not frustrate professional
approach to procurement.
 Get procurement professionals in the Board
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National Enablers
• Kenya Institute of Supplies Management:
– Register, deregister, train, and CPD of procurement
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professionals.
Having a professional body ensures professionalism grows
in the country;
And all stakeholders appreciate the importance of
professionalism in procurement;
There is need for increased focus on procurement
professionalism, with a focus on competition.
As a basis of performance based procurement delivery.
4000 members already and growing.
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Institutional Enablers?
• The idea of separation of duties is a good one;
• But does it work in Africa=Silent corruption;
• There are 9 committees on procurement:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Tender opening committee
Technical evaluation committee
Financial evaluation committee
Tender committee
Procurement committee
Negotiation committee
Inspection and acceptance committee
Disposal committee
Procurement Oversight Committee
• There is no evidence that these committees are effective in supporting
competition, and eradicating procurement corruption?
• Could 2 committees be just enough?
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Procurement by Committees
 Initially a good idea; became an overkill;
 Having 9 committees is too much;
 Hampers creativity in procurement;
 Spreads the “pie of corruption”;
 Hampers procurement professionalism;
 Diverts scarce staff resources from productive activities.
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Procurement Unit Enablers
 Right mix of academic AND professionals qualification
 Developed a critical mass of experience
 Only to do Secretarial duties for Committee
 Decision making: No professional opinion
 There is a race to the bottom…application of rules
with little regard to their implications on the
economy, competition, and small business…to meet
Constitutional provisions.
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Procurement Unit Enablers
 Procurement units need tools to handle political
influence…very important
 Complaints about procurement taking too long;
 Procurement units have no evidence how long
it takes to achieve procurement objectives;
 Because there is no reliable performance
measurement system;
 Hence, there is no evidence of the good work
procurement units are doing;
 There is need for independent procurement
research for informed decision making.
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Where are we going?
 Kenya Procurement is a Constitutional issues;
 Calls for fair competition among suppliers;
 Procurement to be upfront in implementing second
generation procurement reforms;
 A focus on performance rather than process;
 Empowered procurement professionals
 Through their national procurement bodies
 Providing procurement professional opinions on all
matters procurement
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Thank
You
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