QUESTION 1

Public money should be spent economically, effectively and with efficiency. The underlying logic for regulation of public procurement is to make sure that public bodies act appropriately with public money to obtain value for money when purchasing on behalf of the public. The rules require transparency to underpin confidence in public spending decisions and also fairness of treatment for tenderers who may commit considerable amounts of time and costs bidding for public contracts.

The main legislation that regulates and governs public procurement in Ghana is the Public Procurement Act 2003 (Act 663) as amended by the Public Procurement (Amendment) Act 2016 (Act 914). The promulgation of the Act was an integral part of Ghanas Public Financial Management Reforms and good governance initiative, sought to instil propriety and accountability in public sector financial management and expenditure. The Act regulates the procurement of goods, works and services financed, in whole or in part, from public funds and the disposal of government stores. All government agencies, institutions and establishments in which the government has a majority interest are mandated to comply with the Act.

However, the Public Procurement Authority (PPA) has faced many challenges since inception. Among the myriad of challenges that confronts the PPA are low levels of capacity among procurement practitioners within the public sector, low levels of remuneration of public sector procurement personnel and their levels of authority in public establishments. Furthermore, like many government institutions, the PPA has challenges with sufficient funding to support its activities and programs. It could not establish offices all over the country and sufficiently train its staff.

Externally, tenderers or service providers have been complaining of challenges faced with the procurement system. Some of the challenges have been high cost of tender documents, delays in the evaluation of tender documents, lack of fairness and transparency, delays in the payment of jobs well executed, bid security of about 2% of contract sum and blocking of capital of businesses over long periods.

In addition, various non-government and anti corruption agencies are becoming increasingly concerned about the excessive use of Sole Sourcing as a means of procurement in recent years over more appropriate procurement methods such as competitive tendering, two stage tendering, restricted tendering and request for quotation. The perception has been that these sole sourcing methods are often skewed to benefit various interests without necessarily considering the value for money concept. They argue that even though sole sourcing is one of the procurement methods, it is easily abused and hence the default method of Competitive Tendering should be encouraged over all other procurement methods.

Added to the above is another challenge of the difficulty of entities to accept procurement as a strategic value added function. Until the passage of the Act, procurement was handled by Chief Executives and their trusted cronies. With the advent of the new procurement law, it has been difficult for such persons to accept the change. There are therefore several procurement decisions taken outside the ambit of the procurement unit. Goods, services and works are procured ahead of the process and procurement unit only comes in to do damage control.

However, according to the PPA although the challenges of the organization may seem daunting, the authority is resolved to face these challenges head on and squarely deal with them in order to ensure the total realization

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of a world class efficient, transparent, accountable and professionally managed public sector procurement system in Ghana.

Required:

a. Suggest ways by which Value for Money could be achieved in public sector procurements in Ghana

(10 marks)

b. From the Case Scenario, identify five (5) challenges of goods, services and works procurement in Ghana and propose likely solutions to minimize or eradicate them. (10 marks)

c. In your opinion, why do you think the Public Procurement Act encourages the use of Competitive Tendering Method as ideal for public sector procurement? (10 marks)

(Total 30 marks)