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Procurement Capacity Strengthening Initiatives in Uganda: an Anti-Corruption approach

Presented at the 3rd OECD-DAC Joint Venture on Procurement held in Arusha, Tanzania

5th - 7th May 2008

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Theme of the Presentation

Overview of the procurement reforms in Uganda

PPDA Capacity Building interventions Other Anti- Corruption Initiatives Monitoring and Enforcement mechanisms National Public Procurement Integrity Survey Challenges Way Forward

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Uganda

Population 27 million

Area 241,000 square kilometres

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Objectives of the Procurement Reforms

Reforms started in 1999 with a Task Force aimed at: Transparency and Accountability - to fight waste and

corruption Fairness/ Equal opportunity for all in the bidding

process Integration of the public procurement system with

public financial management framework Providing a more attractive investment climate by

lowering risk Maximising competition to satisfy customer needs and

ensure value for money A streamlined procurement process through the

gradual adoption of electronic commerce

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Establishment of Decentralized Public Procurement System in Uganda Key features of the procurement legal reforms

PPDA Act of 2003 abolished the Central Tender Board and established PPDA as the national regulatory body for public procurement

PDEs mandated to undertake unlimited procurement and disposal subject to standard practices and procedures prescribed by law

Publication of detailed procedural regulations and standard formats, guidelines and standard bidding documentation.

Harmonization of local government procurement with national standards achieved in 2006

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Capacity Building Interventions

The 5th strategic objective of PPDA under the Corporate Plan is to “Build procurement and disposal capacity”.

PPDA is implementing a 5 year Capacity Building Strategy that is aimed at promoting awareness of the PPDA Act through training programs for PDEs, Providers and CSOs involved in anti-corruption.

PPDA has conducted capacity needs assessments for central and local government PDEs and for providers to identify the capacity gaps that hinder the effective implementation of the law.

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Capacity Building Interventions

Promoted a Bill for the formation of a National professional institute for procurement professionals (IPPU) and raise professional ethics through an accreditation and certification mechanism to ensure that entry into the profession is restricted to suitably qualified professionals.

Participated in the setting of minimum education standards and curricula for tertiary institutions that offer procurement courses to the public. (Diploma, Degree & Masters level)

Recognition of the importance of the roles of related professional bodies by developing linkages with them and participating in their training programmes.

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Capacity Building Interventions Implementation of a Publicity Strategy that targets CSOs

and general public through print and electronic media. Establishment of the Public Procurement Policy Unit in

Ministry of Finance charged with: Policy guidance and technical support to PS/ST

on procurement policy matters Deployment of the procurement professionals to

PDEs and Professional development of the procurement cadre.

Development of amendment proposals to the PPDA Act and Regulations.

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Other Anti-Corruption Initiatives PPDA is a member of the Accountability Sector

Working Group and is also a member of the Inter -Agency Forum that implements the National Anti- Corruption Strategy.

PPDA is one of the beneficiary institutions under the MCC Anti-Corruption Threshold Country Plan Project under which IFMS is to get procurement module.

Key principle of decentralised system is the Segregation of roles and independence of the powers of the Procurement structures – i.e. Governing bodies, AO, CC, PDU, EC.

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Other Anti-Corruption Initiatives Establishment of the Register of Providers to ensure that

data on providers is more transparent and available to all actors in the procurement process, serves as a basis for monitoring their performance and compliance with the law.

Issuing of Standard solicitation documents to PDEs that provide standard terms and conditions.

Legal requirement for Bid notices to be published in at least one newspaper of wide circulation and displayed on the PDE’s notice board and on the PPDA website on www.ppda.go.ug

Statutory periods for procurement processes e.g. advertising, bidding, display of notices and handling of complaints

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Other Anti-Corruption Initiatives Mandatory requirements for PDEs to hold

Pre-bid meetings for high-value and complex tenders with have the Bids read out and recorded at public bid openings.

Enforcement of Procurement Planning on an annual basis based on approved budgets

Issued Ethical Codes of Conduct for public officers and Bidders - Mandatory declarations

Legal definition of corrupt and fraudulent practices in procurement.

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Monitoring and Enforcement Mechanisms PPDA Monitors through;

Review of the monthly/quarterly reports submitted by PDEs.

Compliance assessments on agreed compliance indicators. (Among pilot countries for OECD-DAC assessment methodology)

Procurement audits that contain agreed action plan for corrective actions and follow up of their implementation.

Civil Society and the general public.

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Monitoring and Enforcement Mechanisms PPDA Enforces by;

Investigation of procurement cases where malpractice is suspected and recommending disciplinary action against the officers responsible for implementation by AO, PS/ST, Head of Public Service, IGG, etc.

Submission of findings and recommendations from audits and investigations to the Auditor General for Parliamentary oversight.

Hearing of administrative review appeals (2 Tier Complaints System)

Suspension of Providers who breach the Ethical Code of Bidders Liaison with law enforcement agencies on investigation and

prosecution of Offences under the Act.

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National Public Procurement Integrity Baseline Survey, 2006 Integrity Survey was conducted in 33 LGs and 13

CG PDEs by PPDA and Office of the Inspector General of Government and was funded by USAID

Main objectives of the Survey were to : Assess the extent to which corruption is perceived as

influencing the outcome of public procurement and disposal in Uganda

Identify deterrent and other measures which are perceived as being effective in reducing the incidence of corruption and in changing attitudes to corruption.

Identify the vulnerable points in the procurement and disposal system.

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National Integrity Survey 2006

Findings of the Survey: Losses due to Procurement Related Corruption - 7.19 – 9.4% of total

contract values were identified as being paid by way of corrupt payments in procurements at both CG and LG levels.

CG Perception about Corruption -73% - 79% of the CG interviewees said corruption was non-existent or very limited in CG procurement while LGs perceived procurement corruption at the CG level to be most prevalent in the higher levels of management

Identified causes of Corruption- Cultural reasons, Lack of independent and effective judiciary, Lack of effective incentive mechanism for public officials, such as lack of promotion on merit, Economic policies, Lack of effective reporting system, Lack of transparent and accountable procurement processes.

Effective anti-corruption measures- Permanent prohibition of a person convicted of corruption from holding any public office, restitution order to seize assets, Payment of informers/whistleblowers on conviction of offender, Increase salaries, Change legal burden of proof and Taxation penalties.

Level of Tolerance to Corruption - 95% of the interviewees perceived corruption as a serious offence. This contradicted other assertions that Uganda is tolerant to corruption

Identified causes of corruption- Effective anti-corruption measures

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Dishonesty/ Corruption (5.1) %

Corruption levels(5.2) %

Average Cummulative %

Uganda Police 79.2 79.3 79.25Ministry of Health 68.6 72.7 70.65Higher LG- Political Leaders 67 68.3 67.65Low er LG- Political Leaders 62.8 65 63.9Higher LG Civil Servants 59.6 62.4 61National Medical Stores 52.6 59.8 56.2Low er LG Civil Servants 51.8 53 52.4Regional Referral Hospitals 49.6 55.1 52.35Min. of Finance 49.1 55 52.05Parliament of Uganda 50.4 50.5 50.45Min. of Local Government 49.9 50.6 50.25Min. of Water, Lands & Environment 41.8 54.7 48.25Min. of Education & Sports 41 47.5 44.25IGG’s Off ice 38.4 42 40.2Min. of Agriculture 35.6 42.6 39.1PPDA 28.2 37 32.6Local Gov’t Finance Commission 27 34.5 30.75Min. of Gender Labour & Soc-Dev’pt 26.6 31.7 29.15

Cumulative %

Insttitution

National Integrity Survey 2006(Statistical Implications)

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Challenges Procurement capacity strengthening is closely linked to the

broader issues of good governance and political and social transformation therefore capacity building and the development of professionalism is a long-term process

The poor record keeping culture has resulted in lack of comprehensive statistics on the value of goods, services and works procured and on the key indicators under procurement process. This is exacerbated by the limited use of electronic commerce.

There are still problems of political interference with procurement process, particularly at local government level.

The limited enforcement powers of PPDA and overlap of mandates with other bodies requires close collaboration in the implementation of capacity development strategies.

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Way Forward Need to establish an effective monitoring and

evaluation of the public procurement systems to determine capacity gaps at individual, organisational and country levels.

Need to determine the risks and vulnerable points at each stage of the procurement/disposal process and put in place strategies to mitigate them.

Emphasise the importance of consistent political commitment and support from the highest levels of government .

Build Partnerships and establish linkages with civic organisations, oversight agencies and donor partners to accelerate the fight against corruption.

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Thank You for Your Attention