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NEPAL
PUBLIC PROCUREMENT STRATEGIC
FRAMEWORK
PHASE I (2010-2013)
GOVERNMENT OF NEPAL
OFFICE OF THE PRIME MINISTER AND COUNCIL OF MINISTERS
PUBLIC PROCUREMENT MONITORING OFFICE
July 2010
i
Executive Summary
A. Introduction: Government of Nepal (GON) has promulgated Public
Procurement Act (PPA) and Regulation (PPR) in 2007 to make the
procurement system transparent, fair, competitive and efficient. Public
Procurement Monitoring Office (PPMO) was established in 2007 under the
Office of the Prime Minister and Council of Ministers (OPMCM) as per the
provision made in the PPA. The overriding objective of the PPMO is to
implement Public Procurement Law effectively as well as to deliver efficiency
and value for money in the use of public funds adhering to the principles of
non-discrimination, equal treatment and transparency.
This Public Procurement Strategic Framework (NPPSF) is the output of the
participatory NPPSF preparation workshops organised by PPMO from April 16
to May 14, 2010.
B. Issues and Problems: The major issues of the public procurement are:
Developing and applying policy, guidelines and standards to enforce
provisions of the PPA/PPR
Improving public procurement (PP) monitoring system to monitor and ratify
the provisions of the legislation.
Strengthening institutional capacity of PPMO and the procurement entities
including internal automation with latest technology.
Restructuring PPMO and motivating its staffs with the application of
performance based incentives.
Installing Procurement Monitoring, Management Information System
(PMMIS) and operationalizing e-procurement system.
Making research and development system functional in PPMO.
Pursuing public private partnership approach in PP by outsourcing services
to private providers. .
Improving complaint review system.
Developing stimulus packages to promote domestic producers/SMEs in
PP.
C. Beneficiaries: Indirect beneficiaries are the people of Nepal. Direct
beneficiaries are the procurement units of the public entities i.e.
constitutional bodies, ministries/departments/their networks, local bodies,
ii
NGOs/INGOs, parastatal organisations (corporation and boards), and other
agencies i.e. suppliers, contractors and consultants
D. Vision: PPMO is envisioned as a leader, regulator and promoter to
reinforce good governance in public procurement management.
E. NPPSF Result-based Framework
Impact (Ultimate Outcome): Sound public procurement environment
established.
Outcome (Intermediate): Public Procurement operation and practices
improved.
Outcomes (Immediate): i) Institutional capacity in public procurement
improved, ii) Embedded learning process established, and iii) PP
operations and market practices improved.
Outputs: Nine outputs will be delivered to achieve the outcomes: a) human
resources in PP developed; b) PPMO capacity enhanced; c) PP planning,
programming and budgeting capacity improved; d) PMMIS established in
PPMO; e) Results-based monitoring and evaluation system established, f)
effective grievance handling and appeals mechanism established, g)
PPMO website fully operationalized; h) PP system standardized; and i) e-
procurement system developed.
F. Implementation Management: The NPPSF-I will be managed by the
PPMO. OPMCM will establish a high level NPPSF Coordination Committee
chaired by the Chief Secretary in PPMO to provide policy guidelines and
coordinate NPPSF-I implementation. PPMO will form a NPPSF
Implementation Committee that will be a forum for participatory consultation
and interaction to plan and implement NPPSF as per the stakeholders‟
feedback and suggestions. A NPPSF Planning Team will be formed in
PPMO for planning of annual programs, implementing and monitoring.
G. Budget: Total Budget for the implementation of NPPSF-I is Rs. 297.4
million rupees. Budget requirement for the year 1, 2, and 3 is 77.5, 108.3
and 111.6 million rupees, respectively.
iii
Abbreviations
ADB Asian Development Bank
CTF Core Task Force
DECS District Expenditure Control System
DoR, Department of Roads
DPs Development Partners
e-GP Electronic Government Procurement
FCGO Financial Comptroller General Office
GIDC Government Integrated Data Centre
GoN Government of Nepal
HLCIT High Level Commission for Information and Technology
ICB International Competitive Bidding
ICT Information Communication Technology
IT Information Technology
INGOs International Non-government Organisations
MOF Ministry of Finance
MOHP Ministry of Health and Population
MOST Ministry of Science and Technology
MTEF Medium Term Expenditure Framework
NGOs Non-government Organisations
NCB National Competitive Bidding
NPC National Planning Commission
NPPSF-I Nepal Public Procurement Strategic Framework Phase I/2010-
013
OAG Office of the Auditor-General
OECD –DAC Organisation of Economic Cooperation and Development –
Development Assistance Committee
O&M Organisation and Management
PMMIS Procurement Monitoring, Management Information System
PEs Public Entities
PEFA Public Expenditure and Financial Accountability
PFM Public Financial Management
PP Public Procurement
PPA Public Procurement Act,
PPMO Public Procurement Monitoring Office
PPR Public Procurement Regulation
OPMCM Office of the Prime Minister and Council of Ministers
RC Review Committee
R&D Research and Development
SBD Standard Bidding Document
SME Small and Medium Enterprises
SOP Standard Operating Practice
TA Technical Assistance
TOT Training of Trainers
iv
Table of Contents
Page
Executive Summary I
List of Abbreviations III
1. Introduction
1.1 Context 1
1.2 Methodology 2
1.3 Role and Responsibility of PPMO 3
1.4 Vision of PPMO 5
1.5 Aims and Objectives of NPPSF 7
1.6 Strategic Directions 9
1.7 Beneficiaries of NPPSF 9
2. Current Status of PP
2.1 Implementation of Procurement Reform Initiatives 10
2.2 Problems and Issues 12
3. NPPSF Result-based Framework
3.1 Result-Based Matrix 21
3.1.1 Ultimate Outcome (Impact) 21
3.1.2 Intermediate Outcome (Effect) 21
3.1.3 Immediate Outcomes 22
3.1.4 Outputs 23
3.1.5 Activities 28
4. Implementation Design
4.1 Implementation Plan 42
4.2 Implementation Management 52
4.2.1 Management Structure 52
4.2.2 Monitoring and Evaluation 53
4.3 Budget 55
4.4 Implementation Strategy 56
Annexes
A – 1 List of Participants 59
A – 2 Major Problems, their causes and effects 60
A – 3 Issues and Strategies 63
A – 4 Investment Plan for FY 2010/011 & restructuring of IDF grant 64
A – 5 e-GP Implementation Strategic Policy Document 68
v
NEPAL PUBLIC PROCUREMENT STRATEGIC FRAMEWORK
PHASE I (2010 - 2013)
1. INTRODUCTION
1.1 Context
The Government of Nepal (GoN), like most governments around the world, is the
largest buyer of goods, services and works, in the country. Some 60 to 70 per cent of
the annual national budget goes to procurement. Hence public procurement plays a
critical role in the economy and is an important factor in economic growth. Sound
and efficient use of scarce public resources is the responsibility of the Government
and every Public Entity. Public Procurement is the fundamental and integrated part
of the good governance and public financial management in the country. Sound
procurement practices plays important role in the service deliveries and to produce
timely result and accomplish the goals and objectives of the entity.
The GoN has initiated governance reform program in various areas for effective
public service delivery. Among others, Public procurement is one of the prime areas
of reform of the Government of Nepal. As a part of this reform agenda, GON has
promulgated Public Procurement Act (PPA) and Regulation (PPR) in 2007 to make
the procurement system transparent, fair, competitive and efficient. These two
legislations aim to maximize returns of public expenditures in an effective and
efficient manner by promoting competition, fairness, accountability and reliability in
public procurement processes by ensuring the equal opportunity to the bidder to
participate in public procurement processes without any discrimination.
Public Procurement Monitoring Office (PPMO) was established in 2007 under the
Office of the Prime Minister and Council of Ministers (OPMCM) as per the provision
made in the PPA. The overriding objective of the PPMO is to implement Public
1
Procurement Law provisions effectively through the development of operational
instruments and monitoring the enforcement of legal provisions as well as to deliver
efficiency and value for money in the use of public funds adhering to the principles of
non-discrimination, equal treatment and transparency. Besides, PPMO has to
recommend the procurement policy to the government along with the measures for
reforming the procurement laws and initiate actions to implement the public
procurement law so as to enhance the quality of procurement outcomes.
PPMO has organized six participatory planning workshops from April 16 to May 14,
2010 to prepare this document "Nepal Public Procurement Strategic Framework
Phase I / 2010-013 (NPPSF-I)" with the support of ADB TA 7111. The current
initiatives for the preparation of the NPPSF is the outcome of the PPMO
commitments to the joint WB-ADB mission on 25 March 2010 right after the
assumption of office by the current Secretary.
1.2 Methodology
The methodologies applied for the preparation of the NPPSF are review of literature,
meeting with PPMO staff and organization of participatory workshops beginning from
April 16 to May 15, 20101. Participants from Office of the Auditor General, Public
Service Commission, PPMO, Ministry of Finance, Ministry of Local Development,
Financial Comptroller General‟s Office, Department of Roads (DoR), Nepal Army
(NA), and Department of Health Services participated in the workshops. List of the
workshops participants are given in Annex 1.
1
Mr. Kapil Dev Ghimire from Communication and Management Institute (COMAT) facilitated the NPPSF
preparation process and prepared preliminary draft of NPPSF document which has been improved by PPMO.
2
1.3 Role and Responsibility of PPMO
Role and Responsibility of PPMO have been mentioned in the PPA and PPR. PPMO
shall not in any way be involved in the process of procurement made by any PE,
other than its office, or settle any dispute arising in connection therewith.
Public Procurement Act, 2063: The followings are the functions, duties and
authority of PPMO as mentioned in the article 65 of the Public Procurement Act,
2063:
Recommend GoN for the improvement in the procurement policies or
contemporary procurement rules and regulation;
Issue technical guidelines and manual required for the implementation of
PPA;
Prepare Standard Bidding Documents, Standard Prequalification Documents,
Standard Contract Documents and Standard Documents of Request for
Proposal to be used by public entities in procurement proceedings;
Monitor and conduct technical audit by collecting data on procurement
proceedings carried out or to be carried out by PEs as to such proceedings
have been carried out in consonance with PPA/PPR or guidelines framed
under the act or not;
Provide advice and opinion on any matter set forth in PPA/PPR or guidelines
framed under the act if so requested by any PEs;
Establish and operate a website on procurement;
Publish bulletins for disseminating or making public PPA/PPR, guidelines,
technical directives, articles / materials on PP and similar other materials;
Prepare procedures necessary to coordinate / harmonize procurement
proceedings and submit such procedures to GoN for approval;
Organize regular training programs for bidders, and employees who have
been or will be involved in procurement proceedings;
Prepare necessary criteria in relation to delisting from the black-list referred to
article 63 of PPA and delist from the black-list in accordance with the criteria;
3
Appraise and review systems relating to constructions, supply, consultancy
services and other services and regularly consult with stakeholders,
international agencies and other foreign entities, as required, to make
procurement system effective;
Prepare Plan to mobilize necessary domestic resources or foreign assistance
for managing and reforming procurement system and act as a central agency
to coordinate such assistance;
Submit an annual report on procurement proceedings to the GoN; and
Perform such other functions as may be prescribed.
Public Procurement Regulation, 2064: The followings are the functions, duties and
authority of PPMO mentioned in the in the rule 144 of the Public Procurement
regulation, 2064, in addition to the functions, duties and authority referred to in
article 65 of the Act:
Monitor the public procurement activities by making observation visit of
procurement proceedings of the concerned Public Entity or by asking the
report and information relating to procurement activities from public entities,
Give direction to Public Entities in respect of the information, data to be
incorporated into the report relating to procurement activities and the period of
submitting such a report,
Operate programs that assist PEs to conduct procurement proceedings and
help bidders, proponents, sealed-quotation bidders, suppliers participate in
procurement proceedings,
Simplify and facilitate procurement proceedings,
Maintain the records of the performance of work relating to contract
implementation by establishing a central data bank,
Develop the methods of disseminating information relating to public
procurement,
Conduct study, research on the policy, law, experiences, practice relating to
procurement proceeding of other countries, in order to improve public
procurement system,
4
Prepare plan for arrangements for employees having capability or expertise
and professional efficiency in procurement in Public Entities,
Ascertain whether the persons to be appointed to the procurement unit of
Public Entities, evaluation committee and the Public Procurement Monitoring
Office have acquired necessary professional efficiency as per the plan under
clause (h),or not,
Prepare the description of the functions, duties, and powers and
responsibilities of the chief of Public Entities, staff of the procurement unit of
such entity and member of the evaluation committee,
Render assistance to conduct training programs required to enhance the
professional skill of the employee engaged in the procurement activities of the
Public entities, and
Conduct training program required for enhancing professional expertise of
employees.
1.4 Vision of PPMO
Vision statement of PPMO is as follows:
"PPMO is envisioned as a leader, regulator and promoter to reinforce good
governance in public procurement management."
In seeking to realize above mentioned vision, the PPMO will be guided by the
following principles:
Coordination: Coordination and collaboration with stakeholders for
system development will be a prime concern of PPMO.
Transparency: PPMO will demonstrate transparency in its interactions
and transactions with the stakeholders and the general public
5
Fair (Competition): PPMO will promote a sound and fair environment
including ethical code of conduct in public procurement.
Value for money: Public procurement will be based on the concept of
creating value for money.
Efficiency and effectiveness: PPMO will encourage its/PEs staff to
develop their professional skills through training programs and apply their
skills, knowledge and experience in their services to the public and
stakeholders and the effective implementation of procurement legislation.
Accountable: PPMO staff will take responsibility for their actions, be
accountable for their performance and be responsible to the public.
e-Governance: The application of information, communication and
technology (ICT) to the management of procurement will be a key
component of procurement reform.
Broad goals of the vision
The aim is to guide and coordinate the public procurement activities by
developing public procurement policies, guidelines, manuals and standard
bidding documents;
The PPMO will build partnership with public and private entities in improving
public procurement environment;
The PPMO will build capacity of all partners/stakeholders to enhance their
knowledge and skills on public procurement to ensure continuous learning
and innovation in the public procurement process;
The PPMO will monitor and evaluate all procurement agencies performance
as per set procurement monitoring indicators and disseminate e-GP and
Procurement Monitoring, Management Information System (PMMIS) to
strengthen procurement practices in the country;
The PPMO will facilitate to create favourable environment for value for money
based public procurement;
The PPMO will promote a policy aiming to facilitate domestic industry sector
and SME through public procurement.
6
1.5 Aims and Objectives of NPPSF
The following are objectives of the NPPSF to attain the vision of PPMO and to
implement PPA and PPR effectively:
a. Open and fair competition in public procurement ascertained
PPMO will publish Invitation for Bids and debriefing of contract award in its
Website. PPMO will establish a comprehensive and publicly accessible PPMO
database of providers of supplies, services and works, which will improve the
procurement system. This information will assist procuring entities in the
preparation of procurement proceedings. A database of average prices for
common user items will also be developed that will also be updated on a regular
basis. Standard Bidding Documents, Contract Documents and Guidelines will be
developed and implemented. PPMO will carry out procurement audits to
discourage malpractices. E-procurement system will also be made operational.
SOP for security force mobilization will be prepared to mobilize security
personnel during the bidding process and take immediate punitive actions against
criminal/hooligans involved in the collusion/coercion/intimidation. This will
improve transparency and enhance fair competition.
b. Optimum return from public expenditure affirmed by implementing PP
legislations
Preparation and publication of guidelines and advice to public entities will be one
of the regular functions of the PPMO to ensure that obligations under the
PPA/PPR are understood and appropriate practices are set out with necessary
details. The guidelines and other documents that have been prepared for a
government context will be adapted so that they set appropriate standards in
local government perspectives. Timely submission of reports to the PPMO will be
made mandatory by providing guidelines and formats for the reports. PPMO will
focus on the establishment of procurement units, having knowledge and
qualification, in the procuring entities at the centre and in each district to make
7
them responsible to prepare procurement plan and maintenance of procurement
records.
c. Capacity of public entities and stakeholders strengthened in PP
PPMO will carry out capacity needs assessment to design accurate demand and
relevant programs for capacity building of public entities and stakeholders. PPMO
will arrange to organize and run capacity building programs to build capacity of
the staffs of the public entities including training of local government procurement
staff and other stakeholders to enforce provisions of the PPA/PPR in the
procurement practices of the GON and local governments. PPMO will develop
procurement trainers, both within the government and external training providers,
to cope with the increasing demand for training and to improve quality of the
trainers. Roaster of resource persons and pool of experts will be kept in PPMO.
Establishment of the National Procurement Training System with twinning
arrangements with international procurement institutions like National Institute for
Financial Management, Faridabad and Administrative Staff College of India,
Hyderabad will be made to provide advanced training programs. Accreditation
criteria for the trainers will be developed and applied to encourage public and
private training institutions and individuals in the area of institutionalizing
comprehensive and regular procurement training programs. Evaluation system of
training outcomes and performance assessment of the trainees will be
developed.
d. Functional relationship between PEs and bidders enriched
PPMO will strengthen relationship with public entities i.e. Constitutional bodies,
government agencies, local bodies, parastatal organizations (corporation and
boards) and other agencies i.e. NGOs, suppliers, contractors and consultant to
communicate its plan, programs and guidelines and in return get their feedback
on the progress made and the problems faced. PPMO will liaise with the
agencies through the Procurement Unit established in such PEs and other
agencies. PPMO will also explore potentials to establish decentralized
mechanism to work in the centre, region and district level on its behalf.
8
Coordination mechanism will be established under the chair of the Chief
Secretary, OPMCM to coordinate works of different agencies.
1.6 Strategic Directions
Strategies needed to achieve the above aims and objectives are as follows:
I. Developing and applying policy, guidelines and standards;
II. Strengthening capacity of procurement entities;
III. Making monitoring and evaluation system functional;
IV. Strengthening management of PPMO;
V. Making research and development system functional;
VI. Strengthening partnership with private sector;
VII. Improving complaint review system;
VIII. Developing stimulus packages to promote domestic products of small and
medium enterprises (SMEs);
IX. Applying ICT to the procurement management; and
X. Making the PPMO website operational and effective.
1.7 Beneficiaries
Indirect beneficiaries of NPPSF are the general people of Nepal as sound
procurement practices plays important role in the service deliveries to them. Direct
beneficiaries are the GoN, constitutional bodies, local bodies (District Development
Committees, Municipalities, and Village Development Committees), NGOs/INGOs,
parastatal organisations (corporation and boards), and other agencies i.e. suppliers,
contractors and consultants.
9
2 Current Status of PP
2.1 Implementation of PP Reform Initiatives
GoN has initiated PP reforms by promulgating Public Procurement Act in
January 2007, followed by the Procurement Regulation in August 2007 and
establishing PPMO under the Office of Prime Minister and Council of Minister
(OPMCM) in August 2007. To help PPMO in its initial phase, Asian Development
Bank (ADB) and World Bank (WB) has been providing TA support (TA 7111
Nepal: Knowledge Transfer for Public Procurement) and IDF Grant support
(P110760: Strengthening Institutional Capacity of the Public Procurement
Monitoring Office), respectively. These support programs have targeted to
develop a clear government-owned strategic framework for implementing the
Procurement Law, develop mechanisms to evaluate progress in implementing
the strategy and develop PPMO as an efficient institution which has a well laid
out Standard Operating Procedures on how to implement the law and initiate
actions to implement the public procurement legislation so as to enhance the
quality of procurement outcomes and improvements in the procurement
environment. Implementation status of PP reform initiatives are given in the
following paragraphs:
ADB TA 7111 Nepal: Knowledge Transfer for Public Procurement:
The TA was implemented over 24 months (September 2008 to August
2010). Consultants for a total of 43 person-months were recruited though
SILT Consultants (P) Ltd in association with NAE KYUNG Engineering Co.
Ltd. One international e-procurement specialist (3 person-months) and
eight national consultants (total input of 40 person-months) were
appointed for the development of Standard Bidding Documents and
guidelines.
10
Standard Bidding Document for the procurement of works (National
Competitive Bidding), Standard Bidding Document for the procurement of
Goods (National Competitive Bidding), and Standard Bidding Document
for the procurement of Consulting Services (National Competitive Bidding)
are prepared and is in the process of approval from GoN. The website
www.ppmo.gov.np has been established and operationalized. Some of the
training modules (Training of Trainers (TOT) on Public Procurement, Basic
procurement training to the officials of District Treasury Controller Office,
basic procurement training to the employees of procurement unit) and
training curriculum are developed and altogether 191 employees from
different public entities are trained. Reports on "Monitoring and Evaluation
System", "An Organizational Strategy for institutional Development of
PPMO", "Towards Instituting an e-procurement system in Nepal" and
"Framework of Business Plan for PPMO" are prepared under the TA.
These documents will be beneficial for strengthening procurement
capacity of the GoN and the institutional development of PPMO which will
improve the efficiency and transparency in public procurement of works,
goods, and services and promote good governance.
Implementation Status of WB/IDF grant: The Program has provided
logistic supports (Lap-top computers, photo copier, printer and server) and
services of the international consultant (the draft report on "Short and Long
Term Strategy of PPMO for the implementation of the Public Procurement
Act and Regulations). National consultant for the institutional development
is working to support on finalization of the Standard Bidding Documents,
guidelines, NPPSF and Action Plan based on this strategy, and
development of Standard Operating Process for PPMO. Appointment of
training consultant is under way for preparing procurement training need
assessment and development of training modules. Consultations with
training institution are being taken with national and international training
institutions for the teacher's training. Three dissemination seminars on the
features of PPA to various stakeholders' (Construction Entrepreneurs,
11
Region level Officers and Departmental Heads) are organised. These
seminars are successful to create awareness of the key provisions of the
procurement laws that will help to improve competitiveness, economy and
improve the national procurement environment. As the NPPSF is
prepared, some of the immediate actions are taken into account; it is in the
process for sending the formal request to WB for the restructuring of the
project in line with NPPSF. The grant will be beneficial for the institutional
development of PPMO and ensure effective implementation of the public
procurement Legislation providing necessary guidelines, correct
procurement advice, monitoring public procurement outcomes and
providing recommendations to GoN on policy improvements.
2.2 Problems and Issues
Problems faced by PPMO in the implementation of PPA/PPR have been formulated
in the question forms to penetrate to the key issues, which are as follows:
Has PPMO efficient and effective organizational structure?
PPMO is not able to deliver an efficient and effective procurement system
and resolve the issue of the implementation of the procurement legislation.
Organizational Structure of PPMO has been poorly designed. Significant
units such as Planning, Research and Development, Information
Technology, Pool of Expert, etc., are missing from the structure.
Existing Procurement, Training and Monitoring Units are also weak
because only one position has been created in these units. As per
requirement, PPMO has formed a Task Force involving representatives
12
from PPMO, Ministry of Finance and Ministry of General Administration to
conduct Organization and Management Survey (O&M Survey) and
recommend efficient and effective organizational structure of PPMO. On
the recommendation of the Task Force, PPMO will be restructured to
accommodate all important units and human resources.
PPMO staffs are not adequately motivated. Employees are not willing to
join PPMO due to their inadequate knowledge on career opportunities in
PP. As a result some positions in PPMO have not been fulfilled. There are
broader problems such as absence of operational procedure, unclear job
description, absence of performance based incentive system, inadequate
practice to award best performers and punishing non-performers, and
inadequate training to the staff to get the job done in PPMO.
Has PPA/PPR been implemented effectively?
PPA/PPR has not been implemented effectively due to insufficient
backstopping services to public entities, inadequate guidelines and
technical notes, inadequate trained manpower in public entities,
inadequate monitoring from PPMO. Procuring entities have not
emphasized to establish and strengthen Procurement Units. Most of the
procurement entities do not have Annual Procurement Plan/ Master
Procurement Plan. They have poor performance in preparing quality
specification and realistic cost estimation and in the finalizing bidding
documents. These influence the quality of the performance in the
implementation of the project and run to increase unhealthy practice
fiduciary risk, time and cost. All these require strengthening of PPMO,
capacity building of PEs and continuous monitoring of PEs to facilitate
them for the compliance of procurement legislation. PPMO initiatives to
strengthen the procurement management of PEs are in the process with
the assistance of WB and ADB.
13
Has PP System been monitored?
An important function of the PPMO is to monitor and evaluate the
economy, efficiency and effectiveness with which public funds are spent.
The PPMO has to be capable of procurement monitoring, performance
evaluation and reporting on the performance of the public procurement
system. Public procurement is inadequately monitored because of
inadequate trained staff, underfunded resources, and inadequate
motivated staff in PPMO.
PPMO does not have accurate data on public contract awards to monitor
effectiveness of PPA/PPR and assess status of open competition, quality,
timeliness and cost (value for money) of PP. PPMO has not developed
instruments to monitor the justification of direct procurement or use of less
competitiveness procurement methods. PPA/PPR has the provision of
procurement complaints mechanism both at PE and Review Committee
level. Furthermore, operation of procurement complaints mechanism at the
level of PE level has not been monitored.
Financial Comptroller General Office (FCGO) has institutionalized District
Expenditure Control System (DECS) in its Financial Management
Information System (FMIS) to generate financial transaction related district
level information. PP Information could be incorporated in DECS, but
PPMO has not coordinated with FCGO.
There is a need to define monitoring instruments such as PP benchmark
and indicators, periodic reporting formats for procuring entities, and
develop PMMIS. It has not been developed due to inadequate institutional
capacity, non-establishment of IT unit in PPMO, non existence of
monitoring indicators and procurement reporting system. Functional teams
to conduct technical audit and monitor procurement proceedings could be
formed involving officials deputed from different PEs and Trainers
14
participated in ToT program of PPMO. PPMO has not developed SOP for
making internal control and audit function effective and efficient. This is
lagging behind the full compliance of procurement legislation.
Has Collusion and intimidation mitigated?
Due to political protection and lack of effective cooperation of security,
collusion among the bidders and intimidation at the time of bid submission
are increasing both in the central and district level. It is said that sister
organization of political parties are involved in the intimidation process
including use of physical force by hired thugs by other individuals.
Government officials are not in a position to take actions of blacklisting the
bidders due to threats. Although presences of Security Force are seen at
the time of bid submission but both Security Force and Procuring Entities
have not initiated any strict actions to mitigate such collusive and
terrorizing activities. Collusion and intimidation practices have adversely
affected and weakened competitive environment of PP.
Has PPMO adopted information technology?
There is inadequate internal automation with latest technology. Continued
growth of PPMO has demanded need of data and other information both in
electronic and paper form for planning and management of public
procurement, which inadequately exists. The available information has not
been well managed in terms of storage and retrieving as per need.
Procurement reporting system has not yet been established including non-
existence of PMMIS unit.
One way to curb mal-practices in public procurement is use of IT, but e-
procurement system does not exist, IT application not yet introduced, and
PPMO is not fully automated with sufficient band-width of internet. PPMO
website has not been fully operational. Efforts to encourage more public
15
entities to display their bid notices and other statutory information on the
PPMO website have been impeded by the low level of information
technology and in particular Internet connectivity available to many
Procuring entities.
Has Human Resource been developed in PPMO and other
stakeholders?
Most of the officials designated for procurement are not well versed to
accompany with the basic provisions of public procurement law which has
decreased the efficiency and outcomes of public procurement. They are
not trained in procurement management, which considerably slowed down
project implementation. PPMO has not prepared Comprehensive Human
Resource Development Strategy. There are insufficient human resources
in PPMO Training Unit. Public and private training institutions have not
been institutionalized for comprehensive and regular procurement training
programs. PPMO has not explored, established and strengthened
coordination and linkages with public and private sector training
institutions. There is piecemeal approach in developing PP Trainers as a
result, ToTs are not sufficiently organized.
There is inadequate policy to establish functional linkage with the Trainers
who have participated in PPMO ToT program. There is a need to assign
Trainers in PPMO Trainers Pool for at least three months on rotation basis
after participating PPMO ToT program. There is also need to outsource
training function to private sector for scaling up training and orientation
activities.
Has PPMO established its existence?
PPMO is the facilitator, promoter and regulator of the public procurement
system – its delineated functions and roles characterize the institution as a
fully development oriented organization. Research and Development
16
function of PPMO is also very poor so that it is unable to analyze major PP
issues and recommend for improvement in PP. PPMO is unable to guide
PEs in the preparation of quality specification and realistic cost estimates,
improving and harmonizing departmental norms. Inadequate monitoring
and research activities have also contributed to unrealistic district rates
and non-uniformed specifications.
Planning Function of PPMO as well as PEs is weak. PPMO has not
prepared Public Procurement Strategic Framework that has limited the
organization to perform and evaluate the PPMO team‟s performance as
planned. Most of public entities have not prepared procurement plan and
integrated with the budget formulation and execution process. Planning
and budgeting process is not practiced properly. There is lack of efficient
human resources for procurement planning because of improper
correlation between procurement and budgeting and vice versa.
Inadequate coordination among concerned stakeholders (NPC, MOF and
line ministries), improper initiation of procurement planning by entities,
insufficient assessment of Annual Program/Budget with regards to
procurement planning, inadequate enforcement of guidelines, inadequate
roles of NPC and FCGO, inadequate manuals and guidelines, and non-
representation of PPMO on different government committees are major
contributing factors to the weak planning and budgeting in PP. It is due to
lack of efficient human resources in the public entities for procurement
planning and lack of monitoring and follow- up by PPMO and concerned
organizations.
Has PPMO established effective coordination with stakeholders?
Functional coordination with stakeholders is weak. Mechanism for
establishing coordination has not been developed. There are inadequate
interactive programs to provide platform to thrash and resolve public
procurement related problems and issues. High level coordination
17
committee does not exist to monitor implementation of PPA and to
accelerate coordination with public entities (PEs) and other agencies.
Has PP initiatives been linked with Public Financial Management
(PFM) reform agenda?
The PFM Performance Measurement Framework Report, February 2008
which is based on PEFA indicators has assessed Nepal‟s performance in
PFM as of FY 2005/06. The report has indicated poor performance in the
area of „competition, value for money and controls in procurement‟ (rating
score: “C”) and has mentioned „explanation of score‟ which is as follows:
1. Available data show that less than 50 per cent of contracts above
the threshold are awarded on an open competitive basis, but the
data may not be accurate;
2. Justification for use of less competitive methods is weak or missing
3. A process exists for submitting and addressing procurement
complaints but it is designed poorly and does not operate in a
manner that provides for timely resolution of complaints
PPMO has not focused on the issues raised by the report. PPMO has
weak linkages with PEFA secretariat and PEFA Steering Committee.
Periodic assessment of PP system using the OECD-DAC Tool for
Benchmarking and Assessing Procurement System has to be done by
PPMO in regular intervals.
Has PPMO established effective management control system?
Procurement management information system does not exist in PPMO.
Electronic procurement has not been practiced with exception of e-
submission in the Department of Road. ICT based software is
inadequately used and technical audit system is not followed in PP.
Compliance to PPA/PPR is insufficient because of insufficient
backstopping services, availability of inadequate guidelines and technical
18
notes, and weak capacity of PPMO to prepare guidelines and technical
notes as required as there are inadequate trained human resources.
Dissemination of PPA/PPR is weak and inadequate.
Has PP Complaints Mechanism been effective?
PP Complaints Mechanism has not been effective both at PE level and
Review Committee. Complaints at the PE level have become a ritual
practice due to weak monitoring and orientation. Negligible complaints
have been registered from the aggrieved bidder in Review Committee due
to high threshold (above 30 million Rs.) for filing appeal and high deposit
security requirement (0.5 per cent of Bid Amount). Furthermore, collusion
among the bidder is also the reason of non-filing of application for the
review. Bidders are more interested to file their application directly to
Commission on Investigation of Abuse of Authority (CIAA) and PPMO.
There is inadequate training and advocacy program to make bidders and
PEs aware in PP.
Grievance handling mechanism is not adequately functional. Increasing
cartelling & intimidation, and inadequate training on procurement
management has constrained conflict management. There is no provision
for blacklisted bidder to appeal for judicial review against debarment
decisions.
Are User Groups / Committee mandated as per PPA/PPR?
Users Groups / committee are not mandated as per PPA/PPR. Users
groups could be contracted only for labour intensive works. They are not
allowed to use heavy machinery and subcontract works to others. There
are complaints that Users Groups are not real as they are not formed by
Users Assembly. Users groups are undertaking highly technical and heavy
equipment involving construction contracts beyond their capacity and
prescribed provisions of law. They often use heavy machinery and
19
subcontract works as if they are contractors. Public audit are not effective.
Monitoring of user groups‟ works is very weak. There is a tendency to
divide works into small pieces so as to meet threshold for awarding
contract to user's groups. Furthermore, guidelines for user groups have
not been developed by PPMO.
Is there adequate policy to support and promote domestic products
in PP
PPA/PPR has mandated PEs to give ten per cent price preference to
domestic products. There are no other stimulus packages to ensure that
the small and medium enterprises (SMEs) benefits from government
procurement. There is a need of a policy for the introduction of certain
percentage reservation for SMEs accompanied by guidance on tender
procedures. PPMO has not analyzed and recommended such policies to
the GoN due to its inadequate knowledge and capacity.
Major problems and their causes and effects are given in Annex 2. Major issues
and strategies are given in Annex 3.
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3 NPPSF Result-based Framework
3.1 Result-Based Matrix
Result-Based Matrix encompasses result-chains of NPPSF. Public Procurement
Results-based Matrix is a brief narrative description of the PPMO programme‟s
structure, its ultimate, intermediate, immediate outcomes and associated outputs and
indicative activities to transform the above aims & objectives and strategies into
reality, and to attain the vision of the PPMO (Table 3.1). Result-chains of NPPSF
are mentioned in the following headings and sub-headings:
3.1.1 Ultimate Outcome (Impact)
Ultimate outcome or impact of NPPSF will be ‘Establishment of sound
public procurement environment’ that will promote competition, promote
integrity of, and fairness and public confidence in, the procurement process
reduced audit objections during external audit, and decrease in collusion and
intimidation in the bidding process.
3.1.2 Intermediate Outcomes (Effect)
The intermediate outcome of NPPSF will be ‘improvement of public
procurement operation and practices’ through the preparation and
application of procurement plan by PEs and other agencies, increased
numbers of bid submitted in each bid process as compared to purchase of
bids, reduced number of withdrawals of bids, reduced number of days from
bid evaluation and contract award time, and guidelines & norms and directives
of PPMO followed by PEs.
21
3.1.3 Immediate Outcomes
Immediate outcomes (IO) to achieve positive effect and impact of NPPSF as
mentioned in 3.1.1 and 3.1.2 are as follows:
3.1.3.1 Institutional capacity in public procurement improved
This outcome aims to build human resources of PPMO, PEs and other
stakeholders and mobilise/utilise the trained human resources in
procurement management training in the procurement process after
training. Organizational capacity of PPMO will be strengthened by
restructuring its structure and building capacity of PPMO staff.
Successes of NPPSF will be well documented and bi-annually
disseminated by PPMO. This outcome also ensures that the trained
staffs of PPMO use their knowledge and skills in PPMO functions.
3.1.3.2 Embedded learning process established
A combination of steering mechanism will be practiced for learning and
innovations. Getting procurement reports in time from PEs, availing
required procurement information within a month, adopting lessons
learnt in the decision making process of PPMO are major results
expected from this outcome. PPMO also recognises that all of
monitored PEs will adopt monitoring recommendations in their next
bidding process and all the complaints cases will be finalized in the
given time framework by review committee.
3.1.3.3 PP operations and market practices improved
Outcome three will ensure that further guidelines, specific guidelines
and advice to the PEs will be issued to ensure that obligations under
the PPA/PPR are understood and appropriate practices are set out
with necessary details. This outcome also demands improvements in
22
the Standard Bidding Documents (SBD) and a list of technical
specification standards to make them a more useful tool for PEs
procurements. PPMO will establish Research and Development Units
to analyse problems and challenges in implementing PPA/PPR and
assess existing PP system to recommend improvement in procurement
legislation.
3.1.4 Outputs
Nine outputs will be achieved to ensure three immediate outcomes of NPPSF
within the planning time period of three years. Outcome-wise outputs and
milestone activities of NPPSF Phase I / 2010-013 are as follows:
Outcome 1: Institutional capacity in public procurement improved
Output 1: Human Resource in PP developed
Its activities will revolve around building capacity of PPMO, PEs and other
stakeholders to implement PPA/PPR effectively. PPMO will develop capacity
building strategy to build the training capacity of public and private sector for
scaling up procurement training, refresher training. PPMO will develop
trainers in procurement management through training of trainers programs,
develop accreditation criteria and accreditation of trainers to meet
procurement training demand needs. PPMO will develop partnership with
public and private institutes including Staff College, universities, private sector
educational institutions, resource person/experts to impart training
Output 2: Management capacity of PPMO enhanced
Output two expects to complete PPMO restructuring with fulfilment of all staff
positions to make sure that its functions can be smoothly implemented. Based
on the Task Force report PPMO will restructured to establish, among others,
23
IT, R&D and planning sections so that research and development related
functions can be performed in the field of public procurement. PPMO will also
make sure that pool of experts will be in place so that it can use their
expertise and experiences as and when needed to improve procurement
management system as well as strengthening PPMO's advisory role to PEs
on specific and complex public procurement issues. The expert would be
identified / selected among the most experienced procurement staff in the
PEs/private sector.
It will also focus towards PPMO staff motivation. PPMO will design
Performance based indicators and introduce/implement performance based
incentive system in order to motivate PPMO staff. PPMO staffs will also be
trained in the performance based incentive system. Potentials for PPMO
staffs‟ career development such as advanced studies will be explored and
provided to address future needs of expertise in public procurement.
Outcome 2: Embedded learning process established
Output 3: PP planning, programming and budgeting processes
improved
PPMO will strengthen planning, programming and budgeting processes to
make procurement proceedings effective and efficient. It will initiate planning
as dialogue and create a platform by organizing regular planning workshops.
Using these platforms, PPMO will thrash out problems and issues, revisit
NPPSF Phase I and prepare NPPSF-I Monitoring Framework as well as
NPPSF Phase II (2013-015). Baseline data of NPPSF will be generated to
compare the progress and compliance to the procurement system.
Output 4: PMMIS established in PPMO
Output 4 ensures that PMMIS is operational in PPMO. PMMIS software will
serve as the main tool for PPMO and centralized monitoring units of the
24
government in carrying out review of major procurement transactions and
procurement complaints, as well as overall monitoring and reporting of public
procurement performance. The development of a PMMIS will help generate
comprehensive reporting and data collecting at the sector level and national
level.
An on-line reporting tool shall be developed for procuring entities. PMMIS
shall examine the processes through which works, goods and services are
acquired in the public entities. Topics of the procurement management
information system shall be based on NPPSF Monitoring Framework and
OECD/DAC indicators. It will mainly include advertisement of bid
opportunities, publication of award, time for preparation of bids, bidders
participation, bid acceptance/quality/ responsiveness, method of procurement,
bid processing lead time and cancelled bidding process.
PPMO will define monitoring instruments such as PP benchmark and
indicators, periodic reporting formats for procuring entities, and develop Public
Procurement Management Information System (PPMIS). Relevant data on
public contract awards to monitor effectiveness of PPA/PPR and to assess
status of open competition, quality, timeliness and cost (value for money) of
PP. PMMIS will also help monitor the justification of direct procurement or use
of less competitiveness procurement methods. PPMO will coordinate with
FCGO to incorporate PP Information in DECS.
IT unit will be established in PPMO to make PMMIS operational. Functional
Monitoring Teams (FMT) exclusively for works, goods and services will be
formed involving officials deputed from different PEs and Trainers participated
in ToT program of PPMO. PPMO will develop SOP for making monitoring
function effective and efficient. This is lagging behind the full compliance of
procurement legislation.
25
Output 5: Results-based monitoring and evaluation system established
The PPMO will define performance indicators and make stricter the reporting
requirements in a prescribed format. The range of statistical information
received from public entities will also be broadened. The OECD/DAC
guidelines will be adapted to measure, monitor and analyse performance data
to determine the impact and effectiveness of changes that are made to the
public procurement system. PPMO will increase supervisions and compliance
review on public entities.
Output 6: Effective grievance handling and appeals mechanism
established
Output six will ensure that PPMO will organize regular meetings and establish
an anonymous "hot line" in the PPMO to receive and keep log of procurement
complaints. Complaints hearing at PE and Review Committee will be
improved by monitoring PEs performance and recommending amendments in
PP regulations.
Outcome 3: Public procurement operations and market practices improved
Output 7: PPMO Website fully operationalized
PPMO website will greatly improve transparency and bring about greater
competition. Public entities‟ bid notices, notices of best evaluated bidder,
notices of contract award and similar information relating to the process will
be published on the PPMO website. Furthermore, reliable up-to-date
information on existing providers for supplies, services and works, records of
current and past contract performance of providers, price and rate
information, etc., will be displayed in the website to assist PEs in the
preparation of short-lists and identify eligible providers. The necessary work
has been undertaken to fully operationalize the PPMO website. PPMO will
timely feed information on website.
26
Public entities will be provided direct access to website so that they can
publish bid information promptly and directly on PPMO website. PEs‟
procurement information such as type of goods and price will be made public
through PPMO website. PPMO will up-grade and up-to-date website
frequently. PP bulletin will be printed monthly, and distributed to PEs as well
as published on PPMO website.
Output 8: PP system standardized
Output eight activities will revolve around formulation of SBD (NCB) of goods,
works, and consulting services; formulation of SBD for ICB of goods, works,
and consulting services; and formulation of guidelines and of works to be
done by user groups, bid evaluation, ration procurement and land/
building/apartment.
The PPMO will establish Research and Development Section and initiate
research and development related functions. It will analyse problems, issues,
challenges of PP and recommend GoN to improve PP policy and legislation.
PPMO will also conduct study to promote procurement of domestic products
by PEs and other agencies and recommend appropriate promotional policy to
GoN.
Output 9: E-procurement system developed
PPMO will install e-procurement system to enhance the efficiency and
transparency in the public procurement through the implementation of a
comprehensive e-GP solution to be used by all government entities. The
system will be introduced in the major procuring entities at the initial stage and
will be rolled-out across all the procurement entities in a phased manner. A
strategic Policy Document on the implementation of e-GP is provided in
Annex - 4
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3.1.5 Activities
All together 38 milestone activities will be accomplished in the first phase of
NPPSF to achieve targeted results. Followings are the activities to attain nine
outputs of NPPSF phase I (2010-013):
Output 1: Human Resource in PP developed
1. Develop strategy and SOP for training: Capacity development strategy
and Standard Operating Process (SOP) will be developed to outsource
and scale up trainings, and maintain quality and time in the
implementation of training.
2. Prepare Training Module and curricula for each target group: Training
modules will be developed after assessment of training needs of the target
groups. Curriculum of the training will be developed as per training needs
to provide training to the operational groups, managerial groups, bidders,
training of trainers and focus group (Evaluation Committees etc.). Training
expenditure norms will be prepared to ease financial management
process.
3. Outsource/conduct training on PP: Selection criteria will be developed
to select participants for trainings. Training programs will be conducted to
train 2440 participants including awareness training to private and public
sector entities. PPMO will explore and coordinate with private sector
institutions to scale up training activities. PPMO will adopt policy to
mobilize Staff College, universities and private sector institutions to
organize PP trainings. PPMO will organize selected trainings using
resource persons from pool of experts. Follow-up of the trainees will be
done after completion of six months.
4. Develop trainers on national and regional basis: Roster of trainers and
resource persons will be compiled and documented to use them in the
training as and when needed, Refresher training will be provided to the
trainers and trainees to update their knowledge in PP. Accreditation
criteria will be developed to accredit training institutions and individuals so
28
that they can be outsourced and quality of the training could be assured as
well.
5. Provide training to PPMO staff: All PPMO staff will be trained annually
to provide them knowledge and skills on PP and update their knowledge to
improve efficiency and quality of services in PP. Capacity of PPMO staffs
will be strengthened through twinning arrangements with international
procurement training institutes. Criteria for the selection of participants for
such courses will be developed to ensure appropriateness in the selection
and application of knowledge and skills gained from such courses in PP
afterwards. PPMO will develop strategy to retain trained staffs in PPMO
after completion of international training. An agreement will be made with
the officials and concerned PEs so that trained staffs can be deputed to
PPMO (Pool of Experts/Trainers) for six months in two years period on
rotational basis. Trained staffs shall participate as a member of PPMO
Functional Monitoring Team and monitor procurement activities of two
PEs. After that, they have to participate as resource persons and conduct
at least six training/orientation programs.
6. Develop human resources in e-GP: Capacity of the human resources
will be enhanced in e-GP through organization of observation visits,
seminars/workshops, training and training of trainers in this area.
Promotional programs will also be conducted to raise awareness and for
advocacy.
7. Provide support to PP Unit of PEs: PPMO will create teams to provide
support to the PEs‟ procurement units to prepare procurement plan.
Information from selected PEs will be collected, documented and
published in this regard. The participants of the Training of Trainers shall
have to work in PPMO for six months within two years time framework.
They will be deputed to pool of experts. A written commitment from the
concerned public entity and the participant of TOT shall be done in this
connection before the participation in the training. A team shall be formed
from the pool and provide support to the PEs to comply with the
29
requirement of procurement regulations. Furthermore, such procurement
plan shall be posted in the PPMO website.
Output 2: PPMO capacity enhanced
8. Restructure PPMO: Task force will complete O&M survey by mid July
2010. The O & M Survey Report of the Task Force will be forwarded to
Ministry of General Administration by mid August 2010. With government
approval, PPMO will be restructured by the end 2010 to include, among
others, R & D Unit, IT Unit, Planning and Information Management Unit.
Existing Monitoring Unit will be segregated in three units: a) Monitoring
Units for procurement of Work and Consulting Services; b) Monitoring
Units for procurement Goods; and c) Monitoring Unit to monitor sub-
national level procurement and manage weekly grievance handling
meeting and hotline. New structure will also create pool of experts having
database expert (1), web expert (1), system technical expert (1),
procurement expert (1) and five advance trainers (retained from TOT
inventory). IT unit will manage PMMIS and e-GP. A new planning and
information management division headed by joint secretary will also be
created.
9. Manage human resources and logistics: After approval of new
organization structure, PPMO will coordinate with Ministry of General
Administration to fulfil newly created positions. Existing vacant positions of
the PPMO, as of current structure, will be fulfilled by July 2010. PPMO will
survey logistics/infrastructure requirement and manage budget to provide
necessary facilities to all units of the restructured PPMO.
10. Introduce performance based incentive schemes: A study on
performance based incentive mechanism will be conducted to prepare
performance incentives indicators of the PPMO units and its staffs.
Performance evaluation criteria will be developed together with formation
of performance evaluation team to assess performance against set
indicators. Incentives will be provided to the staff based on their
performance.
30
11. Reward best performers: Best performers among PPMO staffs and
Procuring Units staffs will be selected on the basis of approved selection
criteria and recommend to provide Civil Service Award. It will recommend
to GoN to emphasize on procurement performance criteria for the Civil
Service Award. PPMO will select best performers in PP and Letter of
Appreciation will be awarded.
12. Organise observation tours to analogous institutions abroad:
Observation tours will be organised to learn from international
demonstrations. Support from development partners will be sought for this
purpose.
Output 3: PP planning, programming and budgeting capacity improved
13. Organize regular planning, programming and budgeting workshops:
PPMO will initiate planning as a dialogue by creating platform to discuss
and interact with various actors to improve panning, programming and
budgeting processes.
14. Develop NPPSF monitoring framework: Monitoring indicators for the
NPPSF will be developed to measure the attainment of targeted results.
Monitoring format as per PPMO and other monitoring public agencies‟
requirements will be prepared and disseminated. A monitoring plan and
SOP for monitoring will be prepared to monitor PP on selected basis.
15. Develop risk engine: Indicators for risk engine will be developed to
identify and monitor risk areas and to reduce collusion and intimidation in
PP. Monitoring of risk areas will be carried out after prioritization of risks
by a team of PP experts.
16. Generate baseline data: Baseline survey and end line survey will be
carried out to collect data and information as per NPPSF results-based
monitoring framework.
17. Prepare NPPSF Phase II (2013-2015) and its implementation plan:
NPPSF Phase I will be revisited and Phase II document will be prepared
through participatory interaction process
31
Output 4: PMMIS established in PPMO
18. Develop PMMIS: IT Unit will manage development and design of PMMIS.
Resource institution and person to develop PMMIS. It will coordinate with
planning and monitoring units to identify required information. PMMIS
software will be developed as procurement performance tracking tool and
database for public procurement entities, contractors as well as
procurement personnel and their qualifications and performance, Logistics,
tools and equipment will be procured to develop PMIS. The PMIS will be
launched and information will be disseminated annually.
19. Establish linkage and network: Linkage and network of the PMMIS will
be established with e-GP, FCGO/District Expenditure Control System
(DECS) and other information networks in the country.
20. Analyse and share information: Information will be compiled in the PMIS
from different procuring entities that will be analysed, processed and
published by PPMO. A feedback system will be developed to update and
improve PMIS as per suggestions of the stakeholders. PMIS information
will also be available in PPMO website.
Output 5: Results-based monitoring and evaluation system established
21. Develop strategy and SOP for PP monitoring and evaluation:
Monitoring and evaluation strategy and Standard Operating Process
(SOP) will be developed to provide guidelines in implementing monitoring
activities.
22. Form Functional Monitoring Team (FMT) and monitor PP
proceedings: Monitoring activities will be scaled up by creating three
functional monitoring team exclusively for works, goods and consulting
services. Trainers participating in ToT programs shall be deputed in FMT
for three months period, continuously or intermittently on rotation basis as
per requirement. FMT will also conduct technical audit of selected works.
32
23. Assess public procurement system using OECD/DAC tool at two year
interval and share results with stakeholder for further improvements:
A study team will be formed to assess the PP system using ODEC/DAC
tools. Report of the study will be available in PPMO website.
24. Prepare and share monitoring reports: Trimester and annual report of
the PPMO/NPPSF will be prepared. Annual report will be published to
share publicly the achievements and shortcomings of the PP sector.
Trimester and annual report will also be available in PPMO website.
Output 6: Effective grievance handling and appeals mechanism established
25. Facilitate aggrieved bidders’ access to Review Committee (RC): Bid
amount threshold to appeal RC will be reduced from rupees 30 million to
rupees 10 million and security deposit requirement of 0.5 per cent of bid
amount will also be reduced by amending relevant rules of PPR.
26. Assess performance of PEs relating to complaints/appeals handling.
Performance of PEs related to article 47 of PPA will be assessed and
information on appeals handling process and results will be generated and
monitored on selective basis.
27. Conduct grievance handling meeting with hotline. Weekly grievance
handling meetings will be organized in PPMO involving representatives of
contractor‟s associations and PEs as per requirement. A hotline will be
installed in PPMO to provide information and consultation services on the
procedures of public procurement.
28. Organize regular consultation with private sector and civil society:
PPMO will organize interactive and advocacy programs /workshops and
consultative meetings with private sector and civil society to create
awareness, advocate PP reforms, share current challenges and issues
and collect their advice in PP
29. Prepare and publish review committee report: The RC will prepare and
publish annual review committee report through PPMO.
33
Output 7: PPMO Website fully operationlized
30. Publish PP information on PPMO website: Public entities‟ bid notices,
notices of best evaluated bidder, notices of contract award and similar
information relating to the process will be published on the PPMO website.
Furthermore, reliable up-to-date information on existing providers for
supplies, services and works, records of current and past contract
performance of providers, price and rate information, etc., will be displayed
in the website to assist PEs in the preparation of short-lists and identify
eligible providers. The necessary work has been undertaken to fully
operationalize the PPMO website. PPMO will timely feed information on
website.
31. Provide access to PEs in PPMO website: PPMO will provide access/
users password to its website to PEs so that they can place their tender
notice directly in PPMO website.
32. Publish PP bulletins at regular interval: PPMO will set up Editorial
Board/Committee to prepare materials for the publication of PP bulletin.
Planning and Information Management unit will coordinate with other units
and relevant agencies to compile publication materials and information. It
will edit and publish PP bulletins at regular interval either on monthly or bi-
monthly.
Output 8: PP System standardized
33. Prepare R&D Strategy and SOP: Research and Development (R&D)
Section will prepare Strategy and SOP for PP research, and define
research areas in a participatory way. A pool of multi-disciplinary experts
will be mobilized to conduct research and obtain innovative ideas in the
PP sector. Recommendations of the research reports will be incorporated
in policies, programs and decision making process of the PPMO.
34. Issue and publish SBD: SBD (NCB) of goods, works, and consulting
services will be prepared and published. Translation of all SBDs,
guidelines and manuals will be done into Nepali version and published.
34
Specific SBD as per requirement of specific PEs will be explored and
developed.
35. Issue necessary guidelines: PPMO will formulate guidelines on
procurement process, evaluation process, blacklisting, large and complex
works for the pre-qualification process, cost estimate and works to be
done by user's group/NGOs.
36. Conduct research to reform PP: PPA/PPR will be reviewed and revised
as per donor harmonization needs and internationally accepted best
practices of PP context. The nature of domestic products to be promoted
will be identified and stimulus packages will be developed to encourage
SMEs form PP and make recommendation to the government. Best
practices in PP will be explored and published. Issues and problems of PP
will be analysed and make recommendation to amend PPA/PPR.
Output 9: E-procurement system developed
37. Manage e-GP Development and Implementation: IT unit will manage e-
GP system development. It will assess infrastructure and procurement
reporting status of PPMO and selected PEs and launch e-GP and
coordinate with other units to develop guidelines and manuals. Operation
and Maintenance of e-GP (Local Consultant: Database / Web /System
technical / procurement) will be done by PPMO for its sustainability.
NPPSF Coordination Committee will coordinate to implement e-GP. A
core Task Force will be established (consisting of PPMO, HLCIT, GIDC,
MOST PPMO, MOHP, NA etc.). e-GP implementation policy (including
phase wise implementation modality) will be developed and adopted.
Policy guide for e-GP development and implementation will also be
provided.
38. Develop e-GP System: Local ICT experts will be hired to review existing
e-submission system of DoR, MoHP and others. The expert team will
finalize system requirement, system design for upgrading / integration and
develop / upgrade existing e-GP system based on single portal (actual IT
related works). Audit and testing of the system will be carried out as
35
planned. An international consultant will be hired for short period for
guiding e-GP system development. Local consulting firm will be hired to
develop e-GP software and application.
36
Table 3.1
Nepal Public Procurement Strategic Framework Phase I /2010-013
Period of Operation: July 16, 2010 to July 15, 2013
Result Chains Performance Targets/Indicators Means of Verification Assumptions/ Risks
Ultimate Outcome (Impact) Percentages of open bidding procedures publicly advertised. PPMO Annual Report
Sound public procurement X number of respondents’2 state positively ‘that procurement management Survey Report
environment established has improved’ - as compared to the data of 2010 July.
Intimidation in procurement decreased as compared to previous year data. Baseline and end line
Survey Report
Intermediate Outcome (Effect) Procurement done by 90% of PEs as per procurement plan. PPMO Annual Report
Public Procurement operation Average numbers of bid submitted in each bid process are more than 50% Baseline and end line
and practices improved. as compared to purchase of bid. Survey Report
Average number of days from bid opening to the issuance of contract Baseline and end line
award reduced. Survey Report
100% PEs follow guidelines and norms and directives of PPMO. PPMO Annual Report
Immediate Outcome (Result)
Outcome 1: PMMIS used by X number of people by 2012. PPMO Annual Report GON approves
Institutional capacity in public Procurement plan available with all PEs PPMO Annual Report additional positions
procurement improved. Procurement unit functional in all PEs PPMO Annual Report and restructuring of
Cost estimates available for all types of procurement PPMO Annual Report PMPO.
Successes of NPPSF well documented and biannually disseminated by PPMO Annual Report
PPMO starting from August 2010.
% of NPPSF progress successfully achieved. PPMO Annual Report Bidders willing to
Turnover rate of PPMO staff decreased. Mid-term and Final participate positively
Review Report in procurement
30% of the trained staff uses their knowledge and skills in PPMO functions PPMO Annual Report process.
by July 2012.
Positive political
Outcome 2 100% major PEs provides procurement reports on scheduled time. PPMO Annual Report
support.
Embedded learning process Required procurement information is available in PMMIS 30 days after end PPMO Annual Report
Law and order
established. of the month.
2
PEs, bidders, media, development partners, beneficiaries
37
Result Chains Performance Targets/Indicators Means of Verification Assumptions/ Risks
Lessons learnt adopted in the decision making process of PPMO. PPMO Annual Report situation remains
100% of monitored PEs adopted monitoring recommendations in their next PPMO Annual Report favourable.
bidding.
Audit objections during external audit reduced as compared to previous PPMO Annual Report Security institutions
years’ audit of health and infrastructure sector. support in PP process
100% complaints cases finalized in the given time framework by review PPMO Annual Report
committee.
Outcome 3 Complied with the standard bid documents, contract documents, guidelines PPMO Annual Report
PP operations and market and directives by sampled 250 surveyed PEs by 2012.
practices improved Civil work norms of all agencies harmonized. PPMO Annual Report
Bi-laws of public enterprises harmonized with PPA. Reviewed PPA/PPR
X% of PEs apply standard documents as against X % of baseline data of Baseline and end line
2010. survey report
X% of PEs is satisfied with applied standards by July 2012. Baseline and end line
survey report
X % of PEs and bidders express that guidelines and standards prepared by Survey Report
PPMO are clear to implement.
Outputs
Outcome 1: Institutional capacity in public procurement improved.
Output 1 Public procurement management training attended by 1900 persons PPMO Annual Report
Human resource in PP working in the procurement unit including 400 office chiefs in 30 districts.
developed 300 bidders trained in procurement management. PPMO Annual Report
Refresher training provided to 20% of the ex-trainees in procurement PPMO Annual Report
management.
X number of TOT on procurement management attended by X number of PPMO Annual Report
participants.
Accreditation criteria available by the end of 2010 and 20% of the trainees PPMO Annual Report
(440 persons) accredited as procurement management
trainers/procurement unit staff/procurement related resource person by
2012.
Output 2: IT and R/D section established by August 2010. PPMO Annual Report
Management capacity of PPMO Pool of experts in place by August 2010. PPMO Annual Report
enhanced. 90% of vacant posts in PPMO fulfilled by December 2011. PPMO Annual Report
38
Result Chains Performance Targets/Indicators Means of Verification Assumptions/ Risks
Restructuring initiated from May 2010 - full-fledged restructured PPMO Annual Report
organizational structure is in place by July 2011.
80% of logistics are available and functional by July 2012. PPMO Annual Report
Mid-term evaluation report of NPPSF available by Dec 2011. MTR Report
Performance indicators for incentive system designed and submitted for PPMO Annual Report
approval by July 2010.
All PPMO staff trained in procurement management. PPMO Annual Report
Each year from 2010 to 2013 ten PPMO staff learned best practices through PPMO Annual Report
observation tour.
Output 3: NPPSF Monitoring Framework Report by October 2010 PPMO Annual Report
PP planning, programming and Baseline database by January 2011 PPMO Annual Report
budgeting capacity improved NPPSF Phase II document by May 2013 PPMO Annual Report
Outcome 2: Embedded learning process established.
Output 3. PMIS operational in PPMO by the end of 2011. PPMO Annual Report
PMMIS established in PPMO. PPMO Annual Report
Output 5. 60 PEs at the centre level, 100 PEs outside the centre monitored with Monitoring report
Results-based monitoring and reports on recommendations.
evaluation system established. Annual Report on monitoring procurement proceedings with results PPMO Annual Report
submitted to Hon. Prime Minister every year in August
Output 6. Weekly Grievance handling meetings regularly organized in PPMO with PPMO Annual Report
Effective Grievance handling hotline facility July 2010.
and appeal mechanism
established PPR amended by end of 2010 facilitating aggrieved bidder to appeal to PPR amendment
Review Committee
Outcome 3: PP operations and market practices improved.
Output 7. 400 PEs provided password by July 2013 PPMO Annual Report
PPMO website established and 400 PEs posted their PP information in PPMO website PPMO Annual Report
operational 100% PP information available in PPMO Website by 2012. PPMO Annual Report
Output 8. Bid documents for NCB and guidelines are available in Nepali language by PPMO Annual Report
PP system standardized July 2012.
39
Result Chains Performance Targets/Indicators Means of Verification Assumptions/ Risks
12 issue areas identified and reforms initiated by July 2012.
Limited bidding system for national producers developed in 3 to 5
production sectors by 2012.
Output 9: E-procurement implementation plan approved by July 16, 2010. PPMO Annual Report
E-procurement system
e-GP system operational in 400 PEs by July 2013
developed.
Activities
Output 1: Human Resources in PP developed Output 2: PPMO capacity enhanced. Output 3: PP planning, programming and budgeting capacity
1.1 Develop strategy and SOP for training 2.1 Restructure PPMO improved
1.2 Prepare Training Module and curricula for each target group 2.2 Manage human resources 3.1 Organize regular planning workshops
1.3 Outsource/conduct training on PP 2.3 Arrange logistics 3.2 Develop NPPSF monitoring framework
1.4 Develop trainers on regional basis 2.4 Introduce performance based incentive schemes 3.3 Develop risk engine and select entities for monitoring
1.5 Provide training to PPMO staff 2.5 Reward best performers 3.4 Generate baseline data
1.6 Develop human resources in e-GP 2.6 Provide higher study opportunity to PPMO staff 3.5 Prepare NPPSF (2013-2015)and its implementation plan
1.7 Provide support to PP Unit of PEs 2.7 Organize observation tours to analogous institutions abroad
1.8 Coordinate with private sector to enhance awareness and
advocacy in PP
Output 4: Procurement monitoring, management information Output 5. Results-based monitoring and evaluation system Output 6: Effective grievance handling and appeals mechanism
system (PMMIS) established in PPMO. established established
4.1 Develop PMIS 5.1 Develop strategy and SOP for PP monitoring and evaluation 6.1 Facilitate aggrieved bidders’ access to Review Committee
4.2 Establish linkage ad network 5.2 Form functional monitoring team and monitor PP proceeding 6.2 Assess performance of PEs relating to complaints/appeals
4.3 Share information 5.3 Prepare and share monitoring reports handling
5.4 Assess public procurement system using OECD –DAC tool at 6.2 Conduct grievance handling meeting with hotline
two year interval 6.3 Organize regular consultation meeting with private sector
and civil society
6.3 Prepare and publish grievance handling and review
committee report
Output 7: PPMO Website fully operationalized Output 8. PP system standardized Output 9: E-procurement system developed.
7.1 Publish PP information on PPMO website on regular basis 8.1 Prepare R & D strategy and SOP 9.1 Manage e-GP Development and Implementation
7.2 Provide access to PEs in PPMO website 8.2 Issue and Publish SBD 9.2 Develop e-GP System
8.3 Issue necessary guidelines 9.3 Establish e-GP /ICT unit in PPMO
8.4 Conduct research to reform PP
8.5 Publish PP bulletins at regular intervals
40
4. IMPLEMENTATION DESIGN
4.1 Implementation Plan:
Activities to achieve outputs and outcomes of NPPSF result framework has been
grouped in the following action areas:
a) Human Resource Development
b) PPMO Capacity Enhancement
c) Planning, programming and budgeting
d) PMMIS Development including Website operation
e) PP Monitoring and Reporting
f) Grievance Handling and Appeal Mechanism
g) PP System Improvement and PP standard setting
h) e-GP Development
Details of activities, milestone targets, inputs and implementation schedule (three years
time framework) is given in Table 4.1
Investment plan for FY 2067/068 (2010/011) is given in Annex 4. It has included details
activities to be supported by IDF grant, ADB TA and government budget. PPMO will
request WB to restructure IDF grant programs in accordance to annex 4.
41
Table 4.1: (a) Operational Plan for Human Resource Development
Output 1: Human Resource Development Responsibility: Director, Training Section
Timeframe (trimester) Resources (human resources, equipment etc.)
Annual Target
Activity/Sub-activity Milestone Year 1 Year 2 Year 3 Costs (Year) - Rs’000’
1 2 3 4 5 6 7 8 9
Particulars
1 2 3 1 2 3 Total
5 training Training
1.1 Prepare and Publish Training Module, curricula 1500 0 0 1500
modules/ Consultant
and training materials based on target groups:
curricula / 100% M 250 0 0 250
(Operational/Managerial/ Bidders/ ToT /
training
Focused Groups) T 0 0 0 0
materials
C 150 0 0 150
1.2 Prepare and publish SOP of training including
SOP & Norms 100% M 50 0 0 50
training expenditure norms
T 100 0 0 100
C 0 0 0 0
1.3 Prepare roster of trainers and retain in Pool Trainers used
33% 33% 34% M 50 50 50 150
of expert on rotation basis from roster
T 0 0 0 0
C 0 0 0 0
1.4 Develop criteria and accredit trainers and
440 trainers 40 200 200 M 50 50 50 150
training institutions in different categories
T/W 100 100 100 300
1.5 Select participants and make agreements C 0 0 0 0
Participants
with training institute trainers /groups (Pool 33% 33% 34% M 100 100 100 300
selected
of Expert) T 0 0 0 0
1.6 Outsource training programs 2690per. 660 895 1135 T 13815 19640 23170 56625
6.a Operational level / 5 days 1500 per./40 T 480 480 540 T 9600 9600 10800 30000
6.b Managerial level/ 2 days – 390per. /13 T 90 120 180 T 1275 1700 2550 5525
6.c Bidders level/ 2 days – 300 per./10 T 90 90 120 T 1290 1290 1720 4300
6.d TOT level/ 10 days 50 per./ 2 T 0 25 25 T 1650 1650 0 3300
6.e Refresher training/2 days 450per./ 15 T 0 180 270 T 0 5400 8100 13500
1.7 Conduct International level training 100 per. 34 34 32 T 8115 8290 15490 31895
7.a ToT/4 weeks 45 per. 15 15 15 T 3000 3000 3000 9000
7.b Executive level training /3 days 24per. 8 8 8 T 990 990 990 2970
7.c International training/ workshop/ seminar 10 per. 4 4 2 T 1875 1800 9000 12675
7.d Observation tour 15 per. 5 5 5 T 2250 2500 2500 7250
1.8 Conduct training/Awareness programs
600 per 200 190 190 T 3400 4000 2000 9400
by PPMO trainers
8.a Executive Level training/1 day 150 per. 30 60 60 T 250 500 500 1250
8.b Focused training/ 3 days 150 per. 30 60 60 T 750 1500 1500 3750
8.C Awareness workshops / 1 day/22 workshop 660 per./ 360 300 0 T 2400 2000 0 4400
1.9 Develop human resources in e-GP 4665 per. 508 2107 2050 T
1616 29,839 30825 62280
9.a Observation visits 15 per. 8 7 T 1616 1414 0 3030
42
Output 1: Human Resource Development Responsibility: Director, Training Section
Timeframe (trimester) Resources (human resources, equipment etc.)
Annual Target
Activity/Sub-activity Milestone Year 1 Year 2 Year 3 Costs (Year) - Rs’000’
1 2 3 4 5 6 7 8 9
Particulars
1 2 3 1 2 3 Total
9.b Executive/Managerial level Seminars 240 per. 180 60 T 1500 500 2000
9.c TOTs 250 per. 100 150 T 6800 10200 17000
9.d Trainings for PEs 1200 per. 0 600 600 T 0 11500 11500 23000
9.e Trainings for stakeholders 1800 bidders 0 900 900 T 0 6000 6000 12000
9.f Awareness and advocacy seminars 900 per. 450 450 T 0 2625 2625 5250
Total of Output 1 29296 62069 71785 163150
43
Table 4.1: b) PPMO Capacity Enhancement
Responsibility: Director, Training/ Admin
Output 2 PPMO Capacity Enhancement
Timeframe (trimester) Resources (human resources, equipment etc.)
Milestone Annual Target
Activity/Sub-activity Year 1 Year 2 Year 3 Particulars Costs (Year) - Rs’000’
1 2 3 1 2 3 Total
C 0 0 0 0
1. Conduct O&M survey and finalize PPMO
organization structure M 200 0 0 200
T/M/W 50 0 0 50
2. Create IT, R&D, Planning units and provide Reviewed C 0 0 0 0
additional officials in Procurement, Training and organogram, M 0 0 0 0
75% 25%
Monitoring Units in PPMO , Finalize TOR of Updated job
T/M/W 50 0 0 50
staff and update job description descriptions
3. Assess need and provide logistics to all units of List of needed C 0 0 0 0
PPMO logistics 100% M 2500 1500 1500 5500
available T 0 0 0 0
Indicator
4. Develop performance based indicators and developed,
Submit performance based incentive Incentive 100% C/M/W* 150 0 0 150
mechanism for decision mechanism
Improved
5. Evaluate and provide performance based Incentive
Incentive 2400 7200 7200 16800
incentive package
6. Develop criteria for rewarding best performers
Criteria
(Select and reward best performing staff )
approved
Integrated PP performance with Civil Service 1 1 1 C/M/W 250 250 250 750
Appreciation
Award and recommend for award
letter
Total of Output 2 5600 8950 8950 23500
44
Table 4.1: (c) Planning, programming, budgeting processes strengthening
Output 3 Planning, programming, budgeting processes Strengthening
Responsibility: Director, Planning
Timeframe (trimester) Resources (human resources, equipment etc.)
Milestone Annual Target
Activity/Sub-activity Year 1 Year 2 Year 3 Particulars Costs (Year) - Rs’000’
1 2 3
Moderator
1. Organize planning workshops and prepare
8 workshops 8 and workshop 0 0 1500 1500
NPPSF (2013-2015)
expenses
Moderator
2. Finalize NPPSF (2013-2015) implementation Project
100% and workshop 0 0 200 200
plan document
expenses
3. Organize planning workshops on regular basis
to thrash problems and issues to improve plan 12 interactive Moderator
and program of PEs and PPMO (output annual planning 4 4 4 and workshop 1200 1200 1200 3600
plans, planning and investment guidelines, workshops expenses
policy documents)
Moderator/
Monitoring consultant
4. Prepare NPPSF -I monitoring Framework 100% 1000 1000
Framework and workshop
expenses
5. Generate baseline information related to
Baseline data 100% Consultant 2000 2000
Monitoring Framework
Total Resources 4200 1200 2900 8300
45
Table 4.1: (d) PMMIS Development
Responsibility: Director, IT
Output 4 & 7. PMMIS Development
Timeframe (trimester) Resources (human resources, equipment etc.)
S Annual Target
Activity/Sub-activity Milestone Year 1 Year 2 Year 3 Costs (Year) - Rs’000’
N Particulars
1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
Total
Equipment 600 600
Identify and Procure logistics and infrastructure in Furniture and
1 IT Unit
Logistics Procured 60% 40% 2000
other 1000 1000
logistics
Field visit 400 400
PMIS data reporting
2 Define information requirements of PMMIS
formats
100% workshops 100 100
200 400 1400 2000
Co-ordinate with FCGO to incorporate procurement
3 information in DECS and FMIS
DECS with PP 10% 20% 70%
Consultant 3300 3300 3400 10000
Hire resource institution / person, develop and run
4 PMMIS application
TOR for software 33% 33%
34%
700
Network linkage with public entities implementing 700
5 e-GP
Linkage 400 PEs 100%
Consultant
workshop,
6 Compile, process and analyze information Data analyzed 50% 50%
material
200 200 400
Verify the reliability, edit and update produced Data sheet ready for
7 information sharing
30% 70% Publication 150 350 500
Information available in
8 Disseminate information
PPMO website
33% 33% 34% Publication 200 200 200 600
Develop feedback system (receive feedback,
9 process and publish)
Annual report 33% 33% 34% outsource 70 70 70 210
Consultant
10 Publish information on website and upgrade website information 33% 33% 34%
& software
200 200 200 600
Provide access (user password ) to PEs in PPMO Mail-box of 400 PEs in
11 website PPMO website
33% 33% 34% Consultant 100 100 100 300
Total 6170 5620 6620 18410
46
Table 4.1: (e) PP Monitoring and Reporting
Timeframe (trimester) Resources (human resources, equipment etc.)
Milestone Annual Target
Activity/Sub-activity Year 1 Year 2 Year 3 Particulars Costs (Year) - Rs’000’
1 2 3
1. Develop SOP for monitoring and form Monitoring 100% workshop 200 00 00 200
Functional Monitoring Team (FMT) framework
ready Publication 100 00 00 100
2. Modification of SOP for monitoring and FMT SOP Modified 100% workshop 00 00 150 150
Publication 00 00 100 100
3. Develop monitoring indicators and prepare List of 90% 10% moderator 300 00 00 300
monitoring and reporting formats monitoring
Publication 200 100 00 300
information
workshop 200 100 00 300
4. Establish risk engine to select PEs for Indicators and 100% Consultant 1000 00 00 1000
monitoring and select procuring entities for list of PEs
Report writing 100 00 00 100
monitoring
5. Prepare annual monitoring plan 3 annual 1 1 1 workshop 200 200 200 600
Action plans
Materials 100 100 100 300
6. Conduct Monitoring of public entities in every CL: 60 PEs 53 53 54 Field visit 1200 1200 1200 3600
year (Central level = CL; Sub-national level SNL: 100 PEs 20 CL 20CL 20CL
33 SN 33SN 34SNL Report writing 500 500 500 1500
=SNL)
7. Interact with procuring entities on findings of 24 workshops 8 8 8 Workshop 600 600 600 1800
monitoring and provide guidance (3 Central Field visit 200 200 200 600
level workshop each year, 5 Regional level 3 CL 3 CL 3 CL
workshop each year) 5 RL 5 RL 5 RL Report writing 200 200 200 600
8. Prepare periodic report and submit to OPMCM 6 Trimester 2 2 2 publication 300 300 300 900
(periodic and annual report should be prepared report Report writing 300 300 300 900
in every year separately)
9. Prepare and Publish annual monitoring reports 3 annual 1 1 1 Publication 200 200 200 600
and submit to OPMCM / also in website Reports
Report writing 200 200 200 600
10. Form study team ,assess and publish public Consultant 1500 00 1500 3000
Assessment
procurement system using OECD –DAC tool 1 1
Report
report at two year interval
11. Publish monthly PP bulletin 34 bulletins 10 12 12 Publication 1000 1200 1200 3400
Grand Total 8600 5400 6950 20950
47
Table 4.1: (f) Effective Grievance Handling and Appeal Mechanism
Output 6 Effective Grievance Handling and Appeal Mechanism
Responsibility: Director, monitoring
Timeframe (trimester) Resources (human resources, equipment etc.)
Milestone Annual Target
Activity/Sub-activity Year 1 Year 2 Year 3 Particulars Costs (Year) - Rs’000’
1 2 3
1. Develop SOP for Grievance Handling and SOP 100% moderator
200 00 00 200
appeals mechanism Documents /Consultant
Publication 100 00 00 100
workshop 100 00 00 100
2. Expand jurisdiction of review committee and Reviewed from 80% 20% Materials 100 50 00 150
review the limit of security deposit 30 to 10 million Allowances 100 50 00 150
rupees and
limit of security
deposit
3. Organize regular consultation with private 9 consultation 3 3 3 Materials 200 200 200 600
sector, civil society and other stakeholders workshops workshop 1000 1000 1000 3000
Field Visit 500 500 500 1500
4. Conduct weekly grievance handling meeting in Minutes of 33% 33% 34% Materials 50 50 50 150
PPMO in every year respectively meetings Report writing 100 100 100 300
Advertisement 200 200 200 600
and publicity
5. Install a dedicated hot line for weekly grievance Functional 100% Advertisement 300 00 00 300
handling meeting in PPMO hotline facilities and publicity
operated every
week at fixed networking 200 00 00 200
time and
communication
6. Monitor complaints appeals proceeding and Complaints 12 12 12 Field visit 200 200 200 600
results of 36 PEs monitored
7. Prepare and publish grievance handling and Published in 33% 33% 34% Report writing 300 300 300 900
review committee report newspapers
and electronic Publication 200 200 200 600
media Materials 100 100 100 300
Grand Total 3950 2950 2850 9750
48
Table 4.1: (g) PP System standardization
Output 8: PP System standardization Responsibility: Director, R & D
Timeframe (trimester) Resources (human resources, equipment etc.)
Sl. Annual Target
Activity/Sub-activity Milestone Year 1 Year 2 Year 3
No Particulars Costs (Year) - Rs’000’
1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
Total
Moderator
Consultant 200 200
Unit with staff 10
1 Prepare SOP & Strategy for R & D
functional 0% workshop 100 100
material 50 50
9 guidelines
Prepare and publish PP guidelines: PP Plan Preparation; PP Consultant 1200 1200
for works,
Specification preparation; Cost estimation; bid evaluation; ration
2 Procurement; User groups works; service contract; NGOs contract;
goods, 9 workshop 200 200
consulting
blacklisting
services publication 100 100
Consultant 450 450
3 specific
3 Identify and prepare guidelines for big and complex PP
guidelines
3 workshop 200 200
publication 50 50
Consultant 200 200 200 600
6 specific
4 Identify and prepare SBD for specific areas or PEs
SBDs
2 2 2 workshop 100 100 100 300
publication 100 100 100 300
Printing 1000
5 Publish SBD (NCB) of goods, works, and consulting services 9 SBDs (NCB) 9 1000
Prepare and publish SBD for ICB of goods, works, and consulting
6 services
3 SBDs( ICB) 3 Printing 300 0 0 300
9 SBDs in Translation
7 Translate SBDs in Nepali
Nepali
6 3
distribution
200 100 300
Define and conduct research on: Ration, works quality, variations
Consultant,
and price adjustment, time and cost over-run, users committee,
Delineated 12 workshop
8 procurement of drugs, collusion and intimidation, contract
areas
4 4 4
and
2000 2000 2000 6000
administration, mode of payment, insurance, stimulus package for
material
SME and others.
workshop,
Review and finalize amendments to PPA/PPR incorporating research PPA/PPR 100 material
9 recommendation and others reviewed % and
250 250
publication
Best practices 10
10 Explore best practices in PP
published 0%
publication 100
100
Total 5750 3550 2400 11700
49
Table 4.1: (h) e-GP Development
Responsibility: Director, IT
Output 9 : e-GP Development
Timeframe (trimester) Resources (human resources, equipment etc.)
Sl. Annual Target
Activity/Sub-activity Milestone Year 1 Year 2 Year 3 Costs (Year) - Rs’000’
No Particulars
1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
Total
IT Service 1200 1800 3000
60
1 Hire Local ICT Expert 24 man-months 40%
%
IT Service 5000 5000 5000 15000
2 Hire international ICT expert 6 man-months 2 2 2
IT Service 2,200 2,200
Consultant
Review existing e-submission system workshop &
3 (of DoR, MoHP)
engaged / SRD 100%
meeting 200 200
ready
material 100 100
Consultant
Hire local consulting firms to Develop
engaged / 67 IT Service 5,000 10,000 15,000
4 / upgrade existing e-GP to single
Application
33%
%
portal system
developed
Consultant IT Service 0 0 1,000 1,000
10
5 Carry out system Audit and testing engaged / System
0%
tested
Guidelines 50 50
6 Develop guidelines and manuals
developed % %
Consultant 0 200 200 400
Assess infrastructure and procurement 400 PEs selected Outsource,
50 50
7 reporting status of PPMO and selected for phase wise
% %
workshop 200 200
PEs implementation and material
10 Logistics /
8 Launch e-GP e-GP commenced
0% Misc.
Hire local experts in Pool of Experts
Dependent
(Database / Web /System technical / 50 50
9 procurement ) to operate and maintain
e-GP in operation
% %
service of 800 2,400 3,200
expert
e-GP
50 50 Logistics,
10 Monitor and evaluate e-GP Monitoring report
% % stationeries
0 250 250 500
Total 13700 18250 8850 40800
50
4.2 Implementation Management
Implementation management has been sought in terms of management structure,
monitoring and evaluation, budget and implementation strategies, which are given in the
following paragraphs:
4.2.1 Management Structure
The NPPSF will be managed by the PPMO. GON/OPMCM will include PPMO in the
Governance Monitoring Committee, provisioned under the Governance Act, as
members to enable PPMO enhance linkages and coordination with other ministries
and agencies. OPMCM will establish a high level Coordination Committee to
coordinate, guide and make strategic recommendations concerning NPPSF
implementation and address the issues related with the effective implementation of
procurement legislation. This Coordination Committee will be chaired by the Chief
Secretary (OPMCM)) and will consist of Secretaries of other relevant ministries. The
Secretary of PPMO will act as Member-Secretary for the committee. The committee
will meet at least four times a year.
a)NPPSF Coordination Committee
Chief Secretary Chair Person
Secretary, OPMCM Member
Secretary, Ministry of Finance Member
Secretary, Ministry of Physical Planning and Works Member
Secretary, Ministry of General Administration Member
Financial Comptroller General, FCGO Member
Secretary, PPMO Member Secretary
Member Secretary of the Committee, in consultation with the Chair, will invite
representatives in the Committee meetings as per need.
51
b) NPPSF Implementation Committee
PPMO will form a NPPSF Implementation Committee wherein representatives of the
PEs and other entities will be members. The committee will be a forum for
participatory consultation and interaction to plan and implement NPPSF as per the
stakeholders‟ feedback and suggestions. The committee will form planning team
involving inter-ministerial representative for planning of annual programs,
implementing and monitoring,
The following will be the composition of the committee:
Secretary, PPMO Coordinator
Joint-Secretary, PPMO (2) Member
Representatives, concerned stakeholders (3 ) Member
Director, Procurement Planning Section, PPMO Member Secretary
PPMO will define representatives of concerned stakeholders as per need.
4.2.2 Monitoring and Evaluation
The PPMO will monitor implementation of NPPSF and its results. It will also monitor
whether the policies, guidelines and manuals are followed -through random
monitoring and inspection, reports of PES and reports of TA providing agencies.
Monitoring Tools: For NPPSF program specific activities, the PPMO will institute
the usage of the monitoring tools. These tools include:
Framework monitoring indicators shall be based on selected indicator of
OECD/DAC indicator mentioned in PEFA;
Monitoring plan;
52
Monitoring & inspection manual;
Software packages;
Post procurement assessments;
Baseline studies;
Meetings convened to monitor the procurement sector.
Baseline surveys: Baseline surveys will be conducted to establish baseline
indicators for monitoring and evaluation purpose. The PPMO will verify the
information, prepare and submit progress reports in the prescribed reporting formats.
The works undertaken will be monitored through regular reporting and reviews.
Review: The Trimester and annual review will be done by PPMO. Mid-term
evaluation / assessment shall be done in the second half of 2011. The mid-term
evaluation shall be done by national /international consultant. The NPPSF
Coordination Committee meeting shall take a decision on selection of consultant for
mid-term evaluation and terms of reference of the consultant and remuneration. The
mid-term review consultant shall submit report to the Member Secretary of the
Coordination Committee.
Evaluation: The evaluation / assessment of the sub-sector will be done in the first
half of the year 2013. The evaluation shall be done by national /international
consultant. The NPPSF Coordination Committee meeting shall take a decision on
selection of consultant for final evaluation and terms of reference of the consultant
and remuneration. The consultant shall submit report to the Member Secretary of the
NPPSF Coordination Committee.
53
4.3 Budget
Budget implement activities is given in the table 4.2
Table 4.2 Estimated Budget requirement („000 Rs):
No. Output Year 1 Year 2 Year 3 Total
Output 1 Human resource in PP developed 29296 62069 71785 163150
Management capacity of PPMO
Output 2 5600 8950 8950 23500
enhanced.
PP Planning, programming, and
Output 3 4200 1200 2900 8300
budgeting system improved
Output 4 PMMIS established in PPMO 6170 5620 6620 18410
Results-based monitoring and
Output 5 8600 5400 6950 20950
evaluation system established
Effective grievance handling and
Output 6 3950 2950 2850 9750
appeals mechanism established
Output 7 PPMO website fully operationalized 300 300 300 900
Output 8 PP system standardized 5750 3550 2400 11700
Output 9 E-procurement system developed 13700 18250 8850 40800
Total 77566 108289 111605 297460
54
4.4 Implementation Strategy
The PPMO will establish a 'strategic' approach for implementing NPPSF activities as
follows:
Form NPPSF Coordination Committee chaired by the Chief Secretary,
OMCM to coordinate, guide and make strategic recommendations
concerning NPPSF implementation and address the issues related with the
effective implementation of procurement legislation;
Form NPPSF Implementation Committee chaired by the PPMO Secretary
to promote stakeholders participation in the NPPSF implementation and
involve them in review and revision of the framework, as needed;
Form NPPSF Planning Team and Implementation Task Force to prepare
annual implementation plan and review progress of the NPPSF;
Prepare results-based monitoring framework for NPPSF with the help of
monitoring and evaluation specialist;
Initiate and finalise the preparatory activities to conduct training
programmes and outsource the activities i.e. training needs assessment,
preparation of training modules and curriculum development;
Institutionalize comprehensive and regular procurement management
training programs through selected public and private training institutions
and outsource them to run the training programmes;
Solicit regular suggestions from private sector, civil society and
development partners in order to make the procurement system effective;
Run awareness training to private sector entities to enhance competition
through improved awareness on their part of the requirements of the public
procurement legislation;
55
Outsource external firms/individuals to map, install and operate PMMIS
with close monitoring and reporting from PPMO;
Identify research areas following a participatory approach and outsource to
conduct research;
Send PPMO staff to international exposure trips, training and higher studies
with the assistance from development partners;
Establish and mobilize a team of experts to prepare SBDs, guidelines,
technical notes, manuals and to monitor procurement proceedings as well
as to involve them as trainers. Use them as retainer experts to use as and
when needed;
For e-GP follow the steps as below:
o The PPMO – a lead agency to initiate, develop and manage
implementation of e-GP;
o Form high level committee for e-GP headed by Chief Secretary and
secretaries from Finance, OAG, FCGO as member – Member Secretary
PPMO;
o Implement e-tendering (including bid-evaluation) in Phase I (2010-13);
o Outsource e-GP software to maintain: 5 stages procurement of services
(ICT consultant, system decision, development, testing and O&M
support);
o Plan e-purchasing, e-contract management, e-contract development in
Phase II (2013 onwards).
Existing WB IDF Grant program will be restructured and further TA support
from ADB will be requested to implement milestone activities of NPPSF-I
The participatory planning process will be taken into consideration by
PPMO to prepare NPPSF related annual plan and programs with
56
participation of key stakeholders i.e. members of the NPPSF
Implementation Committee, PEs and other agencies;
PPMO will prepare and apply Standard Operating Process of monitoring
and training that will guide PPMO and other agencies in the execution and
implementation of the NPPSF.
57
Annex 1
GOVERNMENT OF NEPAL
PUBLIC PROCUREMENT MONITORING OFFICE
PUBLIC PROCUREMENT STRATEGIC FRAMEWORK
LIST OF PARTICIPANTS
S. N. Name Designation Office
1. Mr. Avanindra Kumar Shrestha Secretary PPMO
1. Mr. Mani Ratna Tuladhar Member PP Review Committee
2. Mr. Hem Raj Gautam Member PP Review Committee
3. Mr. Ramesh Kumar Sharma Joint Secretary Public Service Commission
4. Mr. Indra Bahadur Shrestha Joint Secretary PPMO
5. Mr. Mukti Narayan Poudel Joint Secretary PPMO
6. Mr. Prem Prasad Dhungana Facilitator PPMO
7. Mr. Shakti Prasad Shrestha National Consultant for PPMO
Institutional Devt.
8. Mr. Mukti Narayan Manandhar Director PPMO
9. Mr. Ishwar Raj Shrestha Asst. Auditor General Office of Auditor General
10. Dr. Mingmar Galze Sherpa Director LMD, DHS
11. Mr. Bhupendra Chandra Bhatta Sr. D,E. Dept. of Roads
12. Mr. Shanker Krishna Shrestha Director PPMO
13. Mr. Dev Kumar Rai Legal Officer PPMO
14. Mr. Ganesh Pd. Poudel Director OAG/Nepal
15. Mr. Mahendra Kumar Thapa Deputy Auditor General Office of Auditor General
16. Mr. Narendra Bahadur Chand Procurement Officer ADB
17. Mr. Mukti Prasad Kafle Team Leader ADB TA 7111
18. Mr. Bishnu Raj Dhakal Director PPMO
19. Mr. Kumar Dangol Colonel Nepal Army
20. Mr. Pramod Malla Captain Nepal Army
21. Mr. Narayan Niraula Deputy F.C.G FCGO
22. Mr. Shakil Manandhar SDE DoR
23. Mr. Sitaram Karki, Deputy FCG FCGO
24. Mr. Manohar Prasad Shrestha Finance Officer Ministry of Finance
25. Mr. Gyanendra Raj Ojha Finance Officer Office of Auditor General
26. Mr. Sachyut Raj Upreti Section Officer PPMO
27. Mr. Umesh Kumar Chapagain Accountant PPMO
28. Mr. Gyanendra Raj Ojha Account Officer Office of Auditor General
29. Mr. Hari Ballabh Ghimire Na. Su. PPMO
30. Mr. Shiva Prasad Ghimire Accountant PPMO
31. Mr. Raj Bhai Shrestha Computer Officer PPMO
32. Mr. Om Khadka Computer Operator PPMO
33. Mr. Kapil Ghimire Facilitator COMAT
34. Mr. Satish Chandra Gurung Co-facilitator COMAT
58
Annex 2
MAJOR PROBLEMS, THEIR CAUSES AND EFFECTS
(workshop output)
Problem Causes Sub-Causes Effects
Insufficient Insufficient backstopping services Insufficient staff Unhealthy bidding Encouraged corruption‟
compliance to Inadequate guidelines and technical notes environment Decreasing efficiency
PPA/PPR Weak PPMO to prepare guidelines and technical Uneconomical procurement Losing confidence of
notes as required Delay procurement stakeholders
Corruptive Ethos of compliance
Inadequate trained manpower decreasing
Inadequate multi-disciplinary Time and cost overrun
manpower Unhealthy practice increased
Lack of performance based incentives Fiduciary risk increasing
Timely finalization owing the
guidelines from TA
Weak capacity for implementation of
annual program
Reluctance in implementation
Unfair competition Absence of e-bidding Political protection
Collusion between contractors and procuring entities Lack of effective cooperation of
Weak skill development to contractors security
Weak interaction among contractors, suppliers at
public entities
Inadequate Dysfunction monitoring unit in PPMO/Procuring Lack of trained manpower
monitoring of public entities Inadequate manpower and resources
procurement Inadequate motivation for staff
Process and methods not defined
Absence of PMIS Procurement reporting system not
established
PMIS unit not existing
E-procurement system not existing
IT application not introduced
59
Procurement information not
developed in D.E.C.S./FMIS
PPMO not fully automated with
sufficient band-width of internet
PP monitoring indicators not
developed
Inefficient review Limited mandate of review committee (Rs. 30 million Guidelines for user groups not Reduced public trust
system above) developed Fair play in public procurement
Complain maker/disputer discouraged due to high system decreased
deposit security requirement Conflict of interest created
User groups‟ Users committee is not formed through users‟ among bidder, procuring entity
services in not meetings and consensus and users groups
effective Public audit not effective
Users groups are undertaking highly
technical and equipment involving projects beyond
their capacity and prescribed provisions of law
Weak monitoring us user groups‟ works
Committed participation and contribution not
forthcoming
Noncompliance of rules and regulations
Inadequate training Lack of “training policy” on PP Lack of trainer Weak efficiency in PP
Inadequate institutional capacity of procuring entities Absence of policy and vision/ no HR Inadequate common
Lack of needs assessment of training plan understanding of PPA among
Non willingness for training of organization / stakeholders (confusion)
individuals Delayed procurement
Weak PPMO to provide training
Inefficient follow-up system
Nonexistence of procurement
education/communication
Nonexistence of training organization
Insufficient human resource in PPMO training unit
Inadequate planning Lack of efficient human resources for procurement Lack of sufficient training Lack of quality procurement
and budgeting planning Inadequate manuals and guidelines Projects not completed on
Lack of correlation between procurement and Non-representation of PPMO on time/increase in expenditure
budgeting and vice versa different government committees Increase in non budgetary
Lack of monitoring and follow up by PPMO/MOF expenses
Inadequate coordination among concerned Lack of trust over PP/PPMO
60
stakeholders (NPC, MoF and line ministries) Ad-hoc procurement planning
Improper initiation of procurement planning by entities and budgeting
Lack of performance based incentive
Insufficient assessment of Annual Program/Budgeting
with regards to procurement planning
Lack of enforcement of guidelines
Roles of NPC and FCGO not sufficient
Inadequate research Nonexistence of R&D section in PPMO ORGANOGRAM not robust enough Ineffective implementation of
and development Unrealistic cost estimate O&M Survey is not done PPA/PPR
Norms differ from department to May lead to ineffective
department reporting
Norms are not updated Additional financial burden to
Unrealistic district rates government
Un-uniformity in specifications
Inadequate support Local market is not competitive Local production is cost effective Domestic products are
to promote Lack of policy provision for “participation by local No mass production underutilized
local/domestic producers only” Lack of quality assurance Underutilization of domestic
producer in PP Non identification of sector to be skills
protected
Lack of government subsidies in
priority sector
Qualification criteria more than actual
need
61
Annex 3
Issues and Strategies (Workshop output)
Issues Strategies
Has PPMO motivated staff? Establishment of operational procedure
Clear job description
Performance based incentive
Best performance award and punishment for
non-performers
Training for the job
Has PPMO adopted innovation and latest Introduce e-procurement system
technology to reform public procurement? Internal automation with latest technology
Capacity development of supply side
Has PP System been monitored? System development (monitoring) with
indicators
Capacity enhancement in monitoring
Has PPMO building capacity of its own and Organizational re-engineering (multi-
other stakeholders? disciplinary man?)
EDP orientation
EDP orientation to stakeholders
Has PPMO established its existence? Formulation of business policy
Review terms of reference of PPMO
Marketing of business activities
Define PPMO roles – whistle, propagate, -
“Red Flag” – campaigns
Has PPMO established effective linkages Formulation of coordination committee
and coordination with stakeholders? Enhancing representation of PPMO in public
entities
Has public procurement initiative been linked Taking initiative for legal reform
with PFM reform agenda? Harmonizing linkage with PFM
Coordinate/develop relationship with PEFA
Secretariat – Govt. monitoring committee
Has PPMO developed relationship with Building relationship with development
international development partners and partners (ADB, IBA)
international similar organizations? Harmonizing the procurement policy
requirement of different development
62
Issues Factors influencing the issue Strategies
Does PPMO have Nonexistence of pool of expert O&M Survey
its strategy from different disciplines Define process and methods to
framework and Lack of manpower implement activities by the
business plan? No R&D/ Publication wings organization itself and activities to be
Outsourcing experts have not outsourced
been utilized Outsourcing of experts
HR for IT, R&D, documentation Establishment of regional monitoring
Expert – Monitoring, procurement structure
Undermanned – Gazetted third
class, computer operator cum PAs
Nonexistence of Regional based
monitoring structure
Does PPMO have Lack of technical audit unit Prepare strategy framework and
its strategy business plan
framework and
business plan?
Has PPMO No guidelines Develop monitoring indicators
established No procurement management Prepare guidelines/manuals
effective information system Establish PMIS
management No E-GP system Define process and method of
control system No ICT based software technical audit
No technical audit system Develop E-GP system
No monitoring indicators
Has PPMO Mandate of RC is limited Run awareness programs
handled conflict of Inadequate awareness for Develop procurement training
interest procurement entities program
Inadequate dissemination of Organize regular interaction program
PPA/PPR in PPMO
Lack of grievance handling Review PP regulations
mechanism Establish grievance handling
Lack of expertise of procurement. mechanism
P.Es Establish platform for interactive
Collusion and intimidation dialogue
Lack of training on procurement
management
63
Annex 4
Investment Plan for FY 2067/068 (2010/011)
And Restructuring of WB IDF Grant program
Resource Resource Available
Resource
Output Activities Milestone Target requirem WB/IDF ADB5 GoN Total
Gap3
ent Grant4
1.1 Prepare and Publish Training Module, curricula and
training materials based on target groups: 5 training modules/ curricula /
100% 1750 1750 1750 0
(Operational/Managerial/ Bidders/ ToT / Focused training materials
Groups)
1.2 Prepare and publish SOP of training including training
SOP & Norms 100% 300 300 300 0
expenditure norms
1.3 Prepare roster of trainers and retain in Pool of expert on
Trainers used from roster 33% 50 50 50 0
rotation basis
1.4 Develop criteria and accredit trainers and training
440 trainers 40 150 150 150 0
institutions in different categories
1.5 Select participants and make agreements with training
Participants selected 33% 100 100 100 0
institute trainers /groups (Pool of Expert)
1.6 Outsource training programs 2690 per. 660
1.6.(a) Operational level / 5 days 1500 per./40 T 480 9600 4800 4800 4800
1.6(.b) Managerial level/ 2 days – 390 per. /13 T 90 1275 1275 1275 0
1.6.(c) Bidders level/ 2 days – 300 per./10 T 90 1290 1290 1290 0
1.6.(d) TOT level/ 10 days 50 per./ 2 T 0 1650 1650 1650 0
1.7 Conduct International level training 100 per. 34
1.7.(a) ToT/4 weeks 45 per. 15 3000 3000 3000 0
1.7.(b) Executive level training /3 days 24 per. 8 990 990 990 0
1.7.(c) International training/ workshop/ seminar 10 per. 4 1875 1875 1875 0
1.7.(d) Observation tour 15 per. 5 2250 2250 2250 0
1.8 Conduct training/Awareness programs by PPMO
600 per 200
trainers
3
proposal for additional support
4
proposal for on-going IDF grant restructuring
5
proposal for on-going ADB TA support and additional support
65
Resource Resource Available
Resource
Output Activities Milestone Target requirem WB/IDF ADB5 GoN Total
Gap3
ent Grant4
1.8.(a) Executive Level training/1 day 150 per. 30 250 250 250 0
1.8 (b) Focused training/ 3 days 150 per. 30 750 750 750
1.8.(C) Awareness workshops / 1 day/22 workshop 660 per./ 360 2400 2400 2400
1.9 Develop human resources in e-GP 4665 per. 508
1.9 (a) Observation visits 15 per. 8 1616 1616 1616
2.1 Conduct O&M survey and finalize PPMO organization
O&M survey 1 250 250 250 0
structure
2.2 Create IT, R&D, Planning units and provide additional
officials in Procurement, Training and Monitoring Units Reviewed Organogram, Updated
75% 50 50 50 0
in PPMO , Finalize TOR of staff and update job job descriptions
description
2.3 Assess need and provide logistics to all units of PPMO
List of needed logistics available 100% 2500 1500 1500 1000
2.4 Develop performance based indicators and Submit Indicator developed, Incentive
100% 150 150 150 0
performance based incentive mechanism for decision mechanism Improved
2.5
Evaluate and provide performance based incentive Incentive package 2400 2400
2.6 Develop criteria for rewarding best performers (Select
and reward best performing staff ) Integrated PP
Criteria approved Appreciation
performance with Civil Service Award and recommend 1 250 250 250 0
letter
for award
3.3 Organize planning workshops on regular basis to thrash
problems and issues to improve plan and program of
12 interactive planning workshops 4 1200 400 800 1200 0
PEs and PPMO (output annual plans, planning and
investment guidelines, policy documents)
3.4 Prepare NPPSF -I monitoring Framework Monitoring Framework 100% 1000 1000 1000 0
3.5 Generate Baseline Information Baseline Data 100% 2000 2000 2000 0
4.1 Identify and Procure logistics and infrastructure in IT Unit Logistics Procured 60% 1600 1600 1600 0
4.2 Define information requirements of PMMIS PMIS data reporting formats 100% 500 500 0 500 0
Co-ordinate with FCGO to incorporate procurement
4.3 information in DECS and FMIS
DECS with PP 10% 200 200 200 0
Hire resource institution / person, develop and run PMMIS
4.4 application
TOR for software 33% 3300 0 0 3300
4.8 Disseminate information Information available in PPMO website 33% 200 200 200 0
66
Resource Resource Available
Resource
Output Activities Milestone Target requirem WB/IDF ADB5 GoN Total
Gap3
ent Grant4
Develop feedback system (receive feedback, process and
4.9 publish)
Annual report 33% 70 70 70 0
7.1 Publish information on website and upgrade website information 33% 200 200 200 0
7.2 Provide access (user password ) to PEs in PPMO website Mail-box of 400 PEs in PPMO website 33% 100 100 100 0
5.1 Develop SOP for monitoring and form Functional Monitoring framework ready
100% 300 300 300 0
Monitoring Team (FMT)
5.3 Develop monitoring indicators and prepare monitoring List of monitoring information
90% 700 700 700 0
and reporting formats
5.4 Establish risk engine to select PEs for monitoring and Indicators and list of PEs available
100% 1100 1100 1100 0
select procuring entities for monitoring for monitoring
5.5 Prepare annual monitoring plan 3 annual Action plan ready for
Monitoring plan should be prepared in every year implementation 1 300 300 300 0
separately)
5.6 Conduct Monitoring of public entities in every year Central level 60 PEs 20 CL
1700 1700 1700 0
sub-national level 100 PEs 33 SN
5.7 Interact with procuring entities on findings of monitoring
Reports of interaction documented and
and provide guidance 3 CL
analyzed 1000 1000
3 Central level workshop each year 5 RL
24 workshops
5 Regional level workshop each year
5.8 Prepare periodic report and submit to OPMCM
(periodic and annual report should be prepared in every 6 Trimester report 2 600 600 600
year separately)
5.9 Prepare and Publish annual monitoring reports and submit to 3 annual
1 400 400 400
OPMCM / also in website Reports available in PPMO website
5.10
Publish PP Bulletins Bulletins published 10 1000 1000 1000
5.11 Form study team, assess and publish public procurement
Study initiated 1 1500 1500 1500 0
system using OECD –DAC tool report at two year interval
6.1 Develop SOP for Grievance Handling and appeals mechanism SOP Documents 100% 400 400 400
6.2 Expand jurisdiction of review committee and review the limit of Reviewed from 30 to 10 million rupees
80% 200 200 200
security deposit and limit of security deposit
6.3 Organize regular consultation with private sector, civil society 9 consultation workshops
3 1700 1700 1700
and other stakeholders
6.4 Conduct weekly grievance handling meeting in PPMO Minutes of meetings
33% 350 350 350
in every year respectively
6.5 Install a dedicated hot line for weekly grievance Functional hotline facilities
100% 500 500 500
handling meeting in PPMO operated every week at fixed time
6.6 Monitor complaints appeals proceeding and results of Complaints monitored
12 200 200 200
36 PEs
67
Resource Resource Available
Resource
Output Activities Milestone Target requirem WB/IDF ADB5 GoN Total
Gap3
ent Grant4
6.7 Prepare and publish grievance handling and review Published in newspapers and
33% 600 600 600
committee report electronic media
8.1 Prepare SOP & Strategy for R & D Unit with staff functional 100% 350 350 350
Prepare and publish PP guidelines: PP Plan Preparation; PP
Specification preparation; Cost estimation; bid evaluation; 9 guidelines for works, goods,
8.2 ration Procurement; User groups works; service contract; consulting services
9 1500 1500 1500
NGOs contract; blacklisting
8.4 Identify and prepare SBD for specific areas or PEs 6 specific SBDs 2 400 400 400
8.5 Publish SBD (NCB) of goods, works, and consulting services 9 SBDs (NCB) 9 1000 1000 1000
Prepare and publish SBD for ICB of goods, works, and
8.6 consulting services
3 SBDs( ICB) 3 300 300 300
8.7 Translate SBDs in Nepali 9 SBDs in Nepali 6 200 200 200
Define and conduct research on: Ration, works quality,
variations and price adjustment, time and cost over-run, users
8.8 committee, procurement of drugs, collusion and intimidation, Delineated 12 areas 4 2000 2000 2000
contract administration, mode of payment, insurance, stimulus
package for SME and others.
Review and finalize amendments to PPA/PPR incorporating
8.9 research recommendation and others
PPA/PPR reviewed 250 250 250
8.10 Explore best practices in PP Best practices published 100% 100 100 100
9.1 Hire Local ICT Expert 24 man-months 40% 1200 1200 1200
9.2 Hire international ICT expert 6 man-months 2 5000 5000 5000
9.3 Review existing e-submission system (of DoR, MoHP) Consultant engaged / SRD ready 100% 2500 2500 2500
Hire local consulting firms to Develop / upgrade existing e-GP Consultant engaged / Application
9.4 to single portal system developed
33% 5000 5000 5000
Grand Total
77616 23430 29466 12220 65116 12500
68
Annex 5
69
70
Implementation of Electronic Government Procurement (e-GP)
(A Strategic Policy Document)
Table of Contents
Topics Page
Number
1. Background
1.1 The Context 72
1.2 Review of the WB and ADB Consultants' Report 73
1.3 Regulatory framework 76
1.4 Present Status of e-Procurement 77
1.5 Vision, Strategy and Objectives of e-Procurement 80
2. e-GP Implementation: Conceptual Framework 82
2.1 E-GP software and PPMIS Specifications 82
2.2 Information Security Management 82
2.3 Private Sector Activation 83
2.4 Phase-wise Implementation of e-GP 84
2.5 System access 86
2.6 Advertising 87
2.7 Correspondence, amendments, and clarifications 88
2.8 Bidding documents 88
2.9 Submission of bids/proposals 89
2.10 Public bid opening 90
2.11 Bid evaluation and contract award 91
2.12 Payment 91
2.13 Supplementary and archival information 91
3. Action Areas 92
3.1 Implementation of NPPSF driven e-GP activities 92
3.1 e-GP Implementation Policies Guidelines 94
Table 1: e-GP Work-Plan: Milestone Activities, Time-frame
71
Implementation of Electronic Government Procurement (e-GP)
(A Strategic Policy Document)
1. Background
1.1 The Context
The procurement process in Nepal is still manual and takes an average period of 6
to 7 months to materialize. Collusion and intimidation during bid submission have
become common phenomenon in the country. Electronic Government Procurement
system (e-GP) has yet to be developed and practiced. However, development of
information technology in Nepal has created sound bedrock to implement e-GP,
which has been sought by many as an instrument not only to minimize collusion and
intimidation practices, but also to improve efficiency, transparency, and competition
in public procurement system.
Reforms to modernize government procurement have been initiated with TA support
from the Asian Development Bank (ADB) and IDF Grant support from the World
Bank (WB). With the promulgation of the new legal framework for public procurement
(PPA 2007 and PPR 2007), Public Procurement Monitoring Office (PPMO) has been
established in 2007 to implement the spirit of the new legal framework including the
introduction of the e-Procurement system. The World Bank consultant team has
prepared a report on “Nepal Electronic Government Procurement Readiness
Assessment and Roadmap” in October 2007 and recommended activities for the
implementation of electronic government procurement in the future. The ADB e-
procurement specialist has also prepared a report on "Towards instituting an e-
procurement system in Nepal" in September 2009 and recommended a strategic
plans for establishing e-procurement system. Electronic Government Procurement
is a prime concern and development agenda in the recent years.
72
The Government of Nepal has expressed its commitment in the budget speech of FY
2009/10 to implement electronic Government Procurement System. Recently, PPMO
has prepared Public Procurement Strategic Framework (NPPSF/2010-2013). One of
the outputs identified in the NPPSF is: "E-Procurement System Developed." This
strategic policy document has been prepared by the PPMO to develop, initiate and
institute e-procurement system in the country.
1.2 Review of the WB and ADB Consultants' Report
The report on "Nepal Electronic Government Procurement: Readiness Assessment
and Roadmap" prepared by the WB consultant in October 2007 has made the
following key recommendations in regard to the implementation of e-GP in the future.
Develop a vision and objectives for procurement modernization as part of
a process to develop an implementation a plan for e-Government
Procurement.
Quickly establish the roles, responsibilities, powers and resources of the
PPMO with a clear mandate for procurement reform and management, a
high-level leadership and influence role, and sufficient resources to take
effective action when required.
Identify a small group of people with procurement experience, and support
them with a high-level procurement expertise person, to develop a core
resource to support public procurement reform.
Support the development and implementation of an e-GP Implementation
Plan that will result from consideration of both this report and the input of
the public and private sector respondents to a draft Implementation Plan.
This e-GP plan will need to complement the developing plans for e-
Government and Information and Communications Technology but not be
delayed by those plans.
73
Develop a policy statement and a strategy for implementation of e-GP.
Conduct a quantitative assessment of the developing Internet
infrastructure in Nepal and the e-capability of government agencies as
required for supporting sound implementation decisions by the planners of
interactive e-services such as e-procurement.
As a matter of urgency, establish a standards taskforce to coordinate the
development and implementation of the procurement market, system, and
management standards to support e-GP and other proposed e-services.
As a matter of urgency, develop a public sector strategy for achieving the
more formal participation and involvement of the private sector to support
the implementation of forthcoming changes in the public sector
procurement environment.
Once a procurement agency has been established the existing e-
Tendering system could be re-launched as a single portal.
The report has recommended next steps as a roadmap to implement e-procurement,
which is as follows:
Establish the PPMO or an equivalent central procurement lead agency.
Gain high-level political support for the program as a whole and its
implementation over the timeframe required.
Disseminate final Implementation Plan and hold meetings and roundtables to
ensure familiarity by all stakeholders.
Working from the schedule of features presented in the roadmap from this
report, identify e-GP features that the PPMO or MOF believes that it could
readily implement and develop a timetable for their phased introduction.
Review existing e-Tendering system for implementation and amendment if
necessary.
Identify the resource requirements for these phases and seek any required
support.
Specify expertise required and where possible acquire these through internal
retraining as specified in this roadmap.
From the schedule that is decided upon for e-GP, develop an implementation
team to activate the program.
74
Assign the implementation team formal terms of reference and
accountabilities for the program.
Conduct training activities as outlined in this roadmap.
The report on "Towards Instituting an e-Procurement System in Nepal" prepared by
ADB Consultant in September 2009 has made the following key recommendations to
implement e-Procurement system, which could minimize unnecessary visit of bidders
in the public offices for each procuring activity, obviate the need for massive paper
works and reduces proceeding time, and help reduce the irregular practices
performed by face to face process:
Implement e-procurement in a phased manner. Do not merge the on and off-
line system which is complex and not practiced by many countries
Develop fully electronic e-bidding in few procuring entities in the beginning
and expand to more entities step by step until most entities are covered by
electronic procurement system.
The strategic implementation plan is, therefore, proposed as follows:
o Phase I (2010): e-Bidding system Development
o Phase II (2011~2012): e-Bidding system expansion
o Phase III (2013~2014): e-Procurement development & settlement
Under normal circumstances, it is expected that Nepal could reach a stage of
fully integrated e-Procurement system within a period of four years at an
estimated cost of about USD 11.5 million. This is over and above the
infrastructural improvements and new developments in the fields of power
supply and ICT expansion.
75
1.3 Regulatory framework
According to article 14 (2) of Public Procurement Act, 2007 (PPA), the notice on
invitation to tender or prequalification in the case of a central level public entity shall
be placed in the website of the concerned entity or that of PPMO, and such notice
may be placed in the website of the concerned entity or that of PPMO in case of
district level public entity. As per article 69 of PPA, the GON by notifying in the Nepal
Gazette may allow any public entity to invite a pre-qualification proposal, issue notice
of bid invitation, make invitation to letters of intent and make short- listing, invite a
proposal of consultancy service, transmit bidding or pre-qualifying documents, send
tender or pre-qualification related documents, receive tender or pre-qualification
proposals or proposals for consultancy service, enter into procurement contract,
make payments and give or receive any other notice by the means of electronic
communication. The electronic communication shall be used provided that: (a) the
records of the contents of the electronic communication are acceptable and
protected in legal terms; (b) there is an adequate security of such means of
communication; (c) the access of bidders to the procurement proceedings is not
restricted inappropriately; and (d) such use is not contrary to PPA, PPR and other
prevailing laws.
According to rule 146 of Public Procurement Regulation, 2007 (PPR), a public entity
shall send the notice of tender by e-mail to the PPMO and may register its name on
www.bolpatra.gov.np and directly place such notice thereon. It may carry out or
cause to be carried out, the purchase and submission of tenders through electronic
means as far as possible.
Electronic transaction Act, 2006 has provision to authenticate to any electronic
record by personal digital signature transforming electronic record to one place to
other place shall be effected by the use of asymmetric crypto system and hash
function. Furthermore, this Act has made provision that the written or printed
information, document, record maintained in an electronic form and certified by the
digital signature as stipulated in this Act or the Rules made here under, shall also
have legal validity
76
1.4 Present status of e-procurement
Traditional offline based (paper based) procurement proceedings are not only time
and cost wasting process but it has hassles and possibility of collusive practice
among the bidder and intimidation at the time of bid submission. While there is
currently no e-Government Procurement website effectively operational in Nepal, an
e-Tendering system has been developed for local conditions. Department of Roads
(DOR) has an e-procurement system e-submission in June 2007 with WB‟s fund,
and begun to service from Dec. 2007 to cope up with collusion and intimidation. The
system includes mainly bid e-submission. The bidders are allowed to download the
bidding document and they have submit their bid with the scanned copies of
eligibility and qualification requirements along with the bank voucher deposited for
the purchase of bidding document. DOR is processing manually after the proceeding
of bid opening. DOR has achieved contract records of over 200 contract projects,
300,000 USD through the system for road projects under all divisions. Other
procuring entities are in the course of developing their own e-bidding system.
There are several factors that are favorable for the implementation of e-GP in Nepal
at this time, which is as follows:
Government of Nepal has committed to implement e-tendering in big
infrastructure projects in the budget speech, 2009/10.
There is support for procurement modernization from the business sector and
the community.
There is sufficient capability to support most of this program from the Nepali
IT sector.
Nepal is becoming more prepared for the greater introduction of technology
into public administration and service delivery, albeit unevenly across
ministries.
A capable e-Tendering system has already been developed. There are e-GP
systems in Department of Roads, Department of Health and Nepal electricity
Authority,
77
There is growing awareness amongst all stakeholders including bidders,
procuring offices, consultants, policy makers and politicians of the significance
of e-government for the quality of service delivery in Nepal.
Standard bidding documents, procurement guidelines and procedures are
prepared and available to procuring entities.
Common procurement procedures and policies apply across government
agencies as mandated by Public Procurement Act.
An Electronic Transactions Act 2005 has been enacted to promote the use of
electronic documents. It has included provision of Digital Certificates but yet to
set up Digital Authorities.
The issues for e-GP in Nepal are as follows:
The level of experience of e-government development and capacity in the
public sector is generally low,
The level of e-literacy in the public sector is low and constrained by obsolete
management practices,
Educational information related to government procurement is generally not
available to suppliers,
Policy development for public procurement is yet to be developed,
Procurement policy is currently not linked to policies on e-Commerce, e-
Government or industry development,
E-commerce is not widely practiced in the business sector,
Internet infrastructure is still being developed; Access to the Internet in remote
districts is generally difficult.
Power shortages and load shading are common,
Some government ministries and departments are connected to the Internet
and have their own websites, but there is no unifying architecture and no
government intranet,
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The Government has a shortage of IT professionals, PPMO does not have
technical manpower for the successful implementation of e-GP,
Suppliers are unaware or skeptical of procurement practices or reform. Public
perceptions of corruption among suppliers and buyers are widespread,
Procurement is generally not seen as a career and there are no available
comprehensive training courses for procurement managers on strategic
procurement, although some initial training of trainers and procurement
management training programs imparted,
Little formalized training activities exist for private suppliers to participate in
public procurement,
An existing e-Tendering system (www.bolpatra.com.gov.np) is not used due
to proper support system,
There is absence of a government policy statement and a strategy for
implementation of e-GP
The range of people with expertise in e-GP available to the GoN is limited,
PPMO does not have technical manpower for the successful implementation
of e-GP.
During e-procurement readiness assessment, respondents have indicated the
following key priorities for the effective implementation of PPA and PPR:
more comprehensive training for procurement managers, staff and suppliers
on procurement issues and the use of computers;
more resources to consolidate implementation of the Procurement Act and its
regulations;
better quality Internet infrastructure (reliability, bandwidth);
move existing e-Tendering system to a single portal; and
Better consultation between public and private sector and more private sector
participation.
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1.5 Vision, Strategy and Objectives of e-procurement
This strategic policy document for the implementation of e-GP has envisioned that
PPMO as a champion of procurement reform will lead the process and develop
systems and mechanism for the successful implementation of e-GP system in the
country.
In seeking to realize above-mentioned vision, the overall objective of this strategic
policy document is to develop, initiate and institute e-procurement system in the
country which will instill good governance by enhancing fair competition,
transparency, accountability, efficiency, and effectiveness in public procurement.
E-GP is sensitive to the various elements that define organizational success,
including management and leadership culture, regulations, skills and expertise.
Accordingly an e-GP implementation strategy is firstly a management task and
requires coordination and strong leadership as well as consultation and shared
objectives.
Implementation strategies of e-GP will be as follows:
The application of information and communication technology to the
management of procurement will be a key component of procurement reform
Management capacity of PPMO and various stakeholders will be prime
concern for the implementation of e-GP
Systems Design and application shall ensure accessible, integrated and
consistent procurement services addressing business continuity & ownership
Infrastructure & Web Services shall ensure reasonable access to, and quality
of e-services and their sustainable development and maintenance addressing
reliability issues
Private Sector Activation will be prime concern ensuring business value
proposition, considering e-commerce compatibility and enabling the private
sector to both participate and be involved in e-GP
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Components of an E-GP Implementation Roadmap will be as follows:
Management, HR Establish e-GP implementation team,
Regulations & Review management process & policies,
Policy Review Act & Regulations,
Management, Develop HR development strategy
Systems Design, Define implementation phases,
Functionality & Define standard policy,
Standards Develop/update e-GP software
Address system security,
e-GP Address business continuity & ownership,
Strategy
Develop user access policy,
Infrastructure & Ensure narrowband compatibility,
Web Services Consider parallel processes,
Address reliability issue
Implement business awareness strategy,
Private Sector Ensure business value proposition,
Activation Consider e-commerce compatibility
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2. e-GP Implementation: Conceptual Framework
2.1 E-GP software and PMIS Specifications:
PPMO will review current procurement policies to harmonize them with management
practices in the electronic environment. PPMO will also assess existing e-GP
software and develop e-GP system complying with the e-government enterprise
architecture currently under development as part of the e-government strategy.
PPMO will operate a single e-GP framework to ensure consistency across the public
sector. A central procurement website will be created at PPMO and these
capabilities will be gradually released to users. Procurement Management
Information System (PMIS) shall also be developed in parallel with the Internet portal
in a way that integrates the central site and online transactions with procurement
work processes.
2.2 Information security management:
Security management rules will be designed to strengthen confidence, governance
and audit processes. All information recorded and processed in the e-GP system will
be fully secured and protected. For any e-GP processes engaged internally or
through third parties, the system and its management will develop, maintain and
implement an information security management system that conforms with
international standards for information management and takes account of recognized
best practice, including but not limited to asset security, access security, human
resource security, operations management and business application controls,
documentation and script sufficiency and security, physical and online security,
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business continuity, record-keeping and compliance. There must be no outstanding
audit issues that represent material risk to the integrity or security of any project. The
PPMO will indicate in the bidding documents / RFPs the procedures to be followed in
the case of any failure, malfunction, or breakdown of the electronic system used
during the procurement process. The PPMO/ contracting agency will not accept any
responsibility for failures or breakdowns other than in those systems strictly within
their own control. E-GP systems and information security will ensure that secure
records are kept of every process, procedure, transmission, receipt, and transaction
in terms of the content, executing individual and authorizations, time and date. These
records will kept for at least five years after the closing date of the contract and are
made available for audit on request.
The security features incorporated in the application will ensure that all activities are
logged, no unauthorized person has access to data, all sensitive data is encrypted
and system can be restore in a minimal possible time in case of a disaster or system
crash. Electronic signatures will be ensured rather than digital signature. All bids
received against an invitation for bids will consist of electronic signatures and
encrypted at the database level. Further, the login passwords of all the users and the
suppliers will also be encrypted at the database level. There will be two levels of
password verification for the administrator's access. The process validation shall be
so architected that a user cannot view the bid till the date & time specified for the
opening, all the data shall be encrypted and cannot be hacked/misused by anyone
and the bids shall be placed behind a firewall and intrusion detection system for the
protection against unauthorized access and hackers. The backup of the data will be
kept in GIDC.
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2.3 Private Sector Activation:
PPMO will organize consultation, orientation and training program for the business
awareness on e-GP. Business issues will be addressed in consultation with key
major business associations. PPMO will develop a business activation strategy to
address existing government contracted suppliers and non-contracted suppliers. A
formal consultation process with private sector will be established in PPMO.
2.4 Roadmap of the Implementation of e-GP:
Online e-GP services and functions shall be implemented in a phase-wise manner.
Initially, e-GP will be implemented to those public entities which have the volume of
procurement is substantially high including the option of manual bid submission until
the infrastructure i.e. availability of the internet service, band width and reliability
power supply, capacity building of public and private sector gets complete. At the
start, this will be applied to the selected Procuring Entities (PEs) responsible for the
procurement of construction works. The System will be rolled-out gradually covering
remaining procuring entities. The entire public procurement activities shall be
channeled through the e-GP infrastructure in a phased manner. In phase I, e-
tendering component of e-GP will be implemented, which will include activities such
as information service, tender advertising, document down-loads, result disclosure,
bid qualification, bid-up-loads, and bid processing. In phase II, remaining part of e-
GP will be implemented which will include e-contract management, catalogue
purchasing, online transactions, online workflow request for quotations, e-
purchasing, e-reverse auctions, and PMIS. Establish a timetable for the deployment
of e-GP phases will be established that will take account of the managerial, policy,
training, and business issue in the country.
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The sequence of tasks in this optimum process design will (a) facilitate institutional
changes and the modernization of the civil service; (b) promote a learning process
towards e-GP; (c) start simple to complex functions along a controlled development
path; and (d) make faster, less expensive, institutionally sound introduction of e-GP.
E-GP implementation phases are shown as follows:
Request for Quotation Goods and Major districts/ e-Request for
Works Major Procuring Quote (RFQ)
Entities
Information Service
Invitation for Bids
Clarification on bidding
Phase documents
1 Bidding Document
Down-Loads Major Procuring E-Tendering
Works
Bid Up-Loads Entities
Bid Evaluation
Clarification on bids
Letter of intention of
award the contract
Letter of acceptance
Extended
districts, e-Request for
Goods and
Request for Quotation Extended Quote (RFQ)
Works
Procuring
Entities
Information Service,
Invitation for Bids
,Clarification on bidding
Phase
documents, Bidding E-Tendering,
2
Document Down-Loads, Goods E-contracting,
Bid Up-Loads, Bid (including E-contract
Major Procuring
Evaluation , Clarification Ration), Works management
Entities
on bids, Letter of and Consulting Reverse auction
intention of award the Services PMIS
contract, Letter of
acceptance, Signing of
contract ,Contract
management
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The e-Procurement initiative shall be implemented in two phases in designated time
period as shown below considering low capability of ICT infrastructure, volume of
procurement in the PEs The estimated costs of about US$11.5 million are figured
out based on the implementation experiences of other countries in similar
environment to GoN.
Activity Phase I Phase III
head (2010~2013) (2014~2017)
e-Procurement
Objective e-Bidding system
development &
Development
settlement
Terms 3 year 3 year
∙Develop e-Contract, e-
Major Banking, e-Surety,
developing ∙BPR/ISP consulting, Develop Supplier performance Link
activities standard code, procedure, external System, Develop
electronic document ∙Develop e- e-Shopping mall, Develop
Bidding system, Test operation, other systems (stockpile,
User training,(buyer/Supplier) foreign goods,
etc),∙Expand applying
public entities
Applying
400 Over 2,000
public entities
∙Amend procuring
Legal & ∙Set up electronic
laws
Organizational procurement service
∙Expand roles &
issues center
staffs of PPMO
2.5 System access:
System access rules have to be designed to encourage confidence and value for
private sector suppliers. System access should be open, equal and unrestricted to all
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prospective bidders, consultants and the public. Those who want to submit
information or receive online alerts or notifications of amendments or clarifications
are offered an online registration facility. Registration is free of charge.
The principle of single sign-on or single registration will be adopted, which shall allow
bidders/ consultants the multiple use of the same electronic system for different
projects from different parts of the government. The system will be an Internet-based
approach accessible by users through readily available and commonly used browser
software. Downloaded documents will be readable through open standards with a
range of commonly used office software. If specialized software is necessary, this is
also downloadable (e.g. software required reading PDF documents), free of charge
and compatible with commonly used system and office software. Similarly, the
requirements for electronic submissions, where these are provided for, make use of
open standard interfaces with commonly used office software, or the submission
software is made available online from the system as required.
The principle of non-discrimination between paper-based and electronic information
and transactions is, as far as practical, be reflected in the system. The system
performs reliably and securely in time-sensitive, commercial application.
2.6 Advertising
The bid advertising rules will be designed to create transparency and value in the
central site. All tenders will be posted on the central web site. There will not be any
material difference between the paper documents (if any) and those advertised
online. The bidding period is measured from the date of publication on the required
sites / media as required in the regulations. A secure log of these entries shall be
available for audit. The bid advertisements and results disclosures shall not be
restricted except in special security circumstances.
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2.7 Correspondence, amendments, and clarifications
Rules on correspondence, amendments and clarifications shall be designed to
strengthen governance and transparency. All clarifications and amendments of the
bidding documents, as well as any pre-bid conference minutes, are posted
simultaneously onto a bid tracking page of the bid advertising website. Bidders who
have already expressed an interest should be directly informed by the system of any
amendments.
Amendments and correspondence by any official are tracked and recorded by the
system for audit. Systems shall ensure that only authorized changes can be made.
In case of any amendments to the bidding Document/RFP by the Contracting
Authority, the system does not replace the bidding Document/RFP with a new one,
but rather provides such amendment by means of an additional document in line with
the same distribution mechanism as for the bidding Document/RFP. The system
tracks receipt by bidders/consultants when distributing pre-bid amendments and
clarifications online. Online conferencing and chat facilities do not function after the
bid submission deadline.
2.8 Bidding documents
The use of standard bidding documents is required to add value, competition,
confidence and transparency for private sector suppliers. There must be no
difference between electronic and print versions of the bidding documents/RFPs.
The bidding documents use the contract procurement language as the catalogue
standard defining its requirements. The system ensures the integrity of bidding
documents in electronic format, and their online publication. Amendments are
similarly secure and stored with the bidding document.
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2.9 Submission of bids/proposals
The rules for online bid submissions shall be designed to strengthen governance
around the bid management process. Security arrangements shall ensure
confidentiality and integrity of bids/proposals in electronic format. Bids/proposals
submitted online will be virus-scanned by the system before being uploaded and
accepted into the online bid box, and where this causes a bid to be rejected, the
bidder/consultant will be notified immediately by the system.
Online submissions will be received into an electronic bid box and maintained to high
standards of security for long term record-keeping and audit. At no time will
bids/proposals be in unencrypted format. Copies taken and decrypted for bid
evaluation purposes will not affect the integrity of the original record. There must also
be secure procedures to ensure that the time settings are in accordance with
regulations and international time-zone standards. A secure log of these processes
will be made available for audit as required. Bidders/consultants will be allowed to
submit modifications to bids/proposals or withdraw previously submitted
bids/proposals electronically up to, but not after, the time of the bid submission
deadline. Receipt of modification or notice of withdrawal including the date and time
must be acknowledged, and this is also done electronically. The system will accept
only those bids/proposals in electronic format the submission or modification of
which is completed at the time of the bid submission deadline. Receipt of electronic
submissions, including the date and time, must be acknowledged immediately, and
will also be sent electronically. The date and time for the receipt of bids/proposals
will be the same whether submitted electronically or on paper.
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2.10 Public bid opening
Rules for bid opening will be designed to strengthen governance and confidence in
the processes. Electronic and or print bids if submitted will be opened in a public
opening at a location and time (deadline) designated in the bidding documents.
Bidders/consultants who choose to do so may attend the bid opening and will be
invited to sign a record of attendance. Information read out at the bid opening
(prices, offered discounts, and pertinent information) will be simultaneously posted
on a website. A record of the bid opening must be kept in print copy and signed by
individuals authorized to initiate the opening. The bid/proposal opening minutes will
be freely available by means of a website download. Bids/proposals in electronic
format will be protected against access by unauthorized persons until the publication
of the contract award. The PPMO will ensure that, for RFPs, financial proposals in
electronic format shall only be accessed and opened after the evaluation of the
technical proposals.
2.11 Bid evaluation and contract award
Automated evaluation processes will be made operational after successful
implementation of phase I activities. Contract awards will be published online
consistent with bid advertising. The system will show the bids that have been
entered, together with the identification of successful and unsuccessful bidders.
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2.12 Payment
Bidders will have open and free access to all Specific Procurement Notices (SPNs)
and bidding documents. No registration, certification or payment is required. Bidders
will be required to make payment as a pre-condition to be allowed to submit a bid.
For charging, PPMO/procuring entity will accept payments under one of the following
options, at bidders‟ choice: (1) payments online; or (2) payments by any form of
transfer of payment, in which case such time for payment is added to the minimum
time for the submission of bids. The cost of bidding for the supplier will be less than
the cost of paper-based bidding
2.13 Supplementary and archival information
The planning discipline in the procurement system will be strengthened. The
government agencies will be required to define their annual and quarterly
procurement plans. These plans will be posted on a single website in order to add
value that attracts suppliers to the site and enable suppliers to better prepare and
plan their bids. The online submission by all government agencies of plans detailing
scheduled tenders shall be made mandatory.
User-friendly access will be established to all available information and a readily
accessible database and customized information services will be ensured. The
PPMO will develop information requirements regarding to (a) on-line data and
indicators on major procurement operations, (b) automatic delivery, at the request of
suppliers, purchasers and others such as the media, of the information they need
(individualized data, data series, comparisons). PPMO, in consultation with
procurement stakeholders and with reference to international best practice, will
identify supplementary information services to be provided by the system and
develop a service to deliver these through the central site.
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3. Action Areas
3.1 Implementation of NPPSF driven e-GP activities
PPMO has developed Nepal Procurement Strategic Framework - Phase I
(NPPSF/2010-13). The NPPSF/2010-13 will be implemented to improve effective
implementation of Public Procurement Act and its regulation.
NPPSF has identified nine outputs as deliverables and one of them is to develop e-
procurement system. According to NPPSF document, PPMO will install e-
procurement system to enhance the efficiency and transparency in the public
procurement through the implementation of a comprehensive e-GP solution to be
used by all government entities. The system will be implemented in the phased
manner initially putting into action in select lead agencies and will be gradually
rolled-out others covering 400 offices in phase one - NPPSF. The e-GP
Implementation Plan included in the NPPSF is given in Table 1. The milestone
activities identified in the plan are as follows:
Form a high level NPPSF Coordination Committee chaired by Chief Secretary
including secretaries of Ministry of Finance, Ministry of General
Administration, Ministry of Physical Planning and Works, and PPMO, and
Financial Comptroller General and PPMO secretary as member secretary;
Make policy decision to implement e-GP;
Institute a Core Task Force (CTF) in PPMO consisting of representatives from
PPMO, HLCIT, GIDC, GIDC, MOST, MOHP, NA, etc.);
Adopt e-GP implementation policy based on phase wise implementation
modality to be developed by CTF. Break down e-GP services and functions
into smaller steps to match the resources, development and the business
model and finalize activities to be implemented in a phased manner;
Provide policy guide through CTF for e-GP development and implementation;
Hire international and local ICT experts to design, develop and launch e-GP;
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Review the existing e-submission system of DoR, MoHP, and others, if any;
Finalize systems requirement, and systems design for upgrading or
integrating and develop or upgrade the existing e-GP system based on single
portal through CTF;
Set-up e-GP Section/Division in PPMO to develop guidelines and manuals, to
assess infrastructure and procurement reporting status of PPMO and select
PEs and to launch e-GP;
Establish a pool of five local consultants including Database, Web, System
technical and Procurement for the sustainability, operation and maintenance
of the system;
Develop PMIS linking with e-GP to support regulatory activities;
Train PPMO officials to support e-GP implementation;
Develop human resources in e-GP by organizing observation visits, high level
seminars/workshops, and comprehensive training programs for trainers, PEs,
stakeholders. Also organize specialized training in the management and use
of systems as they are developed to raise levels of expertise for applying e-
procurement;
Conduct programs for awareness and advocacy for e-GP implementation;
Develop Systemic Qualities Standards for reliability, security, portability,
communicability and management;
Develop Procurement Market Standards for supplier registries and
catalogues, market networks and communities developed;
Enable Private sector to both participate and be involved in e-GP;
Prepare baseline indicator to measure the outcomes of e-GP implementation;
Establish learning process to explore and adopt opportunities for good/best
practices towards e-GP.
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3.2 e-GP Implementation Policies Guidelines
The implementation of e-GP will be based on the following policy guidelines:
Electronic Government Procurement is a prime concern and development
agenda of GoN. The application of information and communication technology
to the management of procurement will be a key component of procurement
reform. This Strategic Policy Document has been adopted by the GoN to
develop, initiate and institute e-procurement system in the country, which will
ultimately be helpful not only to minimize collusion and intimidation practices,
but also to improve efficiency, transparency, and competition in public
procurement system;
PPMO shall lead the process and develop systems and mechanism for the
successful implementation of e-GP system in the country. For the successful
implementation of e-GP, the management capacity of PPMO and various
stakeholders will be strengthened and systems design and application shall
ensure accessible, integrated and consistent procurement services
addressing business continuity & ownership. Infrastructure & Web Services
shall ensure reasonable access to, and quality of e-services and their
sustainable development and maintenance addressing reliability issues.
Conceptual Framework for e-GP implementation, which has been mentioned
in section 2 of this document, will be taken into consideration for the
development and design of e-Procurement Systems. Private Sector
Activation will be prime concern of PPMO ensuring business value
proposition, considering e-commerce compatibility and enabling the private
sector to both participate and be involved in e-GP;
PPMO will disseminate e-GP Implementation Plan and hold meetings and
round-tables to ensure familiarity by all stakeholders. PPMO will implement
and develop a timetable for their phased introduction. The e-GP system will
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be introduced by publishing names of e-GP implementing government
agencies on Gazette on the recommendation of PPMO;
Sufficient resources will be provided mobilizing internal as well as
development partners‟ resources for the implementation of NPPSF Phase I
including e-GP activities;
The e-GP system will be based on single portal and will be implemented in
the phased manner and will cover 400 offices in three years time.
3.3 NPPSF Coordination Committee:
The following High Level NPPSF Coordination Committee has been formed to
coordinate and expedite successful implementation of NPPSF including e-GP:
Chief Secretary or Secretary nominated by Chief Secretary Chair person
Secretary, OPMCM Member
Secretary, Ministry of Finance Member
Secretary, Ministry of Physical Planning and Works Member
Secretary, Ministry of General Administration Member
Financial Comptroller General, FCGO Member
Secretary, PPMO Member -Secretary
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Table 1
e-GP Work-Plan: Milestone Activities, Time-frame for Implementation
Time-Frame for Target: FY and Trimester
Activities U Targ FY 2010/11 FY2011/12 FY 2012/13
nit et
1 2 3 4 5 6 7 8 9
Management
Government decision to implement % 100 100
e-GP
Form high level Coordination Team % 100 100
Establish core task force (CTF) % 100 100
Develop & adopt e-GP % 100 100
implementation policy
Supervise & provide policy guide % 100 50 50
for e-GP development &
implementation
System Development
Hire local ICT expert % 100 20 20 20 20 20
Review existing e-submission % 100 100
system
Develop /upgrade existing e-GP % 100 33 33 34
system
Carry out system audit and testing % 100 100
e-GP Implementation
Establish e-GP section % 100 100
Develop guidelines and manuals % 100 50 50
Assess infrastructure and No 400 200 200
procurement reporting system of
PPMO & selected PEs
Launch e-GP % 100 100
Hire a pool of 5 local consultants to % 100 25 25 25 25
operate, maintain & sustain e-GP
Link e-GP with PMIS % 100 33 33 34
Monitor & evaluate e-GP % 100 16 16 16 16 18 18
Human Resource Development
Organize observation visits No 3 1 1 1
Conduct high level 6 3 3
seminars/workshops
Conduct TOT No 10 5 5
Conduct training for PEs No 50 25 25
Conduct training for stakeholders No 100 25 25 25 25
Conduct awareness/ advocacy No 20 5 5 5 5
workshops
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