News
New procurement guidelines coming but IMF-prescribed law hit by delays
View(s):By Namini Wijedasa
New Procurement Guidelines (PG) 2024 to replace the outdated 2006 version that continues to be used in government purchasing are now with the Cabinet for approval, but the proposed Public Procurement Law, which is one of the 16 priorities for fighting corruption identified under the IMF programme, is still in the pipeline.
The government undertook to pass the Public Procurement Law by December 2024, the same deadline to push the Proceeds of Crime Act through Parliament (the latter was extended from April to November this year). There are fears of further delays now, owing to elections. A law generally precedes guidelines, which are prone to (and have been many times in the past) being changed by the Cabinet.
Sri Lanka currently lacks a formal legislative basis for procurement, the IMF’s Governance Diagnostic Report states. There is no public procurement law. All government procurement must be carried out in line with Cabinet-approved guidelines, the Procurement Guidelines (PG) 2006, which set out various procurement methods, bidding procedures, and rules for awarding contracts. Along with the PG, detailed manuals for the procurement of goods and works and standard bidding documents have also been issued.
The PG 2024 produced by the National Procurement Commission (NPC), a copy of which The Sunday Times has seen, states that its purpose is “to establish public procurement procedures to ensure adherence of Value for Money (VFM) through effective, efficient and economic use of resources, which requires evaluation of relevant costs and benefits along with non-priced attributes and/or life cycle costs as appropriate that may not necessarily represent the price alone with integrity, fair, equitable, transparent, competitive and accountable procurement process by Government institutions…”
This pertains to the procurement of goods, works and non-consulting services and shall be used in conjunction with financial regulations and/or any laws pertaining to public finance management. A procurement manual has also been prepared.
The PG 2024 states that objectives of the procurement process are to safeguard, apart from value for money, the principles of public procurement, optimum use of budgetary resources, adherence to prescribed standards, specifications, rules and regulations, competitiveness and cost-effectiveness and the provision of fair, equal opportunity for eligible and interested parties to participate in procurement.
Other objectives are to ensure expeditious execution of works, delivery of goods, and provision of non-consulting services; compliance with laws, regulations and other relevant obligations; use of the electronic government procurement system; promotion of social wellbeing and sustainable development through sustainable procurement practices; enhancement of stakeholder trust and confidence in the procurement process; and maintenance of consistency in application of procurement procedures across procuring entities.
Corruption vulnerabilities in public procurement remain high, the governance report has said: “The absence of a public procurement law creates ambiguity in the legal framework and has contributed to high-levels of political engagement in the selection of procurement winners, poor contract management, limited transparency, and a lack of oversight of procurement processes and outcomes.”
Additional issues are generated by poor procurement planning, reliance on non-competitive means for contract awards, inadequate competition, and inconsistent attention to contract performance and the enforcement of contract terms, it states. The lack of information on beneficial ownership of companies increases the risk of conflict of interest in the awarding of contracts.
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