Established in 2003, following the enactment of the Public Procurement and Disposal of Public Assets Authority, (PPDA) Act, the PPDA has over the years spearheaded its crucial role as the principal regulatory body for public procurement and assets disposal in Uganda. 1
The PPDA Act has been amended twice, to wit; the PPDA (Amendment) Act, 2011 and the PPDA (Amendment) Act, 2021. These amendments came into force on 3rd March, 2014 and 1st July 2021 respectively. The amendments have also introduced provisions and changes, which have strengthened and enhanced of the role of PPDA in the execution of its regulatory mandate.
The PPDA Regulations 2023 In addition to new provisions, the amendments also necessitated the revision of the PPDA Regulations that had been issued in 2014 for central government entities, and 2006 for local government entities. In line with Section 96 of the PPDA Act, the Minister of Finance, on the recommendation of the Authority, issues regulations for the better carrying out of the objectives and functions of public procurement and public assets disposal in government.
It is against this background that after the requisite extensive consultations, new regulations were developed and gazetted on 8th December 2023, and became applicable across all government agencies effective 5th February 2024.
The objectives of the new regulations:
- To harmonize the PPDA Regulations. The Government will henceforth use the same Regulations for both Central Government and Local Government Entities. The Local Government (PPDA) Regulations of 2006 were therefore revoked;
- To create efficiency in the procurement process through reduction of procurement lead times;
- To promote the use of procurement as a social- economic tool and to practice sustainable procurement. In other words all public procurement and disposal activities must now be subjected to scrutiny for Environmental, Social and Health Safeguards (ESHS); and
- To simplify procurement and reduce the cost of doing business without compromising quality.
- To provide for Procuring and Disposing Entities sourcing for equipment directly from manufacturers. (Aviation equipment, medical equipment and agricultural and industrial equipment)
- Copies of the PPDA Regulations 2023 are available at the UPPC outlets and on the PPDA website.
Environment, Social and Health Safeguards (ESHS) in the public procurement process.
The amendment of the PPDA Act in 2021, introduced section 61A which provides for Environment, Social and Health Safeguards (ESHS) in the public procurement process. This is an area that was hitherto not considered important in public procurement. The Act now provides that “a procuring and disposing entity shall, for each procurement, take into account environmental protection, social inclusion and stimulating innovation, as may be prescribed”.
And in line with its mandate, under Section 7 of the PPDA Act, the Authority had also earlier in 2019, revised the Standard Bidding Document for use by all Government Procuring and Disposing Entities (PDEs) for the procurement of works. The revision incorporates ESHS for the procurement of infrastructure projects like roads, water and sanitation systems, building works, and bridges.
With respect to environment safeguards, the bidding documents now provide for measures to mitigate the impact on habitats, land use and natural resources of the localities where the projects are being undertaken. Thus, PDEs are expected to work with contractors to identify and put in place measures to address issues of pollution (water, air, soil), plus maintenance of flora and fauna. They are also expected to prudently manage waste disposal. Deviation from these requirements is a breach of the law by both the contractor and the accounting officer.
Electronic Government Procurement, e-GP
On 1st July 2021, the Government rolled out the Electronic Government Procurement System, also known as the e-GP in 12 selected entities as a pilot project.
The e-GP is a product of a number of reforms the Government has undertaken in Public Finance Management over the years. It is also in line with the Government framework for the implementation of the e-governance policy in various sectors including public procurement.
The main thrust of the e-GP is that it is web-based tool used to carry out public procurement and public assets disposal. It uses information and communication technology (ICT) to conduct the end-to-end government procurement planning, bidding, evaluation, award, contract management, invoicing and payment to providers.
To-date, March 2024, a total of 36 entities are enrolled on e-GP. In the next financial year 2024/2025 a total of 250 entities will be enrolled and by the end of 2025/2026, all government of Uganda procuring and disposing entities will be on e-GP.
The e-GP system was developed to address the problems inherent in the semi-automated (largely paper-based) procurement system. It will thus enhance governance through transparency and accountability and economic development through competitiveness and improved business climate.
Preference and Reservation Schemes in Public Procurement.
In 2014, the Government of Uganda enacted the Buy Uganda Build Uganda, (BUBU), policy. The main thrust of BUBU as per its stated mission is “to support the production, purchase, supply, and consumption of local goods and services”. The policy recognises the role of the PPDA in the realisation of these commitments. The policy takes note of the Preference and Reservation schemes developed by the PPDA in 2018 to favour local providers. These schemes cover specific geographical areas and particular eligible sectors as specified in Section 59 of the PPDA Act.
A Reservation Scheme, for instance, serves to ring-fence procurement opportunities for local providers. It is a form of affirmative action that increases the input of local labour, goods and services in the procurement of public sector projects, goods and services.
This is how it works. Once a particular sector within a given geographical area has been specified as eligible for a reservation scheme, eligible bidders exclusively within that locality are allowed to participate in the procurement process. The locals compete against each other for the government agency to obtain the best offer. The idea behind is to promote the use of local expertise and materials, participation of local communities, and the application of specific technologies. In this way, in many cases, local manpower is deliberately protected from competition which under the normal procurement process would probably see jobs going to ‘foreigners’ or people from other localities.
The Reservation Scheme is also applied by threshold. In this case, the value, (in monetary terms), of a project is the primary consideration. Foreigners are barred from participating in the procurements if the value is within these ranges. These include:
- road works worth Uganda Shs45 billion and below,
- other public works worth Shs10 billion and below,
- procurement of supplies worth Shs 1billion and below,
- consultancy services worth Shs1 billion and below
- And non-consultancy services worth Shs 200 million and below.
Under a Preference Scheme, both local and foreign bidders are allowed to submit bids or proposals. However a margin of preference is applied by adding a specified percentage to a financial bid or proposal price to a foreign bidder thereby raising their bid price. In this way, the local firms will have an advantage over the competing foreign firms.
In conclusion, as the public procurement and public assets disposal arena, continues to undergo major changes, the Authority is well poised to manage all emerging trends. This is in line with the PPDA mission, to Promote Service Delivery through Effective Regulation of the Public Procurement and Disposal System.
By: Benson Turamye