PROJECT COMPLETION REPORT INSTITUTIONAL SUPPORT FOR GOOD GOVERNANCE PROGRAMME -PHASE 1

Transcription

1 PROJECT COMPLETION REPORT INSTITUTIONAL SUPPORT FOR GOOD GOVERNANCE PROGRAMME -PHASE 1 May 2010

2 TABLE OF CONTENTS List of Figures List of Tables... iii... iii List of Annexes... iii ACKNOWLEDGEMENT... iv 1.0 BACKGROUND FINANCIAL PERFORMANCE MAJOR ACHIEVEMENTS UNDER THE PROGRAMME Preparation of Medium Term Strategy Preparation and Revision of Standard Bidding Documents and Guidelines Development and Implementation of System for Checking and Monitoring Procurement activities in PEs Development of Public Procurement Anti-Corruption Strategy Development and Implementation of Procurement Management Information system Training of PPRA Staff Establishment of PMUS in PEs System of Procurement of Common Use Items Restructuring of Government Stores Department Professionalization of Procurement Procurement audits and Assessment of the Implementation Of Audit Recommendations Training of Procurement Management Staff OECD-DAC Joint Venture Meeting Computerisation of PPRA s Internal Systems Publication of Procurement Journal Preparation for Implementation of E-Procurement Systems Compilation of Average Prices and Establishment of Price Base for Common Use Items FUTUTE OUTLOOK CONCLUSION ii

3 LIST OF FIGURES Figure 1 Current Organisation Structure of PPRA... 3 Figure 2 Revised Organisation Structure of PPRA... 4 Figure 3 Diagrammatic Presentation of SCMP... 6 Figure 4 A cartoon depicting the problem of corruption in public procurement... 7 Figure 5(a) Percentage of Red flags detected... 8 Figure 5(b) Percentage of Red flags detected in each procurement phase... 9 Figure 6 Signing of MOU between PPRA and PCCB Figure 7 PMIS Architecture Figure 8 A cartoon narrating the Problem of High Transaction Costs Figure 9 PPRA Audit Team Assesses the Quality of Works of a vented drift along Miangula-Chombe Road in Sumbawanga District Council Figure 10 A group photo of participants in one of the Training in Arusha Centre Figure 11 A cross section of participants during the OECD- DAC JV meeting Figure 12 Cover pages of Tanzania Procurement Journal and Supplement Figure 13 A group photo of participants in e-procurement workshop Figure 14 A Journey Towards Improving the Procurement System in the Country Figure 15: Existing Office Building in PPRA s Plot at Kurasini LIST OF TABLES Table 1 Major Challenges Towards Establishing Corruption- Free Procurement System... 7 Table 2 Strategic Interventions in Anti-Corruption Strategy... 9 Table 3 Compliance and Performance Indicators LIST OF ANNEXES Annex 1 Breakdown of Expenditure under the Programme Annex 2 Executive Summary of Medium Term Strategic Plan Annex 3 Red Flag Checklist Annex 4 MOU Between PPRA and PCCB Annex 5 List of Equipment Procured under the Programme Annex 6 List of Staff who Attended Training Under ADB Funding Annex 7 Extract of Executive Summary of e-procurement Study Report iii

4 ACKNOWLEGEMENTS The birth of the Public Procurement Regulatory Authority (PPRA) on 1 st May 2005 marked an important milestone in the regulation of public procurement in Tanzania. Both the Government and the public at large expected some notable changes in the management of public funds through effective and efficient public procurement systems. However, by all accounts, PPRA had a very humble beginning indeed. With little financial muscles, inadequate human resources as well as few material resources to properly exercise its mandate, PPRA could hardly kick-start. It is for this reason that the coming of Phase I of the Institutional Support Programme for Good Governance (ISP I) was received with jubilation by not only the Government of the United Republic of Tanzania but also the whole citizenry. PPRA Management, on behalf of the Board of Directors, would like to take this opportunity to express our sincere gratitude to the African Development Bank (AfDB) for its timely financial support to our organisation and the entire public procurement fraternity. ISP I has been very instrumental in laying a strong foundation for effective and efficient public procurement systems. As it is clearly explained in this report, ISP 1 has benefited many areas of public procurement systems in Tanzania including but not limited to setting up of PPRA offices, initial recruitment of PPRA staff and establishment of various operational tools for PPRA. Other benefited areas include strengthening of the Public Procurement Appeals Authority (PPAA), professionalization of procurement as well as establishment of two important institutions namely; Government Procurement Services Agency (GPSA) and the Procurement and Supplies Professionals and Technicians Board (PSPTB). It is difficult to imagine how such and other important projects could have been successfully accomplished without the support of AfDB. It is our hope that the Bank will continue with its support to our course through the much awaited Phase two of ISP. PPRA is committed to ensuring presence of an enabling environment for smooth execution of ISP II. It is our hope that ISP II will go a long way to ensuring completion of all outstanding activities and also starting of new ones. Special thanks should go to the Board of Directors of PPRA for its oversight role which has been a proper guide to management. We also would like to thank PPRA staff for their tireless efforts in performing activities funded by the Bank. Last, but by no means least, we would like to express our appreciation to all procuring entities and other stakeholders for their cooperation. It is our belief that all have, in one way or another, benefited from ISP I and are now looking forward to ISP II. iv

5 1.0 BACKGROUND The ISP for Good Governance was approved by the African Development Bank on December 2004 and was signed on 11 th February The Grant Protocal entered into force on 30 th March, The project aimed at contributing to the development of a public procurement system that is transparent and professional, thereby making a significant contribution to a number of key Government objectives. First, contributing to the improvement in public expenditure management as it is estimated that in Tanzania, about 70% of the Government's budget is spent on procurement. Secondly, by contributing to sound expenditure management, public procurement ultimately the project was aimed at contributing to the fulfilment of the key objective of poverty reduction. Third, public procurement plays a significant role in private sector development, as the Government is a major consumer of private sector goods and services. Fourth, given the high level of public expenditure that is disbursed through the procurement process, a transparent public procurement system is a fundamental requirement in the fight against corruption. Fifth, many of Tanzania's development partners, including the Bank Group, are channelling their support through direct budget support. An effective procurement system was seen therefore as a key tool for the Government to demonstrate to its partners its fiduciary compliance and prudent management of scarce public resources. The startup of the project was not very smooth. There were delays in the startup of the project and PPRA received its first disbursement of funds in December 2006, almost a year later from the envisaged start of the project. The delay was caused by lack of staff in PPRA to implement all the activities under the programme. The organization structure of PPRA was approved by the Ministry of Finance in February, 2006 and the process of recruitment of staff started thereafter and was completed around October PPRA was thus able to fully implement the programme in January 2007 after receiving its first disbursement of funds from the Bank. It is because of this delay that the Bank granted an approval for the project completion date from 31 st December 2008 to 31 st December This report therefore summarizes major achievements under the programme since January 2007 up to April 2010 which is the end of the project. 2.0 FINANCIAL PERFORMANCE PPRA received Tshs. 6,284,653, which represented 83% of all funds set aside for the programme 1. By the end of the programme PPRA had spent a total of Tshs. 6,057,546, was spent to finance various activities under the programme leaving a balance of Tshs. 227,107, Details of the expenditure are shown in Annex 1. 1 Throughout the programme PPRA had operated with an understanding that the above amount represented 100% of the funds under the programme. It was during the review mission of November 2009 when it was revealed to us that the figure represented 85% of the project funds. 1

6 3.0 MAJOR PHYSICAL ACHIEVEMENTS UNDER THE PROGRAMME 3.1 Preparation of Medium Term Strategy PPRA, through the programme, engaged a consultant to develop a Medium Term Strategic Plan (MTSP) for a five year period, 2009/ /14. The MTSP and its Monitoring and Evaluation Plan were prepared and approved by the Board of Directors in December, A new vision and mission of PPRA were adopted as shown in Box 1 Box 1: Vision and Mission of PPRA The vision of PPRA for the Tanzanian society is: A public procurement system and culture which are characterised by openness, transparency, effectiveness, efficiency and the provision of value for money. The vision of PPRA is: To become a world class model, effective and sustainable public procurement oversight body. The mission of PPRA is: To foster and promote value for money in public procurement for national development. The motto of PPRA is: Promoting Value for Money in Public Procurement. In line with the articulated vision and mission of PPRA, the MTSP, whose executive summary is attached as Annex 2, is designed to address the following critical strategic issues: (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) (k) Linking of public procurement management to national economic growth and poverty reduction objectives; Linking of public procurement management to national anti corruption drive; Increasing procuring entities (PEs) compliance with the Public Procurement Act (PPA) 2004, Regulations and PPRA tools; Increasing PE and Bidders proactive demand for and responsiveness to PPRA services; Harmonization and rationalization of the National Public Procurement, Legal and Regulatory Regime; Harmonization and rationalization of and advocacy for the procurement complaints handling system; Professionalization of the procurement function; Deepening citizenry appreciation of the value for money in public procurement; Improvement of PPRA s operational and outreach capacity; Ensuring PPRA s financial capacity and sustainability; and Fostering PPRA networking and partnering In order to implement the MTSP, PPRA critically reviewed its organization structure in which it was found that there was need to restructure some divisions, establish zonal offices and increase the staffing levels. The old organization structure shown in Figure 1 has now been replaced by the new structure shown in Figure 2 which shall be implemented with effect from July The staffing levels shall increase from the current 51 to 142 with 42 being posted to the zonal offices. 2

7 BOARD OF DIRECTORS CHIEF EXECUTIVE OFFICER INTERNAL AUDIT UNIT LEGAL UNIT PROCUREMENT MANAGEMENT UNIT DIVISION OF FINANCE AND ADMINISTRATION DIVISION OF CAPACITY BUILDING AND ADVISORY SERVICES DIVISION OF MONITORING AND COMPLIANCE DIVISION OFINFO INFORMATION TECHNOLOGY Finance and Accounts Section Administration n and Human Resources Section Guidelines Development and Dissemination Section Research and Documentation Section Training and Advisory Services Section Investigations and Procurement Audits Section Contract and Performance Audits Section Systems and Network Administration Section Data Base Administration Section Figure 1: Current Organisation Structure of PPRA In line with PPRA s new organization structure, four zonal offices shall be established to monitor procurement processes of Local Government Authorities (LGAs), Regional Administrative Secretariats and Parastatal Organisations whose head offices are outside Dares-Salaam. All Ministries, Agencies and Independent Departments (MDAs) together with Parastatal Organisations with head offices in Dar-es-Salaam shall be monitored from the PPRA s head office. The distribution of the four zones and the location of the zonal offices has taken into account convenience of movement within the zone and the number of PEs to be monitored. The proposed zones are as follows: (a) Coastal zone to monitor procurement of 43 PEs located in Dar-es-Salaam, Coast, Lindi, Mtwara, and Morogoro Regions. Its head office shall be in Dar-es-Salaam. The Zonal Services Manager shall also be stationed in the office of the Coastal Zone. (b) Lake Zone to monitor procurement of 52 PEs located in Mara, Mwanza, Tabora, Shinyanga, Kagera and Kigoma Regions. Its office shall be in Mwanza (c) Northern Zone to monitor procurement of 43 PEs located in Arusha, Kilimanjaro, Tanga and Manyara. Its office shall be in Arusha. (d) Central and Southern Zone to monitor procurement of 49 PEs located in Iringa, Rukwa, Mbeya, Ruvuma, Singida and Dodoma. Its office shall be in Iringa The zonal offices shall be headed by Assistant Zonal Managers who shall report directly to the Zonal Services Manager. The proposed zonal offices shall be adequately equipped to enable them discharge their functions effectively. In each zone, it is proposed to establish a training and data entry centre which shall be used for training of PEs staff and for practical sessions of preparation of procurement plans and reporting progress on procurement using the Procurement Management Information System. 3

8 BOARD OF DIRECTORS CHIEF EXECUTIVE OFFICER INTERNAL AUDIT UNIT DIVISION OF LEGAL AND PUBLIC AFFAIRS PROCUREMENT MANAGEMENT UNIT Legal and Secretariat Affairs Section Public Relations Section DIVISION OF CORPORATE SERVICES DIVISION OF CAPACITY BUILDING AND ADVISORY SERVICES DIVISION OF MONITORING AND COMPLIANCE DIVISION OF INFORMATION SYSTEMS Planning and Coordination Section Finance Section Guidelines Development and Dissemination Section Research and Documentation Section Monitoring and Evaluation Section Contract Performance Section Systems Support and Administration Section Systems Development and Maintenance Section Administration and Human Resources Section Training and Advisory Services Section Investigation and Anti-Corruption Section NORTHEN ZONE LAKE ZONE Zonal Services Section COAST OASTAL AL ZONE CENTRAL AND SOUTHERN ZONE Figure 2: Revised Organisation Structure. 3.2 Preparation and Revision of Standard Bidding Documents and Guidelines Under the programme, five standard bidding Documents (SBDs) and a procurement manual have been prepared by PPRA Staff. These SBDs include: a) SBD for Procurement of Large Works; b) Guideline for Conducting Negotiations; c) Standard Request for Proposal for Selection and Employment of Procurement Agents; and d) Standard Agreement for Contracting out Procurement Functions to another Procuring Entity. Also under the programme, SBDs for procurement of Smaller Works Contracts and Standard Invitation for Quotation for Minor Works have been revised. Further, a consultant was also engaged to translate FIVE SBDs into Kiswahili as shown below: a) Standard Bidding Documents for Procurement of Smaller Works Contracts; b) Invitation for Quotations for Procurement of Minor Works; c) Invitation for Quotations for Procurement of Goods; d) Invitation for Quotations for Procurement of Non-consultancy Services e) User Guide for Standard Bidding Documents for Procurement of Smaller Works Contracts; and 4

9 f) Evaluation Guidelines for Evaluating Invitation for Quotations for Procurement of Works, Goods and Non-consultancy Services. The documents have been discussed and accepted by PPRA and are due for dissemination. The programme also facilitated the translation of seventeen (17) Procedural Forms into Kiswahili language as follows: a) Letter for appointment of tender board chairperson/members/secretary; b) Procurement requisition - submission to procurement management unit c) Request for approval of procurement/selection method - submission to Tender Board d) Request for approval of pre-qualification document/expression of interest and notice - submission to Tender Board e) Request for approval of bidding document/request for proposal and bid notice/shortlist - submission to Tender Board f) Request for approval of addendum to bidding document/request for proposal - submission to Tender Board g) Minutes of pre-bid meeting; h) Record of receipt of bids; i) Record of Bid/Proposal Opening; j) Membership of evaluation committee - submission to Accounting Officer; k) Request for approval of evaluation report and recommendations - submission to Tender Board; l) Membership of negotiation team - submission to Tender Board; m) Request for approval of negotiation plan- submission to Tender Board; n) Record of negotiations; o) Request for approval of negotiations - submission to Tender Board; p) Request for approval of contract award recommendations - submission to Tender Board; and q) Request for approval of contract amendments - submission to Tender Board 3.3 Development and Implementation of System for Checking and Monitoring Procurement Activities in PEs The objective of the System for Checking and Monitoring Procurement Activities (SCMP) in PEs is to collect procurement information from all PEs for the purpose of monitoring their compliance with the Public Procurement Act and regulations made under it. The system was developed before the start of the project, but has been subsequently disseminated using project funds. As of the end of the programme, 884 staff from 326 PEs were trained on how to use it. Under the system, which is diagrammatically shown in Figure 3, every PE is required to prepare at the start of each financial year, an annual procurement plan a copy of which is submitted to PPRA as a basis for monitoring the procurement activities and a source for various procurement statistics in the country. The PEs are then required to submit periodic reports to PPRA on the implementation of the annual procurement plan. Based on the submitted reports, selected PEs are visited to verify the submitted information, assess the implementation of the system and provide support where it is needed. A total of 54 PEs were visited under this arrangement which included 36 MDAs and 18 LGAs. The visits had a significant impact and contributed to the compliance of PEs with a remarkable improvement in compliance levels. 5

10 System for Checking and monitoring Procurement activities PPRA Annual Procurement plans Monthly reports on Procurement carried out Procurements initiated as per plan Reasons for Procurements not initiated Procurements completed attach procurement report as per developed Monitoring Checklist and Reporting Tool Ongoing contracts and problems if any Completed contracts attach execution report as per MCRT Auditing of Procurement Checking and verifying records submitted by PES Random check with bidders (and other stakeholders?) on their views on conduct of certain tenders Computation of CPIs 35 Procuring Entities Figure 3: Diagrammatic presentation of the SCMP. 3.4 Development of Public Procurement Anti-Corruption Strategy PPRA embarked on a task of preparing an anti-corruption strategy in public procurement in order to assist it and the Government at large, to minimize corruption in public procurement and enable it to monitor and measure the level of corruption by using baseline indicators. The development of anti-corruption strategy was aimed at tackling the problem of corruption in public procurement as depicted by a cartoon in Figure 4. The development of the strategy was done in two phases, the first phase was to assess the state of corruption in public procurement and the second phase was to develop the strategy to address the weaknesses identified in the first phase. The assessment of corruption in public procurement in the country was carried out with a view to: creating a common understanding of the main challenges facing Tanzania in the fight against corruption in public procurement and its findings to be the basis for developing the anti-corruption strategy in public procurement. The assessment concluded that Tanzania has come a long way in its efforts to prevent and combat corruption in public procurement, and has made major achievements in the following areas: a) Setting up of a sound legal and regulatory framework for fighting corruption in public procurement; b) Growth of PPRA to become a fully functional oversight body and a key player in monitoring and ensuring compliance with the legal framework thereby limiting opportunities for corruption; c) Improved capacity of the Prevention and Combating of Corruption Bureau (PCCB) to investigate and prosecute cases of corruption; and 6

11 d) Introduction of construction sector initiatives in public procurement thus paving the way for much needed innovative approaches to enhancing transparency and accountability in the procurement process. Figure 4: A cartoon depicting the problem of corruption in public procurement. Despite the achievements, the assessment concluded that in all areas, there were still some major challenges towards establishing a corruption-free public procurement system. These challenges are presented in Table 1. Table 1 : Major Challenges Towards Establishing Corruption-Free Procurement System Desired situation A sound and efficient oversight framework Integrity of public officers Integrity of bidders and suppliers Effectiveness of control and audit Challenge PPRA is poorly equipped to address cases of corruption PCCB has limited capacity to handle corruption in procurement Collaboration between PCCB and PPRA remains unexplored in certain areas Anti-corruption safeguards in the procurement process are insufficient Low salaries undermines incentive to refrain from corruption Current Code of Ethics has limited impact Public officers engaging in corrupt practices are rarely sanctioned Bidders awareness of rights and responsibilities in the procurement process is low Bidders no-bribery commitment has limited effect Administrative sanctions are rarely applied Procurement audits do not adequately address risks of corruption Internal audits do not support external procurement audits 7

12 systems Accounting officers are unable to make informed procurement decisions Civil society involvement in monitoring corruption in procurement is limited Efficiency of complaint review mechanism Bidders do not use their right to complain Excessive time spent on the stages of appeal Accounting officers do not act as first line of appeal PPRA s role as second tier creates conflict of interest Inadequate use of remedies The assessment came up with a checklist consisting of 50 red flags for detecting the likelihood of corruption. The objective of the Red Flag Checklist (shown in Annex 3) is to provide a tool for PPRA to collect information about possible symptoms of corruption in the procurement carried out by PEs in Tanzania. PPRA shall use the Red Flag Checklists to monitor the extent of corruption in procurement over time, in order to be able to swiftly address areas generally found to be prone to corruption in the procurement system. The Red Flag Checklist will also serve as a tool to address corruption at the level of the individual PE. It is important to note that a detected red flag is not in itself evidence of corruption. However, the higher the number of red flags detected, the higher the likelihood of corruption. Accordingly, if a high number of red flags is detected, PPRA will consider initiating further investigation of a particular procurement process or take other measures to address the procurement case. PPRA has started to apply the Red Flag Checklist in all procurement audits carried out starting from the financial year 2009/10. For each procurement sampled for auditing, a Red Flag Checklist shall be completed by the auditor as part of his or her auditing of the various phases of the procurement. After the audit, analysis will be made to determine the risky areas and mitigation measures will be taken to address the risks identified. The red flags were tested in the procurement audits carried out between February-March Figure 5(a) illustrates the percentage of red flags detected in each of the 90 procurement processes that were audited. Figure 5(a). Percentage of Red flags detected As can be seen from Figure 5(a), in 24 of the 90 cases between 0-10 percent of red flags were detected. In 25 of the cases percent of the red flags were detected. In 19 of the cases percent of the red flags were detected. In 21 of the cases percent of the red flags were detected. And in 1 case more than 40 percent of the red flags were detected. 8

13 Figure 5(b) illustrates the percentage of red flags detected in each of the three procurement phases in the 90 procurements processes. The results show that 15 percent of all possible red flags were detected in all of the 90 procurements in the pre-bid stage. 14 percent were detected in the evaluation and award stage, and 30 percent of all red flags were detected in the contract management. It can therefore be concluded that there is a higher likelihood of corruption during the contracts management stage, than in the other two stages. Figure 5(b) Percentage of Red flags detected in each procurement phase Analysis all red flags in the 90 procurement processes indicates existence of 728 yeses equivalent to 19 percent of all cases. If the red flags are taken to measure the extent of existence of corruption, then it can be concluded that in the 90 procurement processes that were audited by PPRA, the possibility of existence of corruption was on the lower side. The challenges identified in the assessment report were addressed by the Anti-corruption Strategy for Public Procurement in Tanzania. The developed anti corruption strategy in public procurement is not a stand-alone document, but is a procurement sector-specific contribution to the national endeavours to curb corruption, led by the PCCB and its Enhanced National Anti-Corruption Strategy and Action Plan II (NACSAP II). The Strategy divides its interventions into four different headings: Prevention, detection, investigation, and enforcement as shown in Table 2. In this way, the interventions proposed in the Strategy together cover all the aspects commonly perceived to be preconditions for an effective anti-corruption framework for public procurement. Overall anticorruption interventions in public procurement Interventions to prevent corruption in public procurement Table 2: Strategic Interventions in Anti-corruption Strategy S/N Strategic Intervention 1.1 Establish common ground for collaboration between oversight bodies. 1.2 Create operational framework for oversight collaboration. 1.3 Institutionalise leadership dialogue between oversight bodies. 1.4 Strengthen knowledge about corruption in public procurement. 2.1 Enhance oversight collaboration for prevention of corruption. 2.2 Strengthen public officers awareness of the corruption challenge. 2.3 Strengthen bidders awareness of the corruption challenge. 2.4 Strengthen preventive safeguards in the procurement process. 2.5 Strengthen salary incentives of procurement officers to refrain from corruption. 2.6 Revitalise the role of public ethics in preventing corruption. 9

14 Interventions to detect corruption in public procurement Interventions to investigate corruption in public procurement Interventions to enforce the anticorruption measures in public procurement 3.1 Enhance PPRA s capacity to detect corruption through audits. 3.2 Enhance public officers capacity to detect corruption. 3.3 Promote use of independent actors in detecting corruption. 3.4 Engage Internal Audit Units in detecting corruption. 3.5 Strengthen the role of bidders and suppliers in detecting corruption. 3.6 Revitalise civil society s role as watchdog. 3.7 Enhance transparency in the procurement process through access to information. 3.8 Promote use of whistleblowers. 4.1 Enhance oversight collaboration on investigation into corruption. 4.2 Strengthen PCCB s capacity to investigate corruption in procurement. 4.3 Removal of PPRA from appeals process. 4.4 Revitalise the investigative role of the Accounting Officer. 4.5 Promote access to independent investigation into cases of corruption. 5.1 Enhance PE s capacities to apply remedies. 5.2 Widen access to use of remedies. As initial steps in implementing the anti-corruption strategy in public procurement, PPRA entered into a Memorandum of Understanding (MOU) with PCCB in 11 th February 2010 which is attached as Annex 4. The Director General of PPCB and Chief executive Officer of PPRA are shown signing the MOU in Figure 6. Figure 6: Dr. Mlinga (PPRA) and Dr. Hosea (PCCB) signing a Memorandum of Understanding in Dar es salaam on 11th February, 201 PPRA has already started to share with PCCB its assessment of Red flags for procurements audits carried out for 2008/09 10

15 3.5 Development and Implementation Procurement Management Information System PPRA developed a Procurement Management Information System (PMIS) to enable collection and management of information related to planning and implementation of tenders by all PEs in Tanzania. The system facilitates the implementation of the SCMP by simplifying the submission to PPRA of the various information and checklists required under the system. The system is web-based (available at and its implementation involved building the necessary infrastructure to support the system; training of users from PEs; and monitoring system operation. At the end of the programme, 182 procuring entities out of 362 were trained on how to use the system. Operationalisation of this system is ongoing for entities that have not been trained. To achieve development and implementation of PMIS, various items were procured. These includes 35 desktop computers, 16 laptops, four computer servers, 36 UPSs, a heavy duty printer cum photocopier, eight printers, six scanners, three projectors, a digital camera, internet connection an various software. These items were used to install the system, training as well as general support and maintenance of the system. A full list of all items that were procured under the programme are shown in Annex 5. Figure 7: PMIS Architecture 11

16 3.6 Training Staff on Short Courses The programme has been able to sponsor four PPRA staff to attend long term training abroad and 47 staff to attend short term training within and outside the country as shown in Annex 6. The training received by staff has helped to improve their morale and work performance. 3.7 Establishment of PMUs in PEs Establishment of PMUs and regularization of staffing levels in PEs is one of the strategic interventions contained in PPRA s Procurement Capacity Building Strategy. Todate the availability of adequate staff with knowledge and experience to work in the PMUs still remains to be one of the biggest challenges facing our country today. The Government, in its efforts to tackle this problem, has established a Procurement Policy Unit under the Ministry of Finance and Economic Affairs. The unit is responsible for establishment and development of the procurement cadre in public service. The Government has also transferred the procurement cadre from the Ministry of Infrastructure Development to the Ministry of Finance and Economic Affairs. Proposal on the structure of PMUs has been submitted to the Government and circulars issued to Accounting officers on establishment of PMUs. Under the programme, PPRA carried out parallel sessions on sensitization campaign on the establishment of PMUs and the use of the System of procurement of Common Use Items and Services which was also developed under the programme. 3.8 System for Procurement of Common Use Items As a way of minimizing procurement transaction costs, PPRA, in collaboration with Government Procurement Services Agency (GPSA) has established a system for procurement of Common Use Items and Services (CUIS). A cartoon highlighting the problem of high transaction costs in procurement is shown in Figure 8 which in essence is what the system is intended to tackle. A list of some common use items and services with their average prices has been established and published on PPRA website. Under the system, PEs will be required to compile their requirements of CUIS based on the classification system adopted. The compiled requirements shall be submitted to GPSA with a copy to PPRA and GPSA will then aggregate requirements of all PEs and invite tenders based on Framework Contracts. PEs would then be notified of the suppliers/ services providers who have been awarded framework contracts and shall be obligated to place their call-off orders through them. It is expected that procurement of CUIS through this system will increase efficiency through the following:- a) Elimination of price differentiation of common items and services purchased by all PEs. b) Shortening lead time for PEs used for acquisitioning of materials from suppliers, service providers and Contractors. 12

17 c) Enabling the PEs to implement their plans as per flow of funds from Central Government in line with PPA, 2004 and its Regulations. d) Assuring the PEs of quality of suppliers, service providers and contractors. e) Reduction of cost associated with acquisition of goods, service and works for the PEs. f) Benefiting the PEs from economies of scale, value for money and cost reduction in procurement. Figure 8: A cartoon narrating the problem of high procurement transaction costs on service delivery. Already the system is in use and GPSA have invited and awarded one year framework contracts for various items starting from Feb 2010 to Feb Dissemination of the system was conducted in three zones. The first workshop was conducted in Morogoro from 16 th to 17 th April, 2009, the second one was conducted in Arusha from 4 th to 5 th June, 2009 and the third workshop was conducted in Dodoma from from 3 rd to 4 th September, The workshop was intended for Accounting Officers from MDAs and LGAs. A total of 329 participants have been sensitized through these workshops on formation of PMUs and have been introduced to the system for procurement of CUIS. Furthermore, the system is also being disseminated together with other systems developed by PPRA in various training sessions. 13

18 3.9 Restructuring of Government Stores Department During the country procurement assessment review held in 2003 the Government Stores Department was seen to lack both Financial and Organizational capacity to meet the requirements of the government in terms of supplies. It was therefore recommended to change the department from its current operational set-up to a new slim procurement unit to be responsible for tendering and management of framework contracts. Transformation of the Government Stores Department into an Executive Agency has already taken place through Government Notice G.N No. 235 Published on 7th December, 2007, hence the birth of GPSA. A consultant, M/s Bureau for Industrial Cooperation (BICO) was engaged under the programme to undertake an organization review in terms of activity analysis, business analysis and establishment of a new organization structure, manning levels and scheme of service for the Agency to cater for the current requirements of the PPA, Cap 410 and its Regulations and its expected future status. The consultant submitted a draft report which was discussed at a stakeholders workshop held on 29 th March, 2010 and has now been accepted by both PPRA and GPSA and is due for implementation Professionalization of Procurement Professionalization of procurement is also amongst the six strategic interventions contained in PPRA s Procurement Capacity Building Strategy. Others are training, regulatory harmonization, oversight efficiency, regularization of staffing levels and maximization of procurement performance. An important milestone in implementing this strategy was reached in February 2008 when the President of the United Republic of Tanzania assented the Procurement and Supplies Professionals and Technicians Board Act, The Act repealed the National Board for Materials Management Act of A consultant was engaged under the programme to prepare Regulations for implementing the new Act and a Code of Ethics for procurement and supplies professionals. The Regulations and Code of Ethics were presented at a stakeholders workshop held on 12 th March, 2009 and approved by NBMM Board of Directors on 7 th May, 2009 and signed by the Minister for Infrastructure Development on 30 th September, The same were gazzeted as GN 364 of 6/11/2009 for Regulations and GN 365 of 6/11/2009 for the code of ethics. The Procurement and Supplies Professionals and Technicians Board (PSTB) is now operational replacing the defunct National Board for Materials Management Procurement audits and Assessment of the implementation of audits recommendations The primary objective of the procurement audits is to: provide PPRA with independent information, assurance and opinion about economy, efficiency and effectiveness in the use of public funds; ensure that all eligible suppliers, contractors and service provides are given equal opportunity to compete in providing goods, executing works or providing services, and; ensure that there is integrity, accountability, fairness and transparency in the procurement process. The secondary objective is to identify weaknesses in complying with 14

19 the provisions of the PPA and its Regulations so as to enable appropriate measures to be taken including implementation of appropriate capacity building strategies. During the audits, the audit teams also visit some selected projects to assess their implementation as shown in Figure 9. Under the programme, PPRA has been able to audit a total of 129 PEs, 30 PEs in 2007/08 and 99 PEs in 2008/09. The outcome of the audits in 2007/08 indicated an average level of compliance of fifty percent (50%) while the audits in 2008/09 indicated an average level of compliance of fifty five (55%). This is a significant improvement compared to the compliance level of thirty nine (39%) observed in 2006/07. Figure 9.: PPRA s audit team assesses the quality of works of a vented drift along Miangalua Chombe Kyamatundu Road in Sumbawanga District Council For each audited PE, the average level of compliance is obtained as an average score of 13 Compliance and Performance Indicators shown in Table 5. Table 5: Compliance and Performance Indicators Indicator Establishment and composition of tender boards Establishment and composition of PMUs Independence of functions Annual procurement plan Compulsory approvals Advertisement of bid opportunities Publication of awards Time for preparation of bids Performance Data Existence of a tender board in accordance with the requirements of the Act and Regulations Existence of a PMU in accordance with the requirements of the Act and Regulations Percentage of tenders in which there was no interference between individual functions of Accounting Officer, tender board, PMU or user department Prepared and properly implemented annual procurement plan Percentage of tenders/contracts which received all compulsory approvals in various processes Percentage of open bidding procedures publicly advertised Percentage of contract awards disclosed to the public Percentage of tenders complying with the stipulated time in the Act and regulations 15

20 Indicator Methods of procurements The use of standard tender documents Procurement records Quality assurance and control Contract implementation Performance Data Percentage of tenders using authorized methods of procurement in accordance with their limits of application Percentage of tenders using standard/ approved tender documents Percentage of tenders with complete records Percentage of tenders with adequate quality assurance and control systems Percentage of contracts implemented as per the terms of contract During the financial year 2008/09, a follow-up was made in 45 procuring entities comprising of 17 LGAs and 28 MDAs to ascertain whether the previously observed weaknesses had been addressed.. Specifically, the assessment sought to; ascertain whether, or to what extent, recommendations or observations made by PPRA have been implemented by PE; evaluate the adequacy of the plans in improving compliance; assess problems that might have arisen in the process of implementing the recommendations; determine the impact of the audit by assessing the level of compliance using the same performance indicators which were used in the audits, and; provide professional advice on areas that need further improvement. The assessment indicated a remarkable compliance improvement from an average level of 39% and 50% in the financial years 2006/2007 and 2007/08 respectively, to an average level of 71%. These results show the impact of various strategies which are being implemented by PPRA including procurement audits and implementation of the SCMP Training of Procurement Management Staff PPRA entered into a contract with a Consultant M/s Institute of Procurement and Supplies (IPS) to conduct training to staff involved with procurement activities in PEs. Implementation of the training program started on 1 st June The 14-day training focused on the following areas: a) Overview of PPA 2004 and its regulations, also covering; System for Checking and Monitoring; Procurement Management Information System; and, Procurement of Commonly Used Items, b) Procurement of Goods, c) Procurement of Works, d) Procurement of Non Consultancy Services, e) Procurement of Consultancy Services, f) Disposal of Public assets by Tender, and g) Procurement Procedures of the African Development Bank. The training was conducted in four zonal centres namely Dar es Salaam, Arusha, Mwanza and Mbeya. In each zonal centre the training was conducted six times making the total number of training sessions to be 24. From 1 st June 2009 to 9 th November 2009, training started each week consecutively at Dar es Salaam, Arusha, Mwanza and Mbeya centres. At the end of this program a total of 1671 staff of PEs had been trained. Figure 10 shows a group photo of one of the training sessions that was held in Arusha. 16

21 Figure 10: A group photo of participants of one of the training at Arusha Centre. This program was then extend to cover four extra session between January and March, 2010 in which a further 262 staff of PEs were trained. Altogether the total number of staff from PEs who attended this program is 1933 which is 161% of the pre-set target of 1, OECD-DAC Joint Venture Meeting Tanzania hosted the third Meeting of the OECD-DAC JV on Procurement from 5 th to 7 th May, 2008 at Ngurdoto Hotel in Arusha, Tanzania. The meeting attracted 85 and 73 foreign and local participants, respectively. The main objective of the meeting was to provide participants with an opportunity to be updated on the current situation regarding the 2008 monitoring exercise of the Paris Declaration and to discuss and get the necessary clarifications and agree on the strategic issues regarding the country procurement systems that Joint Venture proposes to share with preparatory regional workshops and the relevant round table at High Level Forum on Aid Effectiveness in Accra, Ghana, September, Furthermore, the participants had an opportunity of sharing experiences in developing procurement capacity development strategies and discussed on the draft document on experiences in applying the OECD procurement assessment methodology. Figure 11 shows a cross section of participants during the meeting Computerisation of PPRA s Internal Systems To improve efficiency in its day-to-day operations, PPRA under AfDB financing, procured software packages for accounting, human resources, payroll and document management systems. By April 2010, all software were installed, tested and key users of the systems as well as systems administrators, were trained. In implementing the document management system, various documents, having approximately 1,200,000 pages were scanned, indexed and systems for workflow were being finalized to accommodate the requirements of PPRA. 17

22 Figure 11: A cross section of participants during the OECD-DAC Joint Venture meeting in Arusha 3.15 Publication of Procurement Journal PPRA continued to publish the Tanzania Procurement Journal (TPJ) where by a total of 21 Editions of Volume I, 13 editions of Volume II and 1 Edition of Volume III have been published. Online copies of the Journal are available in PPRA s website. Beginning July 2009, PPRA introduced TPJ Supplement as a pull-out in Daily News and it is published every Tuesday. The TPJ Supplement contains tender opportunities, tender awards, PPRA s recent reports and any other information related to procurement. So far 40 supplements have been published. The main TPJ is now published on a quarterly basis without the tender opportunities and awards and a decision has been made to suspend its publication and focus on the TPJ Supplement starting from July Figure 12: Cover Pages of TPJ and Supplement. Through TPJ supplement, PPRA has introduced the use of cartoons, some of which are included in this report, as an initiative to simplify messages to the public in relation to PPA, regulations, procedures, ethics and corruption issues. 18

23 3.16 Preparation for Implementation of E-Procurement System A consultant was engaged in January, 2010 to carry out a feasibility study on implementation of e-procurement system in Tanzania. The main objective of the consultancy was to assess readiness of the public and private sectors; and the pertinent enabling environment for successful implementation of public e-procurement system in Tanzania, taking into account international experiences and best practices. Services sought included: - Reviewing the existing legal framework and identify changes and amendments that will allow e-procurement to succeed in Tanzania; Reviewing of the existent pertinent business, economic and financial systems, including the e-commerce environment, business processes, national payments and develop recommendations on the economic viability of e-procurement in Tanzania; Reviewing the existing ICT infrastructure readiness of the public and private sectors for e-procurement and establish additional effort required towards a robust e-procurement environment; Reviewing the existing public procurement institutional framework in view of proposing a framework that will provide effective and efficient implementation of the system in Tanzania. Stakeholders were given the opportunity to discuss the draft report before its adoption during a workshop which was held in Dar-es-Salaam on 4 th march Figure 11 shows a group photo of participants in that event. Figure 13: A group photo of a participants in e-procurement workshop held in Dar es salaam on 4th March, 2010 By the end of the programme, the report with recommendation on how the country should move towards e-procurement, has been submitted, discussed and adopted by PPRA s Board of Directors. 19

24 The assessment revealed that currently Tanzania is not ready to implement e-procurement as far as policy and legal environment is concerned. As far as institutional structures, ICT environment and human resources the country was assessed to be not ready but already some efforts had been initiated. It fared better in the procurement processes where it was assessed to be ready with some additional efforts required. The assessment report is shown in Annex Compilation of Average Prices and Establishment of Price Base for Common Use Items For quite sometime, procuring entities have been procuring items and services that are commonly used at prices that were significantly different from each other. Similarly, it was realized that the cumulative cost incurred by PEs when each carries out the process individually was quite high and could reasonably be reduced. PPRA in consultation with GPSA established a system for procurement of such items and services and GPSA was given the responsibility of managing the process. The purpose of compiling and establishing a price base for common use items and services was to enable PEs on one side to understand the market situation and bidders on the other side not to inflate prices. The survey of prices was undertaken and average (indicative) prices published on the website of PPRA. Such prices are reviewed on an annual basis. Initially, common use items and services were identified, classified and coded for ease of reference. There are therefore 24 classes of items and the entire list contains 2331 items. Meanwhile, a list of common activities in building and civil, particularly road works, has been established and their unit rates (prices) are being finalized ready for posting on the website. The total number of activities is 105 in building works and 69 in road works. It is expected that availability of this information will enhance PE s ability to estimate building and civil works more accurately. The database will also help bidders prepare more responsive bids. 4.0 FUTURE OUTLOOK ISP I for Good Governance has been very instrumental in enabling PPRA to establish and put in place systems and procedures that are important for the successful implementation of the PPA 2004 and its Regulations. Most of the developed system like the SCMP, PMIS, System of Procurement of CUIS and the production of TPJ Supplement need to be implemented on a continuous basis. Other systems, like e-procurement systems, are also in the offing on the basis of the studies carried out under the programme. The road to a procurement system that is transparent, fair, effective, efficient and able to offer value for money is a long one already there is some achievements in areas which are shown in italics and marked in yellow in Figure 12, but a lot of work remains to be done in other areas. It is therefore the expectation of PPRA that the Government, the Bank and other Stakeholders will continue to assist PPRA fulfill its mandate. 20

25 PROCUREMENT SYSTEM WHICH IS TRANSPARENT, FAIR, EFFECTIVE, EFFICIENT AND ABLE TO OFFER VALUE FOR MONEY Enactment of Public Procurement Act 2004 and its Regulations- Capacity of Public Officials to implement the Act, Regulations and Guidelines made under the Act Procurement Regulatory Authority with adequate staff and working tools Public Procurement Appeals Authority with adequate staff and working tools Establishment of Procurement Management Units with adequate staff and working tools Proper System of Checking and Monitoring Procurement Activities Harmonisation of procurement procedures of various institutions including the donors Simple and easy to understand procurement guidelines Code of Ethics for Bidders and Public Officials involved in procurement Proper system for collection, storage and dissemination of procurement information Procurement and Supplies Professional Body with adequate staff and working tools Cooperation of Top Government Leadership in ensuring that the Act is implemented Training Institutions to structure their training in line with the requirements of the current procurement regime Politicians, NGOs, CSOs to understand the procurement system to enable them to unveil wrongdoings on procurement Educate Bidders on the Government Procurement Systems Proper system for procurement of common use items across entities Increased participation of local firms in Government tenders Bidders to exercise their right to complain when they are unfairly treated. Proper identification of needs, preparation of procurement Plans, preparation of TORs and Specs TOWARDS IMPROVING THE PROCUREMENT SYSTEM IN THE COUNTRY Figure 14: A Journey Towards Improving the Procurement System in the Country 21

26 PPRA in particular expects that AfDB will approve the next phase of ISP to enable PPRA consolidate the achievements which has been attained under phase one with a focus to the following: a) Expansion of PPRA s reach by recruiting and training more staff, establishing own office building at Kurasini and zonal offices. Figure 15 shows the proposed office building for PPRA for which funds are being sought for its renovation; b) Increasing further efforts of capacity building by further training of PEs staff, establishing zonal training and data entry centres and instutionalisation of procurement training to training providers; c) Improving PEs compliance with the Public Procurement Act through scaling up of procurement audits and followup on the implementation of audit recommendations; d) Scaling up the dissemination of PPRA s services through the TPJ Supplement, Radio and TV so as to inform the public more of their responsibilities in ensuring that the public procurement system delivers the desired results; and e) Further enhancing the use of ICT in public procurement. 5.0 CONCLUSION Figure 15: Existing Office Building in PPRA s Plot at Kurasini This report has highlighted major achievements under the ISP I. It has shown how the programme has enabled smooth start up of PPRA during its toddler age. It has further described in detail various interventions for capacity building and systems developed to assist PPRA manage its regulatory function and PEs carry out procurement effectively and efficiently in accordance with the Public Procurement Act and its Regulations. The success has been largely to the high level of cooperation that was extended by the Banks staff throughout its implementation for almost last four years. PPRA is looking forward to work with the Bank in the next phase of the ISP and other future phases. 22

27 ANNEX 1: FINANCIAL PERFORMANCE INSTITUTIONAL SUPPORT FOR GOOD GOVERNANCE PROJECT END OF PROJECT PROGRESS REPORT FOR TANZANIA MAINLAND Ser. No. Activities Status of Implementation as of 18th May 2010 Final Budget approved in Dec 2009 Actual Expenditure 19th May 2010 Commitments1 9th May 2010 Balance Outcome 1. Procurement practices provide government with improved value for money in accordance with the new Public Procurement Act. Output 1.1 A Regulatory Authority (RA) with appropriate functions and powers established Ammend Public Procurement Act 2001 and revise Regulations Activity was already executed at the start of the project Establish Regulatory Authority and abolish limits of authority Activity was already executed at the start of the project Develop a Medium Term Strategic Plan for the RA The MTSP was approved by the Board in Dec Conduct baseline survey as required in the Implementation of Monitoring and Evaluation Plan of MTSP has been completed 106,139, ,439, ,700, Set up and staff RA appropriately At the time of execution of the Project most of staff were already employed. Thus, the project supported recruitment of 2 staff, Executive Assistant Secretary and Procurement Expert. The recruitment was done in November, ,513, ,513,

28 1.1.5 Disseminate amendments to Act and Regulations Revision of the Regulations is being done initially by PPRA staff before involving external stakeholders. The internal review of the Regulation was carried out by PPRA staff in April ,614, ,614, ,000,000 Output Total 141,266, ,566, ,700,000 Output 1.2 Revised Standard Bidding Documents and Procurement guidelines and user manuals prepared Identify and consolidate all necessary amendments and revise the existing bidding documents Expenditures on this activity has been covered under activity Prepare new bidding documents, guidelines and manuals A consultant has prepared 5 Bidding Documents and PPRA Staff have prepared Procurement Manual and Training manual 63,875, ,674, ,201, Simplify and translate 10 bidding documents, guidelines and user manuals into Kiswahili Five Standard Bidding Documents, User guides and evaluation guidelines have been translated into Kiswahili. Also 17 procedural forms have been translated into Kiswahili. 13,826, ,979, (1,153,000) Disseminate bidding Documents, guidelines and user manuals This activity was deleted as it is being done during Training of PMU staff. Further PPRA website and Procurement Manual is also used to disseminate the documents Output Total 77,702, ,654, ,048,664 24

29 Output 1.3 Public Procurement Appeals Authority (PPAA established) Appoint members of PPAA Equipments have been procured and dissemination carried out Prepare operational procedures for the PPAA 34,900, ,900, Disseminate procedures and conduct awareness campaigns 107,800, ,719, ,896, (6,815,103) Output Total 142,700, ,619, ,896, (6,815,103) Output 1.4 A System for checking and Monitoring MDAs and Local Government Authorities developed and implemented Design the system in consultation with MDAs and \local Government Authority Activity was already executed at the start of the project Implement the system in 20 MDAs (Visits to Pes to verify the submitted procurement inofrmation and build capacity on weaknesses observed) 27 MDAs were visited to assess the implementation of the System for Checking and Monitoring Procurement processes (SCMP). 28,700, ,829, ,870, Implement the system in 20 Local Government Authorities(Visit LGAs to verify the submitted 18 LGAs were visited to assess the implementation of the System for Checking and Monitoring Procurement processes (SCMP). 34,100, ,512, ,588,000 25

30 procurement information and build capacity of weaknesses observed) Output Total 62,800, ,341, ,458,500 Output 1.5: Anticorruption strategy in procurement developed and implemente Prepare a Strategy in consultation with the Prevention of corruption Bureau Completed and the Strategy is in place. 233,639, ,639, Implement the Strategy High level workshop was held with PCCB on Anticorruption Strategy in Feberuary 2010 to kickstart the implementation of the Strategy. A Memorandum of Understanding was signed between PPRA and PCCB ,440, ,508, ,931,928 Output Total 263,080, ,148, ,931,928 Output 1.6: A Management Information System (MIS) Developed and Implemented Design the system in consultation with MDAs and Local Government Authority Activity was already executed at the start of the project Implement the systems in 10 The completed system was piloted in 2 Pes- 26

31 Pilot MDAs and 10 Pilot Local Government Authority TANROADS and TANESCO. A total of 97 PEs have been trained to use the system Implement the system in all MDAs and Local Government Authorities Funds under these activities were approved to be used to carry out preparatory arrangments to introduce e- procurement in Tanzania 4,633, ,633, Output Total 4,633, ,633, Output 1.7: Competent professional staff of RA appointed and trained Identify key personal requirements and draft job description for RA Activity was already executed at the start of the project Interview and recruit personnel Activity was already executed at the start of the project. 51 staff have been recruited Train staff on short courses Since July, 2008 the Project supported 47 staff in local and overseas short-term trainings. Duration of the trainings varied from one week to 4 weeks. The training which was planned for CEO in February 2010 was cancelled and alternative one has not been secured todate. 813,666, ,548, ,117, Train Staff on long courses The project supported 3 staff in undertaking overseas long-term training at Master s level and one staff who undertook Bachelor s degree. 183,409, ,409, Output Total 997,076, ,958, ,117,

32 Output 1.8: Supplies units transformed into Procurement Management Units (PMUs) Establish PMUs in all MDAs Proposal on the structure of PMUs has been submitted to the Govt and circulars issued to Accounting Accounting officers on establishment of PMUs Ensure that all PMUs are properly staffed Sensitization on the establishment of PMUS was done in parallel with the sensitisation on the system of procurement of common use Items and Services. 49,415, ,880, (7,465,000) Output Total Output 1.9: A system for procurement of common items in MDAS established 49,415, ,880, (7,465,000) Establish System The System was established by a consultant and adopted by Government Procurement Services Agency. The Classification os Common Use Items and Services and their average prices was established and placed on PPRA website] 44,250, ,250, Restructure Government Stores 0 Draft Final Report Submitted and is in the process of final approval and a stakeholders workshop was held on 29th March 2010 to discuss the same 77,282, ,102, ,180, Disseminate and implement the system Dissemination on the system of procurement of common use Items and Services was done in Morogoro, Arusha and Dodoma 52,862, ,989, (1,127,100) Output Total 174,394, ,341, ,052,900 28

33 Outcome 2: Procurement Capacity Developed in the Country Output 2.1: Procurement cadre established in consultation with Public Service Management Draft scheme of service for procurement personnel and gain approval A proposed scheme of service was prepared by a Select Committee Chaired by PPRA and was submitted to President's Office Public Service Management. Shifting of the cadre to the Ministry of Finance from the Ministry of Infrastructure and the Ministry of Finance is in progress. Director to deal with procurement policies has been appointed and will be responsible for this activitity Recruit and appoint staff to the cadre Recruitment of staff shall be the responsibility of the relevant Pes and therefore this activity is deleted Train staff to convert current procurement staff fit in the new scheme of service However there will be a need to carry out skills needs assessment of the existing staff in Pes to fit in the newly introduced scheme of service - a new activity 5.4 has been introduced to cater for this Output Total Output 2.2: Procurement Professional Board Established Prepare/Amend Act to Establish a professional body in consultation with NBMM A new Act- Procurement and Supplies Professional Board Act 2007 was passed by the Parliarment in Nov and assented by President in Feb Regulations and Code of Ethics have been prepared and the Procurement and Supplies Professionals and Technicians Board is now operational.. 62,985, ,985,

34 2.2.2 Set up new professional body and recruit members This will follow immediately after the new Act is operationalised - the time was not sufficient to carry out this activity Prepare code of conduct and ethics for procurement professionals A consultant appointed under activity is also responsible for the preparation of the code of ethics Output Total 62,985, ,985, Output 2.3 Implementation of Procurement Capacity Building Strategy coordinated Carry out capacity building needs assessment of all MDAs Activity was already executed at the start of the project Establish procurement training capacity available in the country Develop procurement Capacity building strategy and program Implement and monitor the Strategy Followup activities on capacity building were being carried out by PPRA including Training of PEs staff. 870, ,000 Output Total 870, ,000 30

35 3. EXTRA ACTIVITIES APPROVED IN DECEMBER, To carry out financial and technical procurement audits on 45 procuring entities 4 vehicles have also been procured to enable enforcement visits to Pes. 30 Entities have been audited by a Consultant IPS. 444,797, ,797, To conduct training of 1200 Procurement Management Staff from Pes, PCCB, CAG on the PPA 2004, Its Regulations, Bidding Documents and User Manuals A total of 1933 Staff have been trained which is above the target of 1,200 staff 1,244,848, ,117,867, ,980, To develop and implement Management Information System (MIS) in 150 Procuring Entities Various computer equipments and internet facilities have been procured which shall be used in the training of PEs to implement the system. 406,041, ,291, ,891, (9,141,682) Output Total 2,095,687, ,934,956, ,891, ,839, NEW ACTIVITIES APPROVED IN NOVEMBER OECD-DAC Joint Venture Meeting The meeting was held successfully in Arusha from 5th to 7th May ,002, ,002,

36 4.2 Computerisation of Internal Systems Software packages and equipment for Accounting, Human resources, Payroll and Document Management Systems have been procured, installed and tested. Implementation in terms of migrating to the computerized system from manual system, is on final stages 376,378, ,632, ,700, (38,954,091) 4.3 Procurement of various publications for the documentation centre Cancelled - to rolled over in the second phase. 30,000, ,452, ,547, Finalisation of setting up of PPRA Offices Procurement of Carpets and furniture, and partitioning services done 55,304, ,304, Publication of Procurement Journals Both the Procurement Journal and Procurement Journal Supplement have been published as scheduled 355,517, ,303, (5,786,000) Output Total 901,202, ,695, ,700, (18,193,062) 5.0 NEW ACTIVITIES APPROVED IN JULY

37 5.1 To carry out Procurement Audits in 90 Procuring Entities to determine the level of compliance to the PPA and Procurement Regulations and recommend appropriate improvement measures by June To monitor implementation of the previous financial year's audit recommendations A total of 99 PEs were audited. The 60 audits are currently done by two consultants namely; M/s National Construction Council and M/s Mzumbe Universityand 39 Audits by PPRA staff Implementation of the previous audit recommendation was done in 45 procuring entities which included (17) LGA s and twenty eight (28) MDAs. 612,520, ,833, ,686,500 38,346, ,846, , Preparations for implementation of e- Procurement system in Tanzania Assignment is complate and the Consultant has submitted final report which has been adopted by PPRA's Board of Directors 501,096, ,353, ,200, , Skills needs assessment of the existing staff in PEs to fit in the newly Introduced Scheme of Services This activity is now cerried out by the Procurement Policy Unit which is responsible for development of Procurement Staff in Public Service. 2,416, ,416,

38 5.5 Compilation of average prices and establishment of price base for common use items. A list of some Common Use Items and Services with their average prices have been established and the compilation of the same for building and civil works has been completed. 57,531, ,700, ,830, Auditing of Project Accounts Audit for period ended 30 June,2008 completed. The remaining funds will be used to carry out Audit for the remaining project period Output Total Project Total 98,928, ,888, ,200, ,840,000 1,310,838, ,195,037, ,400, ,400,889 6,284,653, ,912,819, ,005, ,829,006 34

39 ANNEX 2: PPRA S MEDIUM TERM STRATEGIC PLAN 2009/ /14 EXECUTIVE SUMMARY Introduction PPRA was officially established on the 1 st May 2005, replacing the Central Tender Board following the enactment of the Public Procurement Act (PPA) No 21 of The main objectives of PPRA, according to the PPA 2004 are:- 1. To ensure the application of fair, competitive, transparent, non- discriminatory and value for money procurement standards and practices; 2. To harmonize the procurement policies, systems and practices of the central government, local governments and statutory bodies; 3. To set standards for the public procurement systems in the United Republic of Tanzania; 4. To monitor compliance of PEs; and 5. To build procurement capacity in the United Republic of Tanzania in collaboration with relevant professional bodies. This is the first PPRA Medium-Term Strategic Plan since PPRA became operational on 1 st May The purpose of the Strategic Plan is to assist PPRA make an important contribution in strengthening the public procurement system in the country to become more transparent, fair, effective, efficient and able to offer value for money. Desired Future Direction The envisaged future direction of PPRA is indicated by the following statements of societal vision, institutional mission, vision, core values and guiding theme: The vision of PPRA for the Tanzanian society is: A public procurement system and culture which are characterised by openness, transparency, effectiveness, efficiency and the provision of value for money The mission of PPRA is: To foster and promote value for money in public procurement for national development The medium term vision of PPRA is: To become a world class model, effective and sustainable public procurement oversight body The core values which will guide PPRA stakeholders in pursuing the vision, mission and functions of PPRA are: 35

40 1. Honesty and integrity 2. Professionalism and excellence 3. Customer, stakeholders and client care orientation 4. Openness and transparency 5. Accountability and responsibility 6. Teamwork, networking and partnering 7. Efficiency, effectiveness and continuous improvement 8. Impartiality, equality and equity. The motto of PPRA will be: Promoting Value for Money in Public Procurement Core Strategic Issues In line with the articulated future direction, this PPRA Strategic Plan is designed to address the following critical strategic issues: 1. Linking of public procurement management to national economic growth and poverty reduction objectives 2. Linking of public procurement management to national anti corruption drive 3. PEs compliance with the PPA 2004, Regulations and PPRA tools 4. PE and Bidders proactive demand for and responsive to PPRA services 5. Harmonization and rationalization of the National Public Procurement Legal and Regulatory Regime 6. Harmonization and rationalization of and advocacy for the procurement complaints handling system 7. Professionalization of the procurement function 8. Deepening citizenry appreciation of the value for money in public procurement 9. PPRA operational and outreach capacity 10. PPRA financial capacity and sustainability 11. PPRA networking and partnering Strategic Objectives and Strategies: 2009/ /14 In line with the critical strategic issues, the Strategic Plan has set the strategic objectives and key strategies for the five-year period 2009/ /14 as summarized in Table 1. As can be noted, the MTSP is ambitious in terms of the number of strategic objectives, strategies and targets given the high number of strategic issues facing PPRA. The scope of the plan thus assumes an optimistic financing scenario where the Board and Management of PPRA will adopt a proactive, aggressive and entrepreneurial approach to resources mobilisation. However, given a possible shortfall in the amount of resources mobilised, implementation of the MTSP will need to be prioritised. Prioritization of strategic objectives, strategies and targets has been defined from first to third level. Under the assumption of scarce financial and other resources activities falling under the first relative priority have to be implemented prior to implementing activities which have been accorded lower priorities. Impliedly activities accorded second priority represents what ought to be done while those with third priority are activities that can be done when the financial situation permits. It should be noted that the prioritization has nothing to do with the importance or weighting of the activities as all issues covered in the strategic plan are strategic or crucial and need attention during implementation if the resources envelope allows. Where an activity is not going to be implemented for lack of 36

41 resources, at least some activities to look for the resources must be included in the current annual work plan and budget of PPRA. Given that the MTSP is a rolling plan, the ultimate choice of activities (targets) to be implemented will be done when drawing-out annual work plans and budgets from the MTSP. In this case, the targets falling under a respective year which will not be included in the annual work plan and budget will have to be rolled forward while resources are being looked for. Table 1: Strategic Objectives and Key Strategies S/N STRATEGIC OBJECTIVE PRIORITY STRATEGIES 1. Strengthened linkage between public procurement system and national economic growth and poverty reduction objectives 2 Strengthened linkage between public procurement management and the national anti corruption drive Advocate for procurement plans by MDAs, LGAs and parastatals aligned with institutional strategic plans and NSGRP targets 1.2. Enhance PPRA staff understanding of linkages between NSGRP and the public procurement system Enhance PPRA and PE capacity in undertaking value for money and NSGRP responsive public procurement assessments Enhance collaboration with other state organs especially PCCB to fight corruption in public procurement Improve PPRA capacity to monitor, evaluate and control corruption in public procurement 2.3. Strengthen PPA 2004, Regulations and PPRA guidelines in preventive measures against corruption in public procurement Strengthen PCCB officials knowledge of PPA 2004, Regulations and PPRA guidelines 2.5. Enhance mass media and civil society involvement in the fight against corruption in public procurement 2.6. Establish whistle blowing and witness protection system in tackling corruption in public procurement 2.7. Promote systematic building of research/ data base on corruption in public procurement evidence based strategies 2.8 Enhance availability of information on prices for goods and services for better decision making in public procurement 2.9 Work with the NBAA to enhance the knowledge and skills of financial accountants and auditors in fighting corruption and waste in public procurement 2.10Work with the public procurement stakeholders in the fight 37

42 S/N STRATEGIC OBJECTIVE PRIORITY STRATEGIES against corruption in procurement 3 Strengthened PEs compliance with the PPA 2004, Regulations and PPRA tools 3.1 Build the capacity of PEs 3.2 Promote desirable moral conduct and ethical behaviour amongst public officials involved in public procurement 3.3 Sensitize cooperation of top government leaders and politicians in enforcing the PPA Review PPA, its Regulations and PPRA tools to remove less undue restrictions to the work of PEs and bidders Strengthen enforcement of the PPA Regulations and PPRA guidelines 4 Strengthened PE and Bidders proactive demand for and responsive to PPRA services Reduce the costs and negative effects of public procurement from PE point of view 3.7 Work with the MoFEA and PEs to ensure closer integration of procurement planning and government budget preparation process 3.8. Expedite implementation of the Core National Procurement Strategies & Systems developed by PPRA 4.1. Sensitize parliamentarians, top government leaders, development partners, civil society and, indeed the general public to hold those involved in public procurement accountable for their actions 4.2. Ensure that potential suppliers, consultants and contractors readily have access to information on procuring entities annual PPs Introduce further incentives for local MSMEs participation in public procurement 4.4. Make decisions of the PPRA and PPAA readily available to the general public 4.5. Provide PEs and (potential) bidders with well research information to understand the local procurement market 4.6. Promote PE and Bidders interest through simplified, easy to understand standard bidding documents and other PPRA guidelines and easy access to procurement opportunities 4.7. Stimulate PE and Bidders and public interest in PPRA services by making PPRA s role and the benefits it creates for individual stakeholder better and widely known 4.8. Stimulate mutual PEs and Bidders commitment by ensuring contractual relations that fairly compensate one party for failures by the other (e.g. payment delays by PEs) 38

43 S/N STRATEGIC OBJECTIVE PRIORITY STRATEGIES 4.9 Regularly search for PE and Bidders interests, needs and concerns regarding PPRA services and address them Facilitate better projects which are sensitive and urgent 4.11 Strengthen customer services 5 Harmonization and rationalization of the National Public Procurement Legal and Regulatory Regime 6 Harmonization and rationalization of and advocacy for the procurement complaints handling system 7 Professionalization of the procurement function. 8 Deepening citizenry appreciation of the value for money public procurement 9 Strengthened PPRA Operational and Outreach Capacity Advocate for removal of gaps and overlaps in legal provisions of individual, complementary, oversight bodies 5.2. Advocate for review of PPA 2004 and Regulations and other related laws in order to prevent government and political interference in the decisions of PPRA 6.1. Promote capacity building of bidders and PE staff on complaint handling rules 6.2. Regular publicity on the complaints handling system 6.3. Fight aggressively against blacklisting of procurement complainants by PEs 6.4. Promote closer, regular exchanges between PPRA and PPAA on the complaints handling processes and related issues 6.5. Fight frivolous complaints 6.6. Promote appropriate balance between the public s right to be provided with timely service and an individual bidder s right to complain 7.1. Promote a conducive environment for nurturing and guiding rapid professionalization of the procurement function 8.1. Intensify public education and awareness of public procurement issues 8.2 Motivate institutions whose mission is to inform and fight for change in public attitudes to embrace the promotion of value for money public procurement as important agenda 8.3 Promote first hand interactions (Discussion Fora) with grass root groups (PEs, potential bidders, ultimate beneficiaries, CBOs,WDCs, LGAs, farmers, employees), learning about public concerns related to public procurement and sharing Government strategies with them 9.1. Expand the PPRA national outreach structure cost effectively in a gradual manner. First, start with staff stationed at the HQ but assigned to oversee specified zones. In the second step, physically establish zonal offices and use the trained staff to man them accordingly. 9.2 Strengthen PPRA Institutional Legal and Organisational Framework addressing identified gaps, supporting the 39

44 S/N STRATEGIC OBJECTIVE PRIORITY STRATEGIES outreach strategy and providing a more conducive framework to implement the Strategic Plan 9.3. Strengthen communications and public relations capacity of PPRA 9.4 Capacity Building and Advisory Services Research, Documentation and Dissemination 9.5. Capacity Building and Advisory Services Training and Advisory services 9.6. Strengthen institutional capacity for Monitoring, Evaluation and Enforcement of Compliance 9.7 Strengthen capacity to undertake investigations and procurement, contract and performance audits and their coverage 9.8. Strengthen capacity of PPRA; PEs and other Bodies to take advantage of Information and Communications Technologies to support e-procurement and internal processes 9.9. Strengthening Financial Management capacity 9.10 Strengthening HRM capacity 9.11 Strengthen physical working facilities and administrative capacity 9.12 Strengthen the internal planning capacity- strategic and operational planning 9.13 Implementation of the Business Continuity Management Strategy 9.14 Strengthen Legal Support Services 9.15 Strengthen the Internal Auditing function Strengthen corporate services 10 PPRA Financial Capacity and Sustainability Build the internal capacity for resources mobilisation Promote increased/predictable government funding 11 PPRA Networking and Partnering Promote internal income generation Strengthen the framework for coordination and pursuit of networking and partnerships opportunities 11.2 Promote collaboration arrangements with other oversight bodies 11.3 Promote collaboration with strategic local institutions in the 40

45 S/N STRATEGIC OBJECTIVE PRIORITY STRATEGIES public, private and civil society sectors 11.4 Promote collaboration with strategic regional and international institutions in the public, private and civil society sectors 11.5 Promote establishment of Association of suppliers to link with PPRA Promote establishment of an Association of Heads of PMUs or Councils Advise the Government to pre-inspect the quality of goods in order to ensure value for money Align national procurement strategy in line with pertinent developments in the Region Implementation, Monitoring and Evaluation The performance management system will be strengthened and aligned with the Strategic Plan. Further, a monitoring and evaluation plan for this Strategic Plan has been prepared. Conclusion PPRA is undoubtedly playing a very noble national role that is both quite enormous and challenging. It therefore calls upon the relentless support and cooperation of all of its major stakeholders towards the realisation of its strategic direction as outlined in this Medium Term Strategic Plan for 2009/ /14. PPRA will continue to ensure highly cost-effective, transparent and result-oriented management of its operations, making the most out of every single Tshs/dollar received. 41

46 Annex 3: Red Flags Checklist Procuring entity Procuring entity ID no. Tender number Name of auditor Date of report Procurement phase Pre-bid phase 1. The procurement is not in the procurement plan Red Flag Yes No N/A Evaluation and award phase 2. The objective of the procurement is unclear or vague 3. Insufficient or inconsistent planning timeframe applied 4. The tender is not packaged with other tenders for similar goods (i.e. splitting) 5. Significant deviations from standard bidding documents 6. Technical specifications are weak or unclear 7. Technical specifications are narrow or appear tailored 8. Selected procurement method does not observe existing thresholds Insufficient advertising 9. Inadequate time given for preparing bids 10. Lack of mandatory approvals by appropriate authority 11. Inaccurate minutes of pre-bid meetings 12. Clarifications are not circulated to all bidders 13. Incomplete records of the pre-bid phase 14. Evaluation Committee members do not have the technical expertise necessary 15. The evaluation is being conducted by a small number of persons 16. The same Evaluation Committee members are involved in many procurements 17. Qualified bidders are voluntary dropping out of tender process 18. Disqualification of bidders on minor technicalities 19. Unreasonable delays in evaluating the bids and awarding the contract 20. Evaluation criteria are amended after receipt of bids 42

47 Contract management and audit phase 21. Narrow variance between the cost estimate and the bid amounts received 22. Major similarities between competing bids (e.g. similar format, errors, prices) 23. Unusually large variance between the price of competing bids 24. The same shareholders are involved in several bids using different company names 25. Failure to disqualify bids despite major errors 26. Falsification of submitted documentation (e.g. authorisations, CVs, etc.) 27. Failure to publicise award decisions simultaneously to all bidders 28. Contract is not in conformity with bid documents (e.g. specification or quantities) 29. Non-responsive bids are made responsive as result of clarification from procuring entity 30. Quality criteria are not defined in the contract 31. Incomplete records of evaluation and award 32. Negotiation team does not include adequate technical expertise 33. Minutes of the negotiations are not in line with Terms and Conditions of Contract 34. Contract specifications altered after award of contract 35. Contract is not signed by duly authorised officer 36. Failure to deliver the quality specified in contract 37. Failure to deliver the right quantities of goods and materials 38. Delays in delivery of goods, works or services 39. Replacement of nominated consultant by less qualified personnel 40. Instructions are not given in writing to contractors 41. Cost overruns are inadequately justified 42. Contract variations are not approved by appropriate authority 43. Failure to impose liquidative damages in case of delays 44. Failure to make progress payments or final payment within stipulated timeframe 45. Failure to pay retention money in a timely manner 46. Double payment of supplier 47. No or insufficient evaluation of the contractors quality of performance 48. Client dissatisfaction with completed products 49. Incomplete contract management records 43

48 Annex 4: Memorandum of Understanding between PCCB and PPRA 44

49 45

50 46

51 47

52 48

53 Annex 5: List of Equipment Procured under the Programme LIST OF MOTOR VEHICLES Make Reg. No. Status Value(in Tshs.) MITSUBISHI PAJERO STK 4357 WORKING 34,161, MITSUBISHI PAJERO STK 4358 WORKING 34,161, TOYOTA LAND CRUISER HARDTOP STK 4505 WORKING 51,592, TOYOTA LAND CRUISER HARDTOP STK 4506 WORKING 51,592, TOTAL 171,508, LIST OF LAPTOPS AND PERSONAL COMPUTERS Type Serial No Allocation Division/ Unit Status Value(in Tshs.) LAPTOP 2CE81550ZG RAMADHAN MLINGA CEO WORKING 2,207, LAPTOP 2CE81550ZH PETER SHILLA DIT WORKING 2,207, LAPTOP 2CE81550ZJ HANNAH MWAKALINGA DFA WORKING 2,207, LAPTOP 2CE81550ZK KENNETH SIJAONA DIT WORKING 2,207, LAPTOP 2CE81550ZL BERNARD NTELYA DIT WORKING 2,207, LAPTOP 2CE81550ZM AYUBU KASUWI DMC WORKING 2,207, LAPTOP 2CE81550ZN LAURENT SHIRIMA DCBAS WORKING 2,207, LAPTOP 2CE81550ZP BERTHA SOKA LU WORKING 2,207, LAPTOP CNU8121Y80 CHRISTOPHER MWAKIBINGA IA WORKING 3,852, LAPTOP CNU8121Y82 DEUSDELITY CASMIR DFA WORKING 3,852, LAPTOP CNU8121Y8C ERNEST LOBULU DMC WORKING 3,852, LAPTOP CNU8121Y8K BERTHA LIPINDI DMC WORKING 3,852, LAPTOP CNU8121YCH ROBERT KITALALA PMU WORKING 3,852, LAPTOP W8811G9VYJX DEVELOPMENT PC DIT WORKING 3,817, LAPTOP W8811GBLYJX PETER SHILLA DIT WORKING 3,817,

54 LAPTOP W8811GDFYJX PETER SHILLA DIT WORKING 3,817, SUB-TOTAL(1) 48,373, PC CZC8120ZHZ CHRISTOPHER MWAKIBINGA IA WORKING 1,584, PC CZC8120ZJ3 PMIS MACHINE DIT WORKING 1,584, PC CZC8120ZJ6 DOROTHY MBENNA DFA WORKING 1,584, PC CZC8120ZJB ROBERT KITALALA PMU WORKING 1,584, PC CZC8120ZJG BERTHA SOKA LU WORKING 1,584, PC CZC8120ZJH LWITIKO MWANDOBO DMC WORKING 1,584, PC CZC8120ZJJ RESERVED FOR NBMM STORE WORKING 1,584, PC CZC8120ZJL MARY SWAI DCBAS WORKING 1,584, PC CZC6120ZK7 AMBROCEA ASSEY DMC WORKING 1,584, PC CZC8120ZHN NOT ALLOCATED STORE WORKING 1,584, PC CZC8120ZHQ NOT ALLOCATED STORE WORKING 1,584, PC CZC8120ZHR EVA LUPEMBE DCBAS WORKING 1,584, PC CNC81256HY LIBRARY 1 DCBAS WORKING 1,584, PC CZC8120ZJV AWADHI SULUO DCBAS WORKING 1,584, PC CZC8120ZKW AYUBU KASUWI DMC WORKING 1,584, PC CZC8120ZKY CHRISENSIA SANGU DFA WORKING 1,584, PC CZC8120ZKZ LIBRARY 2 DCBAS WORKING 1,584, PC CZC8124HP3 PETER SHILLA DIT WORKING 1,584, PC CZC81256HP RESERVED FOR GPSA STORE WORKING 1,584, PC CZC81256HR NOT ALLOCATED STORE WORKING 1,584, PC CZC81256HS NOT ALLOCATED STORE WORKING 1,584, PC CZC81256HT RESERVED FOR NBMM STORE WORKING 1,584, PC CZC81256HW ALOIS MANAMBA DCBAS WORKING 1,584, PC CZC81256HX BERTHA LIPINDI DMC WORKING 1,584, PC CZC81256HZ RESERVED FOR GPSA STORE WORKING 1,584, PC CZC8120ZK0 FRANCIS MUSHI DIT WORKING 1,584, PC CZC8120ZK1 LIBRARY 3 DCBAS WORKING 1,584, PC CZC8120ZK8 GRENTINA KIDULILE DCBAS WORKING 1,584,

55 PC CZC8120ZK9 LAURENT SHIRIMA DCBAS WORKING 1,584, PC CZC8120ZKD DEUSDELITY CASMIR DFA WORKING 1,584, PC CZC8120ZKV BERNARD NTELYA DIT WORKING 1,584, PC CNC8120ZJ0 GIFTNESS DAVID DIT WORKING 1,584, PC CZC8120ZJX JAMES NGATIGWA DFA WORKING 1,584, PC CZC8120ZHX OSWARD RANGI DFA WORKING 1,584, PC CZC8120ZJN HANNAH MWAKALINGA DFA WORKING 1,584, SUB-TOTAL(2) 55,474, GRAND TOTAL 103,847, LIST OF OFFICE EQUIPMENTS Type Serial No Allocation Division/ Unit Status Value(in Tshs.) A:UNIVERSAL POWER SYSTEMS(UPS) UPS UPS UPS UPS UPS UPS UPS UPS UPS UPS 3S0706X DOROTHY MBENNA DFA WORKING 436, S0706X KAMANA MLENDA DFA WORKING 436, S0706X WINFRIDA SAMBA LU WORKING 436, S0706X DICKSON NGONDE IA WORKING 436, S0706X LAURENT SHIRIMA DCBAS WORKING 436, S0706X ABBAS KAJWANGYA PMU WORKING 436, S0706X AWADHI SULUO DCBAS WORKING 436, S0706X KENNETH SIJAONA DIT WORKING 436, S0706X HIRTRUDICE JISENGE DCBAS WORKING 436, S0707X MUHIDIN MURO DFA WORKING 436, UPS 3SO651X3 GRENTINA KIDULILE DCBAS WORKING 436,

56 4535 UPS UPS UPS UPS UPS 3SO706X PAUL MHAKALIRA DMC WORKING 436, S0716T DEUSDELITY CASMIR DFA WORKING 436, S0716T AYUBU KASUWI DMC WORKING 436, S0716T MONICA MALIKITA DMC WORKING 436, ZA SERVER ROOM DIT WORKING 2,499, UPS 3S0650X RAMADHAN MLINGA CEO WORKING 436, UPS UPS 3S0650X BERTHA LIPINDI DMC WORKING 436, S0650X JAMES NGATIGWA DFA WORKING 436, UPS 3S0650X LWITIKO MWANDOBO DMC WORKING 436, UPS UPS 3S0651X RAYMOND MBISHI DCBAS WORKING 436, S0652X PETER SHILLA DIT WORKING 436, UPS 3S0652X HANNAH MWAKALINGA DFA WORKING 436, UPS UPS UPS UPS UPS UPS UPS 3S0652X JAMES KITAINDA DMC WORKING 436, S0652X POOL CBAS DCBAS WORKING 436, S0652X SIGANIKE BARUTI DIT WORKING 436, S0652X BERNARD NTELYA DIT WORKING 436, S0652X ALOIS MANAMBA DCBAS WORKING 436, S0652X BERTHA SOKA LU WORKING 436, S0652X OSWARD RANGI DFA WORKING 436, UPS 3S0652X CHRISTOPHER MWAKIBINGA IA WORKING 436,

57 UPS UPS UPS UPS UPS 3S065X RIDHIKI YAMWAKA DFA WORKING 436, S0706X FRANCIS MUSHI DIT WORKING 436, S0706X EVA LUPEMBE DCBAS WORKING 436, S0706X COLETA MNYAMANI LU WORKING 436, S0706X AGNESS MWAMBA DFA WORKING 436, ,762, B:PRINTERS PRINTER PRINTER CNHXR FA DFA WORKING 2,157, CNHX MC ROOM DMC WORKING 2,157, PRINTER CNBV83F GDC SHUKURU STANSILAUS DCBAS WORKING 2,053, PRINTER PRINTER CNBV83F GDD IT ROOM DIT WORKING 2,053, CNDV81L GCF LIBRARY DCBAS WORKING 3,147, PRINTER CNDV81L GCM PUBLIC PPRA WING 802 WORKING 3,147, ,717, C:SCANNERS CN81PTR 00G DOTTO ALLY DIT WORKING 251, CN81PTR 021 RHOBI CHAMBIRI CEO WORKING 251, CN81PTR 025 CHRISENSIA SANGU DFA WORKING 251, CN81PTR 02M ALOIS MANAMBA DCBAS WORKING 251, CN81PTR 02S SHUKURU STANSILAUS DCBAS WORKING 251,

58 CN81PTR 0M5 AMBROCEA ASSEY DMC WORKING 251, ,510, D:PROJECTORS - EPSON EMP-83 JXKF L IT ROOM DIT WORKING 1,402, JXKF L IT ROOM DIT WORKING 1,402, JXKF L BOARDROOM DIT WORKING 1,402, ,207, E:SERVERS CZC80925 YW SERVER ROOM DIT WORKING 8,145, CZC8093 HV1 SERVER ROOM DIT WORKING 8,145, CZC8093 HVV2 SERVER ROOM DIT WORKING 8,145, ,437, F:OTHERS SONY DIGITAL CAMERA DSC-W DIT DIT WORKING 1,100, RACK BG SERVER ROOM DIT WORKING 7,315, PROFESSIONAL COMPUTER TOOL KIT DIT DIT 537, COMPUTER VACUUMS/BLOWERS DIT DIT 49, ELECTRONIC LABELING MACHINE DIT DIT 98,

59 9,101, GRAND TOTAL 71,737, Additions in year 2009 SCANNERS Kodak Document Imaging Scanners Model i1440 with full capture software, A3 Flatbeds New 57,120, PRINTERS Heavy Duty Photocopier/printrer New 48,050, F:OTHERS Steel binding Machine(1) New 1,500, Spiral Binding Machines (3) New 2,160, Adapter Snapserver 3TB(1) New 8,840, Plasmon UDO Drive 60GB(1) New 5,848, Pack of 5 Units UDO Media 6 GB (1) New 680, Projection Screen(2) 1,191, ,219, Total additions 125,389, GRAND TOTAL 149,076,

60 COMPUTER SOFTWARE Type No. of Licence Value(in Tshs.) MS SQL Server 2005 (Standard Edition) 2processor licenses 11,412, MS Front Page (Latest Edition) 1 291, MS Project (Latest Edition) 50 Users 13,437, Ms Office (Enterprises Edition) 50 Users 31,549, Antivirus (MacAfee Latest Edition 50 Users 3,449, Macromedia Studio(Latest Edition) 1 3,506, Linux Redhat Enterprises Edition(Latest Edition) 1 1,247, Adobe Acrobat Proffessional (Latest Edition) 1 711, MS Visual Studio.net 9Latest edition (bundle with crystal) 1 8,777, Adobe Premiere Pro Video Editing Software 1 1,487, Installshield Premier ,921, Microsoft Exchange Svr , Microsoft Exchange Svr 2007 Std 50 3,528, TOTAL 87,181, Additions in year 2009 Sage Accpac ERP 500: HRM, Payroll and Accounting systems 59,428, Global360Document management software Licence 1 27,200, Total additions 86,628, Grand Total 173,809, NB/- There are commitments subject to complete commisioning if Information Systems (a) Sage Accpac 25,469, (b) Document Management System 114,560, ,029,

61 Annex 6: List of Staff who Attended Training Under ADB LONG TERM TRAINING S/n Name Title Course Title University/ College Duration 1 Raymond Joseph PE I MSc. Construction Project Management Loughborough University 1 Year 2 Robert Kitalala HPMU MBA in Strategy and Procurement Management University of Birmingham 1 Year 3 Monica Malikita PE I MBA in Strategy and Procurement Management University of Birmingham 1 Year 4 James Kitainda PE II Bachelor of Supplies and Procurement Management Kampala International University 3 Years SHORT TERM TRAINING S/n Name Title Course Title Institution Country Dates Duration 1 Dr. Ramadhani Mlinga CEO Senior Executive Fellow 2 Harvard University USA 21/10/ /11/ weeks International research study of public procurement University of Bath school of management Paris 13/9/ /9/ week 2 Clement Kisinga PE II Works Procurement and Selection of Consultants ESAMI Mombasa, Kenya 19/2/ /3/ weeks 3 Lwitiko Mwandobo PE II Works Procurement and Selection of Consultants ESAMI Mombasa, Kenya 19/2/ /3/ weeks 4 Kamana Mlenda ACC I Advanced Financial Accounting IPMC Pretoria, South Africa 17/9/ /10/ weeks 5 Chricensia Sangu PS I Office Management and Administration NIP Morogoro, Tanzania 28/5/ /5/ weeks 2 Training partly sponsored by USAID 57

62 S/n Name Title Course Title Institution Country Dates Duration Office Management and Administration IPMC Pretoria, South Africa 16/3/ /3/ Weeks 6 Joel Mwasongole Driver II Road accident prevention NIP Morogoro, Tanzania 28/5/ /5/ weeks 7 Fanuel Yengayenga SAD 1 CNNA Boot Camp Fast lane Computer Consultancy Dubai 25/6/2007 5/7/ weeks 8 Christopher Mwakibinga CIA Risk and controls for internal auditors Crown Agents London 25/6/2007 5/7/ weeks 9 Fenias Manasseh PE II Project management in World Bank funded projects ILO Turin, Italy 9/7/ /7/ week Procurement of Works: Selection and Employment of Consultants IPMC Pretoria, South Africa 20/7/2009-1/8/ Weeks 10 Grentina Kidulile PE I Project management in World Bank funded projects ILO Turin, Italy 9/7/ /7/ week Procurement for Senior Executives IPMC Pretoria, South Africa 12/10/ /10/ Weeks 11 Hitrudice Jisenge PE II Project management in World Bank funded projects ILO Turin, Italy 9/7/ /7/ week Procurement of Works: Selection and Employment of Consultants IPMC Pretoria, South Africa 7/9/ /9/ Weeks 12 Eva Lupembe MGDD Procurement for senior executives Crown Agents London 11/6/ /6/ weeks 14 Oswald Rangi Rec/TO Customer care Management Modern Management Institute Nairobi, Kenya 2/7/2007 7/8/ week 58

63 S/n Name Title Course Title Institution Country Dates Duration Public Relations and Customer Care IPMC Pretoria, South Africa 10/8/ /8/ Weeks 15 James Ng atigwa RMA Records and Information Management Modern Management Institute Nairobi, Kenya 27/7/ /8/ week Electronic Records Management Mananga Management Centre Manzini, Swaziland 15/6/ /6/ Weeks 16 Ridhiki Yamwaka A CC II Advanced Accounting Skills OMEGA Nelspruit, South Africa 16/7/ /8/ weeks 17 Deusdelity Casmir CA Budgeting and financial Management in Public sector Duke centre for international development USA 22/7/ /8/ weeks Leadership Course DIANTE Africa Mbabane, Swaziland 3/5/2009 9/5/ Week 18 Hannah Mwakalinga DFA Financial Management and strategic planning Crown Agents London 11/6/ /6/ weeks 19 Awadhi Suluo MTAS Managing Contracts Mananga Management Centre Manzini, Swaziland 23/3/2009 3/4/ Weeks Middle East Procurement Forum Marcus Evan Dubai 3/6/2007-4/6/ Days 20 Winfrida Samba SA I Goods and Equipment Procurement MDPI Swaziland 5/11/ /11/ Weeks 21 Bertha Lipindi MIPA Procurement Management Program MDPI Swaziland 8/12/ /12/ Weeks Middle East Procurement Forum Marcus Evan Dubai 3/6/2007-4/6/ Days 22 Bertha Soka HLU Procurement Management Program MDPI Swaziland 8/12/ /12/ Weeks 23 Dickson Ngonde IA Auditing for internal auditors OCMD Nelspruit, South Africa 19/11/ /12/ Weeks 59

64 S/n Name Title Course Title Institution Country Dates Duration 24 Bernard Ntelya MSNA Advanced IT control and security OMEGA Nelspruit, South Africa 19/11/ /12/ Weeks 25 Kenneth Sijaona MDBA Management Information Systems, data base systems and data analysis Meridian Consult Manzini, Swaziland 24/9/ /10/ Weeks 26 Siganike Baruti SAN II Web designing and internet studies OMEGA Nelspruit, South Africa 1/10/ /10/ Weeks 27 Giftness David SAD II Planning, designing and managing corporate computer networks OMEGA Nelspruit, South Africa 5/11/ /11/ Weeks 28 Francis Mushi SAN I Data base system design, implementation and management OMEGA Nelspruit, South Africa 5/11/ /11/ Weeks 29 Ernest Lobulu MCPA Contract management and dispute resolution Crown Agent Worthing, UK 8/10/ /10/ weeks 30 Paul Mhakalira PE I International Procurement ILI Washing ton D.C, USA 10/9/2007 6/10/ weeks 31 Dr. Laurent Shirima DCBAS International Procurement ILI Washing ton D.C, USA 10/9/2007 6/10/ weeks 32 Mary Swai MRD Strategic Procurement and Contract Management RIPA London 15/10/2007 9/11/ weeks 33 Abbas Kajwangya PE I Procurement for senior executive IPMC Pretoria, South Africa 10/9/2007 6/10/ weeks 34 Dorothy Mbenna MAHR Change management RIPA London 8/10/ /10/ weeks Advanced HR Auditing DIANTE Africa Manzini, Swaziland 17/5/ /5/ Week 60

65 S/n Name Title Course Title Institution Country Dates Duration W Muhidin Muro AO Organizational development and change management IPMC Pretoria, South Africa 17/9/ /10/ weeks 36 Agnes M. Mwamba HRO Human Resource Management and Development ESAM Arusha, Tanzania 15/10/2007 9/11/ weeks Performance Management IPMC Pretoria, South Africa 20/4/2009 1/5/ Weeks 37 Ambrocea Assey PS I Advanced management development program for secretaries OMEGA Nelspruit, South Africa 15/10/2007 9/11/ weeks 38 Dotto Ally PS I Management development program for Executive Assistants ESAMI Mombasa, Kenya 12/11/2007 7/12/ weeks 39 Shukuru Stanslaus PS I Office management and administration NIP Morogoro, Tanzania 10/12/2007 4/1/ weeks Office Management and Administration IPMC Pretoria, South Africa 27/4/2009 9/5/ Weeks 40 Deogratias William Driver II Road accident prevention NIP Morogoro, Tanzania 17/9/ /10/ weeks 41 Maulid Msalla Driver II Road accident prevention NIP Morogoro, Tanzania 15/10/2007 9/11/ weeks 42 Coleta Mnyamani PRO II Public Relations and Customer Care Global Management Centre Manzini, Swaziland 20/4/ Weeks 43 Rogers Msokello Driver II Road Accident Prevention NIP Morogoro, Tanzania 27/4/ /5/ Weeks 44 Alois Manamba LDO Librarianship IPMC Pretoria, South Africa 27/4/2009 9/5/ Weeks 61

66 S/n Name Title Course Title Institution Country Dates Duration 45 Ayubu O. Kasuwi DMC Managing Contracts Mananga Management Centre Manzini, Swaziland 16/11/ /11/ Weeks 46 Peter Shilla DIT Scalable Internet Services African Network Operators Group Cairo, Egypt 10/5/ /5/ Weeks 47 Rhobi Chambiri EAS Personal Assistant Program Mananga Management Centre Manzini, Swaziland 7/6/ /6/ Weeks 62

67 Annex 7- Extract of Executive Summary of e-procurement study Report Summary of findings and recommendations Procurement environment in Tanzania Public procurement in Tanzania is undertaken by 364 government agencies. Procurement is governed by the Public Procurement Act of 2004 and regulations published by the Public Procurement Authority (PPRA). A recent report from Public Procurement Regulatory Authority (PPRA) indicates that contracts amounting to Tshs. 2,963,477 million were awarded by 216 entities during the FY 2008/ procuring entities acquired goods and services in excess of TShs 2.9 Trillion in 2008/9 This amount is spread across the entities as shown in table below: 1,200,000 1,000, , , , ,000 0 Ministries Parastatal organisations Executive agencies Urban water and sewerage auth... Independent departments Regional administrative secreta... Local government authorities Goods Works Consultancy services Non- consultancy services The need for e-procurement The following circumstances have given rise to the need for an e-procurement environment: while entities submit their annual plans each year, the planning process requires standardised methods of cost estimation and entities require more realistic budgets; there is a strong need to aggregate annual plans for commonly used items across all entities to benefit from volume discounts and better planning and forecasting; 63

68 while adoption of regulations is on the rise, the percentage of compliant entities remains below 50%; there is a strong need for centralised access to information to improve transparency, accountability and improve quality of audits and compliance reviews; Ongoing initiatives towards e-procurement With leadership from PPRA, the Government of Tanzania has embarked on a number of initiatives to prepare the groundwork for e-procurement. These include: establishment of strong institutional structures that govern procurement policy, regulation, enforcement and compliance monitoring; adoption of standard bidding documents in bid document preparation; implementation of a website for providing information services on tender notices, awards and guidance on procurement; Implementation of the Procurement Management Information System (PMIS) for online preparation and submission of annual procurement plans (APP); The National Communications Backbone project has been ongoing and working towards delivering connectivity to all parts of the country; The Evidence Act was amended to allow electronic evidence in courts of law. and Initiatives in modernising the payment systems in the country. The draft bills on e- Transactions and e-payments prepared by Ministry of Finance (Bank of Tanzania) and is yet to be presented through the cabinet paper to the cabinet for approval. However, despite these great efforts, there remains a lot of preparatory work to be undertaken towards a vibrant e-procurement environment in Tanzania Readiness assessment The following chart summarises the levels of readiness and additional effort required towards a successful e-procurement environment in Tanzania. In developing the ratings for each area, we have adopted the following criteria for establishing the level of readiness: Level of Readiness Degree to which current circumstances and initiatives prepare the country for e-procurement 1 - Not ready There is no real evidence that initiatives have been started and ongoing 2 - Not ready but efforts have been initiated 3 - Ready, but additional efforts required There is some evidence that initiatives have started, but in various stages of implementation Implementation of key initiatives have been started and implementation is almost complete or only a few actions remain outstanding 4 - Adequately ready There is adequate evidence that most key initiatives have been fully implemented and ready for e-procurement 64

69 Readiness assessment policy and legal environment Rating 1 Not ready Enablers Evidence gathered 1. Public Procurement Act 2004 and Regulations sets out vision and objectives for public procurement and provides guidance to the procuring entities in administration and management of public procurement Gaps 1. Current legislation does not recognise electronic documents as valid and authentic representation of records; 2. Current procurement Act only supports paperbased methods of undertaking procurement for bidding, advertising and award of contracts; 3. Current legislation does not recognise electronic signatures and technologies such as PKI that support digital certificates; 4. Current laws do not support electronic payments (Bank of Tanzania has prepared a draft bill to support electronic payments); 5. Existing legislation does not support auctions carried out electronically; 6. Current legislation does not support online dispute settlement mechanisms (ODR); 7. National information security policy not in place; 8. The legal framework does not address potential data protection and privacy related aspects of e- procurement; 9. A common e-government and national datacentre strategy has not been established to prepare for e-government implementations Laws Recommended actions 1. Amend the Procurement Act and Regulations to support electronic transactions such as electronic bid documents in the procurement lifecycle. 2. Amend the Sale of Goods Act (CAP 214 RE 2002) to allow electronic forms of bidding and payments; 3. Amend the Law of Contract Act (CAP345 RE 2002) to support electronic contracts 4. Introduce new laws that: a. support electronic transactions and communication; b. define standards necessary for secure transmission and storage of electronic data; c. support Public Key Infrastructure (PKI) technology in the country; d. safeguard data protection and privacy. Regulations 1. Amend public procurement regulations and local government regulations to support electronic transactions; 2. New regulations are required to mandate adoption of e-procurement in phase 1 of the implementation. Regulation shall also state the interoperability of both paper and electronic processes; and 3. Develop and implement a national information security policy to safeguard exchange of electronic information; Readiness assessment institutional structures Rating Evidence gathered 2- (Not Ready but efforts initiated) Recommended actions Enablers 1. Existence of structures with clear roles and responsibilities for management of public procurement 2. Exististing lead agency to provide leadership for procurement management and modernisation (PPRA) 3. Existing professional bodies to train and empower procurement officers (PSPTB) 1. Establish the following working groups to take part in the implementation of e-procurement: a. National e-procurement Council, to facilitate policy changes required for e- procurement implementation. The council should operate at the highest political level; b. National e-procurement Advisory Board to co-ordinate and oversee its implementation and provide technical 65

70 Rating Gaps Evidence gathered 1. A sponsor for implementation and management of an e-procurement system is yet to be identified 2. The current capacities (resources and skill sets) to lead and manage e-procurement implementation need to be strengthened further. (Skills required include policy, legal, security, data standards, infrastructure) 2- (Not Ready but efforts initiated) Recommended actions advise to implementation teams and stakeholders; c. National Project Management Unit (NPMU) responsible for implementation of e-procurement strategies and policies. NPMU must be established, exclusively for e- procurement planning, implementation and management with a discrete structure, and appropriate authority. It would have a core team with public procurement and sector management expertise, while being able to recruit required skills externally, on a permanent and/or term contract basis; and d. ministry and departmental representatives to participate in implementation at their respective departments and champion transition to through training and stakeholder engagement. 2. Provide adequate training to members of these working groups to prepare them in undertaking the task of implementing e-procurement in Tanzania. Readiness assessment procurement processes Rating 3 Ready but additional effort required Enablers Enablers and gaps 1. Public procurement lifecycle clearly defined and supporting guidance is available; 2. Standard Bidding Documents and formats are commonly used across procuring entities; 3. Independent entity performs monitoring and compliance checks of public tenders; 4. Budgets undergo relevant approval processes; 5. Availability of reference guide for estimating prices of commonly used goods; and 6. Some degree of standardisation of item codes has been adopted. Gaps 1. Current processes do not facilitate cross-agency co-operate in procuring Additional actions required 1. Define and implement an approach for strategic planning and procurement of goods and works. Strategic planning and procurement (sourcing) shall facilitate within and cross-agency cooperation in assessment, aggregation, planning and procurement of goods, works, services. 2. Define and implement a framework for public procurement performance management in the country, which clearly identifies the indicators for measuring procurement performance along with target performance metric. 3. Define and implement a structured approach for supplier performance management. Common performance metrics and targets should be established, using recognised external benchmarks where possible and framework shall enable sharing of performance data among all entities; 4. Establish a clear process for the debarment/blacklisting of vendors. This is dependent upon establishment of a structured approach in the management of supplier 66

71 Rating 3 Ready but additional effort required common items; Enablers and gaps 2. Currently, performance management is based on regular compliance reviews. Performance should be based on broader value adding set of goals and objectives such as value for money, process time, supplier satisfaction, customer satisfaction and overall process transparency; 3. There are no formal procedures to monitor supplier performance over the duration of a contract; 4. Some level of standardisation of item codes has been put in place by GPSA for commonly procured goods/items across the entities. However, the codification of all the items is yet to be completed using leading standards such as UNSPSC; and 5. There is lack of simplified standard operating procedures to guide the procurement practitioners Additional actions required performance as identified above; 5. Define and implement standard item code classification for procurement requirements across entities. The standard shall be based on leading standards such as UNSPSC; and 6. Update existing standard operating procedures and user guides; Readiness assessment - ICT Rating 2 Not ready Enablers Enablers and gaps 1. Accessibility to desktop computers and Microsoft office applications 2. Reliable internet connectivity in some procuring entities such as Tanesco and GPSA 3. Available power supply at most cities and towns countrywide 4. Medium levels of teledensity (39% in 2009). While the telephone, mobile and internet penetration has been found to be high in the urban and regional levels, the penetration at district and below levels is improving 5. Online banking services and credit card issuance offered by selected Banks 6. Interbank settlements facilitate faster processing of large payments through electronic funds transfer Gaps 1. The level of computer availability at district level is medium and low at location level 2. Lack of third party data centres or hosting service providers based in Tanzania 3. No PKI infrastructure in place. Additional actions required 1. Establish a national procurement website, independent of PPRA portal, to act as a gateway to procurement related services for public sector buyers, suppliers and the general public 2. Define and implement a content management framework for managing and disseminating information to the stakeholders 3. Constitute technical committee for finalisation of e-procurement system requirements (functional, technical, security requirements), which shall guide system development and implementation 4. Undertake rigorous software selection to determine most suitable e-procurement system for Tanzania 5. Constitute technical committee for finalisation of e-procurement technical standards including information security standards, interoperability standards, data standards and catalogue management 6. Strengthen IT support and build internal capacity to manage and enhance the e- procurement environment on an ongoing basis 7. Agree on pilot entities to take part in phase1 of the implementation. Agree on entities to take 67

72 Rating 2 Not ready Enablers and gaps 4. No standards and interoperability framework for implementation of e-governance initiatives in the country. 5. Inadequate power supply in rural areas. 6. Inadequate internet access in rural areas. Additional actions required part in subsequent phases 8. Finalise approach for adoption of PKI infrastructure and issuance of Digital Signature Certificates for users of e-procurement system 9. Define the standards and technical requirements for IT infrastructure and data centre required for e-procurement system and selection of a professional data centre hosting service provider for hosting e-procurement application. 10. Align system rollout at district level based to progress with the National Communications Backbone project. Readiness assessment - people Rating 2 Not ready Enablers Enablers and gaps 1. Procurement officials in most procuring entities are well trained in the use of technology. 2. There is general concensus among key stakeholders that e-procurement is required and key benefits are understood. Gaps 1. While the level of IT readiness in staff in parastatal and executive agencies is found to be adequate, the readiness of staff in entities such as Ministry of Education, Health and Local Government is found to be inadequate for implementation and usage of e- procurement/web enabled applications. 2. Low awareness of e-procurement and its benefits in PMUs in the Ministry of Education, Health and Local Government. Additional actions required 1. Develop change management and capacity building plan to support e-procurement Implementation. 2. Develop a communications plan to support exchange of information among stakeholders. 3. Establishment training centres of excellence to provide ongoing training to users. 4. Development and implementation of certification programmes in e-procurement and institutionalise e-procurement training through Procurement & Supplies Professionals and Technicians Board. 5. Identify and implement incentives for early adopters of e-procurement. 6. Prepare of training material for awareness for all stakeholders. Materials should include how to guides, key benefits, performance metrics and security awareness. 7. Initiate the provision of a specific education, training and awareness program in strategic and operational benefits of e-procurement implementation to staff and suppliers to widen their understanding and experience of the components that underlay e-procurement. 8. Develop and implement monitoring & evaluation framework for evaluation of effectiveness of training and capacity building programmes and to incorporate the feedback into refinement of training approach and materials 68

73 Economic readiness and cost benefit analysis To assess whether e-procurement is viable in Tanzania, we undertook an analysis of potential costs of implementing e-procurement against potential costs savings that can be derived from the use of the system. Cost of implementing e-procurement There are various models that can be adopted by the Government of Tanzania; 1. Government owned model, where the Government pays for the cost of the software and all costs associated with training and implementation. 2. Private Public Partnership, where the Government partners with a software vendor who owns and operates an e-procurement system. The Government agrees to pay for each transaction that is processed through the system 3. Shared services model, where the Government may hold talks with another Government that has already implemented e-procurement. In such a case, the Government will be met by an initial cost of sharing the service and subsequently agree on transaction fee for every transaction processed in the system We have considered these options in detail and the table below summarises the pros and cons of each model. There are various models that can be adopted by the Government of Tanzania; 4. Government owned model, where the Government pays for the cost of the software and all costs associated with training and implementation. 5. Private Public Partnership, where the Government partners with a software vendor who owns and operates an e-procurement system. The Government agrees to pay for each transaction that is processed through the system 6. Shared services model, where the Government may hold talks with another Government that has already implemented e-procurement. In such a case, the Government will be met by an initial cost of sharing the service and subsequently agree on transaction fee for every transaction processed in the system We have considered these options in detail and the table below summarises the pros and cons of each model. Model Pros Cons Government owned Shared services Complete control on project execution and solution is retained by government Predictable implementation plan Flexibility in definition and implementation of the system functionality as per specific requirements of government Shorter implementation timelines Less effort required during High cost of ownership Requires considerable investments and resources in system creation and maintenance Greater pressure to manage transition to change Lengthy implementation Speed of system adoption is dependent on the speed of response from shared owner 69

74 Private Public Partnership implementation Reduced initial costs Can leverage from the experiences and best practices implemented in the system Reduced cost of ownership Low cost of ownership Minimum effort required in implementation Incentive to the implementation partner to propagate e-procurement system and its uptake in public sector Significant variations in business processes adopted by procuring entities in Tanzania likely to require additional development and customisation effort and costs may be as high as for a new system The procedures for finalising contractual agreements between the governments (if shared service system is owned by a government) are long and lengthy, and may consume longer time than a new system development Lack of flexibility in ammending the system to meet users future requirements Excessive dependence on implementation partners Business continuity at risk due to possible default or liquidation of the implementation partner or at the expiry of contract period for the implementation partner Costs benefits analysis For purposes of the cost benefit analysis we have adopted the highest cost government own model and we have assumed full utilisation and adoption of the e-procurement system. The costs under Government owned model are shown below Year 1 Year2 Year3 Year4 Year5 Total Application costs (US$) 1,100, , , , ,000 1,100,000 Hardware costs(us$) 601, , , , ,978 2,336,722 Implementation costs including training and support (US$) 939, , , ,000 56,000 2,963,000 Totals 2,640,409 1,114,378 1,270,978 1,066, ,978 6,399,722 70

75 We based the potential cost savings on the following: 1. Average time savings for each procurement process multiplied by daily cost estimate of administrative effort; 2. Potential savings arising from reduced cost of advertising and printing3; and 3. Calculated potential volume discounts arising from aggregated buying over per year. Over a 5 year period, the comparison of costs to benefits is shown in the table below: Cost savings Project Costs Year Procurement time (Tsh.million) Transaction cost (Tsh. million) Procurement cost (Tsh. million) (Tsh. million) 1 1,176 1,149 4,425 3, ,200 1,206 4,425 1, ,223 1,264 4,425 1, ,247 1,379 4,425 1, ,270 1,436 4, Total 6,115 6,434 22,126 8,320 The aggregated comparison is illustrated in chart below and shows that if implemented properly, returns can be realised in the first year of using the system. Our analysis has revealed that e-procurement will yield substantial gains in the first year of full usage. In the first year of usage, realised benefits are in excess of costs incurred in year 1. This represents a return on investment within the first year of full utilisation of the system. We estimate that it will take no less than 3 years to realise full utilisation of e-procurement. 3 Since the cost of procurement per day for a given procurement process is known. Average times spent per given stage in a procurement process were obtained from PPRA. The times vary depending on the type of procurement. 71

76 In addition to financial gain, there are other intangible benefits that can be expected from e- procurement. These include: improved quality of audits improved access to procurement information, raising transparency in public sector procurement reduction in procurement time will provide adequate time in implementing government programmes; improved controls in procurement process will result in higher levels of compliance; and improved competition arising from access to information will improve quality of service and enhance value for money in government spending. Implementation of e- procurement will deliver significant returns within first year of full utilisation As a result, implementation of e-procurement in Tanzania is a viable undertaking that is likely to bring forth significant opportunities to the Government and citizens of Tanzania. Conclusion and recommendation Based on our findings, a well organised implementation of e-procurement in Tanzania will yield positive results in the first year of full utilisation of the system. E-procurement is therefore economically viable. To achieve a successful e-procurement implementation, we have set out key tasks that must be undertaken by various PPRA and stakeholders in procurement. The most signficant effort is under change to the legal environment. The current environment requires significant change to laws and regulations to allow a robust e-commerce and e-procurement environment. 72

77 We also recommend a phase approach to implementation, irrespective of the ownership model selected. We recommenda that appointed working group, particularly the e- procurment Council, makes the recommendation ownership model, taking into consideration important factors such as costs and overall e-government strategy. The implementation of system features should be phased out to introduce simple but important features first and introduce complex and sophisticated features last. In addition, we have analysed the pilot agencies that took part in this exercise and recommend that the following entities, who s levels of readiness is higher than the rest, and who undertake sizeable procurement each year, should take part in the pilot phase of the implementation: 1. Medical Stores Department 2. Tanzania Electric Supply Company Limited 3. Tanzania National Roads Agency 4. Government Procurement Services Agency 5. Ministry of Communications, Science and Technology 73

78 1. Proposed implementation schedule The following is a summary of the proposed implementation scheduled. The detailed schedule can be found in the main report. Activity Year 1 Year 2 Year 3 Year 4 Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q1 Q12 Q13 Q14 e-procurement system requirements definition and selection of implementation partner 1 Definition of e-procurement functional, technical & security specifications 2 Bid document preparation and selection of implementation partner Policy and legal changes 1 Finalise on amendments to existing laws 2 Draft bills for new laws 3 Call for stakeholders to review and agree on final draft 4 Present laws to parliament for debate and passing Institutional framework & capacity building 1 Establish e-procurement working groups 2 Capacity building and change management for procuring entities and suppliers* e-procurement System Implementation 1 Roll out of IT Infrastructure in pilot entities 1 Implementation of Phase I of e-procurement System 2 Implementation of Phase II of e-procurement System 3 Implementation of Phase II (e-tendering) of e-procurement System 4 Implementation of Phase II (online disposals of items) of e-procurement System 5 Implementation of Phase III of e-procurement system 6 Implementation of Phase IV of e-procurement system 74

79 75