Paradigm shift in public procurement

The term "tender" is far more familiar to Bangladeshis than its Bangla equivalent, dorpatra. While it has not yet been fully adopted as a Bangla word, "tender' has firmly embedded itself in the country's socio-cultural and administrative discourse. This reflects a governance system that, despite frequent criticism, has also made commendable strides in delivering tangible benefits in public investment – an area crucial for national development.

According to the Bangladesh Public Procurement Authority (BPPA), the government currently spends nearly $30 billion annually on public procurement. This accounts for about 45% of the national budget and 80% of the Annual Development Programme (ADP), involving more than a thousand procuring agencies across the country.

Globally, public procurement accounts for 8–20% of GDP in most countries; in Bangladesh, it represents around 9% of GDP. Private contractors and consultants collaborate with the government to supply goods, execute works, and deliver professional services – all governed by stringent laws and regulations to ensure transparency, accountability, and fair competition.

To ensure transparency, accountability, and efficiency in the expenditure of such a large sum, the government initiated reforms in public procurement. The reform process began in 1999 with the launch of the Country Procurement Assessment (CPA) in collaboration with the World Bank and the Asian Development Bank (ADB).

In 2001, the Country Procurement Assessment Report (CPAR) outlined a series of recommendations to streamline the public procurement process. Three key recommendations of the CPAR focused on institutional, legal, and capacity-building aspects.

In line with the recommendations, the government established the Central Procurement Technical Unit (CPTU) within the Implementation Monitoring and Evaluation Division (IMED) under the Ministry of Planning in 2002. To implement reforms, the CPTU launched the Public Procurement Reform Project (PPRP) with support from the World Bank in the same year. The government also introduced the Public Procurement Regulations in 2003.
As part of the reform initiatives, the CPTU undertook capacity-building programmes, which included training government officials and tenderers in public procurement and developing a pool of national procurement trainers. The preparation and issuance of various Standard Tender Documents (STDs) also commenced in 2003.

In 2006, Parliament passed the Public Procurement Act, and the Public Procurement Rules were formulated under the Act in 2008. Both the Act and the Rules came into effect that year. The reform process accelerated with efforts to digitise public procurement, beginning in 2008 with support from the World Bank under the "Public Procurement Reform Project (PPRP) Phase-II."

On 2 June 2011, the electronic Government Procurement (e-GP) portal was launched to digitise the public procurement process.

Due to the convenience of the e-GP system, its adoption has grown exponentially over the years. At present, all ministries, divisions, and procuring agencies of the government are connected to e-GP. The digitisation of public procurement has opened up new opportunities; however, it has also brought challenges.

The former Central Procurement Technical Unit (CPTU) under the IME Division of the Ministry of Planning lacked the necessary workforce and capacity to keep pace with evolving technological challenges. The ever-increasing volume of public procurement and the need to enhance professionalisation called for the establishment of an authority to address these challenges.

Therefore, it became necessary to transform the former CPTU into an authority to ensure the proper implementation of public procurement laws and regulations, enhance efficiency, promote professionalisation in public procurement management, institutionalise the e-GP system, and implement sustainable public procurement practices.

In line with this objective, the former CPTU launched the Digitising Implementation Monitoring and Public Procurement (DIMAPP) project in July 2017 with support from the World Bank. The first of the four components of the DIMAPP project focuses on restructuring the CPTU and policy reforms. Under this component, the process of transforming the CPTU into an authority commenced.

On 5 July 2023, the Bangladesh Public Procurement Authority (BPPA) Bill 2023 was placed before the Jatiya Sangsad (National Parliament). The Bill was passed on 10 September 2023 and received the assent of the Honourable President on 18 September. Subsequently, Act No. 32 of 2023, the Bangladesh Public Procurement Authority Act 2023, was published for public information.

Core principles of procurement

Since the enactment of the Public Procurement Act (PPA) and Public Procurement Rules (PPR) in 2008, Bangladesh has established a legal framework to ensure the efficient use of public funds —sourced from citizens' taxes. The objective is to achieve Value for Money (VfM), ensuring that projects deliver the expected quality and outcomes. Poor execution, whether in road construction or bridge-building, not only compromises quality but also affects the well-being of citizens, who ultimately bear the cost.

Delays in procurement and substandard quality remain persistent challenges, often leading to project overruns in both time and cost. The Annual Development Programme (ADP), which comprises an average of 1,500 projects each year, frequently faces implementation bottlenecks. These challenges are often attributed to shortcomings in project design, delays in procurement processes, and weak contract management.

Digital transformation: A paradigm shift

The government has led reforms in procurement and project monitoring, marking a significant shift from manual processes to digitised systems. The e-Government Procurement (e-GP) platform, launched by the BPPA in 2011, is central to this transformation. As a comprehensive system, e-GP now covers the entire procurement cycle – from annual planning to contract management. As of November 2024, 65% of public procurement, in terms of volume, is conducted digitally, with plans to achieve full digital coverage.

Key achievements include:

• Introduction of e-Audit.
• Development of Tenderers' Database.
• Deployment of the electronic Contract Management System (e-CMS).
• Integration with iBASS++, NID, and e-PMIS for seamless data flow.
• Implementation of international competitive tendering (ICT) and framework agreement.
• Receipt of four ISO certifications for operational excellence and environmental management.
• Delegations from 11 countries and five international organisations so far have visited Bangladesh to study its e-GP success story.
• Monitoring ADP projects digitally: e-PMIS
• Digitisation of project monitoring began in 2022 with the launch of the e-Project Management Information System (e-PMIS) by the Implementation Monitoring and Evaluation Division (IMED). Integrated with e-GP and NID, this system delivers real-time data on ADP projects. 

Moving towards green and sustainable procurement

Bangladesh is steadily transitioning to green procurement and Sustainable Public Procurement (SPP) to align with Sustainable Development Goals (SDGs). Policy revisions are addressing past challenges, such as excessive reliance on single tenderers and inflated pricing. Citizen engagement in public procurement is another pioneering initiative, fostering local monitoring through the Digitising Implementation Monitoring and Public Procurement (DIMAPP) project with support from the World Bank in 48 upazilas across 18 districts.

Tangible results of reform

According to BPPA and a World Bank study, the impact of these reforms has been remarkable:

• Transparency: 100% publication of tender notices, up from 70% in 2007.
• Efficiency: Contract awards within the bid validity period surged to 99.67% from just 10% in 2007.
• Cost savings: An estimated savings of $1 billion.
• Environmental impact: 153,559 tonnes of CO₂ emissions avoided and significant reductions in travel distances and paper usage.
• Time savings: Procurement lead time dropped from 86.7 days in FY12 to 53 days in FY24.
• Competition: Average bidders per tender increased from 3 in 2007 to 20.04 in 2024.

Conclusion

Bangladesh's public procurement reforms, especially the integration of digital systems, signal a groundbreaking transformation in the domain of public procurement. By embracing transparency, efficiency, and sustainability, the government is not only enhancing procurement processes but also ensuring economic development of the country as well as welfare of its citizens. This paradigm shift serves as a model for other nations striving for similar progress in governance.

Sketch: TBS

Md Shafiul Alam is a senior journalist. He can be reached at [email protected]