Results of reforms in Bangladesh’s public procurement

It is quite natural for anybody wanting to buy a product or service to try and get the best value for his/her money. Durability, resale value and quality are all considered while making purchasing decisions. These are all done at the individual level with personal funds.   

But what about spending from the government's coffer meaning the funds generated through the taxes paid by the people? To keep the wheels of development running, governments need to procure goods and services. Procuring agencies are assigned to do this job. In all, public procurement is done with public funds for the betterment of people's lives. There are currently 1362 procuring agencies (PAs) working under various ministries and divisions of the Bangladesh government.

In 2003, the annual value of public procurement was $4 billion. Later in 2010, it rose to $10 billion and in 2020, it was about $25 billion. For a country like Bangladesh, it is certainly a large amount. It is growing every year with the ever-growing outlay of national budget and Annual Development Programme (ADP). About 80 percent of the ADP and 45 percent of the national budget are spent on public procurement in Bangladesh every year.

So, maintaining transparency, reducing waste and ensuring value for money is quite important for such large annual public expenditures. Government machinery is constitutionally bound to ensure value for money in public procurement.   

But until 2003, there was no unified legal framework to govern public procurement. In 2003, the Public Procurement Regulations was issued following a country procurement assessment report jointly prepared by the government, the World Bank and the ADB. The report in 2002 captured three main observations among others. These are the absence of a legal framework, institution and capacity. Based on the recommendations, the government established the Central Procurement Technical Unit (CPTU) in 2002, issued Regulations in 2003 and started capacity building to enable officers to do procurement as per regulations and procedures. Under a project supported by the WB, the government started policy reforms and capacity building from 2002.

As part of the reform process, the Public Procurement Act 2006 was passed by the parliament while the Public Procurement Rules 2008 was issued. Both came into effect in 2008 since public procurement is conducted under the unified law and rules. 

Between 2003 and 2008, a total of 1800 officers were trained with 25 officers being developed as national procurement trainers. Many Standard Tender Documents (STDs) were developed and issued. These were done with support from the World Bank under a project. Reforms in policies were implemented between 2008 and 2017. About 30 thousand individuals received training for various durations. They included audit, anti-corruption and parliament secretariat officials, BCS officers of various tiers, tenderers and private sector business people and journalists. The number of national trainers has been raised to 60.

As part of procurement professionalisation, 25 government officers achieved Master's degrees in public procurement from the University of Turin, ITCILO. About 160 received MCIPS (Member of CIPS). The process for further professionalisation is now going on.  

The preparation for digitising public procurement started in 2009. On June 2, 2011, Prime Minister Sheikh Hasina inaugurated the national portal of electronic government procurement (e-GP). This was a milestone achievement in digitising procurement towards the path of building a Digital Bangladesh. 

In 2011, the online tendering was piloted in four large procuring agencies such as Local Government Engineering Department (LGED), Roads and Highways Department (RHD), Bangladesh Water Development Board (BWDB) and Bangladesh Rural Electrification Board (BREB).

Building on the success of the pilot projects, the CPTU started implementing e-GP across the government procuring agencies from 2012.  Both the procuring agencies and tenderers embraced e-GP as a great relief from various hassles. 

As of January 21, 2021, a total of 1353 PAs have registered with the e-GP system while the number of registered bidders stood at 83144. A total of 447703 tenders valued at Tk 463215 crore were invited in the e-GP system. Branches of 46 banks across the country have been providing services to tenderers under MoUs with the CPTU. Training on e-GP started as well in 2012 for both procuring officers and bidders and is still ongoing. Presently, the LGED is on a contract with the CPTU to provide e-GP training to 888 local government institutions across the country. It has already started training in its regional training labs. Training on PPR has also continued. With the introduction of e-GP, hassles in submitting tenders have ended as tenderers now can submit tenders online from home which saves time and costs. To support users, a 24/7 e-GP Help Desk has also been established at the CPTU. 

The e-GP system has reduced costs for averting the use of paper and other associated expenses by 6.9 percent. Moreover, $1.1 billion was saved by the e-GP system in government procurement in FY 2018-19 alone. This was revealed in a recent survey conducted by the World Bank. 

A total of 63 percent of expenditures on public procurement in FY 2019-20 was conducted through e-GP. Tender processing time has come down from 58 days in 2019-20 fiscal from 100 days in 2016-17. 

The CPTU is currently implementing a project on the further digitisation of public procurement. The project that was started in 2017 is expected to be completed in December 2023. 

According to a World Bank study, upon completion, the project will reduce 497 million kilometres of travel resulting in a reduction of emissions of 153,559 tons of carbon dioxide. The implementation of the project will save 10,287 million pages of paper.

Meanwhile, e-GP continued to operate uninterrupted during the pandemic from March 2020 to December 10, 2020. During this time, CPTU's Helpdesk and the e-GP system remained open 24 hours a day and seven days a week, according to e-GP activities shown in the system. 

Recent data released on the performance of public procurement and e-GP shows that amid the pandemic since March 1, 2020, to December 10, 2020, the authorities have been able to accomplish a significant volume of work in conducting public procurement through the digital system installed by establishing a dedicated network that connected most of the stakeholders.

The table shows a comparison between COVID period of  March to December 2020 and the performance of e-GP during the same period in 2019..

Source: CPTU e-GP

The credit goes to the procuring entities that are implementing e-GP. The CPTU has also been implementing Digitising Implementation Monitoring and Public Procurement Project with support from the World Bank. Under the project, the e-GP system is being enhanced and institutionalised. 

A study jointly conducted by the World Bank and CPTU in 2019 found some very positive results of e-GP. The implementation of e-GP has increased efficiency, transparency and competition in public procurement. One of the indicators of efficient performance in procurement is the number of contracts signed over time.

In 2007, only 10 percent of the total contracts were signed in the stipulated period whereas it rose to 90 percent in 2019.

Another indicator of transparency was the publishing of information regarding tender awards. In 2007, it was only 15 percent. It stood at 100 percent in 2019.

The indicator for competition lies in the value of participation per tender which, according to the World Bank, was 4 in 2007 and later rose to 16 per tender.  

The electronic contract management system (e-CMS) is being piloted on three contracts of LGED, two of RHD and one of BREB. Furthermore, the CPTU has developed a tenderers' database and taken preparations for introducing international tender invitations through e-GP.

The CPTU launched a citizen portal (www.citizen.cptu.gov.bd) on 26 Aug 2020, that allows citizens to access public procurement data.

The interactive web portal aims to enhance transparency and accountability in the process of public procurement by providing relevant information in line with the Right to Information Act.

From the portal, citizens can get information about the country-wide procurement of goods and services. The portal also allows customisation or search functions through features like sorting or filtering as well as graphical data. They can remain updated on different steps of procurement in their localities as well. Also, citizens can interact through citizen blogs and social media that are connected with this portal. Through the platform, citizens can raise their voice and share their observations on public procurement.

Policymakers, officials of procuring entities, experts, researchers and others will be able to download procurement data following the Open Contracting Data Standard (OCDS) to conduct analysis and research work to evaluate procurement performance.

The CPTU has been working to fulfil SDG targets on public procurement. For this, economic, social, environmental and gender-equality issues will be considered in procurement. To make procurement sustainable, a life-cycle cost basis evaluation system will also be implemented. It is expected that with all the factors mentioned above put in place, public procurement in Bangladesh will be more economic, efficient, effective and equitable. 

The writer is a senior journalist and communication specialist. He can be reached at [email protected]