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Report No. 48653-PK
Pakistan Federal Procurement Baseline Indicator Systems Assessment
June 2009
UK's Department for International
Development The European Commission Asian Development Bank The World Bank Government of Pakistan
Government of Pakistan and Development Partners
GOVERNMENT FISCAL YEAR
July 1 – June 30
CURRENCY EQUIVALENTS
Currency Unit = Pakistan Rupee (PKR)
US$1 = PKR 80.56
ACRONYMS AND ABBREVIATIONS
ADR Alternative Dispute Resolution
BIS Baseline Indicator System
BLI Baseline Indicator
BOT Build, Operate and Transfer
CDA Capital Development Authority
CFAA Country Financial Accountability Assessment
CPAR Country Procurement Assessment Report
CPS Country Procurement Systems
DAC Development Advisory Committee
ECNEC Economic Committee of the National Economic Council
EOI Expression of Interest
ESTA Code Pakistan Civil Services Establishment Code
FIDIC Fédération Internationale des Ingénieurs-Conseils (International Federation of
Consulting Engineers)
GCC General Conditions of Contract
GFR General Financial Rules
ICB International Competitive Bidding
IESCO Islamabad Electricity Supply Company Limited
IFI International Financial Institution
MBDs Master Bidding Documents
MDB Multi-Lateral Development Bank
MTBF Medium Term Budgetary Framework
NAB National Accountability Bureau
NHA National Highway Authority
NHF National Health Facility Programmes of the Ministry of Health and Ministry of
Population Welfare
NESPAK National Engineering Services (Pakistan) Limited
OECD Organisation for Economic Development
PC-IV Planning Commission Form IV (Completion Report)
PEC Pakistan Engineering Council
PEFA Public Expenditure and Financial Accountability
PEPFM Public Expenditure Planning and Financial Management
PFMAA Public Financial Management and Accountability Assessment
PKR Pakistani Rupee
PPR Public Procurement Rules
PPRA Pakistan Public Procurement Regulatory Authority
PQA Port Qasim Authority
SBDs Standard Bidding Documents
SRO Statutory Rules and Orders
WAPDA Water and Power Development Authority
i
PAKISTAN
FEDERAL PROCUREMENT BASELINE INDICATOR SYSTEMS ASSESSMENT
TABLE OF CONTENTS
EXECUTIVE SUMMARY .................................................................................................................... III
I. BACKGROUND ................................................................................................................................... 1
II. THE OECD-DAC BASELINE INDICATOR FRAMEWORK ...................................................... 2
III. FEDERAL PROCUREMENT SYSTEMS – AN OVERVIEW ..................................................... 4
IV. ASSESSMENT OF BASELINE ........................................................................................................ 4
PILLAR I: LEGISLATIVE AND REGULATORY FRAMEWORK .................................................................... 5
Indicator 1: Public procurement legislative and regulatory framework complies with applicable
obligations with regard to national and international requirements. ................................ 6
Indicator 2: Existence of implementing regulations and documentation ............................................. 14
PILLAR II: INSTITUTIONAL FRAMEWORK AND MANAGEMENT CAPACITY ...................................... 19
Indicator 3: The public procurement system is mainstreamed and well integrated into the public
sector governance systems ............................................................................................... 19
Indicator 4: The country has a functional normative/regulatory body ................................................ 23
Indicator 5: Existence of Institutional Development Capacity ............................................................. 25
PILLAR III: PROCUREMENT OPERATIONS AND MARKET PRACTICES ............................................... 28
Indicator 6: The country’s procurement operations and practices are efficient .................................. 29
Indicator 7: Functionality of the public procurement market .............................................................. 32
Indicator 8: Existence of contract administration and dispute resolution ........................................... 34
PILLAR IV: INTEGRITY AND TRANSPARENCY OF THE PUBLIC PROCUREMENT SYSTEM ................ 37
Indicator 9: The country has effective control and audit systems ............................................................ 37
Indicator 10: Efficiency of appeals mechanism .................................................................................... 40
Indicator 11: Degree of Access to Information ..................................................................................... 43
Indicator 12: The country has ethics and anticorruption measures in place ........................................ 44
V. CONCLUSIONS AND REMEDIES ................................................................................................ 49
TABLES & FIGURES
TABLE 1: OECD-DAC MATRIX OF COUNTRY PROCUREMENT PERFORMANCE ..................... 2
TABLE 2: ASSESSMENT OF PROCUREMENT SYSTEMS ................................................................. 5
FIGURE 1: PAKISTAN CPS VS OECD-DAC BLIS ........................................................................................ 5
ii
ACKNOWLEDGEMENTS
1. The report has been prepared as part of the integrated public financial
management and procurement assessment conducted jointly under the auspices of the
development partners (The World Bank, Asian Development Bank, UK Department for
International Development, The European Commission) and in cooperation with the
Government of Pakistan. The United States Agency for International Development
participated in the finalization process during the stakeholders’ workshop. The
assessment was led by Asif Ali (World Bank Senior Procurement Specialist) with major
contributions from Zafar Hameed Ismail (Consultant) and Uzma Sadaf (World Bank
Senior Procurement Specialist). Other members of the PEFA PFM Assessment team
also contributed to the finalization of the assessment report.
2. Comments were received from Asian Development Bank and the European
Commission, as reviewers, and the Office of the Regional Procurement Manager, The
World Bank, also reviewed the draft report. The extensive collaboration of the Public
Procurement Regulatory Authority is gratefully acknowledged, and particular, the special
cooperation of Mr. Sarfaraz Ahmed Syed, Managing Director and Mr. Lodhi, Deputy
Director, PPRA, is acknowledged. The preparation of the report benefited from a
Stakeholders’ Workshop held in Islamabad (20-21 April 2009), and comments received
on the working draft have been incorporated into this final version of the report.
iii
EXECUTIVE SUMMARY
1. The Baseline Indicators (BLIs) assessment has been conducted by the
Development Partners and the Government of Pakistan as a precursor to carrying
forward the Government’s efforts to upgrade the Country Procurement Systems (CPS) to
international standards and to help it assess the level and type of technical assistance
required for achieving this objective. The assessment, being the first phase of a
comprehensive procurement performance assessment, covered the four pillars as well as
all the indicators and sub-indicators in each pillar based on a review of the existing
regulatory framework and the institutional and operational arrangements and as provided
for in the OECD DAC Guidelines. While the views expressed in the report were the
subject of discussions at the stakeholders’ workshop, they do not necessarily represent
the views of the Government of Pakistan.
2. The result indicates that compared to the standard required for a transparent,
efficient and effective procurement system, the existing system in Pakistan needs to be
improved substantially. The highest achieved rating is for Pillar I – the Legislative and
Regulatory Framework – which is an amalgam of specific legislation and sub-legislation
impacting the procurement activity of the government and the older legislative
instruments affecting the overall operations of the public and/or the private sectors. The
other Pillars’ achievements compared to the standard for international good practice are
much lower. This can be seen in both the following table and chart:
Assessment of Procurement Systems
Pillars Maximum
Rating
Achieved
Rating
PILLAR I: Legislative and Regulatory Framework 3.00 1.99
PILLAR II: Institutional Framework and Management Capacity 3.00 1.92
PILLAR III: Procurement Operations and Market Practices 3.00 1.67
PILLAR IV: Integrity and Transparency of the Public Procurement System 3.00 1.52
0.00
0.50
1.00
1.50
2.00
2.50
3.00
PILLAR I Legislative and Regulatory Framework
PILLAR II Institutional Framework and
Management Capacity
PILLAR III Procurement Operations and Market
Practices
PILLAR IV Integrity and Transparency of the Public Procurement
System
Maximum Federal
iv
3. As a first step towards improving the procurement systems, the Federal
Government created the Public Procurement Regulatory Authority (PPRA) in 2002
through a Presidential Ordinance1 for “regulating public procurement of goods, services
and works in the public sector” which expired 90 days after its promulgation2. This was
followed by the enunciation of the Public Procurement Rules 2004, and in December
2008 by the first set of regulations.
4. As part of the reforms, the PPRA commissioned and conducted the re-
engineering of the procurement systems, procedures and manuals of 14 public sector
undertakings to harmonise with the PPR 2004. Of these, seven3 studies have been
completed. The others are in the process of being completed. A Manual has also been
finalised for use by the National Health and Population Welfare Facility which could
well be used by both the Health and Population Welfare ministries/divisions and their
related organisations and with some modification by the other social sector ministries. A
draft Guidelines for the Public Procurement of Consultancy Services was issued in 2006
for soliciting stakeholder comments, and has yet to be finalised.
5. Most of the legislative framework requires to be brought at par with international
good practice4. This needs to be tackled as a first priority without which the likelihood
of donors accepting the CPS in preference to their own systems would not be possible.
6. The Public Procurement Regulatory Authority (PPRA) is the apex body of the
institutional framework (Pillar II) governing the public procurement arena. The Pakistan
Engineering Council (PEC) was involved as a member of the Kazi Committee to prepare
a standard bidding document and standard GCC for all engineering contracts. In 2008
the Executive Committee of the National Economic Council (ECNEC) notified that
public sector entities should use these SBDs and GCC for all public procurement of
works and engineering services.
7. This dichotomy has resulted in a conflict between the PEC and the PPRA on the
oversight of works in the country. The PEC was created for encouraging
professionalism in the engineering sector and not regulating procurement. It, however,
continues to do so as part of the oversight in ensuring professionalism and adherence to
standards which is its true mandate. The overlap between the PEC and the PPRA needs
to be clearly identified and resolved. The PPRA and PEC need to find ways to
accommodate their respective mandates, recognising problems that can arise out of
overlapping jurisdictions
1 XXII of 2002 issued on 15th May 2002.
2 The Ordinance lapsed after 90 days. As it was issued under the authority of the Provisional Constitutional Order it is
argued that this has the status of and Act of Parliament. Nevertheless, this was validated by the Seventeenth
Amendment (assented to by the President on 31 December 2003) to the Constitution through Article 270AA(i) which
states “all other laws made between the twelfth day of October, one thousand nine hundred and ninety-nine and the
date on which this Article comes into force (both days inclusive), having been duly made or accordingly affirmed,
adopted and declared to have been validly made by the competent authority and notwithstanding anything contained in
the Constitution shall not be called in question in any court or forum on any ground whatsoever”.
3 relating to Port Qasim Authority, Higher Education Commission, Capital Development Authority, Pakistan
International Airlines, Telephone Industries of Pakistan, Civil Aviation Authority and Pakistan Steel Mills.
Subsequently three more have been completed.
4 For instance the absence of a clear distinction between public and private sector entities, complaint redressal through
and adequate alternate dispute resolution mechanism.
v
8. Throughout the government there is a dearth of skill in procurement and contract
administration ranging from the development of policy to the management of the
function. This is largely due to the absence of dedicated cadre for professional
procurement officers, and the absence of a career path. Above all, dismal capacity in
procuring agencies, regulatory authorities, and accountability institutions further hamper
the efficiency, economy, and transparency of the procurement systems.
9. In effect, both the institutional framework and the management capacity are
weak and need to be improved substantively through Technical Assistance ranging from
drafting documents to on-the-job training at all levels from policy formulation to
procurement contract administration. As this is a long-term effort, Government should
accord this the second priority of reforms. This, however, should commence
simultaneously with revisions to the Legislative Framework.
10. Improvements in improving the procurement market and operations (Pillar III)
can only happen when substantial progress has been achieved in reforming Pillars I and
II of the procurement framework.
11. Integrity and efficiency in the public procurement system (Pillar IV) is the
ultimate goal of all procurement systems and is not easily achieved. It requires an
enabling environment, a friendly institutional framework, management capacity and
enlightened legislative framework. The OECD-DAC guideline for this, states: “A
cornerstone of a well-functioning public procurement system operating with integrity
(fair, transparent, and credible) is the availability of mechanisms and capacity for
independent control and audit of procurement operations to provide for accountability
and compliance. Similarly, there must be a system for participants to lodge complaints
and challenge decisions with administrative and judicial review bodies having both
appropriate levels of independence and the legal power to impose corrective measures
and remedies against contracting entities in breach of the legal and regulatory
framework. Fraud and corruption, including the issue of conflict of interest, should be
addressed in legislation as well as through special measures in order to create a sound
and fair environment for public procurement operations”. Another key factor ensuring
is a level playing field between the public and private sector suppliers, contractors and
consultants and easy access to market opportunities by all. It is only when all of these
conditions are met that a true transparent public procurement system can exist with the
framework of integrity.
12. This, therefore, requires changes not only within the specific procurement related
legislation, but also across a raft of other legislation to ensure an overall enabling
environment. Coupled to this is the need to motivate decision makers and civil society to
actively participate in ensuring the implementation of the revised legislation. This would
require several years, but the effort could be started at an early stage of the reform
process.
1
I. BACKGROUND
1. As part of the Paris Declaration Committee in March 2005, both developed and
developing countries signed off the commitment for taking far-reaching and monitorable
actions to reform the ways in which aid is delivered and managed. It was also recognised that
while the volumes of aid and other development resources must increase to achieve these
goals, aid effectiveness must increase significantly as well to support partner country efforts
to strengthen governance and improve development performance. At the same time, one of
the actions to be pursued aggressively includes reforming and simplifying donor policies and
procedures to encourage collaborative behaviour and progressive alignment with partner
countries’ priorities, systems and procedures5.
2. This has been expressed at the joint World Bank and OECD Development Assistance
Committee (DAC) Procurement Round Table initiative. These two multi-lateral agencies
have worked together to develop a set of tools and standards that provide guidance for
improvements in procurement systems and the results they produce. Among these tools are
included:
i. Benchmarking for the assessment of the structure of the public procurement
systems; and
ii. Monitoring and Evaluation of the public procurement systems.
3. Under the Paris Declaration, partner countries are required to (a) improve the country
systems so that at least one third move up a scale on 4 point-scale used to assess performance
in procurement systems, and (b) requires the donors to use country procurement systems
where they are robust to meet the requirements of internationally accepted standards. To
attain this, the first task for partner countries is to undertake a Procurement Assessment vis-a-
vis the DAC-OECD Base Line Indicators.
4. It is expected that the exercise of benchmarking the status of the Government of
Pakistan procurement systems, in accordance with the baseline indicator system, would
contribute in improving procurement activities in the following ways:
a. an awareness of the level of achievement in making the public procurement
effective, efficient and transparent;
b. identify needed changes;
c. contribute to the development and implementation of a prioritised capacity
development strategy and plan;
d. move towards acceptability of national procurement systems by the donors; and
e. harmonisation of public procurement rules and procedures around recognized
standards.
5. The OECD-DAC BIS procurement based assessment efforts rest on:
strong Government ownership of and participation in the process;
joint participation of donors and development partners and congruent
coordination of implementation intervention;
participation of all relevant stakeholders in the public sector; and
5 Paris Declaration on Aid Effectiveness.
2
building on the existing body of knowledge where reviews have already been
undertaken by the Government, private sector, Bank and other donors, including
the CPAR 2000, CFAA 2003 and draft PEPFM 2008.
6. Three provincial government procurement systems’ assessments of the governments
of NWFP, Balochistan, Punjab, and Sindh have been undertaken in Pakistan, which give a
snapshot against 12 OECD DAC Baseline indicators. The Punjab report is currently being
finalized while the reports of the other provinces have since been published. The Federal
Government is the subject of this report.
7. The methodology adopted in conducting this assessment is given in Appendix-I.
II. THE OECD-DAC BASELINE INDICATOR FRAMEWORK
8. The 12 indicators each have a number of sub-indicators as shown in Table 1.
9. The OECD-DAC benchmarking tool provides guidance on how to score each sub-
indicator, as well as an approach to produce a single rating for indicator 2(b).
Table 1: OECD-DAC Matrix of Country Procurement Performance
Pillar Indicator
I Legislative and Regulatory
Framework
1 Public procurement legislative and regulatory framework
achieves the agreed standards and complies with applicable
obligations
Sub-indicators 8
2 Existence of Implementing Regulations and Documentation
Sub-Indicators 6
II Institutional Framework
and Management Capacity
3 The public procurement system is mainstreamed and well
integrated into the public sector governance systems
Sub-Indicators 4
4 The country6 has a functional normative/regulatory body
Sub-Indicators 4
5 Existence of institutional development capacity
Sub-Indicators 4
III Procurement Operations
and Market Practices
6 The country’s procurement operations and practices are
efficient
Sub-Indicators 5
7 Functionality of the public procurement market
Sub-Indicators 4
6 Consultant’s note: in the context of Pakistan this would also refer to the federating units, that is, refer also to each of the provinces.
3
Pillar Indicator
8 Existence of contract administration and dispute resolution
provisions
Sub-Indicators 3
IV Integrity and Transparency
of the Public Procurement
System
9 The country has effective control and audit systems
Sub-Indicators 5
10 Efficiency of appeals mechanisms
Sub-Indicators 5
11 Degree of access to information
Sub-Indicators 1
12 The country has ethics and anticorruption measures in place
Sub-Indicators 7
Source: The World Bank; 2008; Use of Country Systems in Bank Supported Procurement Operations – Proposed Piloting
Program; Annex B; The World Bank; Washington DC.
10. The Bank methodology relies on a different approach to rating. No aggregate rating
is computed at the level of the 12 indicators, the four pillars, or the whole system. The fifty-
four (54)7 sub-indicators are evaluated and rated individually.
11. Rating is based on a 0-3 scale, according to the criteria defined by the OECD/DAC
paper. A score of 3 indicates full achievement of the stated generally-accepted international
practice for each sub-indicator. A score of 2 is given when the system exhibits less than full
achievement and needs more improvements in the area being assessed, but still reflects
substantive compliance with the standard.
12. The World Bank classifies the 54 sub-indicators in four categories which reflect the
relative importance of the sub-indicators and the indicators under which they fall:
a. seventeen core sub-indicators which should be assessed to meet the criteria of
the corresponding benchmarks indicated for a “3” rating;
b. ten sub-indicators which could be assessed to only meet the criteria of the
corresponding benchmarks indicated for a “2” rating, provided the country
agrees to put in place an action plan of corrective measures to bring those sub-
indicators to a “3” benchmark rating during implementation;
c. twenty five sub-indicators which should be assessed to meet the criteria of the
corresponding benchmarks indicated for a “2” rating; and
d. two sub-indicators (4-d and 10-e regarding respectively the regulatory body and
the complaints review body, for which only a “3” or a “0” rating can be
allocated).
13. Pakistan accepted the Paris Declaration when it co-signed this on the 2nd
of March
2005 at a meeting in Paris which resolved to “take far-reaching and monitorable actions to
reform the ways we deliver and manage aid……we recognise that while the volumes of aid
and other development resources must increase to achieve these goals, aid effectiveness must
7 Instead of 56 used for the OECD-DAC BLIs.
4
increase significantly as well to support partner country efforts to strengthen governance and
improve development performance. This will be all the more important if existing and new
bilateral and multilateral initiatives lead to significant further increases in aid”8. One of the
actions to be pursued aggressively was “reforming and simplifying donor policies and
procedures to encourage collaborative behaviour and progressive alignment with partner
countries’ priorities, systems and procedures”9.
III. FEDERAL PROCUREMENT SYSTEMS – AN OVERVIEW
14. The “modern” practice of Public Procurement throughout Pakistan was, up until a
few years back, governed by the General Financial Rules of the Central Government and
following two Manuals each dating from the days of the Raj: namely,
a. the Purchase Manual, which covered the purchase of mostly all commodities
barring nine categories of goods10
and those purchased through foreign aided
projects or programmes, and
b. the West Pakistan Building & Roads Department Code which governs the
construction of buildings and roads and the hiring of consultants for this purpose.
15. As Pakistan’s infrastructure development efforts became more dependent on
assistance from international funding agencies, both multi- and bi-lateral, the reliance on
public procurement systems and procedures of these funding organisations became the
standard operating procedure for all funded projects. As the basket of projects and of donors
increased, Governments across Pakistan were unable to achieve the targets set in project
documents and procurement began to suffer due to three principal reasons:
a. The plethora of different systems and procedures operating simultaneously,
b. The lack of institutional capacity to handle the complex set of parameters
governing the wide spectrum of procurement systems and procedures, and
c. The lack of human resources adequately trained to implement the systems and
procedures.
16. Realising this both the Government and the donors initiated a move to reform the
process. In 1999 the modification of the Purchase Manual and of the Code, while keeping the
principle of the acceptance of the lowest bid intact were the first steps towards modifying
local public procurement procedures. In 1999/2000, the World Bank spearheaded the first
assessment of the country’s procurement systems. This11
recommended a number of actions
which needed to be undertaken to upgrade existing systems and procedures to internationally
acceptable standards. One of these was the establishment of a Regulatory Authority.
IV. ASSESSMENT OF BASELINE
17. The analysis for each indicator is presented as a matrix defining the indicator and its
8 Paris Declaration on Aid Effectiveness.
9 op cit.
10 i) Food Stuff; ii) Indigenous Coals, Charcoal and Firewood; iii) Bricks, Stones, Marble, Lime, Sand, Chalk, Cement and
other building material.; iv) School and college furniture; v) P.O.L. items; vi) Jute Mats; vii) Books, Maps, Charts; viii)
Woods and Timber; ix) Raw wool and Woollen yarn.
11 World Bank; Pakistan: Country Procurement Assessment Report; Report No. 22000.
5
sub-categories, the existing situation, the rationale for scoring and the score attained. The
average rating for the four Pillars is 1.78 which is made up as follows:
Table 2: Assessment of Procurement Systems
Assessment of Procurement Systems
Pillars Maximu
m Rating
Achieved
Rating
PILLAR I: Legislative and Regulatory Framework 3.00 1.99
PILLAR II: Institutional Framework and Management Capacity 3.00 1.92
PILLAR III: Procurement Operations and Market Practices 3.00 1.67
PILLAR IV Integrity and Transparency of the Public Procurement System 3.00 1.52
18. Graphically, this is as follows:
Figure 1: Pakistan CPS vs OECD-DAC BLIs
Pillar I: Legislative and Regulatory Framework Rating 1.99
19. The legislative framework in a country is often perceived to be the vehicle which
establishes a system of good governance. In the context of any specific activity, such as
procurement, it sets parameters of the activity and, within this the rules of the process,
provides the legal basis for ensuring the rights of participants, and establishes their authorities
and responsibilities. It is a fundamental element that links the procurement process both to
the overall governance structures within the country and defines obligations of the
government to comply with internal and external requirements. The regulatory framework
either identifies or establishes the agency that would regulate the activity; defines or modifies
its mandate; establishes or changes its structure; and sets or re-defines its authority, role(s)
0.00
0.50
1.00
1.50
2.00
2.50
3.00
PILLAR I Legislative and Regulatory Framework
PILLAR II Institutional Framework and
Management Capacity
PILLAR III Procurement Operations and Market
Practices
PILLAR IV Integrity and Transparency of the Public Procurement
System
Maximum Federal
6
and responsibilities; empowers it to establish regulations, issue guidelines, set standards and
produce handbooks; and limits its scope to either the activity itself or extends it to cover
ancillary and peripheral activities and/or actions.
20. As a first step towards improving the procurement systems, the Federal Government
created the Public Procurement Regulatory Authority (PPRA) in 2002 through a Presidential
Ordinance12 for “regulating public procurement of goods, services and works in the public
sector” which expired 90 days after its promulgation13. This was followed by the
enunciation of the Public Procurement Rules 200414.
21. As part of the reforms the PPRA was a catalyst in initiating the re-engineering of the
procurement systems, procedures and manuals of 14 public sector undertakings. Of these
seven15 studies (and counting as time passes) have been completed. The others are in the
process of being completed. A Manual16 has also been finalised, with the help of DFID. for
use by the National Health and Population Welfare Facility which could well be used by both
the Health and Population Welfare ministries/divisions and their related organisations and
with some modification by the other social sector ministries.
22. A draft Guidelines for the Public Procurement of Consultancy Services was issued in
2006 for soliciting stakeholder comments. Comments from only some of the Ministries and
other Procurement Agencies have been received. Others are yet to respond.
23. The two indicators in this area are discussed and scored below:
Indicator 1: Public procurement legislative and regulatory framework complies with
applicable obligations with regard to national and international requirements.
24. The indicator covers the legal and regulatory instruments from the highest level
(national law, act, regulation, decree, etc.) down to detailed regulation, procedures and
bidding documents formally in use. This indicator is broken down into eight sub-indicators.
25. This is a critical indicator for which most requirements should meet the conditions
for a “3” rating.
Rating 2.29
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
1 (a) Scope of application and coverage The existing legislative The PPRA Ordinance 2.0
12 XXII of 2002 issued on 15th May 2002.
13 The Ordinance lapsed after 90 days. As it was issued under the authority of the Provisional Constitutional Order, it is
argued that this has the status of and Act of Parliament. Nevertheless, this was validated by the Seventeenth Amendment
(assented to by the President on 31 December 2003) to the Constitution through Article 270AA(i). This validates “all other
laws made between the twelfth day of October, one thousand nine hundred and ninety-nine and the date on which this
Article comes into force (both days inclusive), having been duly made or accordingly affirmed, adopted and declared to have
been validly made by the competent authority and notwithstanding anything contained in the Constitution shall not be called
in question in any court or forum on any ground whatsoever”.
14 Cabinet Division, Government of Pakistan; SRO 432(I)-2004 Islamabad, 19 June 2004.
15 Relating to Port Qasim Authority, Higher Education Commission, Capital Development Authority, Pakistan International
Airlines, Telephone Industries of Pakistan, Civil Aviation Authority and Pakistan Steel Mills.
16 Manual of Procurement Policies and Standard operating procedures for the NHF Programmes of the Ministry of Health
and the Ministry of Population Welfare, Government of Pakistan.
7
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
of the legislative and regulatory
framework.
The legislative and regulatory
body of norms complies with all
the following conditions:
(a) Is adequately recorded
and organised hierarchically
(laws, decrees, regulations,
procedures,) and precedence
is clearly established.
(b) All laws and regulations
are published and easily
accessible to the public at no
cost.
(c) It covers goods, works,
and services (including
consulting services) for all
procurement using national
budget funds.
3
The legislative and regulatory
body of norms complies with
(a) plus one of the above
conditions.
2
The legislative and regulatory
body of norms complies with
(a) of the above conditions.
1
The system does not
substantially comply with any
of the above conditions. .
0
framework consists of the PPRA
Ordinance 2002 and the PPR
2004. The necessary supporting
sub-legislation exists partially as
drafts which have yet to be
approved. However, for the
procurement of works, the rules
and forms issued by the PEC are
generally used. This latter has
the force of law through a
decision of ECNEC notified by
the Planning Commission under
the authority of the PPRA.
The PPR 2004 is applicable to all
agencies and organisations of the
Federal Government.
The Rules are applicable to all
purchases made from public
funds.
The amended legislation and the
regulatory framework is work in
progress, but is nevertheless
accessible on the PPRA website.
issued on 15th
May 2002
lapsed after 90 days of
its issue, but the 17th
Amendment to the
Constitution validated
this on 31 December
2003.
The content of the PPR
indicates that it is largely
applicable to only the
procurement of goods
and works. There is no
explicit mention of
services (including
consulting services).
The hierarchy of
legislation is unclear as
the Draft Regulations
state that they supersede
the Rules in a conflict
situation.
1 (b) Procurement Methods
The legal framework meets all
the following conditions:
(a) Allowable procurement
methods are established
unambiguously at an
appropriate hierarchical level
along with the associated
conditions under which each
method may be used,
including a requirement for
approval by an official that is
held accountable.
3
The existing legislation specifies
various alternative methods for
procurement, but does not specify
the applicability of methods to
specific levels of procurement.
The default procurement is a
competitive process.
There is a restriction on
fragmenting procurements
planned for the year unless
While all conditions are
met, they are not clearly
spelled out and require
some rethinking to
provide clarity and to
limit discretionary
decision making to a
minimum acceptable
level, which need to be
specified.
2.0
8
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
(b) Competitive procurement
is the default method of public
procurement.
(c) Fractioning of contracts to
limit competition is prohibited.
(d) Appropriate standards for
international competitive
tendering are specified and are
consistent with international
standards.
The legal framework meets the
conditions of (a) and (b) plus
one of the remaining
conditions.
2
The legal framework meets the
conditions of (a) and (b).
1
The legal framework fails to
substantially comply with any
three of the conditions a)
through d).
0
specifically authorised by
competent authority (Federal
Government or PPRA the
regulating body) Rule 9.
Appropriate Standards are
specified for ICB, in terms of bid
response time etc., these are
incompatible with international
standards.
Defined basis for the
procurement method, if other
than open competition is spelled
out, but could be improved.
Negotiated procedures and direct
purchasing is permitted only
under well-defined and justified
circumstance, subject to controls.
1 (c) Advertising Rules and Time
Limits
The legal framework meets the
following conditions :
(a) Requires that procurement
opportunities other than sole
source or price quotations be
publicly advertised.
(b) Publication of opportunities
provides sufficient time,
consistent with the method,
nature and complexity of
procurement, for potential
bidders to obtain documents and
respond to the advertisement.
Such timeframes are extended
when international competition
is sought.
(c) Publication of open tenders is
mandated in at least a newspaper
of wide national circulation or in
a unique Internet official site,
where all public procurement
3
Procurements worth more than
PKR 100,000 to be advertised on
PPRA webpage and may be
placed in the print media.
Procurements worth more than
PKR 2,000,000 should be
advertised on PPRA webpage
and placed in at least two
nationally circulated newspapers,
one each in English and Urdu. If
the procuring agency has a
website then the advertisement
should also be placed there.
Advertisements should contain
all the necessary information and
be available until the opening
date for the bid. In situations
where publication of such
advertisements or notices has
occurred in both electronic and
print media, the response time
The Rules do not require
mandatory publication.
Rule 437 clearly
stipulates that on
completion of contract
award, “shall make all
documents related to
evaluation of bids and
award of contract public.
3.0
9
Sub-indicator and ranking
condition
Current Status Rationale for
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Score
opportunities are posted, that is
easily accessible.
(d) Content of publication
includes sufficient information
to enable potential bidders to
determine their ability and
interest in bidding.
The legal framework meets the
conditions of (a) and (b) plus
one of the remaining conditions.
2
The legal framework meets the
conditions of (a) plus one of the
remaining conditions.
1
The legal framework only meets
the conditions of (a) above.
0
shall be calculated from the day
of its first publication in the
newspapers.
Under no circumstances the
response time shall be less than
fifteen days for national
competitive bidding and thirty
days for international competitive
bidding from the date of
publication of advertisement or
notice.
1 (d) Rules of Participation
The legal framework meets the
following conditions:
(a) Establishes that participation
of any contractor or supplier or
group of suppliers or contractors
is based on qualification or in
accordance with international
agreements; requires the use of
pass/fail basis for determining
qualifications to extent possible;
limits domestic price
preferential, if allowed, to a
reasonable amount (e.g.15% or
less); and requires justification
for set asides that limit
competition.
(b) Ensures that registration if
required does not constitute a
barrier to participation in tenders
and does not require mandatory
association with other firms.
(c) Provides for exclusions for
criminal or corrupt activities,
administrative debarment under
the law subject to due process or
prohibition of commercial
relations.
3
Firms and individuals from all
countries not prohibited by law
and meeting defined criteria are
allowed to compete without any
prejudice [Rule 24(1)].
Preference to domestic bidders is
allowed through
S.R.O.827(I)/2001 of 3rd
December 2001. The amount of
domestic price preferential is left
flexible to the discretion of
procuring agency with ceilings
(15 to 25 percent) established on
the basis of value addition
ranging from 15 percent to over
30 percent [Rule 24(2)].
The law is silent on the status of
registration of firms before
participation in the tendering
process.
While the PPR 2004 does
not distinguish between
firms of different
nationalities, there
appears to be an implicit
understanding that this
also extends to a lack of
distinction between
domestic organisation.
This may not necessarily
be true. What the
legislation should include
is a statement which
explicitly excludes any
distinction between
public and private sector
entities.
In practice, however,
public sector agencies,
more often than not,
award contracts to public
sector entities either
through sole sourcing or
competitive bidding.
Examples are rife in the
construction industry
where the bulk of large
scale infrastructure
projects have been given
1.0
10
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
(d) Establishes rules for the
participation of government
owned enterprises that promote
fair competition.
The law and regulations meet
the conditions of (a) and (b) plus
one of the remaining conditions.
2
The law and regulations meet
the conditions of (a) plus one of
the remaining conditions.
1
The law and regulations do not
meet the conditions of (a)
through (d) above.
0
to public sector
contractors at a premium
price in the NHA, CDA,
PQA, etc. A similar
situation exists in the
consulting services sub-
sector. Most design
contracts are awarded to
NESPAK at premia
ranging from 100
percent to 400 percent
over the rates quoted by
private consultants17
.
Instances of cartelisation
have been created by
WAPDA and its entities
from among private
sector suppliers. To
illustrate are the recent
supply of transformers
and electricity meters to
IESCO and other
transmission and
distribution companies.
Specific rules ensuring
fair competition between
public and private sector
entities do not exist.
Debarment is allowed
and the basis is defined.
However, the Rules are
silent on allowing for
due process and appeal.
In a large quantity of
tenders restrictions are
placed on the
participated of
unregistered firms.
Specifically in the
context of engineering,
17 Mir, Aized H and .Z. Durrani; 2007; Pakistan Infrastructure Implementation Capacity Assessment; The World Bank in
Pakistan: “ unfair competition from parastatal public sector companies” .... “dominated by just over a dozen construction
and consulting firms each”.. p15.
11
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
those not registered with
the PEC are debarred
from overall
participation.
1 (e) Tender documentation and
technical specifications.
The legal framework meets the
following conditions:
(a) Establishes the minimum
content of the tender documents
and requires that content is
relevant and sufficient for
tenderers to be able to respond to
the requirement.
(b) Requires the use of neutral
specifications citing
international standards when
possible.
(c) Requires recognition of
standards which are equivalent
when neutral specifications are
not available.
3
The legal framework
substantially meets the
conditions of (a) plus one of the
remaining conditions.
2
The legal framework meets the
conditions of (a).
1
The content of the bidding
documents is totally or largely
left at the discretion of the
procuring entity.
0
For competitive bidding, whether
open or limited, the bidding
documents shall include the
following, namely:-
(a) invitation to bid;
(b) instructions to bidders;
(c) form of bid;
(d) form of contract;
*Amended vide Cabinet Division
No. 5/37/2005-M-III/Admin
(PPRA), dated 13-12-2006;
(e) general or special conditions
of contract;
(f) specifications and drawings or
performance criteria (where
applicable);
(g) list of goods or bill of
quantities (where applicable);
(h) delivery time or completion
schedule;
(i) qualification criteria (where
applicable);
(j) bid evaluation criteria;
(k) format of all securities
required (where applicable);
(l) details of standards (if any)
that are to be used in assessing
the quality of goods, works or
services specified; and
(m) any other detail not
inconsistent with these rules that
the procuring agency may deem
necessary.
Each of the conditions in
the first conditionality is
fulfilled.
3.0
1 (f) Tender Evaluation and Award
Criteria.
Procuring agencies are bound to
formulate an appropriate
evaluation criterion listing all the
relevant information against
It is only in the draft
regulations for the public
procurement of
consulting services that
2.0
12
Sub-indicator and ranking
condition
Current Status Rationale for
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Score
The legal framework mandates
that:
(a) The evaluation criteria are
relevant to the decision, and
precisely specified in advance in
the tender documents so that the
award decision is made solely on
the basis of the criteria stated in
the tender documents.
(b) Criteria not evaluated in
monetary terms are evaluated on
a pass/fail basis to the extent
possible.
(c) The evaluation of proposals
for consulting services gives
adequate importance to the
quality and regulates how price
and quality are considered.
(d) During the evaluation period,
information relating to the
examination, clarification and
evaluation of tenders is not
disclosed to the participants or to
others not involved officially in
the evaluation process;
3
The legal framework covers the
conditions of (a) and (b) plus
one of the remaining conditions.
2
The legal frame work covers (a)
but does not fully cover the other
conditions.
1
The legal framework does not
adequately address any of the
conditions (a) through (d) above.
0
which a bid is to be evaluated.
Selection is made according to
the criteria and in the manner
given in the bid documents by
the procuring agency.
Oversight on inclusion of
evaluation criteria in the bidding
documents is considered as mis-
procurement and is not allowed.
adequate importance is
given to quality.
However, the issue of
price appears to be a grey
area and needs to be
elucidated further.
1 (g) Submission, receipt and opening
of tenders
The legal framework provides
for the following conditions:
(a) Public opening of tenders in
a defined and regulated
proceeding immediately
following the closing date for
3
Bids are required to be opened at
specified time and place In
specified form as given in the bid
documents by each procuring
agency.
Opening of tender documents
immediately after receipt or time
specified thereafter at specified
place in front of all bidders and
respondents or their authorised
Meets all conditions
stated in criterion 1.
3.0
13
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
bid submission.
(b) Records of proceedings for
bid openings are retained and
available for review.
(c) Security and confidentiality
of bids is maintained prior to bid
opening and disclosure of
specific sensitive information
during debriefing is prohibited.
(d) The modality of submitting
tenders and receipt by the
government is well defined to
avoid unnecessary rejection of
tenders.
The legal framework provides
for (a) and (b) plus one of the
remaining conditions.
2
The legal framework provides
for (a) plus one of the remaining
conditions.
1
There is no requirement in the
legal framework for public
opening of tenders.
0
representatives is mandatory.
During the bid opening the name
of the bidder and total amount of
each bid, and of any alternative
bids if they have been requested
or permitted, shall be read aloud
(and posted online when
electronic bidding is used) and
recorded when opened and a
copy of this record shall be
promptly sent to all bidders who
submitted bids in time.
At the end of the proceedings of
bid opening the report (record of
proceedings) to be signed by all
bidders present.
1 (h) Complaints
The legal framework provides
for the following:
(a) The right to review for
participants in a procurement
process.
(b) Provisions to respond to a
request for review at the
procuring/agency level with
administrative review by another
body independent from the
procuring agency that has the
authority to grant remedies and
includes the right for judicial
review.
(c) Establishes the matters that
are subject to review.
(d) Establishes timeframes for
3
Where a bidder feels aggrieved by
any act of procurement agency,
the bidder may file a written
complaint within 15 days of
publication of the bidding report.
The procuring agency is bound to
constitute a committee to review
the complaint and give its
decision within 15 days of the
receipt of the complaint.
However there is no second level
of review other than filing a
complaint in the court of law and
no mechanism has been notified
for formation of an
administrative review body.
Only the first level
criteria of the conditions
is fulfilled.
1.0
14
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
issuance of decisions by the
procuring agency and the
administrative review body.
The legal framework provides
for (a) and (b) plus one of the
remaining conditions.
2
The legal framework provides
for (a) plus one of the remaining
conditions.
1
The right for review of the
proper application of the
procurement process is not
provided in the legal framework.
0
Indicator 2: Existence of implementing regulations and documentation
26. This indicator verifies the existence, availability and quality of implementing
regulations, operational procedures, handbooks, model tender documentation, and standard
conditions of contract. Ideally the higher level legislation provides the framework of
principles and policies that govern public procurement. Lower level regulations and more
detailed instruments supplement the law, make it operational, and indicate how to apply the
law to specific circumstances. This indicator consists of six sub-indicators.
27. Many countries, including the most developed, do not have regulations at the central
government level.
Rating 1.68
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
2 (a) Implementing regulation that
provide defined processes and
procedures not included in higher-level
legislation.
- There are regulations that
supplement and detail the
provisions of the procurement law
that meet the following
requirements:
(a) They are clear, comprehensive
and consolidated as a set of
regulations available in a single
and accessible place
(b) They are updated regularly;
3
The rules require improvement.
Supporting Guidelines and
Handbooks need to be
developed. A system needs to
be established which ensures
that these are up-dated from time
to time to respond to changes in
the procurement market.
The existing PEC regulations
need to be revised to reflect
changes in the FIDIC
regulations.
The regulations exist.
No system of regular
review or updating
exists. Responsibility
for updating is unclear.
The entire body of
legislation including
rules, regulations,
guidelines, handbooks,
manuals, standard
bidding documents and
standardised contracts
need either to be revised
or developed.
1.0
15
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
(c) The responsibility for
maintenance is defined.
- The regulations meet the
conditions of (a) plus one of the
remaining conditions.
2
- The regulations exist but there
is no regular updating, the
responsibility for updating is not
clearly defined or there are many
important omissions in the
regulations or inconsistencies
with the law.
1
- There are no regulations or the
existing ones do not meet
substantially any of the
requirements listed above.
0
2 (b) Model Tender documents for
goods works and services:
(a) There are model invitation
and tender documents provided
for use for a wide range of
goods, works and services
procured by government
agencies;
(b) There is a standard and
mandatory set of clauses or
templates that are reflective of
the legal framework, for use in
documents prepared for
competitive tendering.
(c) The documents are kept up to
date with responsibility for
preparation and updating clearly
assigned.
3
- Model documents and a
minimum set of clauses or
templates are available, but the
use of such documents is not
mandatory or regulated. The
2
Other than the documents
developed by the PEC, standard
bidding documents do not exist.
These are limited to only works
and engineering services.
Existing documents (for instance
those specified in the superseded
Purchase Manual and the
Buildings and Roads Code) can
also be used where the Procuring
Agency has not developed new
ones.
Some model documents
exist. These require
revisions to reflect latest
changes in the
internationally accepted
ones.
As the current situation
is between the second
and third criteria, the
score allocation is the
average of the two.
1.5
16
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
documents are not updated
regularly.
- Model documents are not
available, but a set of mandatory
clauses is established for
inclusion in tender documents.
1
- There are no model documents
and the procuring entities
develop their own documents for
with little or no guidance.
0
2 (c) Procedures for pre-qualification:
- Procedures exist that define pre-
qualification which:
(a) Provide for limitations on the
content of pre-qualification
criteria that are based on the
needs of the specific procurement
(b) Specify the use of pass/fail for
application of qualification
criteria.
(c) Provide guidance on when to
apply a pre-qualification
procedure.
3
- Procedures exist that cover (a)
plus one of the remaining
conditions.
2
- Procedures exist that cover (a). 1
- Procedures for the application of
pre-qualification procedures do
not exist.
0
The PPR 2004 provide detailed
procedures for pre-qualification
of bidders, as well as guidance
on when to apply these
procedures.
Criterion 1 is fully
complied with.
3.0
2 (d) Procedures suitable for contracting
services or other requirements in which
technical capacity is a key criterion:
PPR 2004 meet all conditions
for goods and works, are weak
in the context of services and
non-existent for consulting
services.
The rules meet the
requirements of criteria
1 (a) partially, but are
better than criteria 3.
1.5
17
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
- The legal framework and its
implementing regulations provide
for the following:
(a) Conditions under which
selection based exclusively on
technical capacity is appropriate
and when price and quality
considerations are appropriate.
(b) Clear procedures and
methodologies for assessment of
technical capacity and for
combining price and technical
capacity under different
circumstances.
3
- Implementing regulations meet
(a) above but leave (b) to the
discretion of the procuring entity.
2
- Implementing regulations leave
the possibility of use of technical
capacity in selection but neither
the law nor the regulations
elaborate on the procedure.
1
- Neither the law nor
implementing regulations cover
this procedure
0
However these are not lucidly
set out as no guidelines have
been issued for establishing
criteria.
A rating averaging the
2nd
and 3rd
criteria
suggesting rating has
been given.
2 (e) User’s guide or manual for
contracting entities.
(a) There is a unique procurement
manual detailing all procedures
for the correct administration of
procurement regulations and
laws.
(b) The manual is updated
regularly;
(c) The responsibility for
maintenance of the manual is
clearly established.
3
There is no unique manual but
there is an obligation for the
2
A Manual on Standard
Operating Procedures is
available on the website of
PPRA, however it is only
applicable to Ministry of Health
and Population Welfare. With
only minor modifications to
meet specific needs this could be
used as the template
government-wide.
Each entity of the government is
preparing its own set of
guidelines and manuals therefore
creating a raft of documents
which will need to be
harmonised subsequently. . The
PPRA has assisted over 17
Criterion 3 is fully
satisfied. Criterion 2 is
satisfied partially.
1.5
18
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
procuring agencies to have one
that meets conditions (b) and (c.)
There is no manual and no
obligation to have one but many
procurement agencies have an
internal manual for administration
of procurement.
1
There is no manual or
requirement to have one.
0
major public sector corporations
in developing their internal
procurement procedures. Some
of these are ready others are still
in the process of finalisation.
2 (f) General Conditions of Contracts
(GCC) for public sector contracts
covering goods, works and services
consistent with national requirements
and, when applicable, international
requirements
Both of the following apply:
a) There are GCC for the most
common types of contracts and
their use is mandatory.
b) The content of the GCC is
generally consistent with
internationally accepted practice.
3
There are GCC for the most
common types of contracts,
consistent with international
practice, but their use is not
mandatory.
2
There are GCC for the most
common types of contracts but
they do not conform to
internationally accepted practice
and their use is not mandatory.
1
There are no GCC and individual
agencies use the form of contract
of their choice.
0
PEC documents used as standard
bidding documents do contain
GCC which were acceptable, but
need revisions to bring them at
par with FIDIC.
No similar documents exist for
the procurement of goods,
services and consulting services.
However, the PPRA website
hosts the SBDs from the World
Bank which are used sometimes
in the interim.
Criterion 1 satisfied only
for works contracts.
The use of the
documents is mandatory
through SRO
8(60)/WR/PC/2006
dated the 12th
February
2008 from the Planning
Commission and
subsequently notified as
Regulation 3 in August
2008.
Other standard
documents are referred
to, but there is no
mandatory requirement
for using these.
2.0
19
PILLAR II: Institutional Framework and Management Capacity
Rating 1.92
28. Pillar II is designed to examine the central government institutional framework and
its capacity to oversee, manage and support efficient implementation as well as to provide
leadership in modernising and maintaining the public procurement system.
29. The PPRA is the apex body created for “improving governance, management,
transparency, accountability and quality of public procurement of goods, services and works
in the public sector”, and is part of the Cabinet Division. The PEC was involved as a member
of the Kazi Committee to prepare a standard bidding document and standard GCC for all
engineering contracts. The output was finally notified by Government (Planning
Commission) as a decision18 of the Executive Committee of the National Economic Council
which was subsequently modified19 in 2008 requiring all public sector entities to use the
SBDs and GCC developed by the PEC for all tenders/contracts governing works and
engineering services. Subsequently issued as PPRA Regulation 3 in December 2008.
30. This dichotomy has resulted in a conflict between the PEC and the PPRA on the
oversight of works in the country. The overlap between the PEC and the PPRA needs to be
clearly identified and resolved. There is a need to clearly stipulate that the PPRA’s mandate
is limited to regulation, providing advice and technical assistance in building capacity. The
PEC’s role in authoring and gaining government approval is explicitly acknowledged by the
PPRA as it cites them as SBDs and standard GCCs in its regulations. Further, the PPRA
Ordinance superseded all other preceding acts, rules, etc. dealing with procurement and gave
it the sole responsibility for the development of sub-legislation, guidelines, handbooks,
manuals, SBDs and GCCs. This included the work done by the PEC in preparing and
obtaining approval of its version of the SBDs and GCCs. The PPRA and PEC need to find
ways to accommodate their respective mandates, recognising problems that can arise out of
overlapping jurisdictions.
31. Throughout the government there is a dearth of skill in procurement ranging from the
development of policy to the management of the function. This is largely due to the absence
of dedicated posts for professional procurement officers, and the absence of a career path.
Above all, dismal capacity in procuring agencies, regulatory authorities, and accountability
institutions further hamper the efficiency, economy, and transparency of the procurement
systems.
32. In effect, both the institutional framework and the management capacity are weak
and need to be improved substantively through Technical Assistance ranging from drafting
documents to on-the-job training at all levels from policy formulation to procurement
contract administration. The three indicators in this area are discussed and scored below.
Indicator 3: The public procurement system is mainstreamed and well integrated into
the public sector governance systems
33. This indicator looks at the procurement system to: a) determine its suitability to
discharge the obligations prescribed in the law without gaps or overlaps; b) whether the
necessary links with other sectors of government affecting procurement exist; c) whether
18 SRO No. 8(60)WR/PC/2002 dated 21 August 2002. 19 SRO No. 8(60)WR/PC/2008 dated 12 February 2008.
20
procurement operations are constrained by other external institutional factors; and d) whether
the managerial and technical capacity of the system are adequate to do procurement without
unnecessary cost or delay.
34. PFM systems would have already been reviewed by the Bank, and deemed
acceptable.
Rating 1.50
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
3 (a) Procurement planning integrated
into budget formulation process and
contribute to multi-year planning.
There is a regular planning
exercise instituted by law or
regulation that:
• starts with the preparation of
multiyear plans for the
government agencies, from
which annual operating plans are
derived.
• followed by annual
procurement plans and estimation
of the associated expenditures
• And culminates in the annual
budget formulation.
• Procurement plans are prepared
in support of the budget planning
and formulation process.
3
The majority of procurement
plans are prepared based on the
annual and multiyear operating
plans independently from budget
allocation but they are revised to
meet the forward budget
estimates for the sector or agency
allocations before expenses are
committed.
2
Procurement plans are normally
prepared based on the annual and
multiyear operating plans. Links
with budget planning are weak
and plans are not required to
1
The PPR Rules and the
Government’s Budget Rules
require planning at the start of
the year, and reflection of the
planning exercise is in the
annual budgets. Further even
though multi-year planning
exists, and a rolling Medium-
Term Development Framework
is planned, the Annual Budgets,
by and large, are prepared
independently of these plans.
However, the procurement plans
are recast to be consistent with
budgets once the latter have
been announced.
The annual
procurement plans
reflect the budget plans
ex-post facto, that is,
are modified to be
synchronous with the
budget once the latter
has been presented to
and accepted by
Parliament.
2.0
21
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
match the budgetary allocation
available before expenses are
committed.
There is no integrated
procurement and budget planning
of the nature described.
Procurement plans are drawn
without obvious and direct
connection with the budget
planning exercise and there is no
requirement to match
procurement plans with
availability of funds before
expenses are committed.
0
3 (b) Budget law and financial
procedures support timely procurement,
contract execution, and payment:
Budget and financial procedures
in place meet the requirements of
the following:
(a) Budget funds are committed
or appropriated within a week
from the award of the contract to
cover the full amount of the
contract (or amount to cover the
portion of the contract to be
performed within the budget
period).
(b) There are published business
standards for processing of
invoices by the government
agencies that meet obligations for
timely payment stated in the
contract.
(c) Payments are authorised
within four weeks following
approval of invoices or monthly
certifications for progress
payments.
3
Budget and financial procedures
in place meet the requirements of
(a) but there are no published
business standards. Authorisation
of payments is generally timely.
2
Procedures in place take longer
than stated in (a) and conditions
(b) and (c) are not generally met.
1
Budget funds are not committed
in full at the start of the project.
Finance Rules and Regulations
permit the processing of bills in
time, but payments are not
necessarily within time owing to
a multiplicity of approvals
required.
The procedures do not
meet requirements in a
material way. They
however, fulfil
criterion 3.
1.0
22
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
The procedures in place do not
meet the requirements in a
material way.
0
3 (c) No initiation of Procurement
without budget appropriation
The system meets the following
requirements:
(a) The law requires certification
of availability of funds before
solicitation of tenders takes place.
(b) There is a system in place
(e.g. paper or electronic interface
between the financial
management and the procurement
systems) that ensures
enforcement of the law.
3
The system meets requirement
(a) but requirement (b) is not
fully enforced due to weaknesses
in the system.
2
The system meets requirement
(a) only.
1
There system does not meet
requirements (a) and (b).
0
In most cases requirement (a) is
fulfilled.
However, in some cases this can
be waived by the competent
authority and a post-facto
approval is given at the end of
the fiscal year.
Moreover, in some cases,
without the funds in hand, the
procuring agencies initiate
procurement process justifying
tight timelines to meet, in
particular in the last two quarters
of a financial year.
Criterion 2 is fulfilled. 2.0
3 (d) Systematic completion reports are
prepared for certification of budget
execution and for reconciliation of
delivery with budget programming:
The procurement system is
sufficiently integrated with the
financial management and
budgetary systems to provide
information on the completion of
all major contracts.
3
Information on completion of the
majority of large contracts is
submitted as described above.
2
Information on the completion of
contracts is erratic or is normally
submitted with considerable
delay after the fiscal budgetary
1
PC-IVs (Completion Reports)
are supposed to be prepared for
every contract. However, these
are seldom developed, and
where prepared are substantially
delayed. However, for foreign
funded projects, the completion
reports and reconciliation reports
are prepared, to a great extent.
The system meets
criterion 3.
1.0
23
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
period. .
The procurement system does not
generally provide this
information.
0
Indicator 4: The country has a functional normative/regulatory body
35. The assessment of the indicator will focus on the existence of the functions, the
independence of the regulatory function, the effectiveness of performance and the degree of
coordination between responsible organizations. There are four sub-indicators.
36. Many countries, including the most advanced, do not have such a body at the central
level.
Rating 3.00
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
4 (a) The status and basis for the
regulatory authority is covered in the
legislative and regulatory framework:
There is a normative or regulatory
body or the functions are clearly
assigned to various units within
the government which is specified
in the legal and regulatory
framework in unambiguous way
without gaps or overlaps.
3
There is a regulatory body or
functional designation to various
units within government, but it is
not established as part of the legal
and regulatory framework and
there are gaps or overlaps of
regulatory responsibilities.
2
Only part of the functional
responsibilities of a regulatory
body are assigned throughout the
government leaving significant
parts of the work unassigned.
1
Separate functional
responsibilities to regulate the
procurement system are not
recognised as part of the legal and
0
The PPRA established through
the PPRA Ordinance 2002
exists and performs all the
functions of a legal and
regulatory body in unambiguous
way without gaps and is
supported by budget allocations.
There is a prima facie
perception that an overlap exists
between the PPRA and the
PEC. However, a deeper
analysis indicates that is largely
due to a misunderstanding about
the roles of the organisation
rather than an endemic fault in
legislation or the institutional
framework.
There is full
compliance with
criterion 1.
3.0
24
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
regulatory framework and are not
effectively performed.
4 (b) The body has a defined set of
responsibilities.
All the eight functions listed are
clearly assigned to one or several
agencies without creating gaps or
overlaps in responsibility.
providing advice to contracting
entities;
drafting amendments to the
legislative and regulatory
framework and implementing
regulations;
monitoring public procurement;
providing procurement
information;
managing statistical databases;
reporting on procurement to
other parts of government;
developing and supporting
implementation of initiatives
for improvements of the public
procurement system; and
providing implementation tools
and documents to support
training and capacity
development of implementing
staff.
3
At least five functions are
assigned to an appropriate agency
or agencies and there is no
overlap or conflict in
responsibilities.
2
Four or less functions are
assigned to appropriate entities
and there are overlaps and
conflicts in responsibilities.
1
Functions are not clearly assigned
and/or assignments are often in
conflict with other agency
responsibilities.
0
The PPRA Ordinance 2002
provides for all these functions
as part of the mandate of the
PPRA.
Totally compliant with
criterion 1.
3.0
4 (c) The body’s organisation, funding, PPRA is an autonomous body More than adequately 3.0
25
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
staffing and level of independence and
authority to exercise its duties should be
sufficient and consistent with the
responsibilities.
The regulatory body (or the
assignment of responsibilities for
the regulatory function if there is
not a body) is at an adequate level
in Government and financing is
secured by the legal/regulatory
framework.
3
The body is at an adequate level
but financing is subject to
administrative decisions and can
be changed easily.
2
The level of the body is too low
or financing is inadequate for
proper discharge of its
responsibilities.
1
The level of the body is low,
financing is inadequate and the
body has no or little
independence to perform its
obligations.
0
of the Cabinet Division thus
ensuring that it is at an adequate
level of Government.
Its financing is secured by legal
/ regulatory framework.
Given the mandate the level of
financing may not be sufficient.
meets criterion 1.
4 (d) Separation and clarity of
responsibilities to avoid conflict of
interest:
The body is not responsible for
direct procurement operations and
is free from other possible
conflicts (e.g. by being member
of evaluation committees, etc.).
3
The body does not meet the
requirement as stated above.
0
PPRA is not responsible for
direct procurement and is free
from any possible conflicts of
interest.
Meets criterion 1
completely.
3.0
Indicator 5: Existence of Institutional Development Capacity
37. The objective of this indicator is to assess the extent to which the country or agency
has systems to support and monitor the performance of the entire system, and to formulate
and implement improvement plans. This indicator has four sub-indicators.
26
38. This is an important aspect, and it is expected that donor support will be provided for
participating countries.
Rating 1.25
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
5 (a) The country has a system for
collecting and disseminating
procurement information, including
tender invitations, requests for
proposals, contract award information.
There is an integrated
information system that provides
as a minimum, up-to-date
information as described above
and is easily accessible to all
interested parties at no or
minimum cost.
Responsibility for its
management and operation is
clearly defined.
3
There is an integrated system of
the characteristics described that
provides up-to-date information
for the majority of contracts at
the central government level but
access is limited.
2
There is a system but it only
provides information on some of
the contracts and the system
accessibility is limited.
1
There is no procurement
information system except for
some individual agency systems.
Entities keep information on
contract awards and some
statistics.
0
While no integrated system
exists the PPRA has developed a
website where procurement
business opportunity
information across the span of
the federal government and its
parastatal organisations.
This is, however, yet nascent
and needs to be developed to
include results of awards and
more to ensure transparency in
procurement activities.
At present contracts worth more
than PKR 100,000 are required
mandatorily to be advertised on
this website.
The information system
is partially developed
but is reaching towards
maturity rapidly.
2.0
5 (b The country has systems and
procedures for collecting and
monitoring national procurement
statistics.
The country has a system that
meets the following
requirements:
a) There is a system in operation
to collect data.
b) The system collects data on
procurement by method,
duration of different stages of
the procurement cycle, awards
3
No system fulfilling any of the
conditions set forth for such an
information system in this
indicator exists at the federal
level.
Evident from analysis. 0.0
27
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
of contracts, unit prices for
most common types of goods
and services and other
information that allows
analysis of trends, levels of
participation, efficiency and
economy of the purchases and
compliance with requirements.
c) Reliability of the information
is high (verified by audits).
d) Analysis of information is
routinely carried out,
published and fed back into
the system.
The country has a system that
meets (a) plus two of the
remaining conditions.
2
The system is in place to meet
(a) plus one of the remaining
conditions.
1
There is no statistical data
collection system in place.
0
5 (c) A sustainable strategy and training
capacity exists to provide training,
advice and assistance to develop the
capacity of government and private
sector participants to understand the
rules and regulations and how they
should be implemented.
There is a training and capacity
building strategy that provides
for:
(a) Substantive permanent
training programs of suitable
quality and content for the needs
of the system.
(b) Evaluation and periodic
adjustment based on feedback
and need.
(c) Advisory service or help
desk to absolve questions by
procuring entities, suppliers,
contractors and the public.
3
There is a training and capacity
building strategy that provides
for a) above.
2
Training programmes for
improving or providing de novo
skills exist. These include in-
house and on-the-job training to
access to Capacity Development
under Technical Assistance
programmes from donors.
The PPRA is undertaking these
for public sector entities only.
Plans have been initiated to
create a dedicated National
Institute of Procurement
Management.
Dedicated procurement
training capacity exists
at the PPRA which
uses both an in-house
training programme
and An outreach
programme providing
in situ training.
Advisory services are
available for both
public and private
sector entities.
3.0
28
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
The existing program is of poor
quality and insufficient to meet
the needs of the system and there
is no procurement help desk or
advisory service.
1
No formal training or help desk
programs exist.
0
5 (d) Quality control standards are
disseminated and used to evaluate staff
performance and address capacity
development issues.
The procurement system
complies with the following:
a) Provide quality assurance
standards and a monitoring
system for procurement
processes and product.
b) Provide for a staff
performance evaluation
process based on outcomes
and professional behaviours.
c) Ensure that operational audits
are carried out regularly to
monitor compliance with
quality assurance standards.
3
The procurement system
complies with (a) and (b) above
but there is no regular auditing
to monitor compliance.
2
The procurement system has
quality standards but does not
monitor nor use the standards for
staff performance evaluation.
1
The system does not have
quality assurance or staff
performance evaluation systems
0
A system of annual staff
performance evaluations exists.
Evaluations are subjectively
measured against work done vis-
à-vis the employee’s job
description. These are, however,
not related to procurement
specifically. The Ministry of
Finance is ISO certified and is
therefore audited annually for
performance and each activity,
task and person comes within
the purview of the ISO
certificate renewal process. This
is an isolated instance of
performance measurement
within the Government and does
not therefore qualify as a
system-wide SOP.
As Procurement is not
considered to be a
specialist cadre, there
are no quality
assurance standards
and therefore address
issues in skill
development.
1.0
PILLAR III: Procurement Operations and Market Practices
Rating 1.67
39. Public procurement requires participation by both the public sector and private sector
entities. Performance is based on the integrity and professionalism at both ends of the
spectrum – the procuring agency and the supplier/consultant/contractor. Where markets have
participation by the public sector on both sides of the curtain, this creates unfair non-
29
competitive markets leading to unfair trade practices. In such instances the private sector
entities tend to collude with each other creating situations of monopolistic and /or
oligopolistic behaviour leading to clubbing and rationing. For instance, it is not uncommon
in Pakistan for highway and other infrastructure construction contracts being awarded to
public sector organisations without inviting bids or for granting design and supervision
consultancy contracts at much higher rates than to the private sector. This is clearly unfair
trade practice, but a laissez faire attitude generally continues to exist.
40. A functioning, robust and competitive private sector market is, therefore, a key
partner to the public procurement system in a well-functioning system. To be effective, the
market must have confidence in the competence of the contracting authorities at all levels
within the system. The indicators in this area are discussed and scored below.
Indicator 6: The country’s procurement operations and practices are efficient
41. This indicator looks at the efficiency of the operations and operational practices as
implemented by the procuring agencies. There are four sub-indicators
Rating 1.63
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
6 (a) Level of procurement competence
in government officials in the entity is
commensurate with their procurement
responsibilities.
The system meets the
requirements:
a) There are defined skill and
knowledge profiles for
specialised procurement jobs.
b) There is systematic matching of
skills against requirements for
competitive recruitment.
c) Staff required to undertake
procurement activities on an ad
hoc basis have the knowledge
they need to undertake the
activity or have access to
professional staff that can
provide this knowledge.
3
The system meets (a) plus one of
the remaining conditions.
2
The system only meets (a) above. 1
The system does not meet any of
the requirements.
0
No defined skills or knowledge
profiles are in place for
procurement jobs, hence there is
no matching of skills against
requirements for competitive
recruitment.
Lack of skills is
conspicuous largely
because of dearth.
However, there are
instances of a high
level of knowledge and
skill in cases where
procurement officials
have received and put
to use the specifying
training provided to
them either in situation
of off-site; other
instances can also be
found, scattered within
various agencies,
where the skill has
been absorbed through
on-the-=job exposure
over a long stretch in-
post. The PPRA has
trained 2,435
procurement personnel
from various
organisations through
a 2-3 day
training/exposure
programme both at its
headquarters and in-
situ at the offices of
the Pas.
0.0
6 (b) The procurement training and
information programs for government
PPRA is operating a capacity
building plan largely through its
A formal training
curriculum and
1.5
30
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
officials and for private sector
participants are consistent with demand
The training and information
programs available meet the
following requirements:
a) Training programs’ design is
based on a skills gap inventory
to match the needs of the
system.
b) Information and training
programs on public
procurement for private sector
are offered regularly either by
the government or by private
institutions.
c) The waiting time to get into a
course (for public or private
sector participants) is
reasonable, say one or two
terms.
3
The training programs are
sufficient in terms of content and
frequency (waiting time) for
government participants but there
are few information programs for
private sector.
2
There are training programs but
they are deficient in terms of
content and supply.
1
There is no systematic training or
information program for public or
private sector participants.
0
own resources for public sector
officials.
These are limited to 2-3 days of
exposure to the rules.
This is not consistent with
demand as PPRA’s own
capacity is limited. To enhance
this PPRA has developed a
proposal for establishing the
National Institute for
Procurement Management.
programme does not
exist. PPRA is
undertaking capacity
development through a
series of continual
short-term courses in
response to identified
demand, but the
approach is not holistic
nor designed to offer
growth along a career
path.
A similar facility for
private sector entities
does not exist.
6 (c) There are established norms for the
safekeeping of records and documents
related to transactions and contract
management.
The procurement system
complies with the following
requirements.
a) The legal/regulatory
framework establishes a list of
the procurement records that
must be kept at the operational
level and what is available for
public inspection, including
conditions for access.
b) The records should include:
3
The complete list of bidding
documents are required to be
maintained safely and produced
for audit requirements and or a
period specified by the
Evidence Act, the NAB
Ordinance and the Audit Rules.
The Standard Operation
Procedures governing document
maintenance and retrieval are
contained in the Manuals issued
by the Management Services
Division.
However since all systems are
manual and no secure storage is
Absence of secure
storage is an issue, but
is not considered to be
critical for the
maintenance of
records.
3.0
31
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
Public notices of bidding
opportunities.
Bidding documents and
addenda.
Bid opening records
Bid evaluation reports
Formal appeals by bidders and
outcomes.
Final signed contract
documents and addenda and
amendments.
Claims and dispute resolutions
Final payments
Disbursement data (as required
by the country’s financial
management system).
c) There is a document retention
policy that is compatible with
the statute of limitations in the
country for investigating and
prosecuting cases of fraud and
corruption and with the audit
cycles.
d) There are established security
protocols to protect records
either physical or electronic.
The procurement system
complies with requirements (a),
plus two of the remaining
conditions.
2
The procurement system
complies with (a) but not with the
rest.
1
There is no mandatory list of
documents or retention policy
leaving it to the discretion of the
procuring entity.
0
provided, the veracity and
completeness of records cannot
be guaranteed.
6 (d) There are provisions for delegating
authority to others who have the capacity
to exercise responsibilities.
The system meets the following
requirements:
a) Delegation of decision making
authority is decentralised to
the lowest competent levels
consistent with the risks
associated and the monetary
sums involved.
3
Authority is delegated
according to rules specified in
the ESTA Code and the
Financial Powers Regulations
for Drawing and Disbursing
Officers and are not necessarily
devolved according to
capability and accountability is
defined precisely.
However decisions are made at
the higher level.
Compliant with
criterion 2.
2.0
32
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
b) Delegation is regulated by law.
c) Accountability for decisions is
precisely defined.
The law establishes delegation
and accountabilities but the
system concentrates decisions at a
high level creating congestions
and delays.
2
Delegation is regulated in very
general terms creating a need to
clarify accountability for decision
making.
1
Delegation is not regulated by law
and left at the discretion of the
procuring entity. There is lack of
clarity on accountability.
0
Indicator 7: Functionality of the public procurement market
42. The objective of this indicator is primarily to assess the market response to public
procurement solicitations. There are three sub indicators.
Rating 1.33
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
7 (a) There are effective mechanisms for
partnerships between the public and
private sector.
Each of the following conditions
is met.
a) Government encourages open
dialogue with the private sector
and has several established and
formal mechanisms for open
dialogue through associations
or other means.
b) The government has programs
to help build capacity among
private companies, including
for small businesses and
training to help new entries into
the public procurement
marketplace.
c) The government encourages
public/private partnerships and
the mechanisms are well
established in the legal
3
There is no stated PPP policy.
However, instances of such
formal relationships involving
large scale procurement are to
be found in the Infrastructure
Project Development Facility,
the use of BOT for the
development of infrastructure
by the Port Qasim Authority
and the National Highway
Authority.
An open dialogue with private
sector is evidenced by the
inclusion of private sector
professional in various fora
such as Commissions,
Committees and Task Forces.
Condition (a) of
criterion 1 are met. 1.0
33
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
framework to make possible
such arrangements.
The system meets (a) plus one
other condition above.
2
The system only provides for (a)
above.
1
There are no obvious
mechanisms for dialogue or
partnership between the public
and private sector.
0
7 (b) Private sector institutions are well
organised and able to facilitate access to
the market.
The private sector is competitive,
well organised and able to
participate in the competition for
public procurement contracts.
3
There is a reasonably well
functioning private sector but
competition for large contracts is
concentrated in a relatively small
number of firms.
2
The private sector is relatively
weak and/or competition is
limited owing to monopolistic or
oligopolistic features in important
segments of the market.
1
The private sector is not well
organised and lacks capacity and
access to information for
participation in the public
procurement market.
0
The larger institutions in the
private sector are limited in
number, but are highly
competitive within the
constraints of an oligopolistic
framework largely created by
the intrusion of the public sector
entities which are favoured,
The private sector is therefore
able to access the market in a
limited manner.
However, the smaller
organisations, even though
somewhat competitive, tend to
form cartels and have limited
access to the markets.
The rest of the private sector is
disorganised and lacks capacity.
The large scale private
sector firms are well
organised and can
offer fair competition.
Because of the
shortage of capacity
they are unable to meet
the demand placed on
them20
.
This is, however, set
aside when vested
interest intervene when
cartelisation or
rationing takes place.
Such instances can be
found across the board
the latest such instance
in the construction
sector is the near-
award for the Kashmir
Highway by the CDA.
In the power sector is
the award of contracts
for transformers has
been traditionally
spread over five
suppliers each receives
a fixed quota to be
supplied at pre-
determined prices.
2.0
7 (c) There are no major systemic
constraints (e.g. inadequate access to
There are systemic constraints
which inhibit large scale private
Criterion 3 holds true
for the bulk of the 1.0
20 Mir, Aized H., and Durrani, Amer Zafar; 2007; Pakistan Infrastructure Implementation Capacity Assessment; World Bank
in Pakistan.
34
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
credit, contracting practices, etc.)
inhibiting the private sector’s capacity to
access the procurement market.
There are no major constraints
inhibiting private sector access to
the public procurement market.
3
There are some constraints
inhibiting private sector access to
the public procurement market,
but competition is sufficient.
2
There are multiple constraints
inhibiting private sector access to
the public procurement market
which often affect competition
levels.
1
There are major constraints that
discourage competition and the
private sector firms are generally
reluctant to participate in public
procurement.
0
sector participation. The main
constraint is the non-level
playing field because of the
presence of public sector
organisations that are given
preference to the extent of sole
sourcing in the higher valued
contracts.
private sector entities.
Indicator 8: Existence of contract administration and dispute resolution
43. This indicator’s objective is to assess the quality of contract administration practices
which begin after contract award and continue to acceptance and final payments. This
indicator covers three sub- indicators.
44. Critical indicator for open competition and transparency of the country systems.
Rating 2.00
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
8(a) Procedures are clearly defined for
undertaking contract administration
responsibilities that include inspection and
acceptance procedures, quality control
procedures, and methods to review and
issue amendments in a timely manner
Contract administration
procedures provide for:
a) Procedures for acceptance of
final products and for issuance
of contract amendments are
part of the legal/regulatory
3
PEC documents and regulations
ensure compliance with the first
four requirements.
The payment procedures
although well-defined in the
PPR 2004 are not followed
completely, which leads to delay
in payments
Four of five conditions
of criterion 1 are
satisfied
2.0
35
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
framework or are incorporated
as standard clauses in
contracts.
b) Clauses are generally
consistent with internationally
accepted practices (see IFI
standard contracts for good
practice examples).
c) Quality control (QC)
procedures for goods are well
defined in the model
contracts/documents or in the
regulations. QC is carried out
by competent officers,
inspection firms or specialised
testing facilities.
d) Supervision of civil works is
carried out by independent
engineering firms or qualified
government supervisors and
inspectors.
e) Final payments are processed
promptly as stipulated in the
contract.
Contract administration
procedures provide for (a) plus
three of the remaining
requirements.
2
Contract administration
procedures provide for (a) plus
two of the remaining
requirements.
1
Contract administration
procedures do not meet the
requirements of (a) to (e) above.
0
8 (b) Contracts include dispute resolution
mechanisms that provide for an efficient
and fair process to resolve disputes arising
during the performance of the contract.
The system meets all the good
practice standards below.
a. There is an Arbitration law in
the country.
b. The law is consistent with
generally accepted practices for
neutrality of arbitrators, due
process, expediency and
3
The Arbitration Act includes
provision of neutral arbitrators,
due process and expediency but
decision is difficult to enforce.
ICB contracts allow for
international arbitration.
No ADR exists.
Four of the five
conditions of criterion
1 are met.
2.0
36
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
enforceability.
c. The country accepts as a matter
of course international
arbitration for international
competitive bidding.
d. Provisions for Alternative
Dispute Resolution (ADR) are
standard in contracts.
e. ADR provisions conform to the
international standard wording
(may refer to IFI standard
bidding documents for sample of
good international practice).
The system meets (a) plus three of
the remaining good practice
standards.
2
The system meets (a) plus two of
the remaining good practice
standards.
1
The system does not use ADR as a
normal dispute resolution
mechanism in public contracts.
0
8 (c) Procedures exist to enforce the
outcome of the dispute resolution process
The procurement system in the
country meets following the
requirements:
The country is a member of the
New York Convention on
enforcement of international
arbitration awards.
The country has procedures to
enable the winner in a dispute to
seek enforcement of the outcome
by going to the courts.
The country has a process to
monitor this area of contract
administration and to address
performance issues.
3
The country meets two of the three
conditions above.
2
The country meets condition a). 1
The country does not meet any of 0
Only the first two requirements
are met.
evident from analysis. 2.0
37
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
the requirements.
PILLAR IV: Integrity and Transparency of the Public Procurement System
Rating 1.52
45. This is the ultimate goal of all procurement systems and is not easily achieved. It
requires an enabling environment a friendly institutional framework, management capacity
and enlightened legislative framework.
46. The OECD-DAC guideline for assessment states “A cornerstone of a well-
functioning public procurement system operating with integrity (fair, transparent, and
credible) is the availability of mechanisms and capacity for independent control and audit of
procurement operations to provide for accountability and compliance. Similarly, there must
be a system for participants to lodge complaints and challenge decisions with administrative
and judicial review bodies having both appropriate levels of independence and the legal
power to impose corrective measures and remedies against contracting entities in breach of
the legal and regulatory framework. Fraud and corruption, including the issue of conflict of
interest, should be addressed in legislation as well as through special measures in order to
create a sound and fair environment for public procurement operations”.
47. Another key factor is ensuring that there is a level-playing field between the public
and private sector suppliers, contractors and consultants and easy access to market
opportunities by all. It is only when all of these conditions are met that a true transparent
public procurement system can exist with the framework of integrity. The scores and ratings
of the indicators in this Pillar is discussed below.
Indicator 9: The country has effective control and audit systems
48. The objective of this indicator is to determine the quality, reliability and timeliness of
the internal and external controls preferably based on risk assessment and mitigation. The
indicator has five sub-indicators.
49. Further improvements would be part of the action plan of corrective measures to be
implemented during the implementation of the pilot projects.
Rating 1.8
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
9 (a) A legal framework, organisation,
policy and procedures for an internal and
external control and audit of public
procurement operations are in place to
provide a functioning control framework.
Audit, both internal and
external, is largely limited to
financial transactions only.
Mechanisms for performance
audit by external auditors have
been developed, but are rarely
Only condition (a) of
criterion 1 are met. 1.0
38
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
The system in the country
provides for:
a) Adequate independent control
and audit mechanisms and
institutions to oversee the
procurement function.
b) Implementation of internal
control mechanisms in
individual agencies with clearly
defined procedures.
c) Proper balance between timely
and efficient decision making
and adequate risk mitigation.
d) Specific periodic risk
assessment and controls
tailored to risk management.
3
The system in the country meets
(a) plus two of the above. 2
The system meets (a) but controls
are unduly burdensome and time-
consuming hindering efficient
decision making.
1
Controls are imprecise or lax and
inadequate to the point that there
is weak enforcement of the laws
and regulations and ample risk
for fraud and corruption.
0
undertaken largely due to
capacity constraints.
Mechanisms for procurement
audit do exist but findings are
not specifically highlighted.
The time lag between decision
making and risk mitigation is
very large, an average of 2-3
years.
9 (b) Existence of follow-up on findings
and recommendations provide an
environment that fosters compliance.
Internal or external audits are
carried at least annually and
recommendations are responded
to or implemented within six
months of the submission of the
auditors’ report.
3
Audits are carried out annually
but response to or
implementation of the auditors’
recommendations takes up to a
year.
2
Audits are performed annually
but recommendations are rarely
responded to or implemented.
1
Internal audit is concurrent with
transaction.
An Annual audit is conducted,
observations discussed and
settled generally within 6
months wherever feasible.
Criterion 1 complied
with. 3.0
39
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
Audits are performed erratically
and recommendations are not
normally implemented.
0
9 (c) The internal control systems
provides timely information for
management action.
All of the following requirements
are met.:
a) There are written standards for
the internal control unit to
convey issues to management
depending on the urgency of
the matter.
b) There is established regular
periodic reporting to
management throughout the
year.
c) The established periodicity and
written standards are complied
with.
3
Requirement (a) plus one of the
above are met.
2
Only requirement (a) is met. 1
There is no functioning internal
control system.
0
Internal written controls are
available.
Only the first condition
of criteria 1 is
complied with.
1.0
9 (d) The internal control systems are
sufficiently defined to allow performance
audits to be conducted.
There are internal control
procedures including a manual
that state the requirements for
this activity which is widely
available to all staff.
3
There are internal control
procedures but there are
omissions or practices that need
some improvement.
2
There are procedures but
adherence to them is uneven.
1
The internal control system is
poorly defined or non-existent.
0
Performance audit has been
introduced but is used in a
limited manner.
The Manual is being developed.
Adherence to set
procedure is uneven. 1.0
40
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
9 (e) Auditors are sufficiently informed
about procurement requirements and
control systems to conduct quality audits
that contribute to compliance.
There is an established program
to train internal and external
auditors to ensure that they are
well versed in procurement
principles, operations, laws, and
regulations and the selection of
auditors requires that they have
adequate knowledge of the
subject as a condition for
carrying out procurement audits.
3
If auditors lack procurement
knowledge, they are routinely
supported by procurement
specialists or consultants.
2
There is a requirement that the
auditors have general knowledge
of procurement principles,
operations, laws, and regulations
but they are not supported
generally by specialists in
procurement.
1
There is no requirement for the
auditors to have knowledge of
procurement and there is no
formal training program and no
technical support is provided to
the auditors.
0
A programme of training has
been instituted by the Auditor
General’s Office and covers
both procurement and
performance audit.
Complies with
criterion 1. 3.0
Indicator 10: Efficiency of appeals mechanism
50. The appeals mechanism here assesses a range of specific issues regarding efficiency
in contributing to the compliance environment in the country and the integrity of the public
procurement system. There are five sub indicators.
51. This is a critical indicator requiring a “3”rating for all its components.
Rating 0.80
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
10 (a) Decisions are deliberated on the
basis of available information, and the
An appeal must be filed within Criterion 2 is met. 2.0
41
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
final decision can be reviewed and ruled
upon by a body (or authority) with
enforcement capacity under the law.
The country has a system that
meets the following
requirements.
a) Decisions are rendered on the
basis of available evidence
submitted by the parties to a
specified body that has the
authority to issue a final
decision that is binding unless
referred to an appeals body.
b) An appeals body exists which
has the authority to review
decisions of the specified
complaints body and issue
final enforceable decisions.
c) There are times specified for
the submission and review of
complaints and issuing of
decisions that do not unduly
delay the procurement
process.
3
The country has a system that
meets (a) and (b) above, but the
process is not controlled with
regard to (c).
2
The system only provides for (a)
above with any appeals having to
go through the judicial system
requiring a lengthy process.
1
The system does not meet the
conditions of (a) – (c) above,
leaving only the courts.
0
fifteen days of occurrence.
The existing appeals
mechanism consists of a
Committee to be appointed on a
case-by-case basis leading to
inconsistent decisions on
similar issues.
The appeal to the courts and the
Ombudsman Office is
permitted.
10 (b) The complaint review system has
the capacity to handle complaints
efficiently and a means to enforce the
remedy imposed.
The complaint review system has
precise and reasonable conditions
and timeframes for decision by
the complaint review system and
clear enforcement authority and
mechanisms.
3
There are terms and timeframes
established for resolution of
complaints but mechanisms and
2
While existing systems can
handle complaints, decision and
enforcement for remedy takes
years.
Criterion 3 is satisfied. 1.0
42
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
authority for enforcement are
unclear or cumbersome.
Terms and timeframes for
resolution of complaints or
enforcement mechanisms and
responsibilities are vague.
1
There are no stipulated terms and
timeframes for resolution of
complaints and responsibility for
enforcement is not clear.
0
10 (c) The system operates in a fair
manner, with outcomes of decisions
balanced and justified on the basis of
available information.
Procedures governing the
decision making process of the
review body provide that
decisions are:
a) based on information relevant
to the case.
b) balanced and unbiased in
consideration of the relevant
information.
c) can be subject to higher level
review.
d) result in remedies that are
relevant to correcting the
implementation of the process
or procedures.
3
Procedures comply with (a) plus
two of the remaining conditions
above.
2
Procedures comply with (a)
above.
1
- The system does not comply
with any of the above.
0
The system complies with only
the first condition of criterion 1.
However, in implementation the
process can be influenced to
favour the complainant.
Decisions are based on
relevant information. 1.0
10 (d) Decisions are published and made
available to all interested parties and to
the public.
All decisions are publicly posted
in a government web site or
another easily accessible place.
3
All decisions are posted in a
somewhat restricted access media
2
Decisions of administrative
reviews are not published or
made available. Copies of court
decisions are available on
payment.
Complies with the last
criterion. 0.0
43
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
(e.g. the official gazette of
limited circulation).
Publication is not mandatory and
publication is left to the
discretion of the review bodies
making access difficult.
1
Decisions are not published and
access is restricted.
0
10 (e) The system ensures that the
complaint review body has full authority
and independence for resolution of
complaints.
The complaint review body is
independent and autonomous
with regard to resolving
complaints.
3
The complaint review body is not
independent and autonomous
with regard to resolving
complaints.
0
Review bodies are ad-hoc and
appointed by the Head of
department of the Procuring
Agency.
They are therefore not
independent.
Evident from analysis. 0.0
Indicator 11: Degree of Access to Information
52. This indicator deals with the quality, relevance, ease of access and
comprehensiveness of information on the public procurement system.
53. The Bank will support the development of E-gp and E-procurement systems and
platforms in general.
Rating 2.0
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
11 Information (on public procurement)21
is published and distributed through
available media with support from IT
when feasible.
There is a rudimentary public
information system which
provides information only for
the initial opportunities for
submission of expressions of
interest, bids and proposals for
all procurement government
wide.
Criterion 2 is satisfied. 2.0
21 Inserted from the introductory narrative
44
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
Information on procurement is
easily accessible in media of
wide circulation and availability.
The information provided is
centralised at a common place.
Information is relevant and
complete. Information is helpful
to interested parties to understand
the procurement processes and
requirements and to monitor
outcomes, results and
performance.
3
Information is posted in media
not readily and widely accessible
or not user friendly for the public
at large OR is difficult to
understand to the average user
OR essential information is
lacking.
2
Information is difficult to get and
very limited in content and
availability.
1
There is no public information
system as such and it is generally
up the procuring entity to publish
information.
0
However no information is
provided regarding processes,
outcomes, results and
performance.
The PPRA is preparing and
issuing monthly reports on
performance in the form of
proportion of uploads compliant
with PPR, but this only for
circulation within government
and is not available publicly.
Indicator 12: The country has ethics and anticorruption measures in place
54. This indicator assesses the nature and scope of the anticorruption provisions in the
procurement system. There are seven sub indicators.
55. Critical indicator requiring a top rating for most of its aspects.
Rating 2.0
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
12 (a) The legal and regulatory
framework for procurement includes
provisions addressing corruption, fraud,
conflict of interest, and unethical
behaviour and sets out the actions that
can be taken with regard to such
behaviour.
The legal framework contains a
number of legislations and sub-
legislations dealing with these
issues, including the PPR. They
are, however, ambiguous in
their definitions and provide for
a number of loopholes. Action
is however, clearly specified.
Criterion 1 satisfied. 3.0
45
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
The procurement law or the
regulations specify this
mandatory requirement and give
precise instructions on how to
incorporate the matter in
tendering documents. Tender
documents include adequate
provisions on fraud and
corruption.
3
The procurement law or the
regulations specify this
mandatory requirement but
leaves no precise instruction on
how to incorporate the matter in
tendering documents leaving this
up to the procuring agencies.
Tender documents generally
cover this but without
consistency.
2
The legal/regulatory framework
does not establish a clear
requirement to include language
in documents but makes fraud
and corruption punishable acts
under the law.
Few tendering documents include
appropriate language dealing
with fraud and corruption.
1
The legal framework does not
directly address fraud, corruption
or unethical behaviour and its
consequences. Tender documents
generally do not cover the matter.
0
Specific bodies to deal with
these issues exist and consist of
the National Accountability
Bureau (NAB), the Prime
Minister’s Inspection
Committees and the Anti-
Corruption Establishment.
SBDs and GCCs prepared by
PEC and World Bank address
these issues completely.
The NAB requires ex-ante
approval for all contracts
beyond a threshold value.
12 (b) The legal system defines
responsibilities, accountabilities, and
penalties for those found to have engaged
in fraudulent or corrupt practices.
The legal/regulatory framework
explicitly deals with the matter. It
defines fraud and corruption in
procurement and spells out the
individual responsibilities and
consequences for government
employees and private firms or
individuals found guilty of fraud
or corruption in procurement,
3
The overall legal framework in
the country includes specific
and general legislation which
define responsibility,
accountability and penalty for
fraud and corruption. The latest
specific legislation are the
National Accountability Bureau
and the Electronic Crimes
Ordinances which were issued
specifically to fight white collar
crime. However, the
procedures specified are
cumbersome and inordinately
Criterion 1 is fulfilled. 3.0
46
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
without prejudice of other
provisions in the criminal law.
The legal/regulatory framework
includes reference to other laws
that specifically deal with the
matter (e.g. anti corruption
legislation in general). The same
treatment is given to the
consequences.
2
The legal/regulatory framework
has general anti corruption and
fraud provisions but does not
detail the individual
responsibilities and consequences
which are left to the general
relevant legislation of the
country.
1
The legal/regulatory framework
does not deal with the matter.
0
protracted.
12 (c) Evidence of enforcement of rulings
exists.
There is ample evidence that the
laws on corrupt practices are
being enforced in the country by
application of stated penalties.
3
There is evidence available on a
few cases where laws on corrupt
practices have been enforced.
2
Laws exist, but evidence of
enforcement is weak.
1
There is no evidence of
enforcement.
0
While the laws are fairly well
stated, however, the emphasis
of implementation is on the
weaker segments of officialdom
against whom evidence of
enforcement exists.
Evidence of
enforcement in the
major cases of
corruption is sparse.
1.0
12 (d) Special measures exist to prevent
and detect fraud and corruption in public
procurement.
The government has in place a
comprehensive anticorruption
program to prevent, detect and
penalise corruption in
government that involves the
3
Government’s efforts against
corruption are weak and half-
hearted even though special
measures exist.
There is an existing published
Anti-Corruption Strategy and
Policy.
While systems exist,
there appears to be no
evidence of
punishment or
redressed except in
isolated cases.
2.0
47
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
appropriate agencies of
government with a level of
responsibility and capacity to
enable its responsibilities to be
carried out. Special measures are
in place for detection and
prevention of corruption
associated with procurement.
The government has in place an
anticorruption program but it
requires better coordination or
authority at a higher level to be
effective. No special measures
exist for public procurement.
2
The government has isolated
anticorruption activities not
properly coordinated to be an
effective integrated program.
1
The government does not have an
anticorruption program.
0
Specialist organisations to fight
corruption exist in the form of
the Anti-Corruption
Establishment, The Prime
Minister’s Inspection Team, the
National Accountability Bureau
and the white collar crime unit
of the Federal Investigation
Agency.
Oversight by the electronic and
print media and civil society
organisations act as the
whistleblowers.
12 (e) Stakeholders (private sector, civil
society, and ultimate beneficiaries of
procurement / end-users) support the
creation of a procurement market known
for its integrity and ethical behaviours.
The creation of a procurement
market is supported by the
following:
a) There are strong and credible
civil society organisations that
exercise social audit and
control.
b) Organisations have
government guarantees to
function and cooperation for
their operation and are
generally promoted and
respected by the public.
c) There is evidence that civil
society contributes to shape
and improve integrity of
public procurement.
3
There are several civil society
organisations working on the
matter and the dialogue with the
government is frequent but it has
limited impact on improving the
2
The relationship between the
government and stakeholders
can at best be described as wary
and mistrustful. Moreover,
there are many vested interests
against the creation of a
responsive and transparent
procurement market. Thus the
possibility for the creation of a
procurement market known for
its integrity and ethical
behaviour is asymptotic to zero
in the short- to medium-term.
There are only a few
organisations operating
as watchdogs in civil
society.
1.0
48
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
system.
There are only a few
organisations involved in the
matter, the dialogue with the
government is difficult and the
contributions from the public to
promote improvements are taken
in an insignificant way.
1
There is no evidence of public
involvement in the system OR
the government does not want to
engage the public organisations
in the matter.
0
12 (f) The country should have in place a
secure mechanism for reporting
fraudulent, corrupt, or unethical
behaviour.
There is a secure, accessible and
confidential system for the public
reporting of cases of fraud,
unethical behaviour and
corruption.
3
There is a mechanism in place but
accessibility and reliability of the
system undermine and limits its
use by the public.
2
There is a mechanism in place but
security or confidentiality cannot
be guaranteed.
1
There is no secure mechanism for
reporting fraud, unethical
behaviour and corruption cases.
0
Other than the annual external
audit of all PAs, there is a partly
secure mechanism for reporting
these activities, but follow-up is
erratic and more often than not,
targeted.
The access is limited
because of a lack of a
supporting system of
rewards.
The reliability of the
system is questionable
because of apparent
vested interest
interference.
2.0
12 (g) Existence of Codes of
Conduct/Codes of Ethics for participants
that are involved in aspects of the public
financial management systems that also
provide for disclosure for those in
decision making positions.
The existence of these code
ensures the following:
a) There is a code of conduct or
ethics for government officials
with particular provisions for
3
The PEC regulation contains
both a code of conduct and a
code of ethics. This is however
restricted to engineering only.
The Services Efficiency and
Discipline Rules contains such
a code implicitly.
The Services
Efficiency and
Disciplinary Rules
ensure compliance
with all three criteria,
but enforcement is
weak. These need to
be strengthened and
implementation should
be based on objective
criteria.
2.0
49
Sub-indicator and ranking
condition
Current Status Rationale for
Ranking
Score
those involved in public
financial management,
including procurement.
b) The code defines
accountabilities for decision
making and subjects decision
makers to specific financial
disclosure requirements.
c) The code is of obligatory
compliance and consequences
are administrative or criminal.
The system meets requirements
(a) and (b) but is only a
recommended good practice code
with no consequences for
violations unless covered by
criminal codes.
2
There is a code of conduct but
determination of accountabilities
is unclear.
1
There is no code of conduct. 0
V. CONCLUSIONS AND REMEDIES
56. The legal framework is weak and needs to be developed. This should be undertaken
in stages. On completion of the targets for Pillar I, the donors should agree to adopt the CPS.
57. The proposed action is as follows:
Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
PILLAR I Legislative and Regulatory Framework
Indicator 1 - Public procurement legislative and regulatory framework achieves the agreed standards and
complies with applicable obligations
50
Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
1(a) Scope of application and coverage of the
legislative and regulatory framework.
To ensure greater legitimacy to the existence of a
more empowered PPRA, the Ordinance, ideally,
should be reissued as an Act of Parliament
amending the Ordinance to reflect the Public
Procurement Strategy and some elements of the
Rules should be incorporated It should also
specify the roles, responsibility and authority of
the PPRA more explicitly rather than in a broad
based manner.
The Act should also clearly establish the
hierarchy of sub-legislation
The PPR 2004 should extend the scope and
coverage to include explicitly services and
consulting services.
Regulations, Guidelines and Handbooks need to
be developed. The NHF guidelines should be
used to develop a standardised template.
If necessary amendments to the Contract Act,
Arbitration Act, Sale of Goods Act, the GFR and
the Audit Regulations should be issued to reflect
international good practice in procurement.
1 (c) Advertising Rules The specification of print media should be
limited to nationally circulated newspapers and
have the top category ranking accorded by the
Audit Bureau of Circulation.
The current practise of advertising in low-
circulation regional papers should be forbidden
mandatorily for all procurements below the
advertising threshold on the PPRA website (PKR
100,000).
The Press Information Department’s discretion in
selecting the media should be abandoned and the
choice be left to the Procuring Agency as they
can good identify their clientele or possible
suppliers.
Time Limits This is extremely restricting, more particularly so
in the case of ICB. These should be restated in
line with international good practice of a
minimum of 42 days and a maximum of 90 days.
51
Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
1 (d) Rules of Participation Should include a statement on public and private
sector being treated equitably and current
methods of sole-sourcing for large contracts
should be prohibited mandatorily.
If the objective is to develop integrity based
efficient public procurement systems, then these
public sector entities should be phased out of
supply and tasked with monitoring and
evaluation.
The benefits of this would be that private sector
entities would then be able to achieve ISO 9001
etc certifications for output quality assurance.
1 (e) Tender documentation and technical
specifications
Adopt the MBDs or develop similar.
1 (f) Evaluation Criteria and Method
To be aligned with international good practice. A
standard set of criterion needs to be developed
Award Criteria To be aligned with MDBs processes and
procedures
1 (h) Complaints To be brought at par with MDBs. The existing
method of an internal enquiry should include
provisions for external participation to ensure
integrity and transparency.
A second tier for redressal should be integrated.
-- Domestic preference given Should be restricted to a maximum accepted
worldwide, namely 15 percent for a 30 percent
value addition.
Indicator 2 - Existence of implementing regulations and documentation
2 (a) Implementing regulation that provide defined
processes and procedures not included in
higher-level legislation
This results automatically once 1(a) has been
completed.
2(b) Model Tender or submission of proposal
documents
MBDs developed by the MDBs should be used.
Where these are not yet available, the existing
SBDs used by the DBs should be used in the
interim.
52
Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
2 (d) Procedures suitable for contracting services or
other requirements in which technical capacity
is a key criterion
Templates and criterion for evaluation should be
prepared for works, goods, services and
consulting services should be prepared.
Guidelines should be developed to encourage the
participation of newly established forms such that
the criteria for qualification should be experience
of professional partners and not of the entity in its
own name.
2 (e) User’s guide or manual for contracting entities These should be prepared by each procuring
entity based on a template to be prepared by
PPRA.
2 (f) General Conditions of Contracts (GCC) for
public sector contracts covering goods, works
and services consistent with national
requirements and, when applicable,
international requirements
Should be prepared as part of a standardised set
of contracts similar to those by the MDBs and
IFIs. The PPRA should have templates prepared
for this purpose. There should be a clear
distinction between lump-sum and fee plus
contracts.
PILLAR II Institutional Framework and Management Capacity
Indicator 3 - The public procurement system is mainstreamed and well integrated into the public sector
governance systems
PFM systems would have already been reviewed by the Bank, and deemed acceptable
3 (a) to (c) Procurement planning integrated into budget
formulation process and contribute to multi-year
planning
Budget law and financial procedures support timely
procurement, contract execution, and payment and
allows no initiation of Procurement without budget
appropriation
There is a disconnect between the
implementation schedule contained in the PC-
I, Three-Year Rolling Budgets (MTBF) and
the Annual Budget. Procedures for budget
preparation need to be redesigned to reflect
the schedule of work stated in the approved
PC-Is.
Technical assistance should be obtained to
hone systems and procedures and develop
institutional capacity and staff capability.
Indicator 4 - The country has a functional normative/regulatory body
Many countries, including the most advanced, do not have such a body at the central level
4 (a) The status and basis for the regulatory authority is
covered in the legislative and regulatory framework
This needs to be expedited.
4 (c) The body’s organisation, funding, staffing and level
of independence and authority to exercise its duties
should be sufficient and consistent with the
responsibilities
A detailed study should be undertaken to
determine the need for resources (human and
financial) to fulfil the responsibilities specified
by the Ordinance for the PPRA. This should
also include the need for capacity development
both internally and for all procuring agencies.
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Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
4 (d) Separation and clarity of responsibilities to avoid
conflict of interest
The overlap between the PPRA and the PEC
should be clarified through appropriate
amendment of the PEC regulations.
Indicator 5 - Existence of Institutional Development Capacity
This is an important aspect, and it is expected that donor support will be provided for participating
countries
5 (a) (b) The country has a system for collecting and
disseminating procurement information, including
tender invitations, requests for proposals, contract
award information and for
monitoring national procurement statistics
The existing system should be expanded
initially to capture the totality of information
from advertising for EOI or Pre-Qualification
to the award of contracts and then
subsequently to collect information for
monitoring procurement performance.
5 (c) (d) A sustainable strategy and training capacity exists
to provide training, advice and assistance to develop
the capacity of government and private sector
participants to understand the rules and regulations
and how they should be implemented
Quality control standards are disseminated and used
to evaluate staff performance and address capacity
development issues
A phased needs assessment should be
conducted and a training plan developed. The
proposed establishment of the Pakistan
Institute for Procurement Management should
be expanded to also include provision for the
development of private sector capacity in
procurement. In the event of resource
constraint then capacity should be created
within existing public sector institutions.
The existing performance systems and reports
should be evaluated, and, if required modified
and linked to a staff development programme
which also needs to be developed.
Quality control standards need to be
developed to ensure measurement of
performance in the procurement arena.
PILLAR III Procurement Operations and Market Practices
Indicator 6 - The country’s procurement operations and practices are efficient
The Bank will also rely on its assessment of the capacity of the executing agencies of the pilot projects
6 (a) (d) Level of procurement competence in
government officials in the entity is
commensurate with their procurement
responsibilities, and there are provisions for
delegating authority to others who have the
capacity to exercise responsibilities
A capacity assessment of all persons engaged in
procurement should be undertaken. Based on this
a plan for career development should be prepared
which (i) creates a specialist cadre for
procurement specialists, (ii) provides a planned
training programme for providing skill for
different levels of procurement staff, and (iii) ,
provides detailed job descriptions, quality
assurance standards and market-based salaries.
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Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
6 (b) The procurement training and information
programs for government officials and for
private sector participants are consistent with
demand
The existing training programme of the PPRA is
based on the perceived demands in a state of
vacuum. What is required is a training
programme developed on the bases of a needs
awareness programme linked to a career path.
This should be undertaken at the earliest to
consolidate on the progress which has been made
to date.
6 (c) There are established norms for the
safekeeping of records and documents related
to transactions and contract management
The existing system should be evaluated with
respect to security and access and, if needed,
modified.
Indicator 7 – Functionality of the public procurement market
7 (a) to (d) There are effective mechanisms for
partnerships between the public and private
sector, they are well organised, can access the
market with impediment and there are clear
rules of engagement both in domestic and
international market
Develop a stated policy and put into place
mechanisms which facilitate private sector
participation.
Indicator 8 – Existence of contract administration and dispute resolution
Critical indicator for open competition and transparency of the country systems
8 (a) Procedures are clearly defined for undertaking
contract administration responsibilities that
include inspection and acceptance procedures,
quality control procedures, and methods to
review and issue amendments in a timely
manner
As part of the development of Institutional
capacity detailed job descriptions and process and
procedures manuals should be developed for each
agency considering its specific needs
8 (b) Contracts include dispute resolution
mechanisms that provide for an efficient and
fair process to resolve disputes arising during
the performance of the contract
A wider mechanism needs to be resolved which
fast-tracks this. This should be developed and
specified in the contracts, guidelines, manuals
and handbooks. The system should contain a
two-tier system at the administrative level
followed by recourse to arbitration and litigation,
if necessary.
8 (c) Procedures exist to enforce the outcome of the
dispute resolution process
These should be developed such that they are
equitable to both parties to the dispute.
PILLAR IV Integrity and Transparency of the Public Procurement System
Indicator 9 – The country has effective control and audit systems
Further improvements would be part of the action plan of corrective measures to be implemented during the
implementation of the pilot projects
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Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
9 (a) A legal framework, organisation, policy and
procedures for an internal and external control
and audit of public procurement operations are
in place to provide a functioning control
framework
Internal audit is one of the weakest linkages in
the public sector governance arena. A specialist
cadre of internal auditors needs to be developed
within the Finance Division staff separate from
the Auditor General’s Office who should be
trained specifically in procurement audit and
performance measurement techniques.
9 (b) Existence of follow-up on findings and
recommendations provide an environment that
fosters compliance
A Management Information System needs to be
developed and internal redressal mechanisms
developed.
9 (c) to (e) Internal control systems provides timely
information for management action, allow
performance audits to be conducted and
auditors are sufficiently informed to conduct
quality audits that contribute to compliance
A Management Information System needs to be
developed.
Specialist Auditors should be appointed and
trained in Procurement Audits and Performance
Measurement.
Indicator 10 – Efficiency of appeals mechanism
This is a critical indicator requiring a “3”rating for all its components
10 (a) Decisions are deliberated on the basis of
available information, and the final decision
can be reviewed and ruled upon by a body (or
authority) with enforcement capacity under
the law
Mechanisms for these should be designed and
made operational.
10 (b) The complaint review system has the capacity
to handle complaints efficiently and a means
to enforce the remedy imposed
10 (c) The system operates in a fair manner, with
outcomes of decisions balanced and justified
on the basis of available information
10 (d) Decisions are published and made available to
all interested parties and to the public
10 (e) Decisions are published and made available to
all interested parties and to the public
10 (f) The system ensures that the complaint review
body has full authority and independence for
resolution of complaints
Indicator 11 – Degree of Access to Information
The Bank will support the development of E-gp and E-procurement systems and platforms in general
11 (a) Information is published and distributed
through available media with support from IT
when feasible
This should be developed to ensure that
information is carried on the website of both the
procuring agency and PPRA.
Indicator 12 – The country has ethics and anticorruption measures in place
Critical indicator requiring a top rating for most of its aspects
12 (a) to (g) The legal and regulatory framework for Existing laws should be amended or effective
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Matrix of Recommendations
OECD – DAC
BIS Public Procurement Performance Area
Recommendations for Harmonisation of
PPR with International Good Practice
procurement includes provisions addressing
corruption, fraud, conflict of interest, and
unethical behaviour and sets out the actions
that can be taken with regard to such
behaviour ; defines responsibilities,
accountabilities, and penalties for those found
to have engaged in fraudulent or corrupt
practices; enforcement of rulings is evidenced;
embedded detection of fraud and corruption in
procurement; ensures stakeholder support for
creation of efficient procurement based on
ethics and integrity; embeds secure reporting
methods for fraud, corruption and unethical
behaviour; and has Codes of Conduct/Codes
of Ethics for participants that are involved in
aspects of the public financial management
systems that also provide for disclosure for
those in decision making positions
amendments integrated into the PPRA, the rules,
Guidelines, Handbooks and Manuals. This
should be contracted out to consultants with
demonstrated experience of drafting procurement
legislation which should then be peer reviewed
by international agencies.
57
APPENDIX- I
METHODOLOGY
1. The OECD-DAC Baseline Procurement Assessment Report provides an assessment
of the existing public procurement procedures against the following four key areas (pillars)
that have been identified as a way of organising the basic elements of a national/sub-national
public procurement system. Under the pillars, 12 indicators have been defined.
Pillar I. Legislative and Regulatory Framework
Procurement legislative and regulatory framework complies with applicable
obligations deriving from national and international requirements.
Availability of implementing regulations, documentation and tools to support
implementation.
Pillar II. Institutional Framework and Management Capacity
Degree of mainstreaming and integration into Public Financial Management
Systems.
Existence of a Functional Management/Regulatory Body.
Existence of Institutional Development Capacity.
Pillar III. Procurement Operations and Market Practices
Efficiency of Procurement Operations and Practices.
Functionality of the Public Procurement Market.
Existence of Contract Administration and Dispute Resolution Provisions.
Pillar IV. The Integrity of the Public Procurement System
Existence of Effective Control and Audit Systems.
Existence and Efficiency of the Appeals Mechanism.
Degree of Access to Information.
Existence of Ethics and Anti-corruption Measures.
2. The study is based on interviews and desk reviews of government legislation and
documents, and comprises, but is not be limited to, the following tasks:
a. Studying the existing reports on Public Procurement Systems of the Government
of Pakistan.
b. Examining the body of laws, rules, regulations, codes, manuals and guidelines
used by the public sector entities at the Federal level, with particular emphasis on
the overlapping Jurisdictions of the PPRA and the Pakistan Engineering Council
(PEC).
c. Conducting interviews with key stakeholders, not limited to:
i. Managing Director and staff of the Public Procurement Regulatory
Authority
ii. Concerned officials of the Cabinet, Finance and Planning Divisions
responsible for policy making
58
iii. Concerned officials of the Finance Division and of the Auditor General's
Office responsible for oversight and audit (financial and performance) of the
procurement function
iv. Concerned officials of a sample (not more than two from each type) of the
line Ministries or Divisions, autonomous bodies and public sector
corporations of the Federal Government responsible for regulating or
developing internal procedures and systems.
d. Undertaking an analysis of the existing framework, legislations, systems and
procedures to determine the current status of procurement vis-a-vis the BUs
essentially using the OECDDAC methodology and also responding to the issues
highlighted in the World Bank's methodology.
e. Suggesting remedies.