Recent Developments In Public Procurement Ministry of Finance Department of Expenditure January, 2019 Methodology for Assessing Procurement Systems (MAPS); Sustainable Public Procurement (SPP); MSE Procurement Amendment Order, 2018; Public
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Presentation Transcript
01
Recent Developments
In
Public Procurement
Ministry of Finance
Department of Expenditure
January, 2019<br>
02
Methodology for Assessing Procurement Systems (MAPS);
Sustainable Public Procurement (SPP);
MSE Procurement Amendment Order, 2018;
Public Procurement (Preference to Make in India) Order, 2017 Agenda<br>
03
METHODOLOGY
FOR
ASSESSING
PROCUREMENT SYSTEMS (MAPS)<br>
04
Earlier Public Procurement Systems Assessments in India In 2003, World Bank had published a Country Procurement Assessment Report (CPAR) covering:
Central Government;
State Governments (Three);
Public Sector Enterprises under Central Government (250+)
The report recommended improvement in 13 areas pertaining to Public Procurement<br>
05
World Bank, in 2017 published Benchmarking Public Procurement Report (BPP) focusing on legal and regulatory environments that affect the ability of private sector to do business with Government
BPP 2017 report covered 180 economies (including India for first time)
A high score (approaching 100) for the parameters by the economy is considered to have regulatory framework close to internationally recognized good practices Previous Assessments …<br>
06
India’s score on the Six parameters of BPP 2017<br>
07
Comparing India with the World…<br>
08
MAPS is universally accepted method to assess and improve public procurement systems by providing a common tool for analyzing information on key aspects of any system;
Already 90+ countries have been assessed through MAPS;
Based on the strengths and weaknesses identified, to develop strategies and implement reforms;
Report expected in early 2020 Methodology for Assessing Procurement Systems (MAPS)<br>
09
MAPS framework<br>
10
Assessment of India’s Public Procurement through modified MAPS<br>
11
SUSTAINABLE
PUBLIC PROCUREMENT
(SPP)<br>
12
Process whereby public organizations meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life-cycle basis in terms of generating benefits not only to the organization, but also to society and the economy, whilst significantly reducing negative impacts on the environment. Definition- SPP<br>
13
GFRs, 2017 Provision<br>
14
In March, 2018, Department of Expenditure set up a SPTF whose main objectives are to:
Review International Best Practices in the area of SPP;
Inventorise the current status of SPP in India across Government organizations;
Prepare a draft Sustainable Procurement Action Plan;
Recommend an initial set of product/ service categories (along with their specifications) where SPP can be implemented Sustainable Procurement Task Force (SPTF)<br>
15
MSE Procurement Amendment Order 2018<br>
16
Minimum annual purchase requirement from MSEs increased from 20% to 25%;
A minimum of 3% reservation for women owned MSEs within the above mentioned 25% reservation Amendment in MSE Procurement Order issued in Nov, 2018<br>
17
Public Procurement
(Preference to Make in India),
Order 2017<br>
18
Issued by DIPP pursuant to Rule 153 (iii) of GFR 2017 on 15.06.2017
To promote manufacturing and production of Goods, Works and Services in India thereby encouraging Make in India;
Nodal Ministry has to identify items where sufficient local capacity and local competition exists MII Order, 2017<br>
19
Procurements < Rs. 5 lakh are exempted
Procurements less than Rs. 50 lakhs
Only Local Suppliers are eligible
Minimum Local Content (LC) shall be 50%. Nodal Ministry may prescribe higher or lower %;
Margin of Purchase Preference 20%
Ministries/ Departments can reduce the margin of purchase preference below 20%;
The minimum LC, Margin of Purchase Preference and procedure for PPI-MII policy shall be declared in NIT; Salient points of MII Order<br>
20
Procurements more than Rs. 50 lakhs and that are divisible in nature
If L1 is a local supplier, entire quantity is placed on L1;
If L1 not a local supplier, 50% quantity awarded to L1;
For award of balance quantity, lowest bidder among the local supplier, with quotation falling in margin of purchase preference, is invited to match the price of L1;
If lowest local supplier fails to match L1 price or accepts less than the offered quantity, the next higher local supplier is invited with price falling in margin of purchase preference;
The same exercise is carried out till the invited local supplier matches the L1 price and accepts the balance quantity; Conditions for Purchase Preference…<br>
21
Procurements more than Rs. 50 lakhs and not divisible in nature
Lowest evaluated Responsive Bid is considered L1;
If L1 is a local supplier, entire quantity is placed on L1;
If L1 not a local supplier, lowest bidder among the local supplier, with quotation falling in margin of purchase preference, is invited to match the price of L1 for award of entire quantity;
If lowest local supplier fails to match L1 price, the next higher local supplier with price falling in margin of purchase preference, is invited to match the price of L1 and so on;
Where none of the local supplier matches the price of L1, the contract may be awarded to L1 Conditions for Purchase Preference…<br>
22
For procurement < Rs. 10 crore, local supplier shall submit self certification regarding meeting the requirement of minimum LC
The supplier to provide the location details where value addition is done
For procurement > Rs. 10 crore, certificate regarding meeting the requirement of minimum LC shall be submitted by local supplier from
Statutory auditor or cost auditor of the company (for companies);
Practicing cost accountant or practicing chartered accountant (other than companies) Verification of Local Content<br>
23
Nodal Ministries may constitute committees with internal and external experts for independent verification;
For false declarations of minimum LC, bidder shall be debarred for upto two years
The debarred bidder shall not be eligible for preference of MII by any other purchaser for period of debarment.
Debarment shall be prospectively in a manner that ongoing procurements are not disrupted Verification & Debarment<br>
24
Eligibility condition shall not require proof of supply in other countries/exports;
Eligibility conditions like turnover, production capability and financial strength do not result in unreasonable exclusion of local suppliers;
however ensuring quality or creditworthiness of the supplier;
Can restrict foreign suppliers in the tenders, in case such foreign country do not allow the participation of Indian suppliers in their tenders; Specifications in Tenders<br>
