Creating Favorable Conditions for the

Competitiveness of Companies in East African

Community—in Kenya

Joseph OgachiCouncil Member

Kenya Institute of Supplies Management

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In this presentation..Introduction,Procurement objectives,Is there competition?National enablers,Institutional enablers,Individual professional enablers,Where are we going?

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Government procurement market

In 2011, Government Budget is US$ 14 Billion;GDP in 2010 was US$ 31 billion;Procurement spend is approx. 25% of GDP; Hence, US$ 8 billion of procurement spend in 2010 –

market created by government procurementGovernment procurement market will expand:

Devolution to County Governments;Large Vision 2030 Strategy flagship projects;Emphasis on public private partnerships;Regional integration: EAC/COMESA;

And focus on specific procurement objectives3

Procurement ObjectivesThe traditional objectives of public procurement:1.Maximizing economy,2.Maximizing efficiency,3.Promoting competition,4.Fairness among bidders,5. Increasing transparency,6. Increasing accountability,7. Increasing public confidence,8.Promoting local industry,9.Promoting integrity 4

..procurement objectivesThese objectives represent good values;But, integrity is just one of the nine objectives,Understandably, procurement corruption gets a lot of

focus…for obvious reasons, At the expense of the other 8 objectives. It is time procurement professionals changed

tact to focus on achieving economic goals;

And provide evidence of results achieved in using the procurement system;

MUST HAVE PROFESSIONAL BUYERS5

Building capacity to enhance competition

Key players: KISM (capacity/advocacy/ethics), PPOA (regulation/capacity/policy), PPD (policy), academic institutions;

Collaboration: KISM pursues a policy of nationally promoting establishment of appropriate procurement training programs in collaboration with key stakeholders

Currently six (6) local universities offer programs that are recognized by KISM; KISM runs 9 CPD workshops annually, and at least 6 sensitization workshops nationally

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National EnablersNational enablers for healthy competition:The Ministry of Finance:

Policy formulation and resourcing;There is need for high level involvement of

procurement department in policy formulation.

Public Procurement Oversight Authority Advisory Board:Should be seen to enable not frustrate

professional approach to procurement. Get procurement professionals in the Board

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National Enablers• Kenya Institute of Supplies Management:– Register, deregister, train, and CPD of procurement

professionals. – Having a professional body ensures professionalism

grows in the country;– And all stakeholders appreciate the importance of

professionalism in procurement;– There is need for increased focus on

procurement professionalism, with a focus on competition.

– As a basis of performance based procurement delivery.

– 4000 members already and growing.

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Institutional Enablers? • The idea of separation of duties is a good one;• But does it work in Africa=Silent corruption;• There are 9 committees on procurement:

1. Tender opening committee2. Technical evaluation committee3. Financial evaluation committee4. Tender committee5. Procurement committee6. Negotiation committee7. Inspection and acceptance committee8. Disposal committee9. Procurement Oversight Committee

• There is no evidence that these committees are effective in supporting competition, and eradicating procurement corruption?

• Could 2 committees be just enough?9

Procurement by Committees

Initially a good idea; became an overkill;Having 9 committees is too much;Hampers creativity in procurement;Spreads the “pie of corruption”;Hampers procurement professionalism;Diverts scarce staff resources from productive

activities.

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Procurement Unit EnablersRight mix of academic AND professionals

qualificationDeveloped a critical mass of experienceOnly to do Secretarial duties for CommitteeDecision making: No professional opinionThere is a race to the bottom…application

of rules with little regard to their implications on the economy, competition, and small business…to meet Constitutional provisions.

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Procurement Unit EnablersProcurement units need tools to handle

political influence…very importantComplaints about procurement taking too

long;Procurement units have no evidence how

long it takes to achieve procurement objectives;

Because there is no reliable performance measurement system;

Hence, there is no evidence of the good work procurement units are doing;

There is need for independent procurement research for informed decision making.

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Where are we going?Kenya Procurement is a Constitutional issues;Calls for fair competition among suppliers;Procurement to be upfront in implementing

second generation procurement reforms;A focus on performance rather than process;Empowered procurement professionalsThrough their national procurement bodiesProviding procurement professional opinions on

all matters procurement

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Thank You

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