The Place of Procurement in Infrastructural Development and its Sustainability -ONAFOWOTE F. IDOWU – AG. GM - PPA

LAGOS

Lagos City-State as one of the fastest

growing cities in the world

Has a vision of becoming Africa’s Model

Mega City and Global, Economic and

Financial Hub that is Safe, Secure,

Functional and Productive.

To achieve this laudable objective, there

is need to direct investment towards

economic development of Lagos.

Thus, LSDP serves as a veritable platform

providing overall direction for the growth

and development of the State.

It will provide a framework through which

all sectors of the economy can direct

their energies and contribute to the

improvement of the quality of life of

people in the State.

Vision and Mission Statements – The Big Picture

By 2025 Lagos will become

Africa's Model Megacity

and Global, Economic and

Financial Hub that is Safe,

Secure, Functional and

Productive

Achieved by

Poverty Eradication and

Sustainable Economic

Growth through

Infrastructural Renewal and

Development

METROPOLITAN LAGOS

IBILE

VISION TO STRATEGYDEVELOPMENTAL PILLARS STRATEGIC DIRECTION

Pillar 1: Economic

DevelopmentAim: A dynamic, expanding

economy, functional and visually

attractive

Harnessing public and private investment to create a

strong, mixed economy that can provide jobs for all and

create the base for expanding social services and

environmental sustainability

Pillar 2: Infrastructure

DevelopmentAim: An efficient and effective

infrastructure capable of meeting

future needs

Providing efficient power, effective mass transit systems and

other key infrastructures essential to achieve a sound and

growing economy and achieve social progress

Pillar 3: Social Development

and SecurityAim: An educated, skilled, healthy

and secure people

Ensuring a dynamic, progressive social and economic

environment that will result in a well-educated, healthy

people able to fulfill their potential and meet the skill needs

of new industries.

Pillar 4:Sustainable EnvironmentAim: A green, clean and live-able

city that can sustain its complex

natural and man-made

environment

Creating sound systems, regulations and public

participation to maintain a healthy and sustainable

environment that can overcome the environmental deficit

and meet future challenges posed by climate change.

INFRASTRUCTURE

DEVELOPMENT PILLAR

STRATEGIC DIRECTION

Lagos State aims at achieving an efficient and

effective infrastructure capable of meeting future

needs, including increased productivity,

competitiveness, environmental sustainability,

reduced noise pollution, and income inequality as

well as guarantee security and health.

STRATEGIC DIRECTION - CONTD

By 2025 it will have delivered efficient power,

effective mass transit systems and other key

infrastructures essential to achieve a sound, growing

economy and social progress.

Today Lagos State suffers from inadequate and

unreliable infrastructure and this has led to the high

cost of doing business in the State, for example, the

intractable traffic congestion in the Lagos Metropolis

and the associated loss of productivity and valuable

man hours.

PRIORITY AREAS / CURRENT

STATUS

The key priority areas in the Infrastructure Sector are power,

transportation, and water.

They are all, in their present form, deficient and cannot meet the

immediate and future needs of the economy.

FINANCING INFRASTRUCTURE

The financial demands of the Infrastructure Sector are farin excess of the State budget capacity.

LASG will therefore seek innovative ways of engagingother stakeholders in bridging the gap.

Options available to the State include developingstrategic partnerships, increases in charges,improvements in revenue collection strategies, reductionin operating costs, rationalization of service levels anduse of shared services and outsourcing among theservice providers.

One of the key strategies is developing strategicpartnerships through PPPs.

WHY PUBLIC PROCUREMENT

As a state with a development master plan, Lagos State collaborated

with the World Bank in the year 2003 for a broad Public Sector Reform

process to improve Efficiency, Accountability, Transparency and Probity

in the conduct of Government Business and to align with International

Best Practice.

Consequently, the Lagos State Government enacted the Lagos State

Public Procurement Law in October 21, 2011 and the Law became

effective in April 2012.

Background Contd

As part of the strategic plans to achieve the State Developmental

Goals by Y2025, Lagos State Public Procurement Agency was

established in February 2012 with a core mandate to certify all State

procurements prior to, during and after the award of any contract

Procurement Officers’ Cadre was created to carry out procurement

functions in all the MDAs.

PUBLIC PROCUREMENT

VISION:

To be a model regulator

assuring best practices in

Public Procurement

MISSION:

To ensure a transparent,

Competitive, Inclusive,

Sustainable and Value for

Money Public Procurement

System that Supports the

State’s Development Goals

and Engender Public

Confidence

CORE VALUES

Professionalism

Transparency

Competitiveness

Inclusiveness

Value for Money

Background Contd

PPA effectively took over the functions of the defunct State

Tenders Board and State Consultancy Board in April 1st 2014

Procurement Stakeholders

Procurement Stakeholders

End -Users

PE/ Procurement Office

Procurement Agency

Contractors/ Suppliers/

Consultants (Registered)

NGOs/

CSOs/ DevtPartners,

FG, Media

Other

Stakeholders

e.g. CDA, LG

Partnering 4 Development

All the Stakeholders are important in the implementation of Short,

Medium and Long Term Infrastructure Development Strategies to

guarantee sustainability – Synergy is therefore very key

Procurement Definition

General Definition

Procurement refers to thesustainable acquisition anddisposal of goods, works andservices by public bodies/organizations through anefficient, professional,auditable and transparentapproach.

Specific DefinitionProcurement in Lagos StateGovernment entailsstreamlining processes, gettingvalue for money in theacquisition of goods, works orservices in line with themandates of government forthe benefits of the governed inthe State.

Procurement Process

The Procurement Process of acquiring Goods, Works and Services in Lagos State follows the BEST PRACTICE as detailed

below;

Procurement Cycle

Procurement Planning

Tender Documentation

Tender Notice

Tender Harvest

Approval of Contract

Contract Implementation

Tender Evaluation

Contract Signatures

Planning

Needs Assessment

Feasibility Studies

Market Research

Budgetary Allocation

Community Participation

Design specification/ Drawing etc.

Tender Documentation

Preparation of Bidding Documents

Seeking for necessary approvals

Joint review of the

Bidding Documents

Tender Notice

Inviting the prospective bidders to

participate in a bidding process

Request for Quotation

Invitation for Bid

Request for Expression

of Interest/ Proposals

Note: Relevant Media

Tender Harvest

Receipt of offers

Designate an officer to handle the

receipt of bids/ quotes/ proposal

Composition of Bidding Opening

Committee

Preparation for Bids Submission

Preparation of Bid Opening

Composition of Bid Evaluation

Committee

Tender Evaluation

Sensitization of the Bids

Evaluation Committee

Declaration of Conflict of

Interest

Joint review of Pre-determined

Evaluation Criteria

Individual Evaluation of Bids

Collation of Individual Evaluation

of Bids

Preparation of Evaluation Report

Approval for Contract Award

Presentation of EvaluationReport to Tenders’ Board forconcurrence

Seeking relevant approvalse.g. PPA (if prior review)

Types of PPA ApprovalInstruments

1. Certificate of Compliance

2. PPA No-Objection

3. Letter of Confirmation

Contract Formation & Signature

Registration of Letter of Award

Offer of Contract Award

Acceptance of Offer

Payment of statutory fees

MDA Procurement Office liaise withthe Legal Office on ContractualDocuments

Liaise with Ministry of Justice oncontract agreement

Contract Implementation & Management

Nomination of ProjectManager

Work plan (ContractImplementation Plan)

Monitoring of Project

Project Evaluation

Contract Close Out

Complaints, Petitions & Disputes

in Procurement Process

• It is not out of place to have complaints and/ or petitions

from any of the key players in the procurement process

especially from aggrieved bidders who may not be

satisfied with certain decision or action during any of the

bidding process.

• It is also not unlikely to have disputes between the

Procuring Entity and the Contractor/ Supplier/ Service

Provider during or after contract implementation. The

complaint mechanism has been provided for the the

Procurement Law

Why Contracts Fail

Insufficient qualification of contractors

Poor practices in qualifying contractors

Lack of monitoring and remedial actions by

Employer/Engineer/Procurement Officer

Collection of Delay (Liquidated) Damages is

deficient/non existent

Good Practice

Provisions of contract agreement should enforced

Liquidated damages

Interest on delayed payment

Warranty/defect liability requirements

Performance security

Ensure validity throughout contract period

Advance payment guarantee.

Pre Contract Meeting

The pre contract meeting is held by the Employer officials that will be involved in the contract prior to the contract kick off

This meeting is to ensure that there is a clear understanding of their specific responsibilities and restrictions in administering the contract

Issues to be discussed at the meeting include:

authority of officials who will administer the Contract, quality control and testing,

the specific contract deliverable requirements,

special contract provisions,

procedures for monitoring and measuring performance,

contractor invoicing, approval and payment procedures.

Kick off

Kick off meeting should be held before the commencement of the contract

The objective of the meeting is to help the employer and the contractor achieve a clear and mutual understanding of the contract requirements

The meeting also helps the contractor understand the roles and responsibilities of the employers officials who will administer the contract

The following issues should be discussed at the meeting; Organisational structures

Contact names and numbers

Reporting method

Progress meetings

Progress Meetings

Progress meetings at regular intervals should be held to monitor the progress of the contract implementation

Contract implementation progress should be discussed and compared with the contract implementation schedule

Implementation problems are also discussed with a view of solving them

the objective is to ensure that the contract will be completed with requisite quality, on time and within budget

Contract Monitoring and

Supervision

Monitoring and supervision are very essential for successful implementation of any contract

This is to ensure that all the terms of the contract are being implemented as stated in the agreement

For works and installation contracts, all designs, drawings must be reviewed and approved by the Employer

Proper monitoring will ensure that potential sources of disputes are identified and rectified.

Monitoring tools

Project Management and Procurement Process Review by PPA

Change Orders/Variations In spite of best efforts to prepare

complete and error free plans and specifications and to implement contracts in accordance with plans, designs and specifications, quantities are only best estimates

Because field conditions change, errors are made during preparation

As a result of these, revisions to plans and specifications may be required during contract implementation

“Change Orders” will be required to make these revisions

Change Orders (contd)

A “Change Order” can be initiated by both the Employer and

the Contractor

“Change Orders” after being signed by the Contractor and the

Employer become a legally binding document just as the

original contract

Settlement of Disputes

Disputes between the Employer and the Contractor should be resolved as follows

Mutual consultation

Adjudication: if the dispute cannot be resolved by mutual

consultation, the dispute can be referred in writing by either party to the Adjudicator with a copy to the other party

The adjudicator will give its decision in writing to both parties

The decision of the Adjudicator is not final

Settlement of Disputes (contd)

Arbitration:

If either party is dissatisfied with the Adjudicator’s decision or if the Adjudicator fails to give a decision, either party may give notice to the other party of its intention to commence arbitration.

The dispute shall finally be settled by Arbitration

The decision of the Arbitration is final and binding

Contract Closeout

Contract closeout begins when the contract has been physically completed, i.e. all services have been performed and products delivered.

Closeout is completed when all administrative actions have been completed, all disputes settled, and final payment have been made

There is the need to pay more attention to contract closeout. It is as important as contract award and contract monitoring

A checklist of all services, products, etc to be delivered in the contract should be kept in the contract file.

THANK YOU ALL FOR LISTENING

ITESIWAJU IPINLE EKO, LOJE WA LOGUN