Govt frames sustainable procurement policy

The government recently drew up its Sustainable Public Procurement (SPP) Policy 2023, facilitating the participation of small-and-medium enterprises (SMEs) and women-owned business enterprises (WBEs) in public tenders.

As per a gazette published on December 10, government agencies will go for competitive bidding with a flexible approach if SMEs and WBEs are participating in the tender process for select products and services.

Also, the procurement agencies can minimise complexities in tender documentation to attract more SMEs and WBEs, it said.

Additionally, the contracts can be divided into smaller lots, the number lots awarded to each bidder can be limited, and potential bidders can be allowed more time to submit expressions of interest.

The gazette was prepared by the Central Procurement Technical Unit of the Implementation Monitoring and Evaluation Division under the planning ministry.

Bangladesh currently spends $25 billion, or about 40 percent of its annual budget, on public procurement.

The government framed the new policy to fulfil a part of the conditions set by the International Monetary Fund (IMF) for securing a $4.7 billion loan.

The IMF had instructed Bangladesh to ensure a more inclusive and sustainable public procurement process, among other reforms.

Various economic analysts welcomed the policy, but pointed out that implementation will be the key challenge.

"As an example of positive discrimination, it deserves to be commended, but to what extent it will serve its intended purpose depends on proper implementation," said Iftekharuzzaman, executive director of Transparency International Bangladesh (TIB).

He further emphasised on strict monitoring to prevent any potential misuse by those who do not belong to these specific categories (SMEs and WBEs) of potential bidders.

Around three months ago, the TIB conducted a study on "Government e-procurement in Bangladesh: Monitoring the trend of competitive practices".

The study found that one out of five contracts is awarded through a single bid via e-GP and contracts involving Tk 60,069 crore were given out in such a manner, which represents 15 percent of the total e-contract values.

Besides, only 5 percent of contractors in e-government procurement control 30 percent of the work, it said.

The study suggested that efforts to reduce corruption had minimal impact, with political influence and lobbying among contractors being one of the reasons.

The policy also clarified that it would be piloted in the procurement of paper and paper products; office supplies; computer and other electronic equipment and supplies, official publications and so on.

In addition, the contract subject matter should clearly indicate that a sustainable product or service will be purchased, and the accepted price point can be 10 percent more than non-sustainable products.

The products and services must be certified by the Bangladesh Standards and Testing Institution or International Organisation for Standardization to ensure they are sustainable.

The procurement process must consider the whole-life costs covering manufacture, delivery and installation; operating costs including energy, water usage and maintenance; end of life costs including decommissioning and disposal.

Bids that have met the minimum general criteria, financial criteria and qualification and expertise criteria should be evaluated against a specific set of award criteria for sustainability, including social criteria, economic criteria and environmental criteria.

Talking to The Daily Star, Ferdaus Ara Begum, chief executive officer of the Business Initiative Leading Development, welcomed the policy.

The policy will help achieve the country's Sustainable Development Goals, including its aim to "Promote Public Procurement Practices that are Sustainable".

If the policy is implemented properly, more SMEs and WBEs will get better scope to participate in bidding, she added.

However, the gazette said the SPP is being rolled out on a pilot basis, with a feasibility study and progress report on its impacts will be provided after 2026.