Lecture No.

PUBLIC PROCUREMENT ACT, 2004

Definition of Procurement
A function responsible for purchase, lease or other legal
means of acquisition of the right goods (equipment,
material, consumables), works (construction, repairs,
rehabilitation), and services (individual consultants,
consulting firms, training, workshops) required to:
 satisfy certain needs,
 at the right time
 from the right supplier or service provider,
 in the right quantities and
 at the right price. .

PUBLIC PROCUREMENT ACT, 2004

Public Procurement -definition
Defined as the purchasing, hiring or obtaining by any
other contractual means of goods, construction works
and services by the public sector.

PUBLIC PROCUREMENT ACT, 2004

 Benefits of an Efficient
Procurement System
 Enhances the effective use of public financial
resources;
 Improves the availability, quality, reliability and cost
of public services;
 Encourages accountability and responsibility in the
supply management process;

PUBLIC PROCUREMENT ACT, 2004

 Procurement System
(Contd..)
 Improves participation and growth of the private
sector;
 Is an integral part of any Good Governance process

PUBLIC PROCUREMENT ACT, 2004

The implications of inefficient
Procurement
 Encourages corruption and malpractice;
 Inefficiency can lead to delays in delivery of essential
public services;
 De-motivation of private sector suppliers leading to
lack of competition; and
 An increase in the cost of items.
LOSS OF SCARCE PUBLIC FINANCIAL RESOURCES.

PUBLIC PROCUREMENT ACT, 2004

Basic Principles (PPA 2004– Sec. 43)
Equality of opportunity to all prospective suppliers,
contractors or consultants;
Fairness of treatment of all parties; and
The need to obtain the best value for money in terms
of price, quality and delivery having regards to set
specifications and criteria.

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Application (PPA 2004 –Sec.2)
All public bodies;
Non- public bodies but receiving or using public
funds;
Defence and National Security Organs for non-
restricted items.

PUBLIC PROCUREMENT ACT, 2004

PPA- Major features
 The PPA 2004 repeals PPA No. 3 of 2001 (Section
90)b ;
 establishes a Public Procurement Regulatory
Authority (PPRA) in place of Central Tender Board
(Part II: Section 5-27);
 decentralises procurement to Procuring Entities
with no limits of authorities;

PUBLIC PROCUREMENT ACT, 2004

PPA- Major features (Contd..)
 changes the composition of tender boards with
Accounting officers no longer Chairpersons of tender
boards [Section 28 (2)]; and
 changes the membership of PPAA to include private
sector and professional bodies [Section 77(2)- 3 rd
Schedule].

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Establishment of PPRA
(PPA 2004 –Sec.5)
PPRA is established as an autonomous body under
Ministry of Finance

PUBLIC PROCUREMENT ACT, 2004

PPRA - Functions
 to offer advisory services to public bodies and any
other person involved in public procurement;
 to monitor and enforce compliance with the Act;
 to issue standard bidding documents and guidelines
for the better carrying out of procurement activities;

PUBLIC PROCUREMENT ACT, 2004

PPRA – Functions (Contd..)
 to implement measures aimed at building
procurement capacity in the country;
 Store and disseminate information on procurement
opportunities, tender awards and any other relevant
information on public procurement in the Country;
and

PUBLIC PROCUREMENT ACT, 2004

PPRA – Functions (Contd..)
 to facilitate resolution of procurement
complaints.

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Powers of PPRA (PPA 2004 –Sec.16)
PPRA is given wide powers of:
Carrying out investigations for alleged mis-
procurement (PPA 2004 –Sec.8-14);
Calling for any documents or information regarding any
procurement; and
Recommending disciplinary actions for those in breach
of the Act.

PUBLIC PROCUREMENT ACT, 2004

Disciplinary actions that may be
undertaken (PPA 2004 –Sec.17)
the suspension of officers concerned with
the procurement process in issue;
the replacement of the head of a
Procurement Management Unit, the
Chairman, or any member of a Tender
Board, as the case may be;

PUBLIC PROCUREMENT ACT, 2004

Disciplinary actions that may be
undertaken (PPA 2004 –Sec.17)
the disciplining of the accounting officer or
chief executive officer; or
the temporary transfer of the procurement
functions of a procuring entity to a third
party procurement agent.

PUBLIC PROCUREMENT ACT, 2004

Tender Boards – Composition
(PPA 2004 –Sec.28)
a Chairman, who shall be one of the heads of
department or a person of similar standing and who
shall be appointed by the Accounting Officer or Chief
Executive as the case may be;
six members who are heads of department or persons
of similar standing within the same procuring entity
and who shall be appointed by the Accounting Officer
or Chief Executive as the case may be.

PUBLIC PROCUREMENT ACT, 2004

Tender Boards - Composition
the Secretary, shall be a procurement
specialist, who shall be the head of
procurement management unit or
department of that procuring entity.

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Tender Boards - Functions
(PPA 2004 –Sec.30)
• adjudication of recommendations from the
Procurement Management Unit and award of
contracts;
• review all applications for variations, addenda or
amendments to ongoing contracts;
• approving tendering and contract documents;

PUBLIC PROCUREMENT ACT, 2004

Tender Boards – Functions
(PPA 2004 –Sec.30)
• approving procurement and disposal by tender
procedures;
• ensuring that best practices in relation to
procurement and disposal by tender are strictly
adhered by Procuring Entities;
• ensure compliance with PPA ; and
• liasing directly with the Authority on matters within
its jurisdiction.

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Accounting Officer –
Responsibilities (PPA 2004 –Sec.33)
establishing a tender board in accordance with this Act;
appointing the members of the tender board specified in
the second schedule;
causing to be established a Procurement Management
Unit staffed to an appropriate level;

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Accounting Officer –
Responsibilities (PPA 2004 –Sec.33)
advertising tender opportunities;
appointing the evaluation committee;
communicating award decisions;
certifying the availability of funds to support the
procurement activities;
signing contracts for the procurement activities on behalf
of the procuring entity;

PUBLIC PROCUREMENT ACT, 2004

Accounting Officer -
Responsibilities (PPA 2004 –Sec.33)
investigating complaints by suppliers, contractors or
consultants;
submitting a copy of complaints and reports of the finding
to the Authority; and
ensuring that the implementation of the awarded contract
is in accordance with the terms and conditions of the
award.

PUBLIC PROCUREMENT ACT, 2004

Procurement Management
Unit (PPA 2004 –Sec.34)
Each Procuring Entity shall establish a
PMU staffed to an appropriate level;
Shall consist of procurement and other
technical specialists together with
necessary supporting and administrative
staff;

PUBLIC PROCUREMENT ACT, 2004

Procurement Management
Unit –Functions (PPA 2004 –Sec.35)
 manage all procurement and disposal by
tender activities of the procuring entity
except approvals done by the Tender
Board;
 support the functioning of the Tender
Board;

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Procurement Management
Unit –Functions (PPA 2004 –Sec.35)
 implement the decisions of the Tender
Board;
 Act as a secretariat to the Tender Board;

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User Department (PPA 2004 –Sec.36)
 liaise with and assist the PMU throughout
the procurement or disposal by tender
process to the point of contract
placement;
 initiate procurement and disposal by
tender requirements and forward them to
the PMU;

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User Department (PPA 2004 –Sec.36)
 propose technical inputs to statements of
requirements for procurement requirements to the
PMU;
 propose technical specifications to the PMU when
necessary;
 input with technical evaluation of tenders received
as required by the PMU ;
 certify for payments to suppliers, contractors or
consultants;

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User Department (PPA 2004 –Sec.36)
 report any departure from the terms and conditions
of an awarded contract to the PMU;
 forward details of any required contract
amendments to the PMU for action;
 maintain and archive records of contracts
management; and
 prepare any reports required for submission to the
PMU, the Tender Board or the Accounting Officer ;

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Evaluation Committees (PPA 2004 –
Sec.37)
Recommended by PMU, approved by Accounting
Officer or Chief Executive Officer and report to PMU;
Minimum three members depending on complexity
of the assignment;
May be external to the organization.

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Delegation of Powers
(PPA 2004 –Sec.39)
Procurement functions may be delegated to a sub-
division of the PE, another PE or third party
procurement agent;
Details for Delegations are given in the Regulations-
(Part III for GN. No. 97 and Part IX for GN. No. 98) – The same
section of the Regulations sets how disagreements
shall be handled.

PUBLIC PROCUREMENT ACT, 2004

Procuring Entities to observe
the Act (PPA 2004 –Sec.44)
PE should ensure they comply with the Act –
Auditors required to certify that all procurement
carried out complied with the provisions of the Act.
Accounting Officers or Chief Executive Officers and
their delegates shall be accountable for failure to
comply with the Act

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Procurement Planning
(PPA 2004 –Sec.45)
To avoid emergency procurement;
Aggregating requirements to obtain value for money
and reducing procurement costs.
Making use of framework contracts for services,
supplies or works required continuously or repeatedly
over a set period of time.

PUBLIC PROCUREMENT ACT, 2004

Procurement Planning
(PPA 2004 –Sec.45)
Avoid splitting of procurement to avoid using non-
competitive methods
Integrate procurement budget with expenditure
programme.

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Qualification of Suppliers
(PPA 2004 –Sec.46)
Local firms must satisfy all relevant requirements for
registration with appropriate current professional
statutory bodies in Tanzania.
Foreign firms are exempted from the above requirements,
but if they win a tender they must register- this
requirement should be clearly be indicated in the bidding
document and if possible where to obtain relevant
registration information.

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Pre-qualification (PPA 2004 –Sec. 47)
For large procurement this is important to obtain
firms with capacity and capability to execute the
contract.

PUBLIC PROCUREMENT ACT, 2004

Pre-qualification (PPA 2004 –Sec. 47)
Firms need to be assed on:
experience and past performance on similar contracts;
knowledge of local working conditions;
capabilities with respect to personnel, equipment and
construction or manufacturing facilities
financial position;
and current commitments

PUBLIC PROCUREMENT ACT, 2004

Post-qualification
(PPA 2004 –Sec. 48)
This is carried out to the lowest evaluated bidder to
establish its capacity and capability to execute the
contract.
It is particularly important where prequalification
was not carried out – it involves actual verification of
the information submitted by the firm

PUBLIC PROCUREMENT ACT, 2004

National Preferences & Exclusive Preference (PPA
2004 –Sec. 49 and 50)
Margin of preference is granted to local firms or
associations of local and foreign firms as shown on
next slide.
Similarly works up to a certain value are reserved to
local firms only

PUBLIC PROCUREMENT ACT, 2004

Margin of Preference
 National Preference to Tanzanian firms
 20-40% local input in JV –Margin of Preference
4%
 40-60% local input in JV –Margin of Preference
6%
 60-80% local input in JV –Margin of Preference
8%
 80-100% local input in JV –Margin of Preference
10%

PUBLIC PROCUREMENT ACT, 2004

 Margin of Preference

Margin of Preference for Goods mined or

manufactured in Tanzania up to 15%
Limits for Exclusive Preference
Works 1,000,000,000
Consultant Services: firms 500,000,000; individuals
50,000,000
Goods 200,000,000
Non-Consultant Services 250,000,000

PUBLIC PROCUREMENT ACT, 2004

Quality Consideration
 Preference is applied only to the financial proposal.
Firms must first qualify in all other aspects.
 The firm must qualify in the preliminary and
technical evaluation stages

PUBLIC PROCUREMENT ACT, 2004

Tender Securities
(PPA 2004 –Sec. 53)
An area abused in tender process- PPRA shall issue
guidelines – not charged for small tenders and
tenders for consultancy services;
Acceptable securities: Bank guarantee, Certified
Banker’s cheque, insurance bond.

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Tender Securities
(PPA 2004 –Sec. 53)
Aims to safeguard the Client from premature
withdrawal of the bidder before the tender process is
complete.

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Rejection of all tenders
(PPA 2004 –Sec. 54)
Client allowed to reject all tenders if there are
justifiable reasons – should not be used to reject
tenders if the preferred firm does not win.

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Rejection of all tenders
(PPA 2004 –Sec. 54)
Rejection should be followed by re-tendering after
revising the tender documents – at the minimum all
bidders who participated in the first in the cancelled
tender should be invited to participate.

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Record keeping (PPA 2004 –Sec. 56)
Records must be kept for a period of not less than 5
years from the date of completion of the contract.
Part of the information kept may be given to
suppliers on Request

PUBLIC PROCUREMENT ACT, 2004

Blacklisting of suppliers
(PPA 2004 –Sec. 57)
If have been blacklisted outside the country on
grounds of fraud or corruption – period blacklisted
outside + further 10 years
If have been blacklisted outside the country on
grounds other than fraud or corruption - period
blacklisted outside + further 5 years

PUBLIC PROCUREMENT ACT, 2004

Blacklisting of suppliers
(PPA 2004 –Sec. 57)
Within the country – for fraud or corruption –
blacklisted for 10 years.
During that period a blacklisted firm should not trade
under a different name.

PUBLIC PROCUREMENT ACT, 2004

Methods of Procurement
(PPA 2004 –Part V)
Part of Procurement Planning is the selection of a
proper procurement method which shall lead to
maximum competition possible while ensuring that
quality goods or services are obtained in a timely
manner.
The Regulations to PPA 2004 sets out various
methods to be used for procurement of works, goods
or services.

PUBLIC PROCUREMENT ACT, 2004

Standard Tender Documents
The PPRA has so far issued six standard tender
documents
Standard Request for Proposals for consultancy
services
Standard Tendering Documents, Procurement of
Works of Smaller Contracts- International
Competitive Tendering
Standard Tendering Documents, Procurement of
Work- National Competitive Tendering

PUBLIC PROCUREMENT ACT, 2004

Standard Tender Documents (Contd..)
Standard Prequalification Document:
Procurement of Works – International
Competitive Tendering
Standard Tendering Documents: Procurement
of Goods
Standard Tendering Documents: Procurement
of Health Sector Goods (Pharmaceuticals,
Vaccines, and Condoms).

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Tender Evaluation Guidelines
The PPRA has so far issued two evaluation
guidelines
Guidelines on the evaluation of Technical and
Financial Proposals and Preparation of
Evaluation report.
Tender Evaluation Guidelines: Procurement of
Goods and Works

PUBLIC PROCUREMENT ACT, 2004

Where to get information
More information on PPRA activities and all
documents relating to Public Procurement in
Tanzania can be obtained in PPRA’s website
www.ppra.go.tz.

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