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Common use items by GPSA

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Re: Common use items by GPSA

Post  RJM on Thu Jun 10, 2010 7:55 pm

Legality of Common Use Items and Services [CUIS] - Framework Contract [FWC]

From the submissions, no one can judge whether the practitioners are resisting changes or they are against the CUIS system. CUIS-FWC arrangement is derived from the PPA 20004 and Regulations made under it as follows; S7(1) (m)/PPA2004 , S51/PPA2004, R57(2)&(3) /97/2005 and S45/PPA 2004.

From the above provisions, CUIS - FWC arrangement has legal backup and is here to stay. For those suggesting that the arrangement is contravening the act then that is not true. For the time being the system is they to stay and I don’t see any amendment coming soon to change the position take into account that there is an Agency established to oversee the implementation of the system. Therefore, we need to learn how the system works and those responsible to give more clarifications for better implementation. I should not be misquoted, I am not saying that the system will work or not, the time of giving verdict is yet to come. For the time being let us confined ourselves in understanding the system.

1. What is Framework Arrangement and Call-Off Order

As starting point we need to draw a line between the Framework Arrangements and Call-off Order [Contracts].

A Framework Agreement [FA] provides for the supply of products or services over a given time period. It is not in itself a contractual agreement to supply, but is an enabling agreement providing agreed specifications, delivery terms, prices, and terms and conditions of contract. In other words, FA contains no contractual commitment on either party. Despite the fact that FAs involve no commitment to purchase, they commonly specify the terms and conditions of the eventual contract that will apply when goods, works or services are purchased along with the rates that will be charged for that service or the pricing mechanism to be used in order to define the price to be charged. Therefore, contracts are formed only when call-offs are made under the FA.

Call-off contract [CC] is used for the supply of a specific quantity (a minimum and maximum range can be given) of goods or services over a given time period, subject to the prices, specifications and terms and conditions agreed in FA. Once a framework agreement is in place, individual purchase orders can be placed against it under the agreed terms and conditions. When PE have accepted the terms of the standing offer, the orders form a contract. In essence, a call-off contract is the part and parcel of FA except that it is a legally binding contract.

2. Implementation Approach

From the little research I conducted, there are two options of implementing the FAs:

Approach 1:

Supplies from a Single Provider: This is used when a framework agreement is required by the PE and only one provider is selected to provide the service for the entire period agreement. The call-off orders [mini-contracts] are send this provider.

Approach 2:

Supplies from Several Providers – This is used when a framework agreement is required and numbers of providers are selected from the tendering process. The users of the framework go to the provider within the framework whose offer is the most economically advantageous [definitely will be one with lowest price] based on the call-off criteria [which explicitly stated in the framework] required for the particular contract in question.

Where frameworks, for the same goods, works or services, are awarded to several provider, there are two possible options for awarding call-offs under the framework.

Option 1: Apply the Terms of the Framework Agreement

First, where the terms stipulated in the framework agreements are sufficiently precise to cover the particular call-off, the PE can simply award the call-off to the provider who provides the most economically advantageous (vfm) offer based on the award criteria used at the time that the framework was established. If that provider for any reason could not supply the items required at that time, the PE would go to the supplier offering the next most economically advantageous offer, and so on. This is the approach and option which has been adopted by the GPSA.

Option 2: Hold a Mini-Competition

Where the terms laid down in the framework agreements are not precise enough for the particular call-off, a mini competition is held with all those providers within the frameworks capable of meeting the particular need. This does not mean that basic terms can be renegotiated, or that the specification used in setting up the framework can be substantively changed. It is more a matter of supplementing or refining the basic terms to reflect particular circumstances in a way foreshadowed in the framework.

Having highlighted the above, I would like to contribute based on the story so far.

A: Timing of Awarding FAs

From GPSA [PPRA Website]: “A list of suppliers and service providers who have been awarded Framework Contracts for goods and Non consultant services for the period between Feb 2010 and Feb 2011 can be obtained from below”
I think the timing of awarding these contracts was not proper in the sense that most of the PEs were already in the contract with other suppliers for the same items. What happened is that those who awarded CUIS - FWC by the GPSA banged in the PEs doors with their contracts in hand introducing themselves that are the ones who won the tenders to supplies a certain items in the respectively PEs. For sure this caught PEs to surprise, because the same items were being supplied by other suppliers from July 2010. Most of the PEs were in dilemma and did not know exactly what do do. Most of questions are/were; should they terminate the existing contracts and how CUIS-FWC woks?

Traditionally, for PEs which financial year commence on July and those which start on January most of the FAs are entered at the beginning of the financial year. Now, bringing another contract for the same in February, this is confusion. If this trend continues this could be the beginning of failure unless otherwise GPSA harmonized with PPRA that Annual Procurement Plan [APP] to prepare sometimes December instead of the current practice. As we all know there are requirements from PPRA that APP should be submit at beginning of each financial year for monitoring purpose. In line with this, in the institutional arrangements of implementation of the CUIS-FWC, PEs are required to; Prepare APP, Compile a list of CUIS using Templates for CUIS forms and submit a list GPSA and GPSA is charged with the responsibility of aggregating the CUIS for packaging of framework contracts according to the needs of PEs and handling tendering process up to contract placement. Now, where is the link in the entire process? Suppose PEs want supplies by July [commence of financial year] when should GPSA start the procurement process?? I think it will be a little bit early. I am not sure what arrangements are in place for financial year 2010/11 and I hope GPSA have already started process for 2010/11. This is a wakeup call! There should strategic planning which provide good interface between APP prepared by the PEs, aggregation to be done by GPSA as well as requirements of submitting to PPRA.

B: Bid and Contract Documents

Myself I am not convinced with the Bid and Documents [Procurement of Supplies and Services Using Framework Contracts issued by PPRA] are being use in implementing the system if they real reflect the approach and option which have been adopted. Later on we need to examine aspects such as letter of acceptance, some of condition of contracts [Time of the Essence Clauses], Form of Agreement, Call-off Form, Performance Security etc if real fit for intended purpose.

C: Preparedness of the Providers

I am not quite sure if our providers understand the concept of the FA and CC and ready to participate in the process to the extent that they meet demands and expectations of the stakeholders. Assume a scenario that seven suppliers are selected for FAs and each one of them bang in the office PE insisting that he has been awarded the contract.

RJM

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COMMON USE ITEMS

Post  freddy.mbeyella on Thu Jun 03, 2010 2:48 pm

Mr Gadiel, has raised four issues on procurement of Common use items under Framework contract through GPSA. Let me try to respond the way I understand as follows:

(i) I also share the same concern especially on preparation of Annual Procurement Plan
forcommon use items. It obvious a number of columns in APP template will be
redundant. May be the Authority need to provide guidance on this aspect.

(ii) The programme is operational. GPSA has issued user guideline for procurement of common use items under framework contracts. The guidelines are self explanatory. If you have not received just contact them through Email: gpsa.dar@gmail.com

(iii)Indeed. For common use items PEs are only required raise Call Off Orders to contracted firms. No need of advertsment.

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Common use items by GPSA

Post  GadielCM on Fri Apr 02, 2010 3:54 pm

GPSA/PPRA,
I am still stacking somewhere not knowing what to do about the programm so called ''Common Use Items'' geared by GPSA & PPRA. We as procurement practioners, we are always seeing the awarded framework contracts for different suppliers, services providers and contractors, so that the PE's would use to procure their requirement from them.

My concern, is as follows;-
1. What is the essence of APP for every PE? for this year?

2. When this programme is going to be implemented, because there is no any information to PE's officially made to enable us to embark on

3. By those awarded framework contract, that means all PE's will not advertise tenders for those items already implemented by GPSA, so where is the fairness for other local businessmen/enterpreneurs, and new entrants in the market, because the business have barried by GPSA/PPRA by awarding the bulk tender for those have enough capital to carry out call-off orders

4. what is the way forward from this programme to all PE's? from the year 2010/2011.

Let us know if the programme is a pilot or has already officially geared.

GadielCM

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