September 2012 Da-un, Jeong - ADB Procurement...
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Transcript of September 2012 Da-un, Jeong - ADB Procurement...
September 2012
Da-un, Jeong Deputy director, Public Contract and Procurement Policy Division
Ministry of Strategy and Finance, the Republic of Korea
Coverage
1. Authorities Responsible for Public Procurement
2. Regulatory Framework
3. Liberalization of Government Procurement Market
4. Public Procurement Service
5. Volume of Korean Government Procurement Market
6. G.P. Process overview
7. Merits and Demerits of Centralized Procurement
Legal and regulatory framework for central government procurement
Ministry of Strategy and Finance (MOSF)
Executive agency under MOSF
Public Procurement Service (PPS)
Oversees public procurement policies and strategies
Procures goods, services and construction works for central government entities
Legal and regulatory framework for local government procurement
Ministry of Public Administration and Security (MOPAS)
Provides procurement services for local government entities and public enterprises upon request
Legislation of Korean Government Procurement
Act on Procurement to Which the State is a Party
• Guideline on bidding and contracting for the
central government : method of contracting and
awarding
Act on Procurement to Which a Local Government is a Party
• Guideline on bidding and contracting for local
governments
Act on the Management of Government-invested
Institutions
• Guideline on bidding and contracting for public
enterprises and other government-invested orgs.
Public Procurement Act • Mandates the establishment of central
government procurement agency (PPS) and its
responsibilities
Act relating to the Contract to which the State is a Party
Presidential Decree of Act relating to the Contract
to which the State is a Party
Enforcement rule of Act relating to the Contract
to which the State is a Party
「Special Decree of Act and Special enforcement rule of Act relating to the specific contract to which the State is a party」for International Bidding
Acceded to the 1994 Government Procurement
Agreement (GPA) under the WTO
Bilateral Free Trade Agreement
- Korea- Chile FTA , Korea-Singapore FTA, Korea-US FTA,
Korea-EU FTA, Korea-Peru FTA, Korea-EFTA FTA etc.
Category Thresholds of Central Government
Goods 130,000 SDR
(≒ US$ 2,200,000)
Services 130,000 SDR
(≒ US$ 2,200,000 )
Construction Contracts 5,000,000 SDR
(≒ US$ 8,500,000)
l Buys goods and services
l Contracts for construction services
l Stockpiles raw materials such as aluminum, copper, etc.
l Manages government-owned properties
l Operates Korea on-line e-Procurement System (KONEPS)
- - Foreign aid materials management
Established as Office of Foreign Supply (1949)
History
Developed into central government procurement agency
- Became responsible for domestic and foreign procurement, and contracting for public construction projects (1961)
- Management of government-owned goods (1971)
- - Procurement of goods and services from abroad
- Operation of the government e-Procurement system (2002)
Organization
Administrator
Deputy Administrator
Audit and Inspection Officer General Services Division
Office of Planning & Coordination
e-Procurement Service Bureau
International Goods Bureau
Procurement Service Bureau
Construction Works Bureau
Quality Management Office
11 Regional Offices Overseas Procurement Attachés in
Chicago, London, Beijing
Vice-ministerial level organization
945 Staff
Combination of Centralized and Decentralized Procurement
Central government entities
Construction Works
Above US$ 100,000
Above US$ 3,000,000
Goods & Services
- Centralized procurement
Local government entities and public enterprises
- Decentralized (autonomous) procurement
- Legally required to procure through Public Procurement Service (central procurement agency) for requirements above threshold
[ thresholds for centralized procurement]
Centralized
33%
Decentralized
67%
- Centralized : US$ 33 billion
- Decentralized : US$ 67 billion
Public Procurement Total (2011) : US$ 100 billion (10% of GDP)
PPS recovers its operational costs from procurement service fees from
public entities
PPS
Public
Entities Suppliers
• Contracting
• Payment
Supply of Goods
& Services
• Procurement Request
• Payment
Reimbursement
• Procurement Service
Fee
Operation
PPS offers its procurement services upon receiving procurement requests
Procurement Workflow (Goods & Services)
PPS
Public Buyer
2. Public disclosure of PR Details
3. Review of Requirements
4. Determining Procurement Method
5. Tender Notice
6. Preparation of Estimated Value
7. Bid Evaluation and Awarding
13. Contract Closure
1. Purchase Request (PR)
Contractor
12. Reimbursement 11. Payment
9. Contract Delivery
8. Notification of Contract
10. Inspection
Determining the most suitable contract and award method, considering the
purpose, characteristics and size of the contract.
Limited
Tendering Selective
Tendering Single
Tendering
LOW
Competitiveness
HIGH
Open
Tendering
l Tendering Methods
l Awarding Methods
Lowest Price
Awarding
Qualification
Evaluation
Contract by
Negotiation
Local gov’t
Gov’t Corp
Educational
institute
Independent org
Central
gov’t
Services
Construction
Goods
Foreign Procurement
User of PPS’s Procurement Services
Merits Demerits
Centralized
Procurement
• Volume purchasing
• Accumulated know-
how
• Closer monitoring for
transparency
• Effectively utilizes
GP as economic
policy tool
• Complex and longer
procurement process
• Limited choice for the
procuring entity
Decentralized
Procurement
• Freer choices for the
procuring entity
• Urgent procurement
• Tend to be more
expensive
• Difficulties in
standardization and
quality monitoring
• Loose monitoring –
risk of moral hazard
Complemented with
e-Procurement:
• Reduced lead time
via e-Processing
• Convenient
e-Ordering for
commercial goods