Do key performance indicators matter on public procurement rules 2008? An empirical study on local government engineering department, bangladesh

Pages236-257
Date01 March 2015
Published date01 March 2015
DOIhttps://doi.org/10.1108/JOPP-15-02-2015-B005
AuthorMahfuzar Rahman,Amrita Kumar Das,Zohurul Islam
Subject MatterPublic policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 15, ISSUE 2, 236-257 SUMMER 2015
DO KEY PERFORMANCE INDICATORS MATTER ON PUBLIC
PROCUREMENT RULES 2008? AN EMPIRICAL STUDY ON LOCAL
GOVERNMENT ENGINEERING DEPARTMENT, BANGLADESH
Mahfuzar Rahman, Amrita Kumar Das and Zohurul Islam*
ABSTRACT. This study focuses on the importance of transparency and
accountability of Local Government Engineering Department (LGED)’s
procurement performance based on 45 predetermined Key Performance
Indicators (KPIs). The main objectives of this study are to find the extent of
compliance of PPR 2008 by LGED and to identify gaps in compliance and
scope of improvement for implementation. For this study, a questionnaire
survey method collected data from different stakeholders related to
procurement activities of LGED. Key informant interviews were also
conducted with senior officers of LGED and IMED. The study result shows a
clear adherence to the rules of PPR 2008 by LGED in operating its
procurement functions except when paying interest for delayed payment.
This study was confined to compliance issues covering 11 KPIs set by the
Central Procurement Technical Unit (CPTU).
INTRODUCTION
The Chartered Institute of Procurement & Supply dictionary
defines procurement as commonly interchangeable with the term
------------------------------------
*Md. Mahfuzar Rahman, MCIPS, is a Procurement Specialist in the Services
for Children at Risk (SCAR) Pr oject, a World-Bank-funded project of the
Ministry of Social Welfare, Bangladesh. His working and research interests
are ensuring value for money i n the public sector procurement, supply chain
management, proje ct ma nagement a nd procurem ent management. Amri ta
Kumar Das, MCIPS, is a Sub-divisional Engineer, Bangladesh Water
Development Board. His research interests are in public procurement. Md.
Zohurul Islam, Ph.D., is an Assistant Profe ssor, Institute of Governance
Studies, BRAC University. His teaching and research interests are in
business management, education mana gement and public sector
management.
Copyright © 2015 by PrAcademics Press
DO KEY PERFORMANCE INDICATORS MATTER ON PUBLIC PROCUREMENT RULES? 237
purchasing. Procurement is a broad concept that includes the
entire process of acquisition that starts with detection of a
requirement and ends with the fulfilment of that requirement. In
short, such is the life cycle of any procurement. The process
encompasses activities during a pre-contract period such as
sourcing and also activities during post-contract period such as
contract management and management of vendor relationship.
Nonetheless, the wider aspects of Supply Chain Management like
store management and logistics do not come under its purview.
Requirements for procurement are usually categorized into goods,
works and services (CIPS, undated, p. 27).
According to Weele (2010), procurement refers to acquiring
goods, works, and services from other than internal sources. He
further explained that some questions to be asked for ensuring
effective procurement are if the procurements are appropriate and if
they meet the requirement of acquisition: quality, quantity, time and
location at the most competitive cost.
To ensure transparency and accountability in the procurement of
goods, works or services by using public funds, and ensuring
equitable treatment and free and fair competition among all persons
wishing to participate in such procurement, the Government of the
People’s Republic of Bangladesh enacted Public Procurement Act
(PPA) 2006 and subsequently Public Procurement Rules (PPR) 2008
which became effective on January 31, 2008 (Hoque, 2010).
Issuance of the PPA 2006 and PPR 2008 bound the government
agencies to follow the Act and Rules. The Central Procurement
Technical Unit (CPTU) of the Implementation Monitoring and
Evaluation Division (IMED) of the Ministry of Planning was established
for carrying out monitoring compliance.
For this, the government of Bangladesh undertook Public
Procurement Reform Project II (PPRP II) in 2009, to monitor
compliance of PPA 2006 and PPR 2008 by the target agencies in the
light of 45 predetermined Key Performance Indicators (KPIs). The
KPIs were developed by taking the Organization for Economic
Cooperation and Development Assistant Committee (OECD-DAC)
indicators into consideration within the overall framework of the
PPA/PPR and its features within the local context.

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