Public Financial Management Reform Program
ADB Grant 0133-CAM
22 June 2010
Agenda
 Introduction
 Overview: Public Procurement
 Seminar Objectives
 Management of the System
 Oversight, Accountability and Good Governance
 International Best Practices: Public procurements under a
fully-developed, well-functioning public procurement system - Step-by-Step Procedures
 Carrying out Procurements financed by the State budget, and
under the direction of MEF and DPP (in the Khmer language)
 Procurement Sub-Decree No. 105 dated 18 October 2006
 Carrying out Donor-Assisted Procurements under SOP/PM
 Procurement Sub-decree No. 14 dated 2007
Agenda (con’t)
 Oversight, Accountability and Good Governance
 Case Studies (time permitting)
 Seminar Closing
Introduction and Objectives
 In December 2004, the Royal Government of
Cambodia, through MEF, desired the
establishment of an effective and efficient PFM
system with a 10-year planning and
implementation period.
 As a part of these longer-term reforms, the PFM in
Rural Ministries Project, financed by ADB Grant
0133-CAM, aims to strengthen the capabilities of
procurement officials the three rural development
ministries, MAFF, MRD and MOWRAM
Components: Grant Program
 Component 1: Improve Public Financial Management
Capacity in Rural Development Ministries
 Component 2: Strengthening Capacity for Internal
Auditing
 Component 3: Strengthening Debt Management
 Component 4: Strengthening the Effectiveness of the
National Audit Authority (NAA)
PFMRP Objectives
 The Procurement Component of the Public
Financial Management Reform Program
(PFMRP) will support training and capacity
building:
- In all procurement related matters under the
deconcentrated procurement sub decrees for
procurement under national budget in MAFF, MRD,
and MOWRAM; and
- To assist MAFF, MRD and MOWRAM to ensure
efficient functioning of their procurement system;
raise awareness of the need to comply with SOP/PM
procedures among senior officials of EA through
workshops and seminars; and update the SOP/PM
Overview of Public Procurement
 Public vs. Private Procurement
 Management of the Public System
 Oversight, Accountability and Good
Governance
 Public procurement is the use of public funds
to acquire needed public goods and services
 The primary objective of a fully-developed,
well-functioning public procurement system is
to acquire these goods and services at fair and
reasonable prices. Social objectives; such as to
ensure the growth and development of
Cambodian suppliers, consultants and other
service providers, are secondary objectives.
 A system that consistently acquires needed public
goods and services at fair and reasonable prices is
one indicator that it is well-functioning and wellmanaged.
 Another indicator is free and open competition
among private sector firms who have confidence in
the fairness and integrity of the system
 Fraud, waste and abuse will be minimized
 Oversight: supervision or watchful care
 Accountability: liable or answerable.
 Transparency: adhering to published rules
 Good Governance: How Government uses a country’s
resources for the public good
 Oversight and accountability help to ensure “checks
and balances” in the system:
 Internal Audit: General Inspectorate
 External Audit: Cambodia’s Supreme Audit Institution
is the National Audit Authority (NAA)
 Other checks and balances: Stakeholders
Cambodia’s Current Public Procurement
System
 As yet, the Royal Government of Cambodia does
not have a deeply-rooted public procurement law
 The regulatory framework consists of Sub-Decrees
and Amendments, easily changeable
 Procurements and Privately-financed Build-OwnOperate (BOT) Projects are grouped together
 Accordingly, as one of the first steps to
procurement reform, Cambodia may wish to
consider expediting the legal and regulatory
framework to facilitate the capacity building and
institutional development initiatives being
undertaken
Cambodia’s Procurement
Regulatory Framework









Procurement Sub-Decree No. 105 dated October 28, 2006;
Procurement Sub Decree dated June 8, 1995;
Procurement Sub-Decree No. 14 dated February 26, 2007;
Implementing Rules and Regulations Governing Public Procurement
(IRRPP), amended on September 2, 1998;
Draft Implementing Rules and Regulations on Public Procurement and
Procurement Manual for Goods, Works and Services (to be approved);
Procurement Manuals for Externally Financed Projects/Programs in
Cambodia (Vols. 1-3) dated September 2005;
Prakas No. 45 on the Implementation on Deconcentralization for Public
Procurement dated January 31, 2005;
Instructive Circular on Procurement Planning Guidelines No. 12 dated
December 7, 2006
Supplementary Instructions of Prakas No. 319 on Rules and Regulations of
Public Procurement dated 31 August 1995
 Effectively Three Systems
 Procurements financed by the State Budget
 Donor-Supported Procurements (SOP/PM)
 Independent Procurement Agent (IPA)
 Significant capacity building needs
 Procurement officials are (or appear to be) assigned
routine administrative work, without decisionmaking authority (PRC)
 Government not yet able to decentralize the
procurement function due to capacity deficiencies
 MEF awarded contract to Independent Procurement
Authority (IPA) to carryout World Bank-financed
procurements on behalf of the Government.
 At some point in the near future, the ministries will be
required to assume these IPA duties (approx 200
procurements/year)
PFM Reform Program:
Roadmap of Procurement Assistance to
Royal Government of Cambodia
 Focused on 3 rural development ministries
 Training and capacity building in all procurement
related matters under
 the deconcentrated procurement sub decrees for
procurement under national budget and
 within the scope of SOPs and PM
 On-the-Job (OTJ) Training
 Mentoring/Coaching: National and International
Procurement Specialists will work directly with the
three ministries to help “problem solve”
 Specific objectives on the following slides
 Strengthen capacity in procurement planning and
monitoring and assisting in preparing the Annual
Procurement Plan and the Project Procurement
Plan;
 Strengthen capacity to monitor and evaluate the
performance of the public procurement system;
 Clarify lines of accountability within the
procurement process, including effective oversight
guidelines and identify key internal controls in
budget execution
 Strengthen the capability to monitor and evaluate
procurement progress and conformance procedures
and in preparing regular procurement reports to
MEF and other agencies;
 Update databases on procurement status and use
procurement website to post information on
procurement processes and contract awards; and
 Establish good practices to ensure efficient
functioning of the PRCs.
Implementation Structure
Executing Agency
Ministry of Economy &
Finance
Funding Agency
ADB
PFM Committee
Manila
Bank Headquarters
Department of
Investment &
Cooperation
PFM Reform
Secretariat
Cambodian Resident Mission
CONSULTANTS
MRD
MAFF
MOWRAM
PFM Working
Group
PFM Working
Group
PFM Working
Group
SUB- WORKING GROUPS PFM
Economic &
Finance Institute
International Best Practices
 International Best Practices:
 Step-by-Step Procedures
 Following Slide Shows the 4 Cornerstones of a fully-
developed, well-functioning system
Procurement Cornerstone #1
1. COMPETITION:
The primary purpose of a fullydeveloped, well-functioning public procurement system is
to acquire needed public goods and services at fair and
reasonable prices. This objective can most effectively be
achieved through free and open competition. The first step
to maximize free and open competition is through widelycirculated public advertising which opens-up and instills
greater confidence in the procurement process, encourages
more contractors to compete for government contracts,
and results in overall lower tariffs for the benefit of the
public and all users.
Procurement Cornerstone #2
2. TRANSPARENCY: Transparency enables everyone to
understand the Government’s objectives and the
precise methods to be used to attain them. A
transparent public procurement process requires (a)
the "rules of the game" to be made available to all
participants and (b) the "game" to be followed in
accordance with those rules.
Procurement Cornerstone #3
3. FAIRNESS: Capable, responsible contractors will
compete for government contracts only if they have
confidence in the fairness and integrity of the overall
process; i.e., all participants are treated fairly and
consistently over time and as between each other.
Procurement Cornerstone #4
 ACCOUNTABILITY: Accountability is an essential
element of good governance and ensures that the
Government fulfills its fiduciary duty to the public in
identifying, preparing, tendering and contracting for
needed public goods and services.
Step-by-Step Procedures
 The following charts graphically depict the step-by-
step procedures for competitive tendering using
international best practices.
FULL COMPETITIVE BIDDING
Executing Agency Tasks Through Receipt of Bids
Executing
Agency
Authorized to
Proceed with
Procurement
Draft
Pre-qualification
Questionnaire
Executing
Agency
Prepares Draft
Bid Document
Executing Agency
Prepares Final
Pre-qualification
Questionnaire
Liaison with
Associations
Liaison with
Associations
Widely Advertise
Availability
Prequalification
Questionnaire
Publicly-Available
List of
Contractors
Requesting
Pre-Qual
Questionnaire
Provide
Prequalifications
Questionnaire
Simultaneously
to all Requesting
Contractors
Publicly-Available
List of
Contractors Passing
Pre-Qualifications
Contractors
Qualified?
No
Notify Contractors
that Did Not Pass
Prequalification
Procedures
Yes
Shortlist of
Prequalified
Contractors
Issue Bid Document
Simultaneously to all
Shortlisted
Contractors
Executing Agency
to Conduct Pre-Bid
Meeting?
Reasonable
time for
Bidders to
prepare bids
Bids
Received
by Executing
Agency
Yes
Pre-Bid
Meeting
Conducted
Pre-Bid
Conference
Minutes and/or
Bid Amendment
Reasonable
time for
Bidders to
prepare bids
12 Step-by-Step Procedures
 Please refer to the 30 page handout which describes
the twelve (12) step-by-step procedures
 The following slides describe the major procurement
actions
 STEP 1:
 STEP 2:
 STEP 3:
 STEP 4:
 STEP 5:
 STEP 6:
Appoint a Procurement Committee
Prepare a Bid Document
Draft Prequalification Questionnaires
Announce the Availability of an
Invitation to Prequalify
Prequalification Proceedings
Shortlist of Prequalified Bidders
 STEP 7:
Disseminate the Bid Document to all
Prequalified Bidders
 STEP 8: Pre-Bid Meeting for all Shortlisted Bidders
 STEP 9: Administratively Processing Proposals
 STEP 10: Fairly and Impartially Evaluating Proposals
 STEP 11: Ranking all Responsive Bids
 STEP 12: Recommend a Proposed Contractor
State Budget-Financed
Procurements
 Carrying out Procurements financed by the State
budget, and under the direction of MEF and DPP (in
the Khmer language)
 Procurement Sub-Decree 105 dated 18 October
2006
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51
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eFVIeLIgCasaFarN³.
52
karebIkÉksaredjéføRtUveFVIkMNt;ehtu
nigRtUvpþl;kMNt;ehtuenaHeGayRkum h‘unTaMgGs;Edl
)andak;sMeNIsMuedjéføehIykMNt;ehtuenHk¾Gacpþl;eGayR
Kb;PaKIEdlesñIsMupgEdr . kMNt; ehtuebIkÉksaredjéføRtUv
Etkt;Rtaya:gehacNas; eQµaH nigsBa¢atiGñkedjéføtMél
dak;edjéføsuBlPaBÉksaredjéfø vtþmanGñkcUl
rYmcMnYnR)ak;kk;edjéfø nigsuBlPaBR)ak; kk;Fanakaredjéfø.
53
maRta 13
CMBUkTI 3
lT§kmµesvaTIRbwkSa
TIRbwkSaGaceRCIserIsykmkedIm,Ipþl;nUvesvaÉkeTskñúgkar
Gnuvtþn¾KMerag b¤kic©snüa sMxan;² b¤mYypþl;CMnYy
b¤eyabl;CMnaj kñúgkargarBRgwgsßab½n b¤smtßPaB,
TIRbwkSaGacCaRkum h‘un TIRbwkSa b¤CaÉktþCn.
maRta 14
nItiviFIkñúgkareRCIserIs nigkarvaytMélRkumh‘unTIRbwkSa
nwgkMNt;kñúg Gvbls ehIynItiviFITaMg
enHcaM)ac;RtUvGnuvtþsMrab;RKb;krNI. KMrUÉksaredjéfø
54
maRta 15
kareRCIserIsRkumh‘unTIRbwkSa
RtUveFVIkarpSBVpSayCasaFarN³ edIm,I
eGayRkumh‘unTI
RbwkSananacUlrUmdak;cMNab;GarmµN¾ nig
bBa¢ak;BIcMNab;
GarmµN¾kñúgkarbMeBjkargar. kñúgkrNI
tMél)a:n;saµnénesvaTIRbwkSax<s;Cag
kMritTwkR)ak;Edl)ankMNt;kñúg Gvbls
55
maRta 16
kareRCIserIsTIRbwkSaÉktþCn
RtUveFVIeLIgedayEp¥kelImUldæanénlkçN³sm,tþi nigbT
BiesaFn¾
rbs;ÉktþCnTak;TgnwgTIkEnøgkargarEdlFaøb;)anbMeBj.
karGeBa©IjeGaydak;cMNab;GarmµN¾RtUvpSBVpSayCasaFa
rN³TUTaMgRbeTs ehIyenAeBltMél
)a:n;sµanénkargarRtUvbMeBjelIsBIkMritTwkR)ak;Edl)ankMNt
;kñúg GvblsenaHkarpSBVpSay eRCIserIsTIRbwkSaÉktþCn
RtUveFVIeLIgCaPasaExµr nigPasaGnþrCati Ep¥ktamTMhM
kargarRtUv bMeBjTIRbwkSaÉktþCn nwgRtUv)an
eRCIserIsedayEp¥kelIlkçN³vinicä½yEdl)anEcgkñúglixit
56
CMBUkTI 4
sßab½nRKb;RKglT§kmµsaFarN³
maRta 17
RksYgesdækic© nighirBaØvtßú Ca
“saßb½nRKb;RKglT§kmµsaFarN³”.RksYgesdækic© nig hirBaØ
vtßúkMNt;kMritTwkR)ak;sMrab;Gnuvtþþ viFIsaRsþénlT§kmµ
erobcMeKalneya)ayénlT§kmµ nignItiviFI lMGiténlT§kmµ
sMrab;GnuvtþRsbeTAtambTb,BaØtþiEdl manRsab;nigGnuvtþ
GMNacdéTeTot tamkarcaM)ac;edIm,IFanaeGaymuxgar
nigkarGnuvtþdMeNIrkar)anl¥.
maRta 18
RksYgesdækic© nighirBaØvtßú manParkic©eFVIkarEklMG
57
maRta 19
RsbtamGnuRkwtüelx 04 GnRk>bk cuHéf¶TI 20 Ex
mkra qñaM 2000 sþIBIkarerobcM nigkarRbRBwtþ
eTArbs;RksYgesdækic© nighirBaØvtßú
naykdæanlT§kmµsaFarN³
CaesnaFikareGayRksYgesdækic© nighirBaØvtßú
elIkargarRKb;RKglT§kmµsaFarN³enAtambNþa
RksYgsßab½n extþ Rkug XMu sgáat; shRKassaFarN³
nigRKwHsaßnsaFarN³redæ)alTaMgGs;
kñúgRBHraCaNacRk
58
CMBUkTI 5
karTTYlxusRtUvrbs;sßab½nGnuvtþlT§kmµ
maRta 20
karTTYlxuRtUvkñúgkarGnuvtþGnuRkwtüenH k¾dUcCa
GvblsCabnÞúkrbs;RbFansßab½nGnuvtþlT§
kmµRbFansßabn½GnuvtþlT§kmµmanParkic©RKb;RKgnigRtYtBi
nitüCaRbcaMral;kic©lT§kmµrbs;sßab½nxøÜn.
maRta 21
sßab½nGnuvtþlT§kmµnImYy² RtUvbegáItGgÁPaBlT§kmµ “Gl”
Edlmanfañk;esµIkariyal½yedIm,I sMrYl
karGnuvtþkic©lT§kmµeGay)aneBj elj
nigTTYlra:b;rgelIral;kic©lT§§kmµTaMgGs;enAkñúg
59
maRta 22
saßb½nGnuvtþlT§kmµ
RtUveFVIEpnkarlT§kmµRbcaMqñaMrbs;xøÜn
edIm,Idak;CUnRksYgesdækic© nighirBaØvtßú Binitü
nigGnum½t enAedImqñaMsareBIB½n§nImYy².
ral;KMeragcMNayEdl RtUvGnuvtþviFIsaRsþlT§kmµsaFarN³
RtUvkt;bBa©ÚlkñúgEpnkarlT§kmµ. karerobcMEpnkarlT§kmµ
RtUvEp¥ktamTMrg;EdlnwgkMNt;kñúg Gvbls.
kñúgkrNIcaM)ac; EpnkarlT§kmµGacEktMrUv enAqmas TI2
énqñaMsareBIBn§nImYy². saßb½nGnuvtþlT§kmµRtUv
60
maRta 23
sßab½nGnuvtþlT§kmµRtUvepJIr)aykarN¾lT§kmµRbcaM
ExmkRksYgesdækic©nighirBaØvtßúGMBI
Tinñn½yénkic©snüaTaMgGs;
rYmTaMgkargarvishmCÆkarlT§kmµ
tamKMrUrbs;RksYgesdækic© nig hirBaØvtßú pþl;eGay.
kñúgkrNI
Gak;xanmin)anbBa¢ÚnTinñn½yRKb;RKan;eTRksYgesdækic©
nig hirBØavtßú niwgmanviFankarkdak; vin½ytam
karCak;Esþg.
sßab½nGnuvtþlT§kmµTaMgGs;EdleRbImUlniFisaFarN³Rt
61
CMBUkTI 6
KN³kmµaFikarkMNt;buerlkçN³sm,tþi
vaytMél nigRbKl;kic©snüa “Kbvb”
maRta 24
RKb;sßab½nGnuvtþlT§kmµ
RtUvbegáItKN³kmµaFikarkMNt;buerlkçN³sm,tþi vaytMél
nigRbKl;kic©snüa “Kbvb”
mYyEdlTTYlxusRtUvRtYtBinitüelIEpnkarlT§kmµÉksardjéføkar
pþl;Gnusasn¾edIm,IRbKl;kic©snüa karGnuvtþkic©snüa
nigpþl;Gnusasn¾bNþwgtva:.
karerobcMbegáItKN³kmµakarlT§kmµ sMrab; XMu sgáat;
nwgkMNt;edayELkkñúg Gvbls.
62
maRta 25
smaCik Kbvb
EdlRtUvEtgtaMgedayRbFansßab½nmanGNtþikargarry³eBl
2qañM. GNtþienH Gacbnþ)anry³eBl1 qñaMeTot
b:uEnþmineGayelIsry³eBlsrub 3qñaMeLIy. smaCik Kbvb
Edl)anbMerIkargarry³eBl 3qñaMehIyenaH
GacRtUvEtgtaMgeLIgvij)aneRkayBIry³eBl ya:gticbMput 1qñaM
bnÞab;BI)anbBa©b;ry³eBl 3qñaMCa smaCIkrbs; Kbvb.
smaCik Kbvb
EdlRtUvEtgtaMgedayRbFansßab½nGnuvtþlT§kmµRtUvmancM
nYnBI 4 eTA 6 nak;bEnßmelIRbFan nigGnuRbFan Kbvb
Edl)ancat;taMgtammaRta 26 énGnuRkwtüenHehIykñúg
enaHRtUvmanya:gehacNas;smaCikmñak;manCMnajhirBaØvtß
63
maRta 26
KbvbRtUvmansmaCikGciéRnþy¾.RbFanGgÁPaBlT§kmµ
“Gl”RtUveFVICaelxaFikarrbs; Kbvb siT§dwknaMrbs; Kbvb
RtUvmanRbFanmYyrUb GnuRbFanTI1 mYyrUb
nigGnuRbFanTI2 mYyrUb. siT§dwknaM rbs; Kbvb
RtUvERbRbYltamkMriténtMélkic©lT§kmµEdlnwgkMNt;kñúg
Gvbls, siT§idwknaM Kbvb RtUv)ankMNt;tamkMrit
dUcxageRkam³
-lT§kmµkMritx<s; ³ dwknaMedayRbFan Kbvb
CaRbFansßab½n
-lT§kmµkMritmFüm ³ dwknaMedayGnuRbFanTi 1 Kbvb
- lT§kmµkMritTab ³ dwknaMedayGnuRbFanTI 2 Kbvb
GnuRbFanTI 1 nigGnuRbFanTI 2 Kbvb
64
maRta 27
Kbvb manParkic©RtYtBinitüelIskmµPaBlT§kmµ
mansiT§yl;RBmelIr)aykarN¾ vaytMélnig erobcM
cuHkic©snüatamnItiviFI
eTAtamkMritTwkR)ak;EdlnwgkMNt;kñúg Gvbls, Kbvb
RtUveFVIkarsMercCa ÉkcänÞ cMeBaHr)aykarN¾vaytMél
nigkarpþl;Gnusasn¾ edIm,IRbKl;kic©snüa.
GnuRbFanTI 1 nigGnuRbFanTI 2
KbvbRtUv)anpþl;siT§iedIm,IcuHhtßelxakñúgnamsßab½n
edaymincaM)ac;mankaryl;RBmelIkic©lT§kmµehIyenaHmintMr
UveGaymankar yl;RBmbEnßmBI sßab½nNaeTot eLIy
elIkElgEtcMeBaHkrNIdUcxageRkam³
-kic©snüaelIskMritTwkR)ak; EdlnwgkMNt;kñúg Gvbls
65
CMBUkTI 7
tRmUvkarcaM)ac;sMrab;kic©lT§kmµ
maRta 28
RKb;lT§kmµTMnij sMNg; esvakmµ
nigesvaTIRbwkSaTaMgGs; RtUvEteFVIkarpSBVpSayCasa FarN³
elIkElgEtkarsÞg;tMélniglT§kmµEdlGnuvtþtamviFIsaRsþ edayELk
dUcmanEcgenA kñúgmaRta 6 énGnuRkwtüenH.
GñkedjéføTaMgGs;
mintMrUveGayeFVIkarcuHbBa¢IeFVIcMNat;RbePT
nigcMNat;fañk;Rkumh‘un edIm,IsiT§eBj elj kñúgkar
CavÉksaredjéfø b¤sMeNIsMudak;edjéfø elIkElgEtGñkTTYlkarsag
sg;elIKMerag cMNayEdleRbIR)as; fvikarCati
66
maRta 29
edIm,ImansiT§icUlrYmenAkñúgKMeragkargarsaFarN³Gñ
kTTYlkarsagsg;RtUvEtcuHeQµaH kñúgbB¢aIeFVIcMNat;RbePT
nigcMNat;fañk;Rkumh‘unedayeyagelIRbePTKMeragEdlGñkTTYl
karsag sg;mansmtßPaBRKb;RKan;kñúgkarbMeBj.
kareFVIcMNat;RbePT nigcMNat;fñak;Rkumh‘un nwgRtUveFVI
eLIgedayKN³kmµaFikarmYyEdlmantMNagnaykdæanlT§kmµsaF
arN³eFVICaRbFantMNagRksYg erobcMEdndInKrUbnIykmµ nig
sMNg; nig
tMNag]sSahkmµsMNg;kñúgRsukeFVICasmaCiknwgRtUvcat;
;taMgeLIgedayrdæmRnþIRksYgesdækic© nighirBaØvtßú.
Rkumbec©keTsmYyGacRtUv)anbegáItenAral;eBleFVIkarvaytMé
67
maRta 30
manEtÉksaredjéføedayRbkYtRbECgCalkçN³GnþrCati
“dbG” nigkaredjéfø edayRbkYtRbECg Rsuk “dbs” b:ueNÑaH
EdlnwgRtUvlk;eGayGñkedjéfø. ÉksarlT§kmµepSg
eTotRtUvEckCUnedayminKitéfø. tMéllk;Éksaredjéfø
RtUvsißtenAeRkamkarENnaMEdlnwg kMNt;kñúg Gvbls.
68
maRta 31
RKb;Éksaredjéfø edayRbkYtRbECgvCalkçN³GnþrCati
“dbG” karedjéføeday RbkYtRbECgkñúgRsuk “dbs”
nigÉksarbuerlkçN³sm,tþiRtUverobcMeGTayrYceRsc)ac;sMrab;lk
; nwgpþl;eGayGñkcUlrYmedjéfø)anTan;eBlevla nigesµIPaB.
karBnüary³eBlpSBVpSay RtUv)an
kMNt;eLIgvijcMeBaHehtuplsmRsbNamYyEdlbNaþleGayyWty:a
vkñúgkarerobcMÉksaredjéfø.
saßb½nGnuvtþlT§kmµRtUveFVIkarBnüakalbriecäTsMrab;TTYlÉ
ksaredjéføb¤ÉksarbuerlkçN³ sm,tþi
edIm,ITukeBlRKb;RKan;eGayGñkedjéføerobcMÉksar)anTan;eBl.
eBlevlaRKb;RKan;nwgkMNt;kñúg Gvbls
69
maRta 32
ral;karR)aRs½yTak;TgCamYyGñkedjéfø
enAkñúgGMLúgeBlkMBugdMeNIrkaredjéfø kar vaytMél
niwgkarerobcMeFVIkic©snüaRtUveFVIeLIgCalaylkçN¾GkSr
ehIykñúgkrNícrcaéføRtUvman kMNt;ehtuénkarcrcaéfø
EdlRtUvcuHhtßelxa edayPaKITaMgBIr.
maRta 33
KµanGñkedjéføNamYyRtUv)anGnuBaØatieGaydwg
b¤)anTTYlBt’manGMBIlT§pl énkaredjéføCapøÚvkareLIy
kñúgxN³EdlBt’man minTan;)anRbkasCasaFarN³.
70
maRta 34
RKb;sMeNIedjéfø
niwgsMeNIeRCIserIsTIRbwkSaTaMgGs; ¬TaMgbec©keTs
nighirBaØvtßú¦ RtUvEterobcMebIk CasaFarN³
ehIykMNt;ehtuRtUvpþl;eGayRkumh‘un nigbuKÁlEdl)ancUlrYm
TaMgGs;. kMNt;ehtuRtUvbiT nig
RbkaselIbBa¢rBt’manenAsßab½nGnuvtþlT§kmµ
EdlsaFarNCnTU eTAGacemIleXIj cab;BIeRkayéf¶ebIk Éksaredjéfø
b¤ebIksMeNIsMuedjéfø b¤bnÞab;BIkarRbKl;
kic©snüasMrab;mYyry³eBlya:gxøI EdlnwgkMNt;kñg Gvbls.
kMNt;kehtuftcMlgk¾Gacpþl;
eGaysaFarNCnNaEdl)andak;BaküesñIsMu.
71
maRta 36
r)aykarN¾vaytMélRbKl;kic©snüanImYy²
RtUvrkSaTukCaÉksarenAsßab½n Gnuvtþ lT§kmµ.
r)aykarN¾vaytMél RtUvEteKarBtamKMrYsþg;dar
EdlnwgkMNt;kñúg Gvbls. esckþIsegçbGMBIlT§plénkarvaytMél
RbKl;kic©snüa RtUvbiTRbkaselIbBa¢rBt’man b¤dak;kñúg
eKhTMB½rRbsiinebImanenAsßabn½GnuvtþlT§kmµEdl
saFarNCnTUeTAGacemIleXIj cab;BIeRkay éf¶ebIkÉksaredjéfø
b¤ebIksMeNIrsMuedjéfø
b¤bnÞab;BIkarRbKl;kic©snüasMrab;mYyry³eBlya:gxøI
EdlnwgkMNt;kñúg Gvbls
ehIyesckþIsegçbkMNt;ehtuenaHk¾RtUvpþl;eGaypgEdr
72
maRta 37
smaCikTaMgGs;rbs;GgÁPaBlT§kmµ “Gl”
KN³kmµaFikarkMNt;buerlkçN³sm,tþi vaytMél
nigRbKl;kic©snüa “Kbvb”
mRnþInaykdæanlT§kmµsaFarN³
GñkedjéføRtUvhtßelxaelIesckþIRbkassþIBIRkmsIlFm’
viCa¢CIv³ EdlnwgkMNt;kñúg Gvbls. smaCikrbs;
GgÁPaB lT§kmµmRnþInaykdæanlT§kmµ saFarN³
RtUvcuHhtßelxaelIesckþIRbkasenH Caerogra;lqñaM.
GñkedjéføRtUvcuHhtßelxaerogral;eBlEdldak;BaküsuMedjéfø
ehIy Kbvb k¾RtUvcuHhtßelxaelIesckþIRbkasenHpgEdr
enAral;eBlyl;
73
CMBUkTI 8
karbþwgtva: nwgkarRtYtBinitükic©lT§kmµ
maRta 38
Gñkedjéfø
b¤TIRbwkSamansiT§dak;BakübWþgtva:CalaylkçN¾GkSrenARK
b;dMNak;kalén dMeNIrkareFVIlT§kmµ.
Bakübþwgtva:enHRtUvdak;CUnsamIsßab½nGnuvtþlT§kmµeda
ybMeBjeQµaH nigcuH htßelxaelIBakü
bþwgtva:ehIyRtUvcMlgbNþwgenH bBa¢ÚneTARksYgesdækic©
nighirBaØvtßú sßab½nGnuvtþ lT§kmµRtUveFVIkarBinitü
Bakübþwg nigpþl;cMelIykñúgry³eBl 15éf¶énéf¶
eFVIkarKitBIéf¶TTYlBakü bwþgtva:.
74
Gñkedjéfø b¤TIRbwkSa
EdlmineBjcitþnigcMelIyrbs;sßab½nGnuvtþlT§kmµ
mansiT§bwþg bnþEfmkñúgry³eBl 15éf¶
énéf¶eFVIkarKitBIéf¶Edlsaßb½nGnuvtþlT§kmµ)an pþl;cMelIy
nigsMueGayRksYgesdækic©
nighirBaØvtßúeFVIkarBinitüeLIgvijelIesckþIrbs; sßab½nGnuvtþ
lT§kmµ.
RksYgesdækic© nighirBØavtßú RtUvpþl;cMelIy
kñúgry³eBlv 15éf¶ éneFVIkar KitBIéf¶)anTTYlBakübwþgtva:.
maRta 40
esckþIsMercrbs;RksYgesdækic© nighirBaØvtßú
cMeBaHbNþwgtva: CaesckþIesMerc cugeRkay.
75
maRta 41
RKb;saßb½nGnuvtþlT§kmµ Gñkedjéfø GñkpÁt;pÁg;
GñkTTYlkarsagsg; nwgTIRbwkSa
enAeRkamkic©snüahirBaØb,TansaFarN³
RtUvRbkan;x¢ab;nUvRkmsIlFm’viCa¢CIv³x<s;bMput
enAkñugGMLúgeBleRCIserIs nigkarGnuvtþkic©snüa.
raCrdæaPi)almansiT§eFVIGFikarkic©
nigBinitüeLIgvijelIÉksarEdlCab;Bak;B½n§nwgkar edjéfø sMeNI
sMuedjéfø nigkic©snüarbs;Gñkedjéfø GñkTTYlkarGñkpÁt;pÁg;
nigTIRbwkSaTaMgGs;.
76
CMBUkTI 9
eTasb,BaØtþi
maRta 42
buKÁlTaMgGs;EdlBak;B½n§nwgdMeNIrkarlT§kmµRtUvr
aykarN¾eTAKN³kmµaFikarkMNt;buerlkçN³sm,tþi vaytMél
nigRbKl;kic©snüa “Kbvb”
rbs;sßab½nGnuvtþlT§kmµb¤sßab½nman smtß kic©epSgeTot
enAeBlEdlmanPsþútagc,as;las;EdlCamUldæannaMeGaymankars
gS½yfamanGMeBI BukrlYy GMeBIbnøM GMeBIXubXit
nigGMeBIbgçitbgçM.
enAkñúgn½yénGnuRkwtüenH GMeBIBukrlYy
GMeBIbnøM GMeBIXubXit nigGMeBIbgçitbgçM
kñúgkic©lT§kmµsaFarN³ RtUv)ankMNt;dUcxageRkam³
77
eGayxUcxacRbeyaCn¾rbs;raCrdæaPi)al
nigrYmCamYyGMeBIXubXitkñúgcMeNamGñkedjéfø ¬mun
b¤eRkayeBldak;sMeNIsMuedjéfø¦
edIm,IerobcMbegáIttMéledjéføsib,nimµitbegáItkMrit minEmnCa
lkçN³RbkYtRbECg eFVIeGayxUcRbeyaCn¾rbs;raCrdæaPi)al
kñúgn½yminEmnCalkçN³RbkYtRbECg edaycMh nigesrI.
-“:GMeBIXubXit” sMedAdl;Epnkar
b¤karerobcMrvagGñkedjéføBIr b¤eRcInnak; EdlerobcMeLIg
edIm,IbegáIttMéledjéføsib,nimµit
begáIttMélkMritminRbkYtRbECg
b¤edIm,IeFVIeGayman\T§iBlelIs skmµPaBrbs;
PaKINamYyenAkñúgdMeNIrkaredjéfø
78
maRta 43
enAeBlsßab½nGnuvtþlT§kmµxkxankñúgkarpþl;r)aykarN
¾sþIBIskmµPaBlT§kmµEdlnwg kMNt;kñúg Gvbls
b¤lT§plénkarRtYtBinItüelIBakübNþwgbgðajfasßab½nGnuvtþlT§
kmµmin)an GnuvtþRtwmRtUvtam viFIsaRsþ
nignItiviFIénlT§kmµ b¤manJPsþútagbgðajfa manGMeBIBukrlYy
GMeBIbgøM GMeBIXubXit nigGMeBIbgçitbgçM
RksYgesdækic© nighirBaØvtßú
mansiT§tMrUveGaysaßbn½GnuvtþlT§kmµenaH
dak;CUnesckþIRBagkic©snüaTaMgGs;
edayminKitBIkMritTwkR)ak; Edl)ankMNt;edayRksYgesdækic©
nighirBaØvtßú edIm,IeFVIkarRtYtBinitü nigsMerccugeRkay.
maRta 44
79
maRta 45
enAeBlEdlGñkedjéføGñkTTYlkar GñkpÁt;pÁg;
Rkumh‘unTIRbwkSa b¤TIRbwkSaÉktþCn RtUv)anrkeXIjfa
manBak;B½n§kñúgGMeBIBukrlYy GMeBIekgbnøM
GMeBIbgçitbgçM nigGMeBIXubXitKña
rdæmRnþIRksYgesdækic© nighirBaØvtßú Gac
sMerchamXat;Rkumh‘un b¤buKÁlTaMgenaHmineGaycUl
rYmkñúgkarpÁt;pÁg; TMnij sMNg; esvakmµ CaGciéRnþy¾
b¤kñúgry³eBlminticCagbIqñaM. karhamXat;enH
minEmnCa]bsKÁdl;dMeNIrkarénkarecaTRbkan; nigpÞnaÞeTas
edayeyageTAtam c,ab;CaFr maneLIy.
80
CMBUkTI 10
Gvsanb,BaØtþi
maRta 46
bTb,BaØtþiTaMgLayNa EdlpÞúynwgGnuRkwtüenH
RtUvcat;TukCanirakrN¾.
maRta 47
rdæmRnþITTYlbnÞúkTIsþþIkarKN³rdæmRnþI
rdæmRnþIRksYgesdækic© nighirBaØvtßúrdæmRnþIRKb;RksYg
saßb½n rdæelxaFikar RKb;rdæelxaFikardaæn GPi)alRKb;extþ
Rkug RbFanshRKassaFarN³RtUvTTYl GnuvtþGnuRkwtüenH
tamParkic©erog²xøÜn cab;BIéf¶cuHhtßelxateTA.
BakübMeBj nigGkSrkat; énGnuRkwtüsþIBIlT§kmµsaFarN³
-Gvbls³ karGnuvtþviFan nigbTb,BaØtiþ sþIBIlT§kmµsaFarN³
81
- Gl³ GgÁPaBlTÁkmµ
- PU: Procurement Unit
- sl³ sßab½nGnuvtþlT§kmµ
- PE: Procuring Entity
- dbG³ karedjéføedayRbkYtRbECgCalkçN³GnþrCati
- ICB: International Competitive Bidding
dbs³ karedjéføedayRbkYtRbECgkñúgRsuk
-
NCB: National Competitive Bidding
-
Bf³ karBieRKaHéfø
-
Sh: Shopping
-
st³ karsÞg;tMél
-
Ca: Canvassing
-
kp³ karcuHkic©snüa
-
DCo: Direct Contracting
-
kGC³ karcuHkic©snüaCamYyGgÁPaBCMnajénsaßbn½GnuvtþlT§kmµ
-
FA: Force Account
-
lPs³ lT§kmµPaKkmµshKmn¾
-
CPP: Community Participation in Procurement
82
Donor-Assisted Procurements
 Donor-Assisted Procurements Carried Out Under
SOP/PM Procedures
 Procurement Sub-decree No. 14 dated 2007
disseminating:
- Standard Operating Procedures (SOP)
- Procurement Manuals (PM)
The Procurement Manual
 Policies and procedures
for the procurement of
goods, works, and
consulting services
For Externally Financed
Projects / Programs in
Cambodia
84
Project Cycle
Identification
1
Evaluation
Implementation
6
2
5
3
Preparation
Appraisal
4
Loan/Grant Negotiation & Board Approval
85
PFMRP Procurement Plan
The Procurement must be carried out using the
following procurement methods
1.
2.
3.
4.
International Competitive Bidding (ICB)
National Competitive Bidding (NCB)
National and International Shopping (NSH & IS)
Selection based on Consultants Qualifications (CQS)
This training material for the PFMRD project will
focus on the above procurement methods
86
Economy and Efficiency
 Suitability of the goods/equipment/services
purchased.
 The useful life.
 Operating, maintenance and servicing costs.
 Availability of after sales service
 The delivery period.
 Onward transportation costs.
 Storage costs.
 The time taken to procure the goods
87
Equity
 Eligible suppliers provided equal opportunities
 Ensure equitable grounds for competition
 A fair basis on which to compete
88
Ethical Standards
 Code of Business Ethics
 No individual shall use his authority or office for
personal gain
 An individual shall seek to maintain and enhance the
reputation of the Government
 Conflict of interests & personal relationships
 Confidentiality and accuracy of information
 All shall be treated with fairness and impartiality
 No business gifts will be accepted
 A moral and ethical responsibility to report any
unethical conduct
89
Fraud and Corruption
 “corrupt practice”
 “fraudulent practice”
 “collusive practices”
 “coercive practice”
 The ADB will cancel the portion of the Grant/Loan
allocated to the contract
 Declare a consultant or firm ineligible
 Permit the Government and the WB to inspect
accounts and records
90
Conflicts of Interest
 Declare any potential conflicts of interest
 Bidders and consultants with potential conflict of
interest are not eligible
 Firms hired for project design, and implementation
are not eligible to provide goods, works or services
91
Transparency in the Procurement Process






The general procurement notice
Specific procurement notices
UN Development Business on line
Development Gateway’s dg Market
News Paper of national circulation
(The above requirements are mandatory for all ICB
contracts)
92
Procurement Roles and Responsibilities
 Manual on Standard Operating Procedures for
Foreign Assisted Projects
 MEF will undertake an oversight role
 MEF representative on the Procurement Committee
 For EAs as provided in the project/grant agreement
 Financial limits at which decisions can be determined
at the start of each project
93
Project Management Units
 A Project Management Unit (PMU) with the
delegated authority to implement the project
 The PMU acts as the focal point for project
implementation
 It undertakes all of the core procurement activities
required for the project
94
Procurement Responsibilities
 Project Director
 Approves and signs contracts, invoices and
important procurement documents
 A member of the procurement committee
 Overall responsibility for ensuring that the ADB and
the Government’s Procurement Guidelines are
followed
 Ensures that all mandatory reports are issued on
time
95
Procurement Responsibilities/ …Cont.
 Project Manager
 Approves and signs contracts, invoices and





procurement documents below an agreed
threshold
A member of procurement committee
The primary contact for all formal
communications relating to procurement
Ensures that all procurement monitoring and
reporting is undertaken in a timely and efficient
manner
Leads all negotiations
Chairs and supervises all bid openings
96
Procurement Responsibilities/ …Cont
 Senior Administrative Officer
 Assists the Procurement Officer to draft the
overall project procurement plan
 Assists the Procurement Officer in the monthly
updating of the overall project procurement plan
97
Procurement Responsibilities/ …Cont
 Chief Financial Officer
 Supervises the management of all financial
transactions and payments
 As a member of the procurement committee,
undertakes financial pre or post qualification
review
 Attends bid openings, verifies and records the bid
securities that may be required
 Receives and arranges for the safe keeping of all
bid securities
98
Procurement Responsibilities/ …Cont.
 Technical Officer
 Drafting, or supervising the drafting of, all
specifications, scopes of work and terms of
reference
 Assisting the Procurement Officer in selecting the
appropriate evaluative criteria, special conditions of
contract and contractual performance indicators
 Manage and administer the implementation of
contracts
 Monitors and evaluates progress and performance
of technical staff, consultants, and contractors
99
Procurement Responsibilities/ …Cont
 Procurement Officer
 Drafting and updating the project’s general
procurement notice (GPN)
 Quantify the goods works and services required
 Group the goods works and services required into
packages
 Preparing the overall project procurement plan
 Update the overall project procurement plan each
month
 Drafting specific bidding documents
 Prepare and issue through the Project Manager
Specific Procurement notices
 Submit the documents through the Project Manager to
the WB
100
Procurement Responsibilities/..Cont.
 Procurement Officer
 Distribute copies of the Invitation for Bids to all relevant








firms
Distribute the bidding documents
Respond to all clarification requests received
Ensure that the venue for bid opening is adequate and
that logistical arrangements are in place
Receive all bids and proposals ensuring their secure
storage
Undertake the public opening of bids
Review and pass all bid securities to the Financial Officer
at bid opening
Undertake preliminary evaluation of all bids and
proposals
Facilitate the technical evaluation of all bids and
proposals received
101
Procurement Responsibilities/ …Cont
 Procurement Officer
 Seek clarifications to bids and proposals as required to
complete the evaluation
 Draft the Bid Evaluation Report for review
 Respond to queries raised on the evaluation report
from oversight agencies or the ADB
 Prepare draft contracts
 Ensure that the relevant oversight agencies are
provided with copies of contacts
 Issue the notification of award
 Draft the documentary requirement for any letter of
credit
 Monitor suppliers/contractors/consultants
performance against the contract
102
Procurement Responsibilities/ …Cont
 Procurement Officer
 Review all payment requests received
 Ensure that either the performance security or
retention monies are in place to adequately
protect the Government
 Ensure that all performance securities and
retention monies are returned to the supplier or
contractor upon the satisfactory completion of
their contractual obligations
 Act as The Secretary to the Procurement
Committee
103
The Procurement Committee
 Review the scope of each procurement package prior




to commencement
Review all Bidding Documents (BD) and Requests for
Proposals (RFP)
Attend and supervise the public opening of bids and
proposals
Review evaluation and approve evaluation reports for
goods and works
Individually and independently undertake the
evaluation of proposals
104
Procurement Committee Formation and
Thresholds
 Committee on minor procurement
 review and approve all goods up to the value of US$
25,000
 review and approve all works contracts up to to the
value of US$ 50,000
 Review and approve all service contracts up to the
value of US$ 5,000.
 Chaired by the Project Manager and include the
Project Technical Officer and a representative of MEF
105
Procurement Committee Formation and
Thresholds
 General committee on procurement
 Review and approve all goods ranging in value: US$
25,000 - 500,000
 Review and approve all works contracts to the value:
US$ 50,000 - 3,000,000
 Review and approve all service contracts from
US$ 5,000 - 500,000
 Individually and independently undertake the
evaluation of all contract proposals
106
Procurement Committee Formation and
Thresholds
 General Committee on Procurement
 Chaired by the Project Director. The members will be
the Project Manager, one representative from the EA
(and not a member of the PMU) and one or two
representatives from MEF at the discretion of MEF.
 In the event that MEF only designates one
representative for a particular meeting the Project
Financial Officer will be invited to become a Committee
member for that meeting.
107
Procurement Committee Formation and
Thresholds
 Major Committee on Procurement
 review and approve all goods above the threshold
value : US$ 500,000
 review and approve all works above the threshold
value : US$ 3,000,000
 Review and approve services above $500,000
 Individually and independently undertake the
evaluation of all contract proposals above the
threshold value
108
Procurement Committee Formation and
Thresholds
 Major Committee on Procurement
 Chaired by the Head of the EA or a duly authorized
representative
 Project Director
 One representative appointed by the head of the EA
 Two representatives from the MEF
109
Procurement Committee Formation and
Thresholds
 The Project Director or MEF may invite any number of
observers to the meetings of each Procurement
Committee meeting
 In the event that authority or approval is required by a
Committee member from his/her parent organization,
the Chair of the Committee will set a deadline for
obtaining such approval
110
Methods of Procurement
 The Procurement of Goods
 The Procurement of Civil Works
 The Procurement of Consulting Services
111
Methods of Procurement, Goods
 International Competitive Bidding (ICB)
 Limited International Bidding (LIB)
 National Competitive Bidding (NCB)
 Shopping (NS or IS - either national or international)
 Direct Contracting (DC)
112
Methods of Procurement, Goods
 International Competitive Bidding (ICB)
 In most cases the preferred method;
 Must adopt the ADB’s standard documents;
 Used when the value is above US$100,000;
 Provides a wide range of choices from competing
suppliers;
 Provides the suppliers (or potential suppliers)
adequate, fair and equal opportunity;
 Advertised both nationally and internationally
113
Methods of Procurement, Goods
 Limited International Bidding
 Identical to ICB, the same standard document of the
World Bank is used but no advertising
 The goods or equipment is highly specialized and
there are only a limited number of suppliers
 The items are proprietary
 For an urgent repeat order
114
Methods of Procurement, Goods
 National Competitive Bidding
 Value is below US$100,000 or as stated in the
Loan/Grant Agreement
 Advertised nationally
 All suppliers both foreign and national are eligible to
bid
 No domestic preference is applicable
 Standard National Competitive Bidding document
issued by MEF
 Use of this document for NCB is mandatory
115
Methods of Procurement, Goods
 Shopping (International and National)
 For values below US$ 20,000
 Compares the priced quotations
 Above US$5,000 will be advertised
 Quotations are sealed and opened in public
 Used for off the shelf items, when standardization is
important and exceptional circumstances as approved
by MEF/ADB
 Uses standard bidding documents issued by MEF
116
Methods of Procurement, Goods
 Direct Contracting (DC)
 Should be used as little as possible
 No competition
 For procurement of less than $500
 The contract is negotiated
 May be used in exceptional cases with the prior approval
of MEF/WB
117
Methods of Procurement, Works
 International Competitive Bidding (ICB)
 In most cases the most appropriate method
 Used when the value is above US$300,000
 Must use the WB’s standard bidding documents
 Provides a wide range of choices from competing
contractors
 Provides the contractors adequate, fair and equal
opportunity
 Advertised both nationally and internationally
 Open to all who purchase the bidding document
118
Methods of Procurement, Works
 Limited International Bidding
 Identical to ICB, the same standard document of the
ADB is used but no advertising
 The works are highly specialized and there are only a
limited number of contractors
 The works are proprietary
 For an urgent repeat order
119
Methods of Procurement, Works
 National Competitive Bidding
 Value is below US$300,000
 Advertised nationally
 All contractors both foreign and national are eligible
to bid
 No domestic preference is applicable
 Standard National Competitive Bidding document
 Use of this document for NCB is mandatory
120
Methods of Procurement, Works
 Shopping (International and National)
 For values below US$ 20,000
 Compares the priced quotations
 Above US$5,000 it will be advertised
 Quotations are sealed and opened in public
 Used for off the shelf items, when standardization is
important and exceptional circumstances as approved
by MEF/ADB
 Uses standard documents issued by MEF
121
Methods of Procurement, Works
 Direct Contracting (DC)
 Should be used as little as possible
 No competition
 Only when specifically allowed under the projects
Loan/Grant agreement
 May be used in exceptional cases with the prior approval
of MEF/ADB
122
Methods of Procurement, Works
 Force Account
 Government’s own workforce, equipment and
resources are used
 The quantities of works cannot be defined in
advance
 Works are small and at scattered locations
 There is a natural disaster or similar emergency
needing immediate attention
 Has the endorsement of the MEF/ADB
123
Methods of Procurement,
Services
 All service procurement with the exception of single
source must be advertised nationally.
 Service procurements above $100,000 must be
advertised internationally
124
Oversight, Accountability and
Good Governance
 Basic Definitions
 Characteristics of Public Sector Auditing
 External and Internal Audit: Differences
 External Audit
 Internal Audit
 Pre-Award Audits (n/a for Cambodia)
 Post-Award Audits
Basic Definitions
 Oversight: supervision or watchful care
 Accountability: liable or answerable.
 Transparency: adhering to published rules
 Good Governance: How Government uses a country’s
resources for the public good
Characteristics of
Public Sector Auditing
 Audit provides an independent, objective, and a
professionally conducted assessment about the
veracity, accuracy, credibility and reliability of
information.
 Traditionally, audit is seen as a service, provided by
independent professionals strictly observing generally
accepted standards of performance. A professionally
executed audit can provide a fact-based and
objectively-derived opinion.
External and Internal Audit:
Differences and Similarities
The essential difference between external and internal
audit is that internal audit is part of the organization
being audited, while external audit is not.
External audit in the public sector reports to
parliament and is considered part of legislative
oversight
Internal audit in the public sector reports to the
executive and is considered to be part of executive
oversight.
External Audit
 External auditors are those who are outside of, and
independent from, the entity subject to audit.
Reporting is usually to third parties. In the public
sector, external audit is generally external to the
Executive Branch of government. In the private sector,
external auditors are appointed at the annual meeting
of shareholders of an entity, usually to conduct an
audit of the entity’s annual financial statements.
1945 Constitution
Judicial
Judicial
Commission
Commission
Supreme
Supreme
Court
Court
Constitutional
Constitutional
Court
Court
State
State Ministry
Ministry
for
for BUMN
BUMN
President
President
State
State Ministry
Ministry
for
for Administrative
Administrative Reform
Reform
DPD
DPD
MPR
MPR
DPR
DPR
BPK
BPK
MoHA
MoHA
DPRD
DPRD
Governor
Governor
Secretary
Secretary
Bawasda
Bawasda
Minister
BUMN
BUMN
Line
Line Unit
Unit
BPKP
BPKP
SPI
SPI
BUMN
Echelon1
SPI
Inspectorate
General
Bupati/Mayor
Bupati/Mayor
BUMD
BUMD
SPI
SPI
Line Units
Line Units
Line Units
DPRD
DPRD
Secretary
Secretary
BUMD
Bawasda
Bawasda
SPI
Line
Line Unit
Unit
Central
Government
Regional
Governments
Government Boundaries
Legend:
Ministry and Non Ministry Agency Level
Audit Institutions
Command
Provincial Level
Audit Mandate
Coordination
District
Audit Reporting
Internal Audit
 Internal auditing is an independent, objective
assurance and consulting activity designed to add
value and improve an organization’s operations. It
helps an organization accomplish its objectives by
bringing a systematic, disciplined approach to evaluate
and improve the effectiveness of risk management,
control, and governance processes.
Pre-Award Audit
 Before the award of a government contract
 Purpose: to independently determine the fairness and
reasonableness of a bidder’s price
 A critical step when competition is lacking
Post Award Audit
 After the award of a government contract, if permitted
by statute or a contractual provision
 Purpose: to determine the completeness and
accurateness of factual representations, and therefore
recover excess profits
Case Studies (time permitting)
 You chair the Procurement Review Committee
and the following situations arise. What action
do you take in response to these situations?
 Case No. 1: There are five other Committee members. During the
evaluation of proposals Bidder XYZ is ranked number one. Then, one
member states “I heard Bidder XYZ was going into bankruptcy. We
don’t want to award a contract to a firm on the verge of bankruptcy,
they can’t perform the work!” Another Committee member states she
also heard of Bidder XYZ’s poor financial situation, and the fact that it
may face bankruptcy. What should you do?
 Case No. 2: Five bidders have submitted proposals that are
valid for a period of ninety (90) days. It is now the 87th day
and the evaluation is taking longer than expected, and
cannot be completed by the 90th day because key officials
are on an international mission. What should you do?
 Case No. 3: Five bidders timely submitted their proposals
on Friday afternoon at 5:00 pm. Your ministry safely stored
the proposals pending evaluation. On Monday morning, a
representative of Bidder XYZ visits you to request you to
accept his firm’s proposal, which was due Friday at 5:00 pm,
because his flight from Bangkok was delayed. What should
you do?
 Case No. 4: The same situation as Case No. 3, except
the representative of Bidder XYX offers you $500 to
accept his firm’s proposal, and mark it timely
submitted. What should you do?
 Case No. 5: The financial proposals of five bidders are
opened, and Bidder XYZ is lower than the other four
bidders by 25%. When the time to sign the contract
comes, Bidder XYZ refuses to commit to the contract,
stating it would lose money, but it will sign if the price
is increased by 20%, still making it the lowest price
offered. What should you do?
 Case No. 6: Proposals from three firms have been
evaluated, and Bidder XYZ has been evaluated the
highest, primarily based on the qualifications of
Professor Dr. Big Shot, an internationally noted
Engineering expert. Just prior to the time the contract
is to be signed, Bidder XYZ wants to substitute Mr.
Nobody instead of Professor Dr. Big Shot. What
should you do?
Thank You!