A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4, 2013

pp 209-213

Urgent Need of Procurement Management Information System (PMIS)

For Improving Public Procurements

Shree Ram Dhakal Consulting Engineer

PDE, Rural Access Improvement and Decentralization Project (RAIDP) District Technical Office, Surkhet

dhakal.shreeram@gmail.com

1. Background

Sound Public Procurement Policies and

Practices are among the essential elements of good

governance. Good practices reduce cost and produce

timely results in efficient manner. Poor practices

lead to wastage and delays and often become the

cause of allegations in corruption and government

inefficiencies. It is government’s duty to take

measures to ensure adequate principles and practices

are followed in public works and services. Sufficient

regulatory provisions have been made; meanwhile

sufficient threats and weep holes have been

identified along with in our procurement practices.

Prevailing Public Procurement Act 2063,

along with previous FAR had, has adopted the

competitive bidding process for procuring works,

goods and services. It is aimed to acquire the

reasonable standard of delivery in the least cost

through capable deliverer/supplier. Despite such

provision, current practices have not attained

sufficient satisfactory result as aimed in the

regulatory provisions. It has been a big challenge for

every public authority to get the reasonable standard

of delivery. Manipulations are often found both from

contracting parties during bid preparation as well as

procuring authority during the evaluation process.

During bidding process major alterations the bidders

make is the faulty information about the work

experience, financial turnover, faulty equipment and

manpower capability information. It is often

observed that the bidders have a wide tendency to

make fake documents to show that they meet the

qualifying criteria mentioned in the bidding

documents. Likewise, during evaluation process

public authoritarians have often found to have vested

interest to make certain bidder successful

prejudicially and alterations in the posted documents

of bidders have taken place with motive of unethical

financial gain.

All such unfair practices have made the

procurement practices unfaithful and government

works and services ineffective compared to their

objectives. So, there is urgent need of adopting a

smart system which minimizes the chances of

alteration and manipulation before, during and after

bidding process. To make procurements efficient

and unaltered, Procurement Management

Information System (PMIS) can be a smart remedy

in reducing inefficiencies, manipulations and fraud

& corruption during tendering and contract

execution.

2. What is PMIS?

Procurement Management Information

System (PMIS) is a smart system which collects,

stores and synthesizes the procurement related

information all over the country. It is an online based

central and integrated data management system

concerning to the procurement activities. PMIS uses

centrally updated data warehouse to track, record

and verify the procurement history and current

capabilities of the contracting parties’ viz.

contractors/suppliers/ consultants. During bidding,

bid evaluation and contract execution PMIS serves

as necessary source of transformation of authentic

information and bridges between the bidders and

procuring authority. PPMO can be an appropriate

authority to undertake the central data management

system.

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4,

2013 pp 209-213

3. Components of PMIS and Registration

Components of PMIS are more similar to that of

e-submission system being adopted till date. The

difference lies in the continuous receiving and

updating of the capabilities and procurement

information by PMIS unlike to e-submission system.

Following are the component units of PMIS.

a. Central Data server- a data warehouse

b. Online Service Package

c. System Members

i. System administrator, say

PPMO

ii. Procuring Authorities

iii. Bidding Parties i.e. contractors/

suppliers/consultants

iv. Scheduled Banks

4. Work Flow Steps in PMIS

Work flow of adopting PMIS should take in

the following sequential order.

a. Registration of Users

Registration of different users

should follow different methods.

Adequate review and verification

should be done prior to the

registration since the users are made

authorized, with designated powers

according to the type of user, to

participate in the public

procurement by registering them in

the system. Registration of users’

takes place with following

hierarchical order.

i. Registration of System

administrator:- This is a single

entity type of user. PPMO (or

any central authority) is a single

and one time registration

process.

ii. Registration of Procuring

Authorities:- All the procuring

entities should enter into the

system by certifying their

procurement needs by the

government departments with

authorized lettering.

iii. Registration of

contractors/suppliers/consultant

s: - Registration of bidding

parties in PMIS should be

managed in such a way that they

are bound to enter in the PMIS

by written request with

supporting documents rightly

after they are registered in the

firm/company registration

authority. At the time of

registration the current

capabilities i.e. Manpower,

equipments, financial resources

and other technical capabilities

should be registered along with.

iv. Registration of Scheduled Banks: -

Registration of Banks takes place on

demand to the system by bidding parties

(for presenting bid charge amount, bid

security guaranty or performance

guaranty during bidding process) or by

procuring authorities (during payments).

b. Electronic Bidding

Invitation of bids, quotations, RFPs

etc should be called officially through

electronic bidding process. For doing so

every procuring authority should keep

online based centralized service

package/software. Preparation of bid

documents can be simplified by already

prepared templates by administrator where

necessary entries can be made pertaining to

the unique details of that contract. Posting of

bid notice to the system automatically

generates email notification to every

members registered to the system.

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4,

2013 pp 209-213

On receiving the notification,

bidders can prepare his bid by providing his

necessary entries of item rates and other

required customization to the provided bid

template. Also the bidding parties have to

manage the appropriate bank to issue bid

security guaranty which too, gets submitted

through online in the PMIS system along

with the bid. There is no need to mention the

experience information, manpower and

equipment capabilities and financial

turnover etc. by the bidders on their own as

these things are automatically stored and

updated continuously in the system. Bidding

by that time only indicates the willingness of

the particular bidder.

c. Bid Opening and Evaluation

Opening of bid will not be a big deal

after going online system of PMIS as there

is no chance of manipulations and

alterations as like in case of hard copy

submission. So, it follows a regular office

day process. Bidding period can also be

reduced as online system gives a reduced

effort on bid preparation. After opening of

bids on the specified date and time, it can be

automated in the PMIS system to send the

abstract details of submitted bids to all the

bidders as bid opening checklist (muchulka

as we say).

After opening of bids evaluation of

the bid takes place. This section in the

system is only accessible from the terminal

of procuring authority (the buyer). Through

this section the buyer generates the checklist

of Requirement Details of the contract as

indicated in the bid document already

prepared and also the detail capability of the

bidders though the PMIS central data

warehouse. On comparison of both, system

automatically indicates the eligible and

ineligible bidders. After generating the

Comparative Chart of proposed item rates in

the BOQ provided by the eligible bidders

along with the bid document template,

Lowest Eligible Bidder is easily determined.

The case of responsive and non responsive

bidders can be omitted by filtering during

the bidding process i.e. not allowing the

non-responsive bids for particular contract

during bidding.

d. Contract Award and Monitoring

After evaluation of bid, contract is

awarded to the successful bidder through the

system. Going through the contract award

terminal by the buyer, contract agreement

template document already created in the

system is modified and customized in the

required field only (i.e name and ID of

contract, SCC, Priced BOQ, time of

execution, milestones etc) which gets

entered in the data warehouse. It can be

utilized by the system for real-time tracking

of contract.

By the help of set data in the system

(or say in the contract document) PMIS

regulated and notifies the necessary

information like milestones, time frame,

guaranty times, and progress and suggests

action to the concerned party. Mandatory

actions cannot be modified or altered by

none of the registered users (neither buyer

nor the administrator). For example, if the

milestone provisioned in the contract is not

achieved, it suggests charging Liquidated

Damage as in the contract document and it

has to be done by the buyer otherwise

payment order by the system does not

proceed. Hence the chance of manipulations

in the contract execution is highly reduced.

e. Payments and Completion of

Contract

During or on completion of contract

execution series of payment shall be

released. The payments can be released to

the contracting parties upon the billing of

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4,

2013 pp 209-213

executing works through the billing section

of the PMIS accessible only to the buyer.

Payment can be issued through the

scheduled banks upon the online request

order through the system. On completion of

works or services, completion report is

prepared with contract execution details and

final payment is released.

f. Updating the Contract Execution

Report

Since every action is preceded

through the online based software package

of PMIS connected to the central server it is

gets automatically saved to server. On

termination of contract, summary of contract

execution, milestones, progress record,

billing information and payment history is

recorded by the system removing the other

tracking histories.

Compilation of such executive

summaries of all contracts handled by a

particular contracting party, yearly work

experience and financial turnover can be

easily generated by the system. Turnover

Report of all the registered contracting

parties can be published in the system in the

yearly basis. Such reports are usable for

future bidding actions and contract

management.

g. Updating the Increased Capability of

Bidders

The system should support the

update of the increased capability of bidding

parties. Increment in the resources,

manpower, equipment and other capital

assets etc should be updated with written

request by the contracting parties on

verification of the requested update with

supporting documents (i.e. purchase receipt

and departmental registration slip etc.) by

the system administrator.

5. Advantages of PMIS over Traditional

System

Adoption of PMIS can make vast difference

in the current procurement practices. There

is very little or no chance of manipulations

during the bidding process as well as

contract execution. Following are some of

the advantages.

i. During bidding process, bidders

cannot present the fake

information of experience,

turnover and equipment as in

the current hard copy

submission system since tracked

factual data are given by the

system server.

ii. One equipment, manpower or

vehicles allocated by bidder for

particular contract in the bid can

be made used for that contract

only making unable to allocate

for other contracts.

iii. Opening and evaluation of bids

is highly simplified work in

PMIS. There is no chance of

manipulations and alterations in

the documents by evaluation

team. Chance of unethical

processing is reduced.

iv. PMIS timely informs and

alarms about the milestones,

critical activities and time

frames which we often forget

during contract execution in our

present practice.

v. Every detail of all ongoing as

well as completed contracts is

tracked by the system server

enabling the generation of status

of contracts overally, particular

to a contract or particular record

of a contracting party. Helps in

taking necessary action.

A Journal on Rural Infrastructure Development, Society of Engineers for Rural Development, Nepal Vol.4 Issue 4,

2013 pp 209-213

vi. Since PMIS eliminated major

alterations, it greatly reduces the

cases of fraud and corruption as

procurement is the major source

of corruption.

6. Current Challenges of Adopting PMIS

Every new starts faces some challenges.

Adoption of PMIS too, will not be free from

hindrances and obstacles at its start.

Following are our challenges to go for

adopting PMIS in public procurements.

i. Reluctance of public authorities

and political circle to adopt a

smart and alteration –free

system.

ii. PMIS is fully online based.

Lack of continuous electricity

supply and internet connections

every places of country.

iii. Limitation of proper level of

computer skills among public

personnel’s and contracting

parties.

iv. Proper mechanism of data

encryption in online system

should be established.

v. Without clearly stating in the

procurement act and until detail

regulations and guidelines to go

for an online based system is

made, it is difficult to adopt

PMIS.

7. Emerging from the Challenges and

Way Forward

Despite a nos. of limitations and

reluctance in our current system, we are

bound to correct them as we are, now or

then, bound to rise from our misery. It’s

only we and our generation to make our

environment a better place. If we sought for

a dynamic and well mechanized system in

our governance, the result is efficient service

delivery with a lesser operation cost. Since

procurement sector is a major area of

corruption; a properly controlled, dynamic

and smart system in our procurement

practice is urgently needed. Procurement

Management Information System plays a

vital role in curbing corruption eliminating

the chances of manipulations.

PMIS does not make the

procurement different but makes it proceed

differently. The reduced effort, lesser

chances in alterations, elimination of

unhealthy competition, reduction in chances

of undue benefits are the results PMIS

provides. Many of the countries in the world

including Bangladesh, whom we used to call

a major country of procurement mishmash

in South Asia, has already gone for complete

online based procurement system. So, it’s

our time to leap into a prosperous and

mechanized country through procurement

reforms and good-governance. It’s a crucial

time that PPMO is undertaking the process

of replacing of the current Public

Procurement Act with a new one and is a

better instance to quest for an efficient and

smart system. The recent budget speech of

FY 2070 has too, proclaimed its

commitment for electronic government

procurement i.e. e-GP system, which should

be advocated to make happened in real.

References

i. World Bank Country Procurement

Assessment Report (October 2002)

ii. Asian Development Bank, “Curbing

Corruption in Public Procurement in Asia

and the Pacific, Progress and Challenges in

25 Countries”,2006

iii. E-GP Guidelines of Government of Peoples

Republic of Bangladesh, 2009

iv. E-procurement Portal of DoLIDAR,

Nepal,<https://www.edolidar.gov.np>