The Sindh Public Procurement Regulatory Authority (SPPRA) is an authorised body of the Government of Sindh responsible for providing a functional guideline for procurement of works. The SPPRA regulations are supposed to provide a step-by-step guideline/choice for interested contractors and suppliers to engage in procurement activities with several government departments.
One of six core objectives listed in the document published by SPPRA is to enable contractors to provide ‘best value for money’. Fair enough, this should be the core objective of any government department and the contractor. The government is responsible for providing the best value to citizens in the form of constructed facilities i.e. roads, bridges, or any other infrastructure. The contractor, on the other hand, is responsible for providing a better quality of works within time, budget, and stated requirements by the client.
It is essential to understand the ‘best value for money’ concept in the conventional procurement approach. Since the SPPRA relies on a single procurement method and a few contracts — generally known as the conventional approach — it is hard to understand how they will comprehend ‘value for money’ in projects. Research has already pointed a narrow view of the best value for money in conventional procurement due to inherent risk transfer motivation.
Once the contract is awarded, the contracting party (a contractor) in conventional procurement is generally focused on their benefit i.e. cutting corners, compromising on quality, and extending time to get the maximum benefit of the situation without thinking about the project as a whole or the best value for money. Therefore, it is risking three out of six core objectives of SPPRA rules: fairness and transparency, quality, and completion of project in time and within budget.
I won’t blame the contracting party for this situation, which we usually do. The contracting party is a private entity involved in earning a profit, not the loss. Therefore, they will try their best to maximise benefit in given circumstances. However, if someone has to be blamed, it is the procuring body or the procurement rules that position a contracting party where they have minimal choice to provide the best value for money, thus creating an environment of disputes, conflicts, and litigation in projects.
We need to realise that the conventional procurement methods which we are using are decades-old. Most governments are already moved to collaborative procurement arrangements which enable them and other stakeholders to provide the best value for money. For example, Alliances are hailed as an approach in Australia to provide the best value for money; New Engineering Contracts in the United Kingdom and Hong Kong; and Integrated Project Delivery in the United States of America.
Therefore, it is time for the Government of Sindh and SPPRA to rethink and revise current SPPRA rules to incorporate collaborative procurement choices, keeping the ‘best value for money’ concept in mind. In this way, they may be able to achieve core objectives outlined in SPPRA rules.
Published in The Express Tribune, August 4th, 2021.
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