Transparent and Accountable Procurement System for Local Authorities in Sri Lanka (LK0010)

Local Authorities are the closest governance entity to citizens providing essential services from “Womb to tomb”. The services provided by Local Authorities are financed by transfers from the Central and/or Provincial Governments or from revenue generated by the Local Authorities. The procurement procedure in the Local Authorities is generally guided by the system that is universal to all state entities. Nevertheless the difference is that Local Authorities are legally an incorporated body that has a legal identity and status of an independent unit, hence the procurement procedures can only be supervised and guided not mandated and enforced. Local Authorities are responsible for most of the medium to small scale infrastructure development activities that are taking place at village and city levels including improving thoroughfares, markets, crematoriums, parks etc. In addition, there are many services that are delivered to citizens including waste management, libraries, free clinics, recreation facilities, which are procured by the councils independently. In terms of procurement, currently there are two systems that are being followed i.e. direct award and tender process to procure goods and services and both these methods are done with the approval of the councils. As per the 19th amendment to the Constitution, chapter XIXB a “Procurement Commission” was established and accordingly per clause number 156 (H) the Commission is vested with the powers to formulate fair, equitable, transparent, competitive and cost effective procedures and guidelines, for the procurement of goods and services, works, consultancy services and information systems by government institutions and cause such guidelines to be published in the Gazette and within three months of such publication, to be placed before Parliament.” Therefore, under the purview of the “Procurement Commission” it is essential to develop guidelines for Local Authorities to ensure that a transparent and accountable procurement system is implemented. In addition, this guideline needs to provide space for suitable members including representatives from Civil Society to represent in procurement committees established in the councils to minimize malpractices and to be accountable for total procurement processors. Issues to be Addressed: Local authorities are responsible for procurement of goods and services that are essential to provide optimum services to their constituencies. Often it is noted that public funds are wasted due to malpractices and corruption. Main Objective: To establish a transparent and accountable procurement system for local authorities.Transparent and Accountable Procurement System for Local Authorities in Sri Lanka
Lead Agency Local Government Authorities
Other Actors Government Ministry of Provincial Councils and Local Government & Procurement Commission
Civil Society, Private Sector Federation of Sri Lankan Local Govt. Authorities
Issues to be Addressed Local authorities are responsible for procurement of goods and services that are essential to provide optimum services to their constituencies. Often it is noted that public funds are wasted due to malpractices and corruption.
Main Objective To establish a transparent and accountable procurement system for local authorities
OGP Challenge Improving public integrity. More effectively managing public resources.
OGP Principles Transparency Accountability Public Participation
Milestones to Fulfil the Commitment New or ongoing: Start Date: End Date:
1. Guide Lines prepared by FSLGA for Municipalities, Urban Councils and Pradeshiya Sabhas are reviewed by a committee consisting of Procurement Commission, FSLGA, and Ministry of Local Government and representatives from Civil Society New August 2016
2. Incorporate required amendments to the reviewed Procurement Guidelines New Nov 2016 Dec 2016
3. Approval obtained from “Procurement Commission and Ministry of Local Government on the final guidelines New Jan 2017 Sep. 2016
4. Gazetting out the relevant procurement guidelines and approval from Parliament for the same. New Jan 2017 March 2017
5. Government to publicise the procurement guides through mass & social media and make copies of the same available for the public at the local authorities/councils. New Jan 2017
6. Printing and distribution to the councils New Feb 2017 March 2017
7. Creating awareness among all Local Authorities, Commissioners offices of Local Govt. and Assistant Commissioners of Local Govt. (In collaboration with Sri Lanka Institute for Local Governance) New April 2017 Nov. 2017
8. Publicly disseminating the guidelines through websites and through display boards in all Local Authorities New April 2017 Nov. 2017

10. Procurement System for Local Authorities

Commitment Text:

Transparent and Accountable Procurement System for Local Authorities in Sri Lanka (A)

[…] The services provided by Local Authorities are financed by transfers from the Central and/or Provincial Governments or from revenue generated by the Local Authorities. The procurement procedure in the Local Authorities is generally guided by the system that is universal to all state entities. Nevertheless, the difference is that Local Authorities are legally an incorporated body that has a legal identity and status of an independent unit, hence the procurement procedures can only be supervised and guided not mandated and enforced.

As per the 19^th amendment to the Constitution, chapter XIXB a “Procurement Commission” was established and according to clause number 156 (H) the Commission is vested with the powers to formulate fair, equitable, transparent, competitive and cost effective procedures and guidelines, for the procurement of goods and services, works, consultancy services and information systems by government institutions and cause such guidelines to be published in the Gazette and within three months of such publication, to be placed before Parliament.

Main Objective:

Establish a transparent and accountable procurement system for local authorities (prepare and publicise procurement guidelines).

Milestones:

• 1 Guidelines prepared by FSLGA for Municipalities, Urban Councils and Pradeshiya Sabhas are reviewed by a committee consisting of Procurement Commission, FSLGA, and Ministry of Local Government and representatives from Civil Society
• 2 Incorporate required amendments to the reviewed Procurement Guidelines
• 3 Approval obtained from “Procurement Commission and Ministry of Local Government on the final guidelines
• 4 Gazetting out the relevant procurement guidelines and approval from Parliament for the same
• 5 Government to publicize the procurement guides through mass & social media and make copies of the same available for the public at the local authorities/councils
• 6 Printing and distribution to the councils
• 7 Creating awareness among all Local Authorities, Commissioners offices of Local Govt. and Assistant Commissioners of Local Govt. (In collaboration with Sri Lanka Institute for Local Governance)
• 8 Publicly disseminating the guidelines through websites and through display boards in all Local Authorities

Responsible institutions: Ministry of Provincial Councils and Local Government (MPCLG) & Procurement Commission

Supporting institutions: Local Government Authorities, Federation of Sri Lankan Local Government Authorities (FSLGA)

Start date: August 2016....... End date: June 2018

Editorial Note: The text of the commitment was abridged for formatting reasons. For full text of the commitment, see the Sri Lanka National Action Plan 2016–2018 at http://bit.ly/2wv3jXR. [131]

Commitment Aim:

This commitment aimed to introduce a transparent procurement system for local authorities, thereby minimising malpractice and corruption. In particular, the commitment focused on preparing and publishing guidelines to outline a uniform procurement system for local authorities.

Status

Midterm: Limited

This commitment achieved limited completion by the midterm. In September 2016, the MPCLG convened a 12-member multistakeholder committee to review existing documents and protocol pertaining to procurement (Milestone 10.1). The committee comprised representatives from the MPCLG, provincial local government commissioners, local authorities, and civil society organisations, including the Federation of Sri Lankan Local Government Authorities (FSLGA).

In the drafting process, the Procurement Commission expressed that they were keen to consolidate procurement guidelines for local authorities with those at the national level. [132] In reviewing the draft guidelines, the committee discovered that there were discrepancies in procurement processes between the two levels, and agreed to introduce unique provisions for local government under the prospective national guidelines. [133] However, as the guidelines were not formally introduced, the commitment was unable to progress further by the midterm (Milestones 10.2–10.8).

End of term: Limited

The commitment remained of limited completion at the end of term.

Milestones 10.1–10.2: According to a representative of FSLGA, the MPCLG submitted draft guidelines to the Procurement Commission, who reviewed and approved them with minor changes in December 2017. [134] The Procurement Commission issued separate national procurement guidelines in May 2018. These have been published on the Procurement Commission’s website and are available in all three languages. [135]

Milestones 10.3–10.8: The Parliament and the Procurement Commission had not gazetted, approved, and published guidelines for local authorities by the end of term. According to the FSLGA, it is the primary responsibility of the Procurement Commission to submit the guidelines for approval by Parliament. Thereafter, having received parliamentary approval, the Procurement Commission must formally gazette the guidelines. [136] As this process has not yet taken place, the commitment did not progress any further.

Did It Open Government?

Access to Information: Did Not Change

Civic Participation: Marginal

Limited implementation of this commitment marginally contributed to opening government. At the outset of the action plan, the procurement of goods and services by local authorities across Sri Lanka took place in an ad-hoc and unregulated manner. In the absence of clear guidelines to direct the process, the potential for malpractice and corruption in public procurement was high. [137]

Through this commitment, the MPCLG was able to proactively convene a diverse set of key stakeholders, including civil society, to deliberate and develop the procurement guidelines. Actors outside the government are rarely able to participate meaningfully in developing national policy and thus, this represents a noteworthy achievement in civic participation in decision-making processes. However, this does not relate directly to the main objective of the commitment—i.e., the relevant stakeholders were unable to finalise and publish the procurement guidelines for local authorities, so there was no effect on opening government in terms of improved access to information.

According to the FSLGA, the inclusive process of developing the procurement guidelines fostered limited levels of awareness among a wide range of key stakeholders in government and civil society. [138] In February 2018, alongside efforts to introduce procurement guidelines, FSLGA independently prepared guidelines on asset management, a subset of procurement. FSLGA noted that provincial commissioners of local government were involved in raising awareness of these guidelines among all 341 local authorities. [139]

Carried Forward?

Sri Lanka’s second action plan was not released at the time of this report.

In the 2016–2017 IRM midterm progress report, the IRM researcher recommended that stakeholders maintain positive momentum toward introducing procurement guidelines. Apart from finalising the guidelines, successful completion would entail ensuring awareness, publicity, and close monitoring of implementation (see Commitment 11). The IRM researcher reaffirms the pertinence of these recommendations at the end of term.

[131] In the action plan, milestones under this commitment are included as part of a single commitment that broadly seeks to establish a transparent and accountable procurement system for local authorities. However, for purposes of clarity, this report separates the evaluation of milestones that pertain to the preparation and publication of procurement guidelines (Commitment 10) and the evaluation of milestones that pertain to monitoring of implementation and grievance redress (see Commitment 11).

[132] Hemanthi Goonasekera (Federation of Sri Lankan Local Government Authorities), interview by IRM researcher, 22 September 2017.

[133] S. Boralessa, interview by IRM researcher, 27 September 2017; Goonasekera, interview.

[134] Ms. Hemanthi Goonasekera (Federation of Sri Lankan Local Government Authorities), interview by IRM researcher, 17 September 2018.

[135] National Procurement Guidelines – 2018, Gazette No. 2070/15 (9 May 2018) https://bit.ly/2xTxxnx.

[136] Goonasekera, interview.

[137] Goonasekera, interview, 22 September 2017.

[138] Goonasekera, interview, 17 September 2018.

[139] Id.