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Provinces and Districts Told to Establish Procurement Committees

All Provinces and Districts without Committees of the National Procurement Commission (NPC) are warned not to do procurement of goods and services on behalf of the Government as they do not have legal standing under the National Procurement Act 2018 (NPA).

Chief executive officer of the NPC Mr Simon Bole in a statement said this following a Circular Instruction issued by the Commission to all Provincial Administrators, District CEOs and District Administrators last week.

Mr Bole said National Procurement Act 2018 (NPA) has commenced operations effective 1st April 2019 and under section 77 of the NPA, it gives authority to the National Procurement Commission Board that it may delegate, on such terms and conditions as it thinks fit, its procurement function at a provincial, district and local level.

He said all Provincial Supply and Tenders Board (PSTB) & District Supply and Tenders Board (DSTB) ceased effective 1st April 2019.

He said NPC has staffs and interim board in operation effective 6th of May 2020.

“Therefore, all DSTB & PSTB ceased to exist and Transition Provisions Section 81 of NPA ceased effective 6th of May 2020,” he said.

“All and any PSTB, DSTB or procurement committee meetings without the NPC board approval or delegation of board’s powers will be illegal and penalties provisions in NPA, 2018 section 78 after 6th May 2020 and other provisions will apply,” Mr Bole said.

“Provinces and Districts can no longer use the PSTB and DSTB to carry out procurement activities in the provinces and districts.

“Under the procurement reform and NPA, they do not exist after 6 May 2020 and any PSTB and DSTB meetings and activities is illegal and the penalty provision of NPA will apply which offences under the act are strictly liable,” Mr Bole said.

He said penalty for offences committed by individual patches at penalty of fine not exceeding K2 million and a prison term not exceeding 15 years.

Other than an individual, a fine not exceeding K50 million is applied.

Mr Bole said a list of all provinces and districts that have the NPC committees established were published in last week Wednesday 22nd July Circular issued by the Commission on the newspapers.

“We have around 26 NPC Committees which includes seven provinces and 19 districts already established and approved by the NPC Board.

“Number of District Committees sworn in already are 5, and they are Namatanai District Committee, Finzhapen District Committee, Lufa District Committee, Daulo District Committee and Obura Wonenara District Committees, these procurement committees are legally established, therefore may procure for contracts under their K2. 5m threshold.

“Others who already have their committee established and approved by the NPC Board, we encourage you to communicate with the NPC and ensure your NPC Committee members are sworn in.

“Those that have yet to establish your committee, we urge that you immediately contact NPC to facilitate the establishment of the Committees,” Mr Bole said.

He said without establishing the committee, provinces and districts can be held liable for deliberately delaying procurement activities in the districts and provinces.

Mr Simon Bole further added that district committee has a threshold limit of K2.5 million and provinces has a threshold limit of K5 million to do procurement.

He said amount greater than the allowable threshold limit are to be sent to the NPC to do procurement on behalf of the districts and provinces.

He said all Provincial and District Procurement Committees should not award any contracts to Foreign owned companies as per requirement to Section 48 of NPA. All District and Provinces and other government agencies threshold less than K10m are restricted to 100% Nationally owned companies.

This restriction also relates to government departments heads awarding minor contracts within their K500 000 threshold limits of Section 26 of NPA.

“All government agencies and government departments are to strictly award minor contracts value less than K500, 000 to national companies only, no foreigners should be allocated/awarded minor contracts values less than K500, 000,” Mr Bole said.

He encouraged public servants to report to NPC on information regarding their department heads awarding contracts value less than K500 000 to foreigners to email address

“Let’s work together to take back PNG by empowering PNG SME,” he said.

Mr Bole also encourage districts and provinces to allocate a procurement officer in their respective districts and provinces and an office space for them to operate.

Credit: Statement from the National Procurement Commission.

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