- 10 Marks
Question
A newly appointed Chief Executive Officer (CEO) of a large Government Teaching Hospital has just resumed work. The Hospital is financed by 40% Internally Generated Funds and 60% subventions. At his first meeting with the Management Committee of the Hospital, the CEO briefed the Committee about his policies and strategies to improve efficiency in the Hospital’s operations. He identified the use of the Public Procurement Procedures as the major obstacle of the Hospital in achieving its objectives. He therefore suggested the use of established commercial procurement practices because a consultant advised him that it is very possible and permissible under the Public Procurement Act 2016 (Amendment) Act 914. He added that the head of an entity has the responsibility to decide whether to use public procurement rules or otherwise.
Required:
i) Explain to the Chief Executive Officer, the conditions under which the Public Procurement Act 2016 (Amendment) Act 914 permits the use of established commercial practices.
(3 marks)
ii) Describe the approval procedure involved prior to the use of established commercial practices of procurement.
(2 marks)
iii) In your opinion, would the Hospital meet the conditions for using the established commercial practices of procurement? Explain.
(2 marks)
iv) Explain THREE (3) functions of the Head of Procurement Entity under the Public Procurement Act 2016 (Amendment) Act 914.
(3 marks)
Answer
i) Conditions under which the Public Procurement Act permits the use of established commercial practices
The Public Procurement Act 2016 (Amendment) Act 914 permits the use of established commercial practices under the following conditions:
- The entity must be legally and financially autonomous and operate under commercial law.
- It must be beyond contention that public procurement practices are not suitable, given the strategic nature of the procurement.
- The proposed procurement method must ensure value for money, provide competition, and maintain transparency to the extent possible.
ii) Approval procedure for using established commercial practices
- To apply commercial procurement practices, the entity must seek approval from the Governing Board of the Public Procurement Authority.
- Once approval is granted, it must be published in a gazette to make it official.
iii) Suitability of the Hospital for using commercial practices
- The hospital is not legally and financially autonomous as it operates under the Ministry of Health and Ghana Health Services. Therefore, it does not qualify to apply for approval to use commercial procurement practices.
- Given the hospital’s structure and the need for transparency in public procurement, the use of established commercial practices is not suitable. The hospital should focus on improving the efficiency of public procurement procedures instead.
iv) Functions of the Head of Procurement Entity under the Public Procurement Act 2016 (Amendment) Act 914
- Ensure compliance with the Public Procurement Act and regulations, even when concurrent approval from a tender review committee is obtained.
- Establish a procurement unit within the entity, staffed with qualified personnel.
- Empanel competent and qualified evaluation panels.
- Ensure that procurement procedures are followed, including due process and reporting requirements.
- Facilitate contract administration and ensure compliance with contract reporting requirements.
- Tags: Act 914, Commercial Practices, Public Procurement, Public Sector Accounting
- Level: Level 2
- Topic: Public Procurement
- Series: MAY 2020
- Uploader: Theophilus