Procurement Management Information System (PMIS) for Improving Public Procurements in Nepal

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.

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

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.

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>

Procurement Management Information System (PMIS) for Improving Public Procurements in Nepal

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