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What is the relevant legislation regulating the award of public contracts?
The main legislation that regulates and governs public procurement in Ghana is the Public Procurement Act2003 (Act No. 663) (the Act) as amended by the Public Procurement (Amendment) Act2016 (Act914) (the Amendment Act). The promulgation of the Act was an integral part of Ghana’s Public Financial Management Reforms and good governance initiative, which sought to instil propriety and accountability in public sector financial management and expenditure. The Act regulates the procurement of goods, works and services financed, in whole or in part, from public funds and the disposal of government stores. All government agencies, institutions and establishments in which the government has a majority interest are mandated to comply with theAct.
The application of the Act is, however, subject to two key exceptions. The first is the power vested in the minister of finance to direct the use of a different procurement procedure where the minister determines that it is in the ‘national interest to do so’. Where the minister makes such a determination, the procurement method shall be published in the Ghana Gazette. The second exception is in respect of the procurement of goods, works and services financed by loans taken or guaranteed by the state, or aid granted under an international agreement that prescribes the procurement procedures to be employed.
The Public Procurement Authority (the Authority) is mandated to ensure that public procurement is carried out in a fair, transparent and nondiscriminatory manner. The Authority is vested with administrative powers to ensure that procuring entities comply with the Act. The Authority is also mandated to:
- monitor the processes employed by procuring entities;
- review procurement decisions made by procuring entities;
- investigate procurement malpractices; and
- sanction offenders.
Procuring entities under the Act have responsibility for the procurement of goods, works and services for prescribed threshold values set out in the schedules to the Act.
Is there any sector-specific procurement legislation supplementing the general regime?
There is no sector-specific procurement legislation to supplement the Act. Note, however, that under the Act the minister of finance is vested with the power to employ a different procurement procedure other than those prescribed under the Act where it is in the national interest (ie, a scenario where the nation attaches high value, returns, benefit and consideration to the matter in question). The minister of finance is also required to define and publish in the Gazette the method of procurement to be used. With respect to public-private partnership (PPP) arrangements, the proposed PPP Bill has a specific procurement process for the selection of a private sector partner for a PPP project.
In which respect does the relevant legislation supplement the EU procurement directives or the GPA?
Ghana is not a member of the European Union or a signatory to the World Trade Organization’s Agreement on Government Procurement (GPA). Therefore, the EU directives and the GPA do not affect Ghana’s procurement regime. However, the key principles of transparency and nondiscrimination are reflected in the Act and the Amendment Act aims to ensure the Act is consistent with the United Nations Commission on International Trade Law’s model law on procurement.
Are there proposals to change the legislation?
There is no existing proposal to amend the Act as amended by the Amendment Act. The recent Amendment Act addresses shortcomings identified since the original Act was brought into operation in2004. The Amendment Act addresses the following issues:
- An increase in the threshold limits, to ease operations and empower procurement entities to make smaller value purchases without reference to approving authorities, with corresponding changes to thresholds of referrals to approving authorities. If approved, entity tender committees (ETCs) and entity heads, for example, could purchase more than twice as much than ids currently permitted. Certain categories of ETCs (including state-owned enterprises) would be able to go directly to the Central Tender Board for concurrent approval for limits above 1million cedis for goods and services and 2million cedis for works.
- The streamlining of the following areas in order to speed up procurement decision making and minimise delays or administrative costs:
- re-categorisation, based on the type of institution and spending levels;
- powers of delegation to key ETC members, to ensure a continuous implementation process;
- availability of requisite legal and procurement personnel of ETCs, especially outside the regional capitals;
- clarification and harmonisation of ETC functions;
- simplification of the concurrent approval process; and
- inclusion of thresholds for consultancy services.
To avoid subjecting procurement decisions of decentralised entities (ie, metropolitan, municipal and district assemblies) to centralised administrative review (the decision is left to be challenged through a court process) the following have been addressed under the AmendmentAct:
- the removal of the minister of finance’s discretion to exempt the application of the Act where it is in the national interest to do so;
- the introduction of provisions on the rejection of tenders, proposals and quotations;
- the introduction of provisions on the rejection of abnormally low submissions;
- the expansion of the process for public notice of a procurement contract award;
- the addressing of the issue of inducements from suppliers, contractors and consultants to deal with unfair competitive advantage;
- the provision of rules on disclosures of information to suppliers and contractors; and
- the introduction of provisions on competitive negotiation and framework agreements.
The Public Procurement Authority has commenced the process for the preparation of subsidiary legislation to implement, interpret and enforce the Public Procurement (Amendment) Act2016 (Act914) (the Amendment Act).
Applicability of procurement law
Which, or what kinds of, entities have been ruled not to constitute contracting authorities?
The Act, without limiting the generality of the scope of application, applies to the following entities:
- central management agencies;
- government ministries, departments and agencies;
- subverted agencies;
- government institutions;
- state-owned enterprises to the extent that they utilise public funds;
- public universities, public schools, colleges and hospitals;
- the Bank of Ghana and financial institutions such as public trusts, pension funds, insurance companies and building societies that are wholly owned by the state or in which the state has a majorityinterest;
- institutions established by the government for the general welfare of the public or community;
- statutory funds, commissions and other bodies established by the government for a special purpose; and
- phases of contract administration.
In addition, any other institution as far as it is engaged in the procurement of goods, works and services financed in whole or in part from public funds must comply with the Act. By implication, any institution that does not fall into any of the categories above, and whose procurement is not financed in whole or in part from public funds is not required to comply with the Act.
Are contracts under a certain value excluded from the scope of procurement law? What are these threshold values?
There are no contract values excluded from the application of the Act.
The Act applies to all goods, works and services financed in whole or in part from public funds and does not exclude contracts based on the value. It does, however, provide different threshold limits above which the procurement process must be carried out by a higher authority and approved by the appropriate entity tender committee. The Act also provides thresholds beyond which specific procurement methods must be used. The Amendment Act has amended these thresholds and the respective ETCs.
Amendment of concluded contracts
Does the legislation permit the amendment of a concluded contract without a new procurement procedure?
The amendment of a concluded contract does not require a new procedure. However, some changes, such as an increase in the value of the contract, will require approval. Where there will be an aggregate increase in the original value of a contract by more than10per cent, a procuring entity is mandated to inform the appropriate tender review boards of any proposed extension, modification or variation order, with reasons. In the case of contracts that are not subject to review by a tender review board, any proposed modification of a contract which will result in an increase in the contract price in excess of the procurement method threshold, or the threshold of the procuring entity, shall be effected only with the prior approval of the appropriate tender review board. The requirement for prior approvals does not apply in cases of ‘extreme urgency’. However, the Authority must subsequently approve any such emergency procurement.
Has there been any case law clarifying the application of the legislation in relation to amendments to concluded contracts?
We are not aware of any decided case law that clarifies how amendments to concluded contracts are to be carried out.
In which circumstances do privatisations require a procurement procedure?
Privatisation is currently regulated by the Divestiture of State Interests (Implementation) Law1993 (PNDCL326) and not the Act. Divestiture involves the disposal of government interests (ownership of shares, debentures, securities and any other property) held by the state. The Law establishes the Divestiture Implementation Committee (DIC), which is charged with the responsibility for overseeing all divestitures in Ghana. The DIC has a procedures manual that sets out the different procurement methods that may be used depending on the nature of thedivestiture.
In which circumstances does the setting up of a public-private partnership (PPP) require a procurement procedure?
PPPs in Ghana are currently regulated by the National Policy for PPPs in Ghana (the PPP Policy). Except for unsolicited bids, the selection of private sector parties in PPP transactions shall be carried out through competitive bidding methods. The PPP Policy, however, requires that the selection of a transaction adviser to assist and advise a contracting authority on the PPP project must comply with the procurement procedures under the Act. There are currently efforts being made to prepare a specific law to regulate PPPs in Ghana, including regulating the procurement process for a private partner.
Advertisement and selection
In which publications must regulated procurement contracts be advertised?
The Amendment Act provides that requests for tenders must be published in the Public Procurement Bulletin and on the Authority’s website. The invitation to tender or pre-qualify must also be published in at least one daily newspaper of national circulation. In addition, the procurement entity may also opt to publish the invitation in a newspaper of wide international circulation, in a relevant trade publication or technical or professional journal of wide international circulation.
Are there limitations on the ability of contracting authorities to set criteria or other conditions to assess whether an interested party is qualified to participate in a tender procedure?
The Act provides that the qualification of tenderers must be assessed based on procedures and criteria set out in the invitation document. The Act specifically prohibits the contracting authority from using any criteria not set out in the invitation document. The Amendment Act provides that the procurement entity may ask a supplier or contractor for clarification of its qualification information or its submission at any stage of the procurement proceeding. However, the Amendment Act expressly prohibits the procurement entity from permitting a change in qualification information that will make an unqualified supplier or contractor qualified or an unresponsive bid responsive.
Is it possible to limit the number of bidders that can participate in a tender procedure?
The Act provides for restricted tendering, single-source and request for quotation methods of procurement. These methods may only be used under specific conditions outlined under the Act and the Amendment Act, with the approval of the Authority.
A procurement entity may for economy and efficiency, and with the approval of the Authority, use restricted tendering where:
- goods, works or services are available only from a limited number of suppliers or contractors;
- the time and cost required to examine and evaluate a large number of tenders is disproportionate to the value of the goods, works or services to be procured.
The single-source procurement method may be used where:
- the goods, works or services are available only from one source;
- there is an urgent need for the goods, works or services;
- there is an urgent need due to a catastrophic event; or
- the procurement entity requires continuity or additional supply of the goods, or the performance of the works or service.
A procurement entity may request quotations for:
- goods or technical services that are readily available and are not specially produced or provided to the particular specifications of the procurement entity; and
- goods where there is an established market.
Where the request for quotations is used, the procurement entity must request quotations from at least three different supplier/contractorsources.
Regaining status following exclusion
How can a bidder that would have to be excluded from a tender procedure because of past irregularities regain the status of a suitable and reliable bidder? Is the concept of ‘self-cleaning’ an established and recognised way of regaining suitability and reliability?
The Act provides that the Authority will maintain a list of debarred firms but does not provide for modalities on how blacklisted firms may ‘self-clean’. The concept of self-cleaning does not seem to be recognised or established.
The procurement procedures
Does the relevant legislation specifically state or restate the fundamental principles for tender procedures: equal treatment, transparency and competition?
The memorandum to the Act restates these fundamental principles. The Act also provides that the Authority is vested with the power to ensure that, among other things, public procurement is carried out in a fair, transparent and nondiscriminatory manner.
Independence and impartiality
Does the relevant legislation or the case law require the contracting authority to be independent and impartial?
Even though there is no express provision in the Act requiring the impartiality of the contracting authority, the Act requires that bid processes must be fair, open and transparent. Additionally, the Authority has the power to reverse or annul procurement decisions that do not comply with the Act’s requirements for fairness, openness and transparency.
Conflicts of interest
How are conflicts of interest dealt with?
A procuring entity shall reject a bid if a bidder offers, gives or agrees to give, directly or indirectly, to ‘any current or former officer or employee’ of the procuring entity or other governmental authority a gratuity in any form, an offer of employment, or any service of value as an inducement to influence the procurement process. The Amendment Act also expressly provides that a procurement entity shall reject a tender proposal or offer if the supplier or contractor has an unfair competitive advantage or a conflict of interest.
Additionally, the Act requires all officials to comply with the constitutional requirement that enjoins public officers not to put themselves in a position where personal interest conflict, or is likely to conflict, with the performance of the functions of their office.
Bidder involvement in preparation
How is the involvement of a bidder in the preparation of a tender procedure dealt with?
The Act does not provide for a bidder’s involvement in the preparation of tender documents.
What is the prevailing type of procurement procedure used by contracting authorities?
The prevailing procurement procedure is the competitive tendering process (national or international). However, the Act provides for the use of less competitive procedures including restricted tendering procedures, quotations and sole source under specific circumstances, subject to the approval of the Authority.
Separate bids in one procedure
Can related bidders submit separate bids in one procurement procedure?
The Act does not allow a bidder to submit separate bids in one procurement procedure. However, where the bidder is a consortium, the constituent firms - except for the lead firm - can associate with other bidders in the same procurement procedure, if the specific request for tender or proposal does not prohibit such multiple associations.
In addition, related bidders may be unable to submit separate bids in one procurement procedure as this may be interpreted as collusion, which may lead to disqualification of the related bidders. The nature of the relationship between the bidders would, however, have to be examined on a case-by-case basis.
Negotiations with bidders
Is the use of procedures involving negotiations with bidders subject to any special conditions?
There is no provision in the Act for a competitive dialogue procedure and it has not been used in practice in relation to procurement of goods, works and services financed from public funds. However, the Amendment Act introduces competitive negotiations by providing that a procurement entity may engage in procurement by requesting quotations by competitive negotiations. The detailed procedure is to be provided for by regulations.
If the legislation provides for more than one procedure that permits negotiations with bidders, which one is used more regularly in practice and why?
What are the requirements for the conclusion of a framework agreement?
The Amendment Act introduces framework agreements as a cost-saving government policy. The Amendment Act provides that a procurement entity may engage in a framework agreement for a procurement contract where the Board of the Authority and the Minister of Finance introduce a framework contracting agreement and in accordance with Regulations to be passed. The Regulations are yet to be enacted to provide the detailed rules for the conclusion of a frameworkagreement.
May a framework agreement with several suppliers be concluded?
See question23. The Amendment Act allows a framework agreement with several suppliers to be concluded.
Changing members of a bidding consortium
Under which conditions may the members of a bidding consortium be changed in the course of a procurement procedure?
There are no specific provisions in the Act in this regard. In practice, once a bid is submitted and submission of bids is closed, any change of members of a consortium may be effected only with the consent of the procurement entity.
Participation of small and medium-sized enterprises
Are there specific mechanisms to further the participation of small and medium-sized enterprises in the procurement procedure? Are there any rules on the division of a contract into lots? Are there rules or is there case law limiting the number of lots single bidders can be awarded?
The Act does not provide direct mechanisms to further the participation of small and medium-sized enterprises and there is currently no obligation to partition awards into lots. However, the law seeks to increase the competitiveness of domestic businesses by:
- the application of a margin of preference; and
- the restriction to domestic suppliers and contractors for the procurement of goods, works and technical services where the value of the procurement does not exceed the thresholds that are now to be set by the Regulations mentioned in question 23.
What are the requirements for the admissibility of variant bids?
Variant or alternative bids are admissible only where the tender document provides that such bids will be admissible. In practice, an alternative bid should be submitted together with a conforming bid.
Must a contracting authority take variant bids into account?
The contracting authority is obliged to take variant bids into account when it is indicated in the tender documents that variant bids will beaccepted.
Changes to tender specifications
What are the consequences if bidders change the tender specifications or submit their own standard terms of business?
A bid is required to respond to the criteria prescribed in the set of bid documents. A bid that does not conform to the requirements prescribed in the bid documents shall be judged to be nonresponsive and shall be rejected. Generally, a tender may be declared nonresponsive if it contains deviations that materially alter or depart from characteristics, terms, conditions and other requirements set out in the invitation documents, or it contains errors or oversights that are incapable of being corrected without altering the substance of the tender.
What are the award criteria provided for in the relevant legislation?
The Act provides that the contracting authority shall accept the bid with the lowest evaluated price. The lowest evaluated tender is ascertained on the basis of objective and quantifiable criteria that are given relative weight in the evaluation procedure or expressed in monetary terms.
Abnormally low bids
What constitutes an ‘abnormally low’ bid?
There are currently no provisions for abnormally low bids in the Act. The Act, however, requires the procurement entity to award the contract to the lowest evaluated bidder, which is determined on the basis of the evaluation method adopted by the procurement entity. In practice, an abnormally low bid often relates to a bid price based on rates significantly below the known prevailing rates so as to entitle the procuring entity to reasonably assume that a successful bidder cannot meet the procurement requirements at those rates if the contract is awarded. In practice, procuring entities compile price indices periodically and may determine the ‘abnormality’ of the price on the basis of existing price indices. The Amendment Act, however, provides that a procurement entity may reject a submission if the procurement entity has determined that the tenderer’s price combined with other considerations is abnormally low in relation to the subject of the procurement and the ability of the supplier or contractor to perform the procurement contract if the procurement entity has:
- requested the details of the submission from the supplier or contractor in writing; and
- taken account of any information provided by the supplier or contractor but maintains the view that the submission is abnormally low for the performance of the procurement contract.
What is the required process for dealing with abnormally low bids?
There are currently no prescriptions in the law for dealing with abnormally low bids. See question33on the proposal introduced in the Amendment Act. In addition to the above, the Amendment Act provides that the decision of the procurement entity to reject a submission, the reasons for the decision, and communication between the procurement entity and the supplier or contractor, must be included in the procurement proceedings and quickly communicated to the supplier or contractor concerned.
Which authorities may rule on review applications? Is it possible to appeal against review decisions and, if so, how?
A complaint shall in the first instance be submitted to the head of the procurement entity within21days of the complainant becoming aware of the circumstances giving rise to the complaint. The procurement entity is required to make a decision within21days of the submission of the complaint.
The complainant may make an application to the Authority to review the decision of the procuring entity or make an application directly to the Authority if the procuring entity has not made a decision within the 21-day period. The decision of the Authority is subject to review by a court of competent jurisdiction. The Amendment Act exempts decisions of decentralised departments or agencies from this further review by the Authority. The Constitution and the Local Governance Act 2016 (Act 936) require that local government assemblies (metropolitan, municipal and district assemblies) are the highest decision-making body at the local government level. In line with that, the Amendment Act removes any power of administrative review of procurement decisions of decentralised departments and agencies and provides that such decisions can only be challenged in a court of law.
If more than one authority may rule on a review application, do these authorities have the power to grant different remedies?
The Authority and the courts have the power to grant remedies following an application for review. The remedies granted by the court may differ from that of the Authority where an application is made to the court following a decision by the Authority.
Timeframe and admissibility requirements
How long do administrative or judicial proceedings for the review of procurement decisions generally take?
An initial complaint to a head of a procuring entity and any subsequent review by the Authority is to be concluded within21days in each instance. The duration of an appeal before a court of competent jurisdiction will depend on the complexity of the case and the applicable procedural rules of the civil court.
What are the admissibility requirements?
Any bidder that alleges to have incurred a loss, or asserts the likelihood of an impending loss, due to a breach of a duty imposed on the procurement entity, may seek a review.
The Act, however, states that the selection of a method of procurement and the choice of a selection procedure shall not be subject to review. The Amendment Act also seeks to restrict this prohibition by providing that the selection of a method of procurement and the choice of selection procedure can be challenged where inappropriate procedures have been applied.
What are the time limits in which applications for review of a procurement decision must be made?
Does an application for review have an automatic suspensive effect blocking the continuation of the procurement procedure or the conclusion of the contract?
The Act provides that where review proceedings are instituted, procurement proceedings may be suspended for a maximum of30working days. The Amendment Act empowers the Authority to order suspension of a procurement contract that has not entered into force, or order the suspension of a procurement contract that has entered into force, as long as the suspension is necessary to protect the interest of the applicant, unless the Authority decides that urgent public interest considerations require the procurement proceedings or a contract to proceed. However, the procurement process may only be suspended in the following circumstances:
- if the complaint is not frivolous;
- where the bidder demonstrates in the complaint that it will suffer irreparable damage if the process is not suspended;
- where the complaint has a high likelihood of success; and
- where the hearing of the complaint will not cause inappropriate harm to any procurement entity or other bidders.
Approximately what percentage of applications for the lifting of an automatic suspension are successful in a typical year?
Usually, the Authority suspends the procurement process for a maximum period of30working days. The Authority in most cases will make the final decision prior to the expiry of the30working days, although the Authority may extend the period if necessary.
Notification of unsuccessful bidders
Must unsuccessful bidders be notified before the contract with the successful bidder is concluded and, if so, when?
A procurement entity is required to give notice in writing to all unsuccessful bidders on the award of a procurement contract to a successful bidder. The notice shall be given after the commencement of the procurement contract and shall specify the name and address of the successful bidder and the contract price.
Access to procurement file
Is access to the procurement file granted to an applicant?
Subject to the parts of the records that the Act restricts (and which may not be disclosed), records of a procurement proceeding may be made available to an applicant on request.
Is it customary for disadvantaged bidders to file review applications?
Prior to the enactment of the Act, disadvantaged bidders did not file review applications for fear of being victimised by procuring entities. However, this has changed and recent developments indicate that there has been an increase in the number of review applications to theAuthority.
Violations of procurement law
If a violation of procurement law is established in review proceedings, can disadvantaged bidders claim damages?
The Act empowers the Authority to annul the procurement proceeding or cancel the procurement contract if a violation of the Act is established. In addition, the Act provides that the Authority can order the payment of compensation for a reasonable cost incurred by the bidder who submitted the complaint, in connection with the procurement proceedings as result of an illegal decision of, or procedure followed by, the procurement entity. The courts generally have power to award damages to any bidder who suffers damage owing to the breach of duty imposed either under law or contract and, therefore, can award damages to a disadvantaged bidder. The requirement for such a claim would be the general requirements for claims in a court of law.
May a concluded contract be cancelled or terminated following a review application of an unsuccessful bidder if the procurement procedure that led to its conclusion violated procurement law?
When a contract is awarded in violation of the procurement law, the Authority is empowered to annul the proceedings and cancel the procurement contract.
Is legal protection available to parties interested in the contract in case of an award without any procurement procedure?
No, legal protection is not available in respect of de facto awards of contract. The parties can apply to the court or the Authority for investigation into the award of the contract.
What are the typical costs of making an application for the review of a procurement decision?
The cost and duration of an application for review will depend on the complexity of the case and the applicable procedural rules of the civilcourt.