Bangladesh

Removing the ±10% Cap on Open Tendering for Works

• Issue: The Open Tendering Method (OTM) for works includes a price cap of ±10% above or below the estimated cost. This policy, intended to prevent unrealistic bidding, has instead led to market distortions by discouraging competition, reducing bidder participation, and increasing the incidence of single bids.
• Recommendations:
  • Remove the ±10% cap to encourage competitive bidding.
  • Introduce alternative measures to handle abnormally low bids, such as strict qualification criteria and post-qualification assessments.

Reforming the Limited Tendering Method (LTM)

• Issue: The Limited Tendering Method (LTM), designed to support small and new bidders, includes a ±5% price cap and uses a lottery system to determine the winner in case of tied bids. This has resulted in failed constructions, delays, and cost overruns, while large firms continue to dominate the process.
• Recommendations:
  • Remove the ±5% price cap and lottery system from LTM.
  • Introduce a preferential procurement policy for SMEs, women-led enterprises, and startups.
  • Create a supplier/contractor database to track the performance of specialized groups.

Promoting Sustainable Public Procurement (SPP)

• Issue: Bangladesh has national policies on sustainable development, but sustainability criteria are not yet incorporated into public procurement legislation and practices.
• Recommendations:
  • Develop a national SPP strategy with a clear implementation roadmap.
  • Introduce lifecycle costing methodologies and preferential criteria for energy-efficient, low-carbon, and sustainable goods and works.

Strengthening the Central Procurement Technical Unit (CPTU)

• Issue: CPTU, the national procurement regulatory body, lacks full autonomy and adequate staffing to effectively regulate and monitor procurement across more than 1,300 public organizations.
• Recommendations:
  • Convert CPTU into the Bangladesh Public Procurement Authority (BPPA) with greater independence.
  • Strengthen CPTU/BPPA’s in-house technical capacity and reduce dependency on external consultants.

Increasing Procurement Approval Thresholds

• Issue: Approval of high-value procurement contracts often requires higher-level government committees, leading to delays of 45–60 days before contract signing.
• Recommendations:
  • Increase procurement approval thresholds at the agency and ministry level, with enhanced accountability mechanisms.
  • Expand the use of framework agreements for frequently procured items like medicines, vaccines, and office supplies.

Professionalization of Procurement Personnel

• Issue: There is no structured certification program for procurement professionals, leading to skill gaps and inconsistent procurement execution.
• Recommendations:
  • Implement a four-tier procurement certification program based on competency levels.
  • Develop specialized training modules for procurement officers, engineers, and auditors.

Enhancing Contract Management and Performance Monitoring

• Issue: 70% of contracts are not completed on time, leading to delays, cost overruns, and compromised quality. Weak contract monitoring systems further exacerbate these challenges.
• Recommendations:
  • Fully implement the electronic contract management system (e-CMS) within the e-GP system.
  • Conduct regular contract audits and introduce performance-based contracting.
  • Scale up citizen monitoring of contract implementation.

Strengthening Procurement Planning

• Issue: Many procurement processes are launched without strategic planning, leading to higher costs, rebidding, and lower procurement performance.
• Recommendations:
  • Develop a mandatory procurement planning framework with spend and market analysis.
  • Require procuring entities to align procurement plans with budget allocations.

Increasing Supplier Participation and Market Competition

• Issue: Supplier participation in public procurement is low, with only 5% of registered businesses actively bidding in tenders.
• Recommendations:
  • Conduct sectoral market studies to identify barriers to competition.
  • Simplify supplier registration procedures and provide incentives for SMEs.
  • Establish a mentorship program for new and small bidders.

Introducing an Independent Procurement Appeals Mechanism

• Issue: The current procurement appeals process lacks independence, as appeals are reviewed by the contracting authority itself, discouraging suppliers from challenging unfair decisions.
• Recommendations:
  • Establish an independent procurement review body to handle appeals.
  • Remove financial barriers, such as appeal fees, that prevent suppliers from filing complaints.

Strengthening Procurement Integrity Monitoring

• Issue: There is inadequate monitoring of fraud and corruption in procurement, and procurement-specific corruption cases are not separately tracked.
• Recommendations:
  • Introduce an integrity module in the e-GP system to detect red flags during bid evaluation.
  • Ensure the Anti-Corruption Commission (ACC) tracks procurement-related corruption cases separately.

Increasing Civil Society and Public Engagement in Procurement Oversight

• Issue: Civil society organizations (CSOs) and the public have no formal role in monitoring public procurement.
• Recommendations:
  • Establish a formal mechanism for CSOs to monitor procurement processes.
  • Develop a public feedback system for reporting procurement irregularities.