Public Procurement Reform in Bangladesh

The Government of Bangladesh, as part of strengthening overall sectoral governance, embarked upon a comprehensive effort to improve performance of public procurement.

In order to achieve its aim and objective, a permanent unit, named Central Procurement Technical Unit (CPTU) was established in 2002 as implementing unit in the field of procurement reform and reform implementation monitoring. Reform process was carried out with ultimate outcomes of formulation and issuance of a unified procurement processing system (Public Procurement Regulations 2003), Implementation Procedures for PPR 2003, Public Procurement Processing and Approval Procedures (PPPA), Revised Delegation of Financial Powers (DOFP) and several Standard Tender Documents (STD's)/Standard Request for Proposal Document for the procurement of Goods, Works and Services.

1. 2006, the Public Procurement Act (PPA 2006) was passed by the Parliament and in 2008, a new set of Public Procurement Rules (PPR 2008) was issued. The PPA 2006 and PPR 2008 were made effective with effect from 31 January 2008.

Country Procurement Assessment Report (CPAR) and the Public Procurement Reform Project (PPRP)

The slow procurement performance under different projects led to the Country Procurement Assessment of prevailing public procurement policy, framework, institutions and staff skills in 2001. The Country Procurement Assessment Report (CPAR) which was prepared by World Bank and ADB, in agreement with the Government of Bangladesh, identified many deficiencies, including the following major deficiencies, in the procurement system of the Government of Bangladesh:

• • • Absence of sound legal framework governing public sector procurement
    • Complex bureaucratic procedure causing delay
    • Absence of planning
    • Multiple layers in the approval and review process
    • Lack of adequate professional competence of staff to manage public procurement
    • Generally poor- quality bidding documents and bid evaluation
    • Ineffective administration of contracts
    • Absence of adequate mechanism for ensuring transparency and accountability.

With the above backdrop, the need for improving governance in the public procurement management area was felt. The first "Public Procurement Reform Project" with IDA assistance approved on 14 February 2002 clearly defined its implementation objectives as to 'contribute to improved performance in public procurement through introduction of measures to make the public procurement system compliant with internationally agreed norms for efficiency, transparency and accountability with the increase of procurement capacity through training and creation of a pool of national procurement professionals.

Under the PPRP (2002/03 to 2006/07) government made considerable improvements by completing following major policy reform actions;

• • • • Issued Public Procurement Regulations 2003 (PPR) (remained in force up to 30 January 2008) with the implementation procedures, procurement processing and implementation procedures and in July 2006 passed a procurement Act in the Parliament. The Act and the regulations contain most features of the international good public procurement practices.
      • A specialized unit on public procurement practices implementation, the former Central Procurement Technical Unit (CPTU), was established to implement, manage and support the recommended procurement reforms;
      • The former CPTU established a website (www.cptu.gov.bd) publishing Invitation to Tenders, RFPs, RFQ, contract awards on procurement for public access,
        • Developed a centralized Procurement Management Information System (PROMIS),
      • Developed a critical mass of 25 national trainers and provided training to over 1800 staff of 260 organizations up to March 2007.
      • A comprehensive set of Standard Tendering Documents were developed complying the Public Procurement Regulations 2003 for use by all government funded agencies;
      • Revised the delegation of financial power
      • Public Procurement Act was ratified by the parliament in 2006;
      • A new set of public procurement rules and supporting procedural guides were prepared;
• Subsequently the Public Procurement Regulations 2003 was replaced by Public Procurement Rules, 2008, framed under Public Procurement Act, 2006.

A number of changes to improve the process have been included in the Public Procurement Rules 2008:

• • • • Provision of Framework Contracts
      • Provision of Concession Contracts
      • Use of Request for Quotation Method for the procurement of divisible commodities in bulk
      • Special provision to meet urgent national needs

Public Procurement Reform Project II (PPRP-II)

To sustain and strengthen the public procurement reform, a technical assistance project titled 'Public Procurement Reform Project II (PPRP-II)' was approved by the government in June 2007. The project having extension twice was implemented by the former CPTU of IMED. In implementing those initiatives and addressing the issues PPRP-II had a comprehensive set of four (4) major components:

• • • Component 1: Furthering Policy Reform and Institutionalizing Capacity Development
    • Component 2: Strengthening Procurement Management at Sectoral Level & CPTU/IMED
    • Component 3: Introducing e-Government Procurement (e-GP)
    • Component 4: Communication, Behavioral Change, and Social Accountability

The PPRP-II ended on 30 June 2017 successfully. According to World Bank Final Review Mission, the achievement of project development progress was Satisfactory. At the end of the project all five PDO indicators met the project-end target with four exceeding the targets and contributed to a systemic change in the public procurement environment in Bangladesh in a sustainable manner.

Digitizing Implementation Monitoring and Public Procurement Project (DIMAPPP)

On 29 August 2017, at 03:00 pm a Financing Agreement of US$ 55 million was signed between the Government of Bangladesh and the International Development Association (IDA) of the World Bank Group at the NEC-II Conference Room of Economic Relations Division (ERD) to implement the five-year (July 2017-June 2022) "Digitizing Implementation Monitoring and Public Procurement Project (DIMAPPP)".

Kazi Shofiqul Azam, Secretary, ERD and Mr. Qimiao Fan, Country Director of the World Bank, signed the Agreement on behalf of their respective sides. Senior officials of the Government and the World Bank were present at the ceremony. The project was implemented during July 2017-June 2022 period by former Central Procurement Technical Unit (CPTU) of Implementation Monitoring and Evaluation Division (IMED) under the Ministry of Planning.

The DIMAPPP has four components:

1. Restructuring CPTU and Policy Reform,
2. Enhancing Digitization of Public Procurement,
3. Professionalization Procurement and Citizen Engagement (CE), and
4. Digitizing Project Implementation Monitoring.

A total of 32 Selected Public Sector Organizations (SPSOs) including previous four target agencies (BREB, BWDB, LGED, RHD) that constitute the bulk of total public procurement was the part of procurement management, monitoring and e-GP implementation. It is expected that gradually all procuring Public Sector Organizations (SPOs) would be registered with the e-GP system and conduct e-procurement as part of government’s plan to fully digitize public procurement in the country.

Objective of DIMAPPP: The overall objective of the project is to improve public procurement performance and enhance capacity for implementation monitoring of development projects/programs through digitization.

Restructuring of CPTU into an Authority and institutionalization of e-GP system; Digitizing public procurement process to bring all government organizations under e-GP system; Training of government officials and bidders to enhance capacity and professionalizing public procurement to increase capacity of procurement management and e-GP system of government offices and Strengthening capacity of Implementation Monitoring and Evaluation Division (IMED) for digital and modern monitoring of projects were taken up by this project.

Through implementation of this project one more step would be achieved in building a prosperous Bangladesh by expediting and ensuring transparency and accountability in public procurement process.

DIMAPPP Additional Financing (AF)

The agreement for DIMAPPP Additional Financing was signed by the government of Bangladesh (GoB) with the World Bank on 11 April 2021. The World Bank Board approved the AF on 5 February 2021.

The IDA of the World Bank contributed 40 million US dollars and the GoB part was 5 million US dollars in the AF. The duration of the AF was from July 2022 to December 2023. The GoB approved revised TAPP in February 2021.

Rationale for the Additional Financing

The main purposes of the DIMAPPP AF were;

1. scaling-up of the coverage and features of the e-GP and associated activities in response to the COVID-19 pandemic.
2. covering the estimated expenses related to extension for one year and a half of the original project to complete the ongoing activities under the original project which will need more time and resources to complete due to the COVID-19 pandemic.
3. Incorporating MAPS (methodology for assessing procurement system) recommendations, jointly made by GoB and WB in 2020, into the procurement law.

The DIMAPPP-AF (first revised) with World Bank assistance ended in December 2023. The second revised DIMAPPP started in January 2023 and it was scheduled to end in December 2024.

Project Progress up to November 2024

Between the period of July 2017 and November 2024, the project has accomplished and made significant progress in all its scheduled tasks. In March 2021, the World Bank awarded DIMAPPP as a project which is the most Innovative, Collaborative and Impactful. Until June 2021, despite the outbreak of the COVID pandemic, the project continued working towards completion of various activities under the following components. The e-GP system remained uninterrupted.

1. 1. 1. 1. Restructuring CPTU and Policy Reform.

The former CPTU was transformed into Bangladesh Public Procurement Authority on 18 September 2023. The Sustainable Public Procurement (SPP) Policy was approved by the government in 2023 and SPP Guidelines was issued in 2024. The Asset Disposal Policy has been drafted.

 

1. 1. 1. 2. Enhancing Digitization of Public Procurement.

Procurement of computers and accessories for 28 NSPSOs covering 2085 PEs is done. During the period of DIMAPPP up to November 2024, a total of 33058 participants received training on e-GP. Of them, 12948 are from government procuring entities, 13102 from tendering community, 1725 from banks, 693 policy level officials, 1001 tenderers on Tenderers’ Database, 2000 PE users on TDB.

Since 2011 to November 2024, a total of 41697 persons covering procuring entities/officers, tenderers, admin, bank and policy level officials received various training on e-GP. Of them 1021 tenderers received training on Tenderers’ Data Base (TDB) and 2169 from PEs in TDB. Up to 31 October 2024, the number of registered tenderers was 1,18,084, agencies 1472, tenders invited 8,68,093 valued at 107.35 billion US dollars.

Training on e-GP for 888 local government institutions (LGIs) was also completed.

The e-GP system is upgraded (Java) by the developer to make it suitable for international tender. It is live in training server. As part of technological modernization, development work is now ongoing to enhance e-GP system to microservices from monolithic.

Independent audit firm for e-GP security and vulnerability assessment is hired. Tenderers’ database has been prepared and it has been put into use. It is growing. Electronic contract management system (e-CMS) was piloted and then put on practice. It has been been rolled out in other agencies after piloting. An audit module has been prepared and added to e-GP system. It is now in practice. The e-GP system has been integrated with IBASS++, NID and e-PMIS. The international competitive tender (ICT), service procurement and framework agreement have been added to e-GP. The e-GP system has earned four ISO certificates for its operations, quality of services, business continuity and environmental management. After implementation of e-CMS the e-GP has now become a complete automated system starting from annual procurement planning up to contract management.

So far, 11 countries and 5 international organizations have visited e-GP system to learn about its successful implementation in Bangladesh.

1. 1. 1. 3. Professionalizing Procurement and Citizen Engagement.

The number of national procurement trainers in BPPA pool of trainers is now 73.  Under the DIMAPPP, a total of 3,484 officers received three-week training in 115 batches from 2019 up to 2023. In 167 batches from 2019 up to 2022, a total of 4333 participants in 167 batches comprising various stakeholders received training on public procurement under short courses. A total of 57 government officers received MCIPS under DIMAPPP.

Since 2003 to December 2023, a total of 12,520 participants in 412 batches received 3-week training on public procurement management and in 505 batches a total of 15241 participants including media received training on public procurement issues under various short courses.

Under the Additional Financing of PPRP-II, a total of 25 government officers obtained the MSc in public procurement from ITC-ILO, Turin University.

Also, 52 out of a total of 60 national trainers in public procurement of Bangladesh had the opportunity to undergo short training at ITC-ILO, Turin University under the project.

Citizen engagement

Sorkari Kroy Batayan, a citizen portal on public procurement, to disclose procurement information to citizens was developed in 2020, made functional and opened to all in August 2020. Social media strategy for former CPTU was implemented. Citizen feedback mechanism has been developed and piloting started in 2024.  

In a total of 48 upazillas, physical monitoring of contract implementation was done. Besides, BPPA also implemented a communication programme on public procurement issues with various “above the line (ATL)” and “below the line (BTL)” contents and materials.

Engaging citizens in public procurement is one of the Bangladesh Public Procurement Authority’s (BPPA) significant initiatives. Based on recommendations from the high-level Public-Private Stakeholders Committee (PPSC) on public procurement, BPPA introduced local citizen monitoring of public procurement contract implementation under the DIMAPP project. This initiative, launched in 2019, involved forming local citizen groups in 48 Upazilas across 18 Districts in all 8 Divisions of Bangladesh.

Citizen Monitoring: Process and Outcomes

The selected citizens received training on monitoring methods, guided by a predefined framework outlining their scope of work. From 2019 to March 2022, a total of 316 public procurement contracts were monitored by 254 citizen groups. These groups were formed considering factors such as age, education, gender, and social acceptability. Citizen engagement was organized into two models: structured citizen groups and unstructured citizen groups.

The initiative collaborated with key implementing agencies like the Local Government Engineering Department (LGED), Public Health Engineering Department (DPHE), and Education Engineering Department (EED). Across the 316 monitored contracts, 316 signboards were installed, engaging 2,516 citizen team members and impacting 24,402 individuals directly or indirectly. Citizens raised 443 complaints, of which 409 were resolved.

Timeline of Implementation

• 2019: Monitoring in 16 upazilas, covering 80 contracts.
• 2020: Monitoring in another 16 upazilas, covering 200 contracts.
• 2021: Monitoring expanded to 16 additional upazilas, covering 36 contracts.

Awareness and Capacity-Building Efforts

BPPA held 24 citizen forum workshops in 8 divisional cities and 16 district headquarters. It also organized 17 PPSC meetings to discuss citizen monitoring outcomes and various public procurement issues. Additionally, 3 research studies and 3 documentary videos were produced to enhance public awareness.

1. 1. 1. 4. Digitizing Project Implementation Monitoring.

Electronic Project Monitoring Information System (e-PMIS) contract was signed in March 2021 for upgrading and enhancing the existing e-PMIS system at IMED. The e-PMIS has been made functional. It has been integrated with e-GP and NID. The electronic system provides real-time data on various projects under the ADP. In 2024-25 fiscal year, there are 1343 projects under ADP. Up to November 2024, 1268 project directors registered with e-PMIS. A total of 616 officers received functional user training and 595 project directors were given orientation on e-PMIS software.

 Results of Procurement Reforms

Up to November 2024:

• Increase in transparency: In 2007, 70 per cent of tenders used to be advertised. Presently, in e-GP, it is 100 per cent.
• Increase in efficiency: The contract award decision in initial bid validity period was 10 per cent in 2007. It is now 99.67 per cent.
• Savings of time: It would take on an average 86.7 days in FY2012, starting from tender invitation up to contract signing, in the open tendering method. It came down to 53 days in 2024.
• Increase in competition: In 2007 on an average the competition for every tender was 3. Now it has increased to 20.04 (with open and limited tender together).

Impact of reforms

• Publication of 100% of IFT and contract award information
• Percentage share of awarded bids within original bid validity period increased from 10% (FY07) to 99% (FY24)
• Estimated around US$ 1 billion annual savings
• 1,053 million pages of papers savings
• Average procurement lead time (invitation to contract signing) decreased from 86.7 days (FY12) to 53 days (FY24)
• Percentage share of rejected bids decreased from 8% (FY12) to 3% (FY19)
• Estimated 497 million km. of travel distance reduction
• Decrease 153,559 tons of CO2 emission
• Improved market access and bidding environment compared to manual bidding