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Sri Lanka to end the unsolicited proposals for project tenders under a new law.

By: Staff Writer

March 09, Colombo (LNW):The government is set to enact new Public Procurement Law to end the practice of accepting unsolicited proposals without competing bids and there is a lack of clarity in the government procurement which leads to reports of large-scale corruption, official sources said.

Many government purchases are made by public tenders, usually advertised in the local media and increasingly through government websites.

The government has publicly committed to follow international government procurement standards but often implementation of international procurement standards is weak, especially for projects and goods not funded through international financial institutions.

Well-informed local agents can be the key to winning these tenders, though even the most connected local firms have trouble navigating the labyrinth of the government-tender process.

Local agents also often represent more than one foreign supplier, so when they encounter difficulties, including charges of possible corruption, they are reluctant to voice concerns fearing it will jeopardize other business interests. It can sometimes be difficult to get an objective appraisal from local agents.

Sri Lanka’s current public procurement system based on comprehensive National Procurement Guidelines issued in 2006/7 is being replaced by a new Public Procurement Law in December 2024, public finance department sources proclaimed.

The country currently lacks a formal legislative basis for procurement. All government procurement are being carried out in accordance with Cabinet approved guidelines.

The Procurement Guidelines 2006, sets out various procurement methods, bidding procedures, and rules for awarding contracts.

The proposed law is aimed at enhancing the effectiveness, efficiency and transparency in the public procurement system making it more accountable, streamlined and cost effective, a high official of the department said.

This will be a fulfillment of International Monetary Fund conditions under its public reforms and management of public resources.

The government authorities recognise that public procurement remains an area of governance weakness, with associated corruption vulnerabilities, despite attempts to improve its effectiveness.

The reports of the Finance Ministry, the Auditor-General’s Department, and the Department of Management of Audit have indicated procurement malpractices and corruption that have led to inefficiencies and waste of scarce state resources.

These reports have identified issues including lack of procurement planning, not using relevant procurement procedures stipulated by the Procurement Guidelines, inadequate competitiveness in the selection procedure, accepting unsolicited proposals for high value projects.

The other short comings were poor contract management, lack of knowledge and capacity of the officials in procurement, poor monitoring and weak external oversight, and the incomplete coverage of independent complaints mechanisms.

A regulatory body will be established under the new law with necessary authority and competency for the modernisation of the legal framework, public finance department high official disclosed.

Necessary action will be taken to design and operate a designated website containing information on al public procurement contracts above Rs 1 billion while updating it in every 6 months.

A list of contracts above a designated threshold that were assigned without a competitive tendering process will be published in the web site Information is to be updated every 6 months.

All public procurement transactions will be carried out under an e-Government Procurement System by the end of 2025 in accordance with recommendations made by the IMF, he said.

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