Public Procurement and Government Contracts 2018 Comparisons

Last Updated November 06, 2018

Contributed By Arcadia Advocates

Law and Practice

Authors



Arcadia Advocates has a team of 15 practising lawyers with formidable experience in procurement law and advisory. The team participate in public procurement processes in the key sectors of the East African economy by bidding for the provision of legal services and advising clients taking part in other public procurement processes. The lawyers specialise in legal advisory on public procurement planning, bidding processes, procurement administrative review processes, contract negotiation advisory, PPP structuring and SPVs, public procurement statutory compliance, and a wide range of related matters. The firm is retained by a national, regional and international clientele. The heavy investment in infrastructure by governments in the East African region, notably in high-value construction projects in the petroleum and transport sectors, continues to expose the team to complex public procurement projects and procedures.

The Public Procurement and Disposal of Public Assets Act, 2003 (the PPDA Act) is the primary statute governing government procurement contracts in Uganda. However, whereas the Act lists the different contracts under which a Government entity or a Procuring and Disposing Entity (PDE) may procure works, supplies (goods) or services, the Act only provides for the circumstances under which the respective contracts may be applied. The provisions of the PPDA Act (Part VIA) are operationalized under the PPDA (Contracts) Regulations, 2014, and the Local Governments (PPDA) Regulations, 2006 (in respect to Local Government procurements). The PPDA Act was last amended in 2011 and there is no pending amendment Bill or proposal before Parliament or Cabinet.

The PPDA (Contracts) Regulations, 2014 (SI No. 14 of 2014) operationalize the provisions of the PPDA Act on cost reimbursement and pricing for government contracts under the prescribed types of contracts. The PPDA (Contracts) Regulations (under Part III) provide for nine types of contracts, stating how the costs of the procurement are covered and reimbursed under the contract. The types of contracts are restated under Part VIII of the Local Governments (PPDA) Regulations, 2006. The types of contracts include: -

  • Lump sum contract,
  • Time-based contract,
  • Admeasurement contract,
  • Framework contract,
  • Percentage based contract,
  • Cost reimbursement contract,
  • Target price contract,
  • Retainer contract, and
  • Success fee contract.

Regulation 7 (1) (b) of the PPDA (Contracts) Regulations requires the Accounting Officer, prior to the PDE’s signing of a binding contract with a provider, to confirm that the contract price is not higher than the market price established prior to the commencement of the procurement process. The contract pricing and reimbursements must therefore fall within the assessed market prices established at the commencement of the procurement.

Part IV of the PPDA (Contracts) Regulations (see also: Part VIII – Local Governments (PPDA) Regulations), has detailed provisions addressing contract pricing and payment. The contract may have fixed prices or provide for price adjustment. Regulation 39 (1) of the PPDA (Contracts) Regulations requires a PDE to use fixed prices for a procurement requirement which is scheduled to be completed within 18 months. However, Regulation 39 (2) of the PPDA (Contracts) Regulations provides for the exceptions of rapidly rising prices, or significant price fluctuations in case of imported goods due to changes in foreign currency. Contracts for procurements extending beyond 18 months have price adjustment provisions.

The PPDA Authority is mandated to advise PDEs on internationally accepted practices applicable to price adjustment for different procurement requirements. (see: Regulation 39 (5) – PPDA (Contracts) Regulations). The application of price adjustment under a contract, the method of calculation, and any restrictions or conditions on adjustments must be stated in the bidding documents and in the contract. (see: Regulation 40 (2) – PPDA (Contracts) Regulations). In calculation of the price adjustment, the predefined applicable formula must separate the total price into components (such as labour, equipment, materials, fuel), adjusted by price indices specified for each component. (see: Regulation 40 (3) – PPDA (Contracts) Regulations).

Background

Public sector procurement procedures in Uganda are primarily governed by the Public Procurement and Disposal of Public Assets Act, 2003 as amended in 2011 (the PPDA Act), and the Regulations made thereunder. The oversight and regulation of public procurement is vested in the Public Procurement and Disposal of Public Assets Authority (the PPDA Authority), established under Section 5 of the PPDA Act, whose objectives and functions are respectively set out under Sections 6 & 7 of the PPDA Act. 

The public sector procurement procedures under the PPDA Act and the Regulations, as held in M/S Sendege Senyondo & Co. Advocates v Kampala Capital City Authority Civil Suit No. 147 of 2016 (HC Commercial Division), are intended to foster “fair, competitive, transparent, nondiscriminatory and value for money procurement and disposal standards and practices”, with the goal of improving the existing system for the procurement and disposal of goods and services under acceptable standards for public procurement. 

Part IV (Sections 43 – 49) of the PPDA Act further elaborates the application of the basic principles of public procurement and disposal to include non-discrimination; transparency, accountability and fairness; the maximisation of competition and ensuring value for money; confidentiality; economy and efficiency; and the promotion of ethics. 

The procurement procedures enumerated herein apply to ‘procuring and disposing entities’ (PDEs) within the meaning of the PPDA Act (see: interpretation Section 3), which among others include “a Ministry or department of Government, a district council or a municipal council, a body corporate established under an Act of parliament other than the Companies Act,” companies incorporated under the Companies Act in which the Government or a PDE has majority interest (51% controlling majority shareholding), and procurements financed from public finances specified under the PPDA Act (see: Section 2 (1) of the Act).

Uganda has a decentralised system of government under the national Constitution, consisting of the Central Government at the national level, and the Local Governments at the district level (see: Article 8A, Objective II (iii) of the National Objectives and Directive Principles of State Policy, and Article 176 (2) (b) of the Constitution of the Republic of Uganda, 1995). The harmonisation of public procurement procedures at the Central Government and Local Government levels was effected by two critical amendments. The first was the Local Governments (Amendment) Act, 2006 (Act No. 2 of 2006), which repealed and replaced the old provisions of the Local Governments Act Cap 243 (Sections 91 – 94), providing the procurement procedure for Local Governments. 

The significant amendments introduced by the 2006 amendment include the following:

  • the abolishment of the District Tender Board and Urban Tender Board and its replacement with the District Contracts Committee and Municipal Contracts Committee (see: Sections 91 & 94A – Local Governments (Amendment) Act, 2006);
  • the establishment of a Procurement and Disposal Unit (PDU) at the appropriate level under the district council and the municipal council, to be headed by a procurement officer who also respectively serves as a secretary to the District or Municipal Contracts Committee (see: Section 93 & 94B – Local Governments (Amendment) Act, 2006); 
  • granting the PPDA Authority the mandate to regulate the functions of PDEs of the district (Local Government) to ensure the application and maintenance of the same procurement standards of the Central Government in Local Governments procurements; and
  • providing for the application of the PPDA Act to Local Government procurements, with necessary modifications (see: Section 94 - Local Governments (Amendment) Act, 2006).

In addition, Regulation 141 of the Local Governments (PPDA) Regulations, 2006 makes other procurement regulations applicable to Local Government PDEs, as long as those other procurement regulations are not in conflict with the Local Governments (PPDA) Regulations.

The second key amendment is the PPDA (Amendment) Act, 2011 (Act No. 11 of 2011), which introduced the following spotlighted reforms:

  • widened the definition of a PDE to include a district council or a municipal council (see: Section 3 (b) – PPDA (Amendment) Act);
  • extended the functions of the PPDA Authority to advising Local Governments “on procurement and disposal policies, systems and practices and, where necessary, on their harmonisation” (see: Section 5 – PPDA (Amendment) Act);
  • additional functions of the Contracts Committee (see: Section 17 – PPDA (Amendment) Act); and
  • established the PPDA Appeals Tribunal (see: Section 47 – PPDA (Amendment) Act).

Public Sector Procurement Procedures

Procurement procedures follow the procurement process prescribed in the PPDA Act and the Regulations. The definition section of the PPDA Act defines the ‘procurement process’ as entailing “the successive stages in the procurement cycle including planning, choice of procedure, measures to solicit offers from bidders, examination and evaluation of those offers, award of contract, and contract management”. The import of the definition is that the procurement procedures involve a step-by-step process at the various stages of the procurement cycle. The different roles and responsibilities at each stage of the procurement cycle are executed and undertaken by a specific designated person, office or entity under the PDE. These include the User Department, the Procurement and Disposal Unit (PDU), the Accounting Officer of the PDE, a Contracts Committee, the Board or Council, an ad-hoc Evaluation Committee, the PPDA Authority, and the PPDA Appeals Tribunal (for the resolution of disputes). 

Procurement Planning Process

The planning process is the initial stage of the public sector procurement procedure, during which  the User Department, the PDU, the Contracts Committee, and the Management, Board or Council play proactive roles in commencing and completing the procurement of supplies, works or services.

Accounting Officer

The “overall responsibility for the execution of the procurement and disposal process in the PDE” is a mandate of the Accounting Officer under Section 26 (1) of the PPDA Act. According to Section 3 of the PPDA Act, an ‘Accounting Officer’ can be appointed by the Secretary to the Treasury (Ministry of Finance, Planning and Economic Development), or under an Act of Parliament or an instrument of appointment under an Act of Parliament. The functions, duties and roles of an Accounting Officer in Local Government procurements are exercised by a Chief Administrative Officer for a district council, and by a town clerk in the case of municipal councils (see: Local Governments (PPDA) Regulations, 2006, (SI No. 39 of 2006)). 

The duties and responsibilities of the Accounting Officer of a PDE under the PPDA Act include:

  • establishing a Contracts Committee and appointing its members in accordance with the PPDA Act;
  • causing the establishment of a PDU, staffed at an appropriate level;
  • advertising bid opportunities; 
  • communicating award decisions;
  • certifying the availability of funds to support the procurement or disposal activities; 
  • signing contracts for procurement or disposal activities on behalf of the PDE;
  • investigating complaints by providers;
  • submitting a copy of any complaints and reports of the findings to the PPDA Authority; and
  • ensuring the implementation of awarded contracts in accordance with the terms and conditions of the award. 

User Department

A User Department is a “department, division, branch or section of the Procuring and Disposing Entity, including any project unit working under the authority of the Procuring and Disposing Entity”, which initiates the procurement of the required supplies, works or services, as the user of said requirements. This is done through the preparation of procurement plans by the respective User Departments of the PDE, in line with the approved work plan and budget of the PDE. This is in accordance with Section 34 (2) of the PPDA Act and Regulation 3 (2) of the PPDA (Procuring and Disposal Entities) Regulations, 2014. The procurement plans of the User Departments inform the preparation of a PDE’s annual procurement plan, which is prepared by the PDU.

In Local Government procurements, a User Department is required to prepare an annual work plan for procurement, based on the approved budget. The annual work plan is submitted to the PDU in order to facilitate the orderly execution of annual procurement activities, and is provided for under Regulation 62 (1) of the Local Government (PPDA) Regulations. 

Procurement and Disposal Unit (PDU)

Upon receipt of the procurement plans of the various User Departments, the Procurement and Disposal Unit of the PDE consolidates the various procurement plans to form the PDE’s annual procurement plan, as provided for under Regulation 3 (1) of the PPDA (Procuring and Disposing Entities) Regulations and Regulation 62 (2) of the Local Government (PPDA) Regulations. The annual procurement plan is subject to approval by the Contracts Committee (under Regulation 3 (4) of the PPDA (Procuring and Disposing Entities) Regulations) and is required to contain the following information:

  • works, services and supplies to be procured;
  • contract packages of the works, services and supplies to be procured, and the estimated cost of each package;
  • time schedule of the procurement requirements; 
  • common use items; 
  • works, services and supplies to be used by the PDE in concert with another PDE;
  • resources required for the procurement, supported by a schedule of the projected funding; 
  • recommended method of procurement for each contract package and the time estimated for each stage of procurement; and 
  • the type of contract recommended for each requirement and, where applicable, the requirement for deviation from the use of the standard bidding documents (see: Regulation 4 of the PPDA (Procuring and Disposing Entities) Regulations). 

Under Regulation 62 (4) of the Local Governments (PPDA) Regulations, a Local Government PDE’s annual work plan is required to have the following information:

  • a detailed breakdown of works, services and supplied to be procured;
  • a schedule of procurement requirements, in order of priority;
  • a statement of required resources supported by a schedule of the projected funding; and 
  • a plan of the likely method of procurement for each requirement and the likely time required for each stage in the procurement cycle.

The PPDA Act provides for various methods of procurement of goods (termed as supplies in the Act), works and non-consultancy and consultancy services, including open domestic bidding, open international bidding, restricted domestic bidding, restricted international bidding, quotation method, direct procurement, and micro procurement. In addition, the Local Governments (PPDA) Regulations (see: Regulation 42) allow a Local Government to use the ‘community purchase method’ to procure goods, services or works for community programmes or projects, subject to the thresholds prescribed by the PPDA Authority, in consultation with the Ministry of Local Government. 

The choice of the method of procurement of supplies, works, non-consultancy and consultancy services proposed by a PDU in the annual procurement plan is guided by the provisions of Part VI of the PPDA Act and the Public Procurement and Disposal of Public Assets (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, 2014 and the PPDA. Regulations 6 (3) & (4) of the same Regulations are instructive on what informs the choice of the procurement method. This includes the estimated value of the requirement, the circumstances relating to the requirement, and the type of procurement – whether supplies, works or non-consultancy services. The procurement method selected must comply with the thresholds specified in the guidelines issued by the PPDA Authority (see: PPDA Guideline on Thresholds for Procurement Methods No. 1/2014, and the Local Governments (PPDA) Guideline on Thresholds for Procurement Methods No. 1/2008). 

Procurement of consultancy services, on the other hand, is provided for under Section 88A of the PPDA Act and is initiated by an invitation of expressions of interest, or use of a list of providers registered with the PPDA Authority, use of the PDE’s list of pre-qualified consultants, or use of another PDE’s list of pre-qualified consultants. The procurement of consultancy services is specifically guided by the Public Procurement and Disposal of Public Assets (Procurement of Consultancy Services) Regulations 2014.

Contracts Committee

Under Regulation 3 (4) of the PPDA (Procuring and Disposing Entities) Regulations, the Committee receives, considers and approves the consolidated annual procurement plan and any changes or updates of the plan prepared and forwarded by the PDU. The Contracts Committee, among others, considers the submitted annual procurement plan's compliance with the requirements of the contents of an annual procurement plan stipulated under Regulation 4 of the PPDA (Procuring and Disposing Entities) Regulations, as well as the approved PDE budget thresholds. 

Management, Board or Council Approval

The Contracts Committee forwards the approved annual procurement plan to the Management, Board or Council for approval. Upon approval, the plan is then submitted to the PPDA Authority and the Secretary to the Treasury of the Ministry of Finance, in accordance with Section 58 of the PPDA Act. Section 58 (5) of the PPDA Act further obligates a PDE to submit updated and approved procurement plans in the event of any changes to the initially submitted procurement plan. A PDE is required to display its annual procurement plan and its update on the entity’s notice board. Copies can be published on the PDE’s website and the PPDA Authority website (see: Regulation 58 (6) – PPDA (Procuring and Disposing Entities) Regulations).

Figure 1 – Illustration of the Procurement Planning Process

Figure 1- Procurement Planning Process

Procurement Initiation

The procurement of any works, services and supplies by a PDE has to comply with the approved and submitted annual procurement plan, and such works, services or supplies must have been reflected as requirements of the PDE in the annual procurement plan. Under Regulation 5 (1) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations or Regulation 5 (1) of the PPDA (Procurement of Consultancy Services) Regulations, the Accounting Officer is obligated to make an assessment of the market price of a procurement requirement to inform the costs/prices for the intended procurement prior to initiation of the procurement. 

A member of a User Department can initiate the procurement of a requirement (works, supplies, or non-consultancy services) by filing Part 1 of the Request for Approval of Procurement, which is Form 5 under Schedule 1 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, as provided for under Regulation 3 (5) of the same Regulations. Where the procurement is for consultancy services, the Request for Approval of Procurement is filed under Regulation 3 (5), Form 18 of the PPDA (Procurement of Consultancy Services) Regulations. The request is signed by the member of the User Department making the request, and confirmed by the Head of the User Department, prior to confirmation of availability of funds and approval to procure by the Accounting Officer of the PDE. Before signing the requisition, the Head of the User Department confirms whether the procurement requirement is approved in a budget. The PDU then confirms whether the requirement is in the procurement plan, assigns a sequence number to the requisition, and the procurement is recorded in the procurement register. A similar process of initiating the procurement of requirements under Local Government PDEs is provided for under Regulation 65 of the Local Governments (PPDA) Regulations. 

An Accounting Officer is required to confirm the availability of funds for the procurement before approving any request to procure as per the approved budget. Suffice to note, a request to procure a requirement must be sanctioned or approved by the Accounting Officer, evidenced by the Accounting Officer’s signature (see: Regulation 3 (4) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations; Regulation 3 (4) of the PPDA (Procurement of Consultancy Services) Regulations; and Regulation 65 (4) of the Local Governments (PPDA) Regulations). Upon confirmation of the availability of funds to procure the requirement, the Accounting Officer sanctions the procurement. Where the method of procurement selected is by bidding (open or restricted domestic or international bidding) as opposed to the quotation method or micro procurement, the PDU prepares bidding documents in accordance with Part V (Regulation 32) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations. The bid documents prepared by the PDU include instructions to the bidders (statement of requirements/specifications/terms of references/scope of work), the evaluation criteria, bid forms, and contract terms. 

Procurement of consultancy services as provided for under Regulation 6 of the PPDA (Procurement of Consultancy Services) Regulations is either through publication of a notice inviting expressions of interest and developing a shortlist of consultants (see: Regulation 7), by developing a shortlist of consultants without publication of a notice inviting expression of interest (see: Regulation 11), or by inviting a single or sole source consultant under Regulation 16 of the PPDA (Procurement of Consultancy Services) Regulations. Under Regulation 23 of the PPDA (Procurement of Consultancy Services) Regulations, a request for proposals is issued to consultants invited to submit proposals for consultancy services. 

Figure 2 – Illustration of the Procurement Initiation Process

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Figure 2 - Procurement Initiation Process

Bidding Process

The bidding process is managed by the Contracts Committee and the PDU. The role of the Contracts Committee is to approve the procurement method selected, review and approve the bidding documents prepared by the PDU and approve the Evaluation Committee under Section 28 (1) (b) of the PPDA Act (see also: Regulation 17 (1) – Local Governments (PPDA) Regulations). The invitations and advertisements of bidding opportunities are issued by the PDU (in furtherance of its functions under Section 31 (j) of the PPDA Act), through print and electronic media, through publication on a website, and through a notice displayed on the notice board. The PDU issues the bid documents to the respective bidders upon payment of a prescribed fee, and records the issuance and sale in accordance with Regulation 47 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations. 

Bidders submit their bids to the PDU, which receives the bids with adherence to the set bid submission deadline under Section 32 (f) of the PPDA Act. The bidders are required to comply with the prescribed bid submission method (one- stage single envelope method, one-stage two envelope method, or two stage method – see: Regulation 56 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations). Under Regulation 62 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, the bid documents of the open bidding method or the restricted bidding method are required to contain instructions to the bidders concerning the date, time and place of the bid opening, and the information to be read out and recorded at the bid opening session. Furthermore, the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations (see: Regulation 57) provide for instructions on the withdrawal of a bid, the submission of a replacement bid, the or modification of a bid before the deadline for submission of bids, which should be contained in the bidding documents from the PDU (see also: Regulation 33 of the PPDA (Procurement of Consultancy Services) Regulations for withdrawal, modification and replacement of proposals in respect to proposals for procurement of consultancy services). 

At the bid opening, which is conducted immediately after bid closing (see: Regulation 62 (3) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations and Regulation 36 (8) & 37 of the PPDA (Procurement of Consultancy Services) Regulations), the bids are opened publicly in the presence of the bidder(s) or their representative(s). Regulation 64 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations states that the information to eb read out at bid opening must include the name of the bidder, the presence or absence of a bid security (if requested), the technical score obtained by bid under the applicable bid submission method, the submission of power of attorney (where applicable), and any other information required under the bidding documents. The equivalent provision for opening technical proposals for consultancy services is Regulation 38 of the PPDA (Procurement of Consultancy Services) Regulations, which requires the PDU to notify the consultants of the following:

  • the consultants who submitted proposals;
  • the consultants who did not submit a proposal securing declaration (where requested);
  • the consultants who submitted separate sealed financial proposals (where required); and
  • any other information required to be stated at the public opening as indicated in the request for proposals. 

The management of the public bid opening is vested in the PDU and witnessed by a member of the contracts committee or a person nominated by the User Department. The procedure for the public bid opening is provided for under Regulation 65 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, and the opening of technical proposals for consultancy services is stipulated under Regulation 39 of the PPDA (Procurement of Consultancy Services) Regulations. Envelopes marked “WITHDRAWAL” are dealt with first, “by reading out the names of the bidders as indicated on the envelopes and returning the sealed envelopes to the bidder” (see: Regulation 65 (2) of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations). In the procurement of consultancy services, the names of consultants are read and sealed envelopes for withdrawn proposals are returned to the consultants under Regulation 39 (2) of the PPDA (Procurement of Consultancy Services) Regulations. 

A bid under the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations is effectively withdrawn where the notice of withdrawal complies with the instructions for withdrawal of bids stipulated in the bidding documents. The withdrawal of a proposal under the PPDA (Procurement of Consultancy Services) Regulations, on the other hand, is effective where the withdrawal notice is in accordance with the instructions for withdrawal of proposals stated in the request for proposals. 

The PDU then proceeds to open other envelopes, including envelopes marked “REPLACEMENT” or “MODIFICATION”. The public bid opening is recorded using Form 12 (Record of Bid Opening form) under the Schedule to the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations. The record is signed by the chairperson and the secretary, and posted on the procurement and disposal notice board of the PDE within one working day of the opening session and displayed for a minimum of seven working days.

Equivalent provisions on bidding (from invitation of bids to bid opening) under Local Government procurement are stipulated in Regulations 66 – 71 of the Local Governments (PPDA) Regulations. 

Bid Evaluation and Contract Award

The evaluation of bids (for works, supplies and non-consultancy services) is regulated by the PPDA (Evaluation) Regulations, 2014. Regulations 72 – 81 of the Local Governments (PPDA) Regulations similarly guide the evaluation of bids under Local Government procurement. The valuation of submitted bids is done by an Evaluation Committee approved by the Contracts Committee under Section 28 (1) (b) of the PPDA Act, as recommended by the PDU under Section 32 (a) of the PPDA Act. The Evaluation Committee is made up of a minimum of three members, including a representative of the User Department and a member of the PDU. However, a member of a Contracts Committee cannot be part of the Evaluation Committee (see: Regulation 3 of the PPDA (Evaluation) Regulations). Members of the Evaluation Committee are required to have knowledge of the subject matter (“technical skills and experience relevant for the procurement requirement”) as well as financial management skills, among others. 

Members of the Evaluation Committee are required to sign and comply with the Code of Ethical Conduct in Business provided for under the 5th Schedule to the PPDA Act. The Evaluation Committee’s recommendation of the best evaluated bidder is guided by the evaluation methods and criteria under the Regulations. Bids for the procurement of supplies, works and non-consultancy services are evaluated using the ‘technical compliance evaluation method’, while the ‘quality and cost-based evaluation method’ is applied to bids for the procurement of text books and information technology systems, and for design and build contracts (see: Regulation 6 - PPDA (Evaluation) Regulations). The evaluation is intended to determine the best evaluated bid that is eligible and administratively compliant with the technical requirements of the PDE, and has the lowest evaluated price, in addition to the bidder having the capacity and resources to effectively execute the contract (see: Regulation 6 (3) - PPDA (Evaluation) Regulations). 

The evaluation criteria applied by the Evaluation Committee must be in accordance with the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, as stated in the bidding documents. The assessment of the Evaluation Committee in respect of the evaluation criteria considers compliance of the bid with the statement of requirements, the ability of the bidder to perform the proposed contract, and the ability of the bid to meet the objectives of the procurement (see: Regulation 7 of the PPDA (Evaluation) Regulations). The meetings of the Evaluation Committee are conducted in accordance with Regulation 5 of the PPDA (Evaluation) Regulations, which requires the Evaluation Committee to sign an evaluation report for submission to and consideration by the Contracts Committee through the PDU. The Contracts Committee considers the evaluation report submitted to it by the Evaluation Committee and may either approve the report and make an award of the contract decision or reject the evaluation report and give reasons for the rejection.

Evaluation of Consultancy Proposals

The evaluation of consultancy proposals for the procurement of consultancy services is done by an Evaluation Committee in accordance with the provisions of the PPDA (Procurement of Consultancy Services) Regulations, using the method and criteria stated in the request for proposals. Under the PPDA (Procurement of Consultancy Services) Regulations, technical proposals are required to be evaluated within 30 working days from the date of opening, while financial proposals should be evaluated within seven working days from the date of opening (see: Regulation 42 - PPDA (Procurement of Consultancy Services) Regulations). The PPDA (Evaluation) Regulations apply to the evaluation of proposals for the procurement of consultancy services with necessary modifications (see: Regulation 41 - PPDA (Procurement of Consultancy Services) Regulations).

A technical consultancy proposal is subjected to preliminary examination, at which stage the Evaluation Committee determines whether the proposal is administratively compliant – ie, “conforms to the instructions, requirements and the terms and conditions of the request for proposals without any non-conformity or omission” (see: Regulation 46 - PPDA (Procurement of Consultancy Services) Regulations). 

A technical proposal that passes the preliminary examination is subjected to a detailed evaluation under Regulation 47 of the PPDA (Procurement of Consultancy Services) Regulations, and proposals that do not achieve the minimum score required in the request for proposals are rejected. The technical proposals are then subjected to the merit point procedure evaluation under Regulation 48 of the PPDA (Procurement of Consultancy Services) Regulations, where the members of the Evaluation Committee score the respective proposals against the set criteria, record their scores in the score sheet and an average score is computed to determine the total technical score of the proposal. 

A technical evaluation report is prepared containing a summary of the preliminary examination, results of the technical evaluation, non-conformity or omissions (if any), and recommendations on the proposals that should be evaluated at the financial comparison stage. The technical evaluation report is prepared using Form 24 in the Schedule to the PPDA (Procurement of Consultancy Services) Regulations (see: Regulation 49). Upon approval of the Evaluation Committee’s technical evaluation report by the Contracts Committee, the consultants whose proposals were disqualified at the technical evaluation stage are duly informed before the opening of the financial proposals; a debrief stating the score awarded to their proposal at the technical evaluation, the reasons for the disqualification of the proposal, and the weaknesses of the proposal against the evaluation criteria can be provided upon the request of the consultant (see: Regulation 50 - PPDA (Procurement of Consultancy Services) Regulations). Where the consultancy services are to be procured from a single or sole source consultant, the Evaluation Committee makes a recommendation for an award of the contract where the proposal of the consultant achieves the minimum technical score (see: Regulation 51 - PPDA (Procurement of Consultancy Services) Regulations). 

The PDE notifies the consultants whose technical proposals qualify for financial evaluation, and the procedure of opening the financial proposals is managed by the PDU, witnessed by a member of the Contracts Committee or a person nominated by the User Department (see: Regulations 52 & 53 - PPDA (Procurement of Consultancy Services) Regulations). The public opening session is attended by the consultants whose financial proposals are to be opened, or by their representatives. The Evaluation Committee compares the financial proposals opened, assesses the conformity of each proposal with the terms and conditions of the request for proposals, determines the proposal price and awards the financial score, among others (see: Regulation 55 - PPDA (Procurement of Consultancy Services) Regulations). The methods for the selection of consultants are stipulated under Regulation 40 of the PPDA (Procurement of Consultancy Services) Regulations, and are applicable to the evaluation of financial proposals for consultancy services (see: Regulation 58 of the same Regulations). The evaluation methods include evaluation of financial proposals under the following: 

  • the quality and cost-based evaluation method and determining the best evaluated proposal: Regulation 59 - PPDA (Procurement of Consultancy Services) Regulations;
  • the quality-based evaluation method: Regulation 60 - PPDA (Procurement of Consultancy Services) Regulations;
  • the fixed budget evaluation method: Regulation 61 - PPDA (Procurement of Consultancy Services) Regulations; and
  • the least cost evaluation method: Regulation 62 - PPDA (Procurement of Consultancy Services) Regulations.

The consultants' qualifications selection method (under Regulation 40 (1) (e) - PPDA (Procurement of Consultancy Services) Regulations) is applied by the Evaluation Committee in the selection of a consultant who is an individual under Regulation 63 - PPDA (Procurement of Consultancy Services) Regulations. The evaluation report for selection of an individual consultant is prepared under Regulation 63 (12) - PPDA (Procurement of Consultancy Services) Regulations, using Form 26 in the Schedule to the same Regulations (see Regulation 63 (13)) for submission to the Contracts Committee for approval.

In specific reference to evaluations under Local Government procurements, Regulation 79 (1) of the Local Governments (PPDA) Regulations provides the evaluation methodologies (similar to those applicable under the PPDA (Procurement of Consultancy Services) Regulations) available to a district or municipal council PDE Evaluation Committee, which has the discretion to choose the evaluation method that best suits the procurement requirement (see: Regulation 79 (2) – Local Governments (PPDA) Regulations). The evaluation methodologies include:

  • Quality and Cost Based Selection (QCBS);
  • Quality Based Selection (QBS);
  • Fixed Budget Selection (FBS);
  • Least Cost Selection (LCS); and
  • Technical Compliance Selection (TCS).

Bid Award & Contract Signing

The award and management of contracts is regulated by the PPDA (Contracts) Regulations, 2014. The specific provisions on the award and signing of procurement contracts for Local Government procurement are contained under Regulations 84 – 89 of the Local Governments (PPDA) Regulations. When the Contracts Committee approves the proposal of the best evaluated bidder or consultancy proposal by the Evaluation Committee, the former makes an award decision. 

However, the award of the contract by the Contracts Committee does not constitute a binding contract between the PDE and the bidder or consultant (see: Regulation 3 (3) - PPDA (Contracts) Regulations). Under Regulation 4 of the PPDA (Contracts) Regulations, a notice of the best evaluated bidder (NOBEB) is delivered to all bidders who participated in the bidding process and displayed on the notice board of the PDE; a copy is also sent to the PPDA for publication on the Authority’s website. The notice does not amount to a contract.

In the case of Galleria in Africa Limited v Uganda Electricity Distribution Company Limited, Civil Appeal No 08 of 2017, the Supreme Court pronounced itself on the position of the law in respect to an award or NOBEB not constituting a binding contract. Galleria sued UEDCL in the High Court for lost profit as special damages, general damages, interest and costs of the suit in an action for breach of contract. It was contended that the parties entered into a contract by a letter of bid acceptance dated 6th June 2007 issued by UEDCL to Galleria, to which the later responded by a letter dated 11th June 2007 confirming receipt and verified to proceed with the supply of creosote oil.  Galleria had been selected as the best evaluated bidder following the submission of bids in response to an advert by UEDCL in two newspapers in March and April 2007.  By a letter dated 21st August 2007, UEDCL cancelled the procurement. At the time of cancelling the procurement, the parties had not signed a ‘formal’ contract.

The High Court dismissed Galleria’s suit having found that there was no contract between the parties. On appeal by Galleria, the Court of Appeal reversed the decision of the trial court, found that there was a valid contract between the parties and allowed the appeal. Galleria was dissatisfied with the amount of damages awarded by the Court of Appeal and appealed to the Supreme Court. UEDCL cross appealed against the decision of the Court of Appeal. The decision of the Supreme Court delivered on April 26th 2018 reversed the Court of Appeal decision, found that there was no valid contract since the procedures under the PPDA Act on signing of a procurement contract were not strictly followed. Since the bid acceptance letter was not followed by signing of a contract as required by the PPDA Act, the Supreme Court dismissed Galleria’s appeal with costs, set aside the award of damages of the Court of Appeal, and allowed UEDCL’s cross appeal with costs. The Court further reaffirmed that an award decision of the Contracts Committee and the notice to the best evaluated bidder (or a letter of bid acceptance) do not amount to a contract between a PDE and a successful bidder.

The requirement for a NOBEB does not apply to micro procurement, direct procurement or procurement in emergency situations, irrespective of the procurement method (see: Regulation 4 (6) - PPDA (Contracts) Regulations). 

Ten days must elapse from the date of display of the NOBEB before the contract can be signed, although the observance of this requirement under Regulation 5 (1) & (2) of the PPDA (Contracts) Regulations is not applicable to micro procurement, direct procurement or procurement in emergency situations, irrespective of the procurement method (see: Regulation 5 (4) - PPDA (Contracts) Regulations). The PPDA (Contracts) Regulations provide for the debriefing of bidders after the signing of the contract; the debrief must be unique to each bidder as required by Regulation 6 of the PPDA (Contracts) Regulations. The contract is issued and signed in accordance with Regulation 7 of the PPDA (Contracts) Regulations, which requires compliance with the foregoing notice periods and confirmation by the Accounting Officer that the contract price is not higher than the market price, the procurement is not subject to any administrative review, there is a commitment of the full amount of the funding for the period proposed, and applicable approvals from all relevant agencies, including the Attorney General, have been procured. In Engineer Investments Ltd v Attorney General & KCCA HCCS No. 0331 of 2012, the High Court held that the constitutional requirement of obtaining legal advice from the Attorney General prior to the signing of a procurement contract does not apply to Local Government procurements. Under Section 26 (1) (g) of the PPDA Act, the Accounting Officer signs the contract on behalf of the PDE. 

Contract Management Process

Contract management is the role of the Accounting Officer or such person appointed by the Accounting Officer from the User Department upon nomination by the User Department. The contract manager is required to prepare a contract management plan, using Form 49 in Schedule 2 of the PPDA (Contracts) Regulations, upon receipt of the contract from the PDU (see: Regulation 51 - PPDA (Contracts) Regulations). Complex or high-value contracts, or contracts forming part of a larger project, are assigned to a contract management team by the Accounting Officer. The PPDA (Contracts) Regulations also provide for management of a contract by a body or person outside the PDE, under the supervision of the User Department (see: Regulation 52 (2) & (3) of the PPDA (Contracts) Regulations). 

In Local Government procurement, a PDE employs a contract supervisor “as its agent responsible for monitoring the progress and execution of the contract”, generally acting on behalf of the PDE (see: Regulation 105 (1) – Local Governments (PPDA) Regulations). The contract supervisor executes the role of a contract manager and can be the relevant head of a division or a technical officer appointed by the head of department. Under Regulation 119 (1) & (2) of the Local Governments (PPDA) Regulations, the User Department nominates an experienced member of staff to serve as the contract supervisor. The User Department is required to notify the Accounting Officer, the internal audit department, the secretary Contracts Committee and any other relevant stakeholders of the nomination in writing. In case of large-scale or cross-sectoral contracts involving contractors, suppliers and consultants, the Accounting Officer can constitute a steering committee to monitor the execution of the contract (see: Regulation 105 (3) – Local Governments (PPDA) Regulations). 

Monitoring of the contract implementation involves monitoring contract deliverables and quality assurance regarding time, cost and quality control, submitting progress reports, monitoring the supplies, works or services delivered, certifying the work done, making interim payments, conducting contract site meetings, maintaining contract records, and recommending contract termination (should the need arise), among other obligations (see: Regulations 53 & 56 - PPDA (Contracts) Regulations). 

Upon completion of the contract deliverables, a final report of the deliverables is submitted for final acceptance and handover; payment of the reconciliations against the deliverables is made (under Regulation 48 - PPDA (Contracts) Regulations); final payment of the contract price is made; the contract guarantee or payment security is released by the PDE (under Regulation 47 - PPDA (Contracts) Regulations), depending on the warranty expiry period or defects liability period; and the archive of contract records and commission of the project (if applicable) is done.

Figure 3 – Summary of the Procurement Cycle

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Figure 3 - Summary of Procurement Cycle

Types of Procurement

According to the statistics in the PPDA Report on the Performance of the Public Procurement System for FY 2016/17 (August 2017), the most common types of procurement vary according to each considered variable. However, the procurement of works and non-consultancy services ranks highest. The procurement of works, supplies, non-consultancy services and consultancy services ranks differently when considering the number of contracts in the reviewed financial year and the value of contracts for the respective procurement types. 

When considering the number of contracts for FY 2016/2017, non-consultancy services ranked highest, followed by supplies (goods), works and consultancy services. According to the criteria of the value of contracts per procurement type, the procurement of works with the highest value was ranked the highest, followed by supplies (goods), non-consultancy services and consultancy services, in descending order.

Figure 4 – Comparison of the performance of the types of procurement by number and value of contracts in FY 2016/2017

Figure 4 - Types of Procurement (Source PPDA - PPPS Report FY 2016/2017, pg. 17)

The figure above clearly shows that, while the procurement of non-consultancy services had the highest number of contracts in FY 2016/2017, the procurement of works had the highest total value of contracts, which is explained by the government's investment in high-value public infrastructure projects (see: p. 15 – PPDA Report on the Performance of the Public Procurement System for FY 2016/17).

Contract Mechanisms

The contract mechanisms available to a PDE are provided for under Part VIA of the PPDA Act and the PPDA (Contracts) Regulations. Similar provisions specific to Local Government procurement are stipulated under Part VIII (Regulations 90 – 100) of the Local Governments (PPDA) Regulations. A PDE can use any of the contract types provided for under the Act, or a combination of the contract types as guided by the procedures prescribed under the PPDA (Contracts) Regulations and the Local Governments (PPDA) Regulations (in the case of Local Government procurement) (see: Section 88B of the PPDA Act). However, there is no consolidated statistical data (under the PPDA Annual Reports on the Public Procurement System) on the types of contracts applied by the respective PDEs for their procurements, so it is not possible to draw an accurate conclusion on the most common types of contract mechanisms applied by PDEs. 

Regulation 14 of the PPDA (Contracts) Regulations is instructive on how to determine the appropriate contract type for a procurement, and provides the following considerations: 

  • the nature of the procurement requirement;
  • the need to minimise risk for a PDE;
  • the need to maximise value for money for a PDE;
  • the likelihood of any delays or unforeseen circumstances requiring contract extensions, or variations of change of orders; and 
  • the need for effective management and cost control. 

The types of contracts under the Act and Regulations are as follows:

  • Lump sum contract – used where the content, duration and outputs of the procurement are well defined (see: Section 88C – PPDA Act). The contract stipulates the fixed contract price and allows for interim or stage payments linked to cleared specified outputs or deliverables (see: Regulation 15 – PPDA (Contracts) Regulations and Regulation 91 – Local Governments (PPDA) Regulations).
  • Time-based contract – applied where the scope and duration of the procurement requirement is difficult to define (see: Section 88D – PPD Act). Payment under the time-based contract is based on agreed hourly, daily, weekly or monthly fees for nominated personnel or type or grade of personnel, and reimbursable items using actual expenses or agreed unit prices (see: Regulation 16 – PPDA (Contracts) Regulations and Regulation 92 – Local Governments (PPDA) Regulations).
  • Admeasurement contract – used for works that are not well defined or that are likely to change in quantity or specifications, or where difficult or unforeseen site conditions are likely (see: Section 88E – PPDA Act). Payments under an admeasurement contract are made for the actual quantity of the work performed. The contract may have fixed prices or price adjustment for the items, allowing for interim or stage payments (see: Regulations 17 – PPDA (Contracts) Regulations and Regulation 93 – Local Governments (PPDA) Regulations).
  • Framework contract – the contract comprises a schedule of rates of an indefinite delivery agreement. It is used where the procurement requirement is needed ‘on call’, but the quantity and timing of the requirement cannot be defined in advance. The framework contract is also applied to reduce procurement costs for a requirement that is needed repeatedly over a period of time (see: Section 88F – PPDA Act). Payment under the contract is made on the basis of the works, services or supplies delivered or performed (see: Regulation 18 – PPDA (Contracts) Regulations and Regulation 94 – Local Governments (PPDA) Regulations). 
  • Percentage based contract – used where it is appropriate to relate the fee paid to the provider directly to the estimated or actual cost of the subject of the contract (see: Section 88G – PPDA Act). The contract defines the total cost from which the payable percentage is calculated, and the bidder indicates the fee rate as a percentage of the total cost of the procurement requirement (see: Regulation 19 – PPDA (Contracts) Regulations and Regulation 95 – Local Governments (PPDA) Regulations).
  • Cost reimbursable contract – applies for emergency work where there is insufficient time to fully calculate the costs involved in the procurement. It is also used for high-risk works where it is more economical for the PDE to bear the risk of price variations than pay a provider to accept the risk, or where the latter does not accept the risk (see: Section 88H – PPDA Act). The PDE pays the provider for the actual cost of the works, evidenced by receipts and other appropriate documentation, in addition to a fee or profit agreed upon and specified under the contract (see: Regulation 20 – PPDA (Contracts) Regulations and Regulation 96 – Local Governments (PPDA) Regulations). 
  • Target price contract – used in lieu of a cost reimbursement contact where the target price can be agreed upon and cost savings may be achieved. The provider is offered an incentive payment for any cost savings below the target price (see: Section 88I – PPDA Act). The PDE pays the provider the actual cost of the works, evidenced by receipts and other appropriate documentation, in addition to a fee, profit or agreed percentage of any cost savings below the target price (see: Regulation 21 – PPDA (Contracts) Regulations and Regulation 97 – Local Governments (PPDA) Regulations). 
  • Retainer contract – applied under the Act to retain a provider to provide services over a prescribed period of time, without defining the level and actual amounts of services required (see: Section 88J – PPDA Act). The retainer is either a flat fee as a total payment due irrespective of the level and amount of services provided during the prescribed period, or a flat retainer fee for the retainer period in addition to a pre-agreed unit rate for the services provided (see: Regulation 22 – PPDA (Contracts) Regulations and Regulation 98 – Local Governments (PPDA) Regulations).
  • Success fee contract – used to link the fees of a provider to an achieved objective as an incentive for successful completion of a particular task, event or action. (see: Section 88L – PPDA Act). The contract must describe the nature of success to which the success fee is applicable, and the timescale in which the task, event or action is to be achieved. The success fee is either a pre-agreed amount linked to the successful completion of a target or event, a percentage of some predetermined amount or proceeds, or a basic flat rate not linked to the successful completion of a particular task, event or action (see: Regulation 23 – PPDA (Contracts) Regulations and Regulation 99 – Local Governments (PPDA) Regulations).

The PPDA Act (Section 88L) further provides for the application of other contracts and contracting arrangements by a PDE, with guidance from the PPDA. This is also reiterated under Regulation 100 – Local Governments (PPDA) Regulation. Such arrangements include the mobilisation of private sector resources for financing public projects through Public Private Partnership (PPP), Build Own Operate (BOO), Build Own Transfer (BOT) and Build Own Operate Transfer (BOOT) arrangements. The Public Private Partnerships Act, 2015 regulates these types of contracting arrangements. 

It can be seen from the provisions of the PPDA Act and the Regulations that some types of contracts can be used for procuring any procurement requirement, while certain contracts are limited to procuring specific procurement requirements (whether works, supplies, consultancy or non-consultancy services) and some types of contracts are limited to the circumstances surrounding the procurement. 

Bidders must meet certain prerequisites in order to be eligible to bid on public sector opportunities, provided under the PPDA (Evaluation) Regulations, the Local Governments (PPDA) Regulations, the PPDA Guideline on Reservation Schemes to Promote Local Content in Public Procurement, No. 1 of 2018 (15th February, 2018), and the respective bid documents issued for the procurement of a particular requirement.

The eligibility requirements set out in the PPDA (Evaluation) Regulations (see: Regulation 17) and the Local Governments (PPDA) Regulations (see: Regulation 45) include the following:

  • the bidder must have legal capacity to enter into a contract with the PDE;
  • the bidder should not be insolvent, in receivership, bankrupt, or being wound up, nor the subject of legal proceedings for any of the foregoing circumstances;
  • the business activities of the bidder should not be suspended; 
  • the bidder must be fully compliant with tax payments and social security contributions in Uganda; 
  • there must be no conflict of interest in relation to the subject of the procurement,;
  • the bidder should not be suspended from the list of providers by the PPDA; and
  • the bidder must not be a member of the PDE, as defined under the PPDA Act. 

Unless registered with the PPDA on the Register of Providers, or where the bidder’s eligibility is verified at the pre-qualifications stage, a bidder is required to attach the following documents to the bid in order to qualify as eligible: 

  • a copy of the trading licence of the bidder or its equivalent;
  • a copy of the certificate of incorporation/registration of the bidder or its equivalent;
  • a declaration of no conflict of interest in relation to the subject of the procurement; and 
  • any other relevant documents or statements required under the bidding documents (see: Regulation 17 (3) – PPDA (Evaluation) Regulations). 

The other set of prerequisites for eligibility are under the umbrella of preference and reservation schemes, which are intended to give domestically manufactured goods and Ugandan contractors and consultants a competitive advantage when competing with foreign manufactured goods and foreign contractors or consultants for public procurement contracts (see: Section 50 (1) of the PPDA Act). 

In early 2018, the PPDA Authority passed the Guideline on Reservation Schemes to Promote Local Content in Public Procurement, No. 1 of 2018 (the Local Content Guideline), pursuant to Section 50 (2) of the PPDA Act and Regulation 53 of the Local Governments (PPDA) Regulations, 2006. The Local Content Guideline clearly defines a ‘reservation’ to mean “exclusive preference to procure goods, works and services set aside by threshold by sector”. The import of the reservations is that certain providers are not eligible to bid for the reserved procurements of goods, works and services set aside under the Guideline by threshold and by sector. The reservations under the Local Content Guideline apply to procurements funded by the Government of Uganda and development partners (see: Guideline 8 – Local Content Guidelines). 

Under the Local Content Guideline, the following reservation of public contracts (for supplies, works and services) by threshold to the benefit of national and resident providers are made: 

  • procurements for supplies whose estimated cost is UGX1 billion and below;
  • procurements for road works whose estimated cost is UGX45 billion and below, and other public works whose estimated cost is UGX10 billion and below;
  • procurements for consultancy services whose estimated cost is UGX1 billion and below; and 
  • procurements for non-consultancy services whose estimated cost is UGX200 million and below (see: Guideline 1 – Local Content Guideline). 

A ‘national provider’ is defined under the Local Content Guideline as “a provider registered in Uganda and wholly owned and controlled by Ugandans”, while a ‘resident provider’ is defined as “a provider incorporated in Uganda for at least two years at the time of submission of the bid and is not a national provider”. The above definitions and reservations render any provider who is not a national or resident provider ineligible to bid for public contracts reserved for national and resident providers under the respective thresholds.

In addition, the Local Content Guideline (see: Guideline 2) requires a foreign bidder to subcontract 30% of the value of works for procurements of road works above UGX45 billion, and other public works above UGX10 billion. Sector reservations under the Local Content Guideline are made for the procurement of uniforms and related clothing materials (see: Guideline 3), the procurement of electrical cables and conductors (see: Guideline 4), and the procurement of medicines and medical supplies (see: Guideline 5). The sector reservations impose residence restrictions and require the use of local raw materials and registration on the PPDA Register of Providers, among other requirements. 

The PPDA Authority is vested with the powers to determine the code of conduct for providers of works, services or supplies; providers are obligated to comply with the code and sign a declaration of compliance under Section 93 (2) of the PPDA Act. The Code of Ethical Conduct in Business for Bidders and Providers was issued under the PPDA Guideline on Codes of Ethical Conduct for Bidders and Providers No. 4 of 2014 (3rd March 2014) and addresses ethical principles, standards to be complied with by bidders, disclosures of conflict of interest, confidentiality and accuracy of information, gifts and hospitality, the prohibition of inducements, and fraudulent practices.

The respective provisions of the Code of Ethical Conduct in Business for Bidders and Providers are briefly explained below:

  • Ethical Principles: Bidders and providers are required at all times to maintain integrity and independence in their professional judgment and conduct, to comply with both the letter and the spirit of the laws of Uganda and any contract awarded, and to avoid associations with businesses and organisations that are in conflict with the code of conduct.
  • Standards: Bidders and providers are required to provide works, services and supplies of high quality, to accept full responsibility for all works, services or supplies provided, and to comply with the professional standards of their industry or any professional body of which they are members.
  • Conflict of Interest: Bidders and providers are required not to accept contracts that would constitute a conflict of interest with any prior or current contract with any PDE. They are also required to disclose to all concerned parties those conflicts of interests that cannot reasonably be avoided or escaped.
  • Confidentiality and Accuracy of Information: Information given by bidders and providers in the course of performance of contracts should be true, fair and not designed to mislead. Providers are required to respect the confidentiality of information received in the course of performance of a contract, and should not use such information for personal gain.
  • Gifts and Hospitality: Bidders and providers are prohibited from offering any gifts or hospitality directly or indirectly to staff of a PDE that might be viewed by others as having an influence on a government procurement decision.
  • Inducements: Bidders and providers are prohibited from offering or giving anything of value to influence the action of a public official and should not ask a public official in the procurement process or in contract execution to do anything that is inconsistent with the Act, Regulation, Guidelines or the Code of Ethical conduct in Business.
  • Fraudulent Practices: Bidders and providers are prohibited from colluding with other businesses and organisations with the intention of depriving a PDE of the benefits of free and open competition. A bidder or provider is prohibited from entering into a business arrangement that might prevent the effective operation of fair competition, and from engaging in deceptive financial practices, such as bribery, double dealing or other improper financial practices, and ought not to misrepresent facts in order to influence a procurement process or the execution of a contract, unlawfully obtain information relating to a procurement process, or withhold information from the PDE during contract execution to the detriment of the PDE.

The Code of Ethical Conduct in Business for Bidders and Providers is signed by an authorised signatory of the bidder or provider agreeing to comply with the Code. 

It is worth noting that the 5th Schedule to the PPDA Act provides for a Code of Ethical Conduct in Business applicable to public officers and experts engaged to deliver specific services. The Code provides for ethical principles, the disclosure of conflicts of interest, respect of confidentiality and the giving of accurate information, fair competition, gifts from current and potential government suppliers, hospitality, and restrictions on the use of information acquired by virtue of holding office in the PPDA Authority or in association with the Authority for personal advantages.

The PPDA Act (Part VII) and the PPDA (Administrative Review) Regulations, 2014 (the Administrative Review Regulations) contain remedies for dissatisfied bidders, laying out the procedure for administrative review of a procurement process. The review may be commenced on the grounds of an omission or breach by the PDE of the PPDA Act, any Regulations or Guidelines made under the PPDA Act, the provisions of bidding documents or best practices of procurement (see: Section 89 (1) – PPDA Act). According to Regulation 2 of the Administrative Review Regulations, the administrative review process is only applicable where a PDE has not yet entered into a contract for procurement with a bidder. After the award of the contract to the best evaluated bidder by the Contracts Committee and the publication of the NOBEB, Regulation 5 (1) of the PPDA (Contracts) Regulations provides that a PDE cannot sign a contract with the bidder until ten days after the publication of the NOBEB.

Accounting Officer

The first forum for a dissatisfied bidder is a complaint in writing to the Accounting Officer within ten working days of the bidder becoming aware of the facts giving rise to the complaint, stating the grounds of dissatisfaction with the decision of a PDE, and the corrective measures requested by the bidder, among other matters (see: Section 90 (1a) (b) – PPDA Act, & Regulation 4 (1) – Administrative Review Regulations). The bidder is required to pay the prescribed administrative review fee for the corresponding value of the procurement provided for under the Schedule to the Administrative Review Regulations. Upon receipt of the complaint and the prescribed fee, the Accounting Officer suspends the procurement proceedings and is required to make a decision within 15 working days; a copy of the decision is submitted to the PPDA (see: Section 90 – PPDA Act, and Regulation 4 & 5 – Administrative Review Regulations). The complaint can be dismissed on any of the grounds under Regulation 6 of the Administrative Review Regulations, and the Accounting Officer has to notify the bidder of the dismissal in writing. If dissatisfied with the decision of the Accounting Officer, or where the Accounting Officer makes no decision within the prescribed period, the bidder can make a complaint to the PPDA Authority within ten working days. 

PPDA Authority

The Authority is required to review a decision of the Accounting Officer within 15 working days of receiving it. The Authority then makes a recommendation to the PDE in writing, indicating the corrective measures to be taken (if any) and giving reasons for the recommendations (see: Section 90 (4) – PPDA Act). If the PPDA Authority fails to make the review within the prescribed period, the bidder can submit a complaint to the PPDA Appeals Tribunal under Section 90 (6) of the PPDA Act. 

However, where the Authority receives an appeal from the bidder against the decision of the Accounting Officer, it suspends procurement proceedings, investigates the complaint, and makes its decision within 21 working days from the date of receipt of the complaint (see: Section 91 (4) – PPDA Act).

PPDA Appeals Tribunal

The Tribunal’s power to review the decision of the PPDA Authority is provided for under Section 91I (1) of the PPDA Act, and a bidder can submit an appeal against the decision of the PPDA Authority under Regulation 10 of the Administrative Review Regulations on the following grounds:

  • if the bidder is dissatisfied with the decision of the PPDA Authority (Sections 91 (4), 91 (5), 91I (1) – PPDA Act);
  • if the bidder alleges that the PPDA Authority has a conflict of interest in the subject of the complaint (Section 91I (2) – PPDA Act);
  • if the PPDA Authority failed to make a recommendation within the 15-day timeframe prescribed under Section 90 (4) – PPDA Act (see: Section 90 (6) – of the Act); and
  • if a bidder’s or PDE’s rights are adversely affected by the decision of the PPDA Authority (see: Section 91I (3) – PPDA Act). 

Under Section 91I (7) of the PPDA Act, the Appeals Tribunal is required to issue its decision within ten working days of receiving an application for review. 

Appeal to the High Court

Section 91M of the PPDA Act provides for a right for any party to proceedings before the PPDA Appeals Tribunal to appeal against a decision of the Tribunal to the High Court. The appeal is commenced by lodging a notice of appeal with the registrar of the High Court. The party indenting to appeal is required to serve a copy of the notice of appeal to the other party to the PPDA Appeals Tribunal proceedings.

It is worth noting that in Chogm Tour Agents 2007 (U) Ltd v Masaka Municipal Council Local Government, Civil Appeal No. 7 of 2010 (25th January 2011), the Supreme Court held that the administrative review procedure is not mandatory and that a bidder need not follow that procedure to the letter, as per Okello JSC.

The resolution of disputes during contract performance is guided by the dispute resolution clause under the contract. The general conditions of contract in the standard bidding documents for the respective procurement methods issued by the PPDA Authority, provide for amicable settlement of disputes through negotiations between the parties, and if negotiations fail, the dispute is resolved in accordance with the Arbitration and Conciliation Act Cap 4 (Laws of Uganda). Whereas there are no special rules or regulations for resolution of disputes during contract performance outside the executed contract, the legal remedies arising from resolution of contract disputes before courts of law are available to the parties. 

In addition, a contract may be terminated by a PDE under Regulation 56 of the PPDA (Contracts) Regulations, with a recommendation to the PPDA Authority to suspend the provider from participating in public procurement. If a provider is dissatisfied with the suspension, they can appeal to the PPDA Appeals Tribunal under Regulation 15 of the PPDA Regulations.

The solicitation of proposals from potential government contractors is done in accordance with the procurement procedures under the PPDA Act and the applicable Regulations. This depends on the requirement to be procurement, namely; works, supplies, non-consultancy services or consultancy services.

Subject to the requirement to be procured and the procurement method to be used, the government can solicit proposals from potential contractors through the following processes.

  • Bidding process: the bidding method be open (domestic or international) or restricted (domestic or international) bidding. The bidding method is used in the procurement of supplies, works and non-consultancy services under the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations. A PDE can make an invitation to bidders to bid by publication of a bid notice, through a pre-qualification exercise, by development of a shortlist, or by direct invitation of a sole or single provider. (See: Regulation 41 – PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations). A bid notice is published in at least one newspaper of wide circulation, displayed on the procurement notice boar of a PDE and the PPDA Authority’s website. (see: Regulation 42 – PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations). A shortlist of bidders must have at least three bidders to ensure competition unless otherwise approved by the Contracts Committee of the PDE, in cases where it is not practicable to have three bidders shortlisted. (see: Regulation 43 – PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations). A shortlist is used when procuring supplies, works or non-consultancy services using the quotation method under Regulation 15 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations.
  • Expression of Interest: proposals under procurement of consultancy services under Regulation 6 of the PPDA (Procurement of Consultancy Services) Regulations can be solicited through: publication of a notice inviting expression of interest and developing a shortlist, developing a shortlist without publication of a notice inviting expression of interest, or by inviting a single or sole source consultant in exceptional circumstances. The notice of expression of interest is published in at least one newspaper of wide circulation in Uganda, and where necessary, the notice is published in the relevant trade or professional publication, or a publication of wide international circulation, and is displayed on the PPDA Authority’s website and procurement notice board of the PDE. (see: Regulation 7 – PPDA (Procurement of Consultancy Services) Regulations). The shortlist of consultants (without publication of a notice inviting expression of interest) to be used is subject to approval by the Contracts Committee under Regulation 12 of the PPDA (Procurement of Consultancy Services) Regulations. The PDE uses a prequalified list of providers to identify the single or sole source consultant under Regulation 16 (3) of the PPDA (Procurement of Consultancy Services) Regulations. A PDE which does not have a prequalified list of providers can use the PPDA Authority Register of Providers, recommendations of a competent authority, or the prequalified providers of another PDE.

Applicable Statute and Regulations

The specific applicable laws regulating the process of soliciting proposals from potential government contractors are; -

  • The Public Procurement and Disposal of Public Assets Act, 2003, Act No. 1 of 2003 as amended by Act No. 11 of 2011, (the PPDA Act),
  • The PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, 2014, SI No. 8 of 2014,
  • The PPDA (Procurement of Consultancy Services) Regulations, 2014, SI No. 10 of 2014,
  • The PPDA (Contracts) Regulations, 2014, SI No. 14 of 2014,
  • The PPDA (Evaluation) Regulations, 2014, SI No. 9 of 2014,
  • The PPDA Guideline on Pre-qualification of Providers for a Group of Contracts, No. 8 of 2014 (3rd March 2014), and
  • The PPDA Guideline on Thresholds for Procurement Methods, No. 1 of 2014 (3rd march, 2014),
  • The Local Governments (PPDA) Regulations, 2006, SI No. 39 of 2006,
  • The Local Governments (PPDA) Guideline on Thresholds for Procurement Methods, No. 1 of 2008 (25th January, 2008)
  • The Local Governments (PPDA) Guideline on Minimum Bidding Periods of Procurement, No. 2 of 2008 (25th January, 2008).

After the evaluation of bids or proposals, the Evaluation Committee can make recommendations on issues for which negotiations should be conducted with the bidder or consultant and (where applicable) propose a contract price. (see: Regulation 35 (2) (b) & (c) – PPDA (Evaluation) Regulations, & Regulation 66 – PPDA (Procurement of Consultancy Services) Regulations). However, there is limited room for negotiation of prices prior to the award of the contract in the procurement of supplies, works and non-consultancy services due to the evaluation criteria used in evaluating the bids for such procurements.

Negotiation is mostly restricted to price. This happens after the financial proposals. Evaluation of the financial proposals is competitive when determining the best evaluated bidder. The negotiation of the price is only with the best evaluated bidder and there is not competition at this stage. Section 74 (2) of the PPDA Act provides an exception to the prohibition of negotiations with a contractor to the effect that negotiations are only carried out “where the best evaluated bid or proposal exceeds the budget of the PDE”. Negotiations with a contractor under Section 74 (1) of the PPDA Act are conducted where; -

  • the competitive procurement method was used and only one bid was received in response to the call for bids;
  • the direct procurement method was used; or
  • the procurement is for consultancy services.

Subject to the investigation of PDE as to why the best evaluated bid or proposal exceeds the budget of the procurement, the PDE may “cancel the procurement process and request for new proposals; or negotiate with the best evaluated bidder in order to obtain a reduction of the scope of the quantities of the procurement.” (see: Section 74 (3) – PPDA Act).

Section 88A (6) of the PPDA Act allows a PDE to conduct negotiations with the selected consultants under procurement of consultancy services, but not simultaneously. The negotiation is conducted before the award of the contract, with the consultant to whom the award of the contract is recommended. (see: Regulation 66 (1) – PPDA (Procurement of Consultancy Services) Regulations). Where the direct selection method, quality-based selection method, or consultant’s qualifications method is used in the selection of consultants, the allowed price related aspects of the negotiations (under Regulation 66 (3) – PPDA (Procurement of Consultancy Services) Regulations) are “reduction of inputs for budgetary reasons”, and “proposal unit rates”.

Notably, Regulation 83 of the Local Governments (PPDA) Regulations provides for the negotiation procedures applicable in Local Government procurement.         

The prices proposed by the contractors are compared to the assessed market price established by the Accounting Officer prior to the commencement of the procurement. (see: Section 26 (4) – PPDA Act, Regulation 5 – PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, & Regulation 5 – PPDA (Procurement of Consultancy Services) Regulations).

The Accounting Officer is required to re-assess the market price to establish whether it is still valid, in the event that the price of the best evaluated bidder is higher than the market price established at the commencement of the procurement. The procurement is cancelled and retendered if the Accounting Officer establishes that the assessed market price at the commencement of the procurement is still valid, and the price of the best evaluated bidder is higher than the former. (see: Regulation 5 (3) & (4) – PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, & Regulation 5 (3) – PPDA (Procurement of Consultancy Services) Regulations). In addition, prior to the signing of the contract with a provider, the Accounting Officer is required to confirm that the contract price is not higher the market price established prior to the commencement of the procurement process. (see: Regulation 7 (1) (b) – PPDA (Contracts) Regulations).

The specific applicable laws relating to negotiating and auditing contract proposals in public procurement are: -

  • The Public Procurement and Disposal of Public Assets Act, 2003, Act No. 1 of 2003 as amended by Act No. 11 of 2011, (the PPDA Act),
  • The PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations, 2014, SI No. 8 of 2014,
  • The PPDA (Procurement of Consultancy Services) Regulations, 2014, SI No. 10 of 2014,
  • The PPDA (Contracts) Regulations, 2014, SI No. 14 of 2014,
  • The PPDA (Evaluation) Regulations, 2014, SI No. 9 of 2014,
  • The Local Governments (PPDA) Regulations, 2006, SI No. 39 of 2006.

There is generally no requirement to comply with particular accounting standards in the preparation of price proposals, however the offerors are required to fully comply with the instructions in the bid documents or expression of interest invitation in preparing their price proposals. The bid documents or invitation of expression of interest are instructive on how to prepare the financial proposal. In addition, the Code of Ethical Conduct in Business for Bidders and Providers (under Paragraph 4 (1) on accuracy of information) obliges offerors to give correct, fair and accurate information in the course of the procurement process.

The standard bidding documents under the General Conditions of Contract make reference to internationally accepted accounting principles. For example, the accounting clause in the Standard Bidding Document for the Procurement of Non-Consultancy Services (Open and Restricted Bidding) provides as follows: -

“The Provider shall keep accurate and systematic accounts and records in respect of the Services hereunder, in accordance with internationally accepted accounting principles and in such form and detail as will clearly identify all relevant time charges and costs.” (see: Clause 31).

Under the law, offerors are not required to submit certifications in support of the prices offered under their proposals. For example, under the quotation method in which price quotations obtained from a number of providers are compared, the offerors are not required under Section 84 of the PPDA Act, nor under Regulation 15 of the PPDA (Rules and Methods for Procurement of Supplies, Works and Non-Consultancy Services) Regulations to provide certifications for the quoted prices. According to the Standard Bidding Document for Non-consultancy Services (Quotation Method), Part 1 on bidding procedures only requires an offeror to submit the bid submission sheet, a list of services and price schedule, and documents evidencing the offeror’s eligibility to bid for the contract.

The offeror must have proper accounting systems that ensure compliance with internationally accepted accounting principles. When the contract is awarded, the contractor is expected to keep proper records and to provide correct, fair and accurate information during the performance of the contract. For example, Clause 31 of the General Conditions of Contract in the Standard Bidding Document for the Procurement of Non-Consultancy Services (Open and Restricted Bidding) highlighted earlier is a good example of this contractual obligation, and the requirement which arises therefrom.

Whereas there the PPDA Act, the PPDA (Contracts) Regulations, and the PPDA Guideline on Codes of Ethical Conduct for Bidders and Providers have no express provisions on the nature of the accounting an offeror is required to have, the contractual and ethical obligations of a provider require the provider to have adequate accounting systems.

For example, the administration of a cost-reimbursement contract requires a provider to have effective accounting systems to track the costs to be reimbursed by government under the contract. In practice, a contractor’s payment may be withheld or suspended pending the establishment of a proper accounting system.

Bidders are only required to produce income tax clearance certificates issued by the Uganda Revenue Authority (URA). This is one of the requirements to be satisfied at the preliminary stage of evaluation. It is therefore assumed that the bidder’s books of accounts have been verified by URA. In very specific contracts, particularly procurement of works, the PDE may require audited books of accounts, albeit it is not a required of the law.

Payment of contractors is made in accordance with the contract of procurement signed by the PDE and the contractor. The PPDA Act and the PPDA (Contracts) Regulations provide for the different types of contracts that a PDE may execute with a contractor in the procurement of a requirement: lump sum contract, time-based contract, measurement contract, framework contract, percentage based contract, cost reimbursement contract, target price contract, retainer contract, and success fee contract (see 1.2 Common Types of Procurement and Contract Mechanisms). However, the PPDA (Contracts) Regulations (under Part IV on contract pricing and payment) operationalise the provisions of the PPDA Act and are more instructive on the process and on terms and conditions for payment of a contractor during the performance of the contract. 

The procurement contract must specify the payment terms, including the method of payment, the payment structure, payment documents, the payment period and the currency of payment (see: Regulation 41 – PPDA (Contracts) Regulations). The method of payment is agreed upon by the PDE and the contractor under Regulation 42 of the PPDA (Contracts) Regulations. According to Regulation 43 of the PPDA (Contracts) Regulations, the payment structure may include advance payments, stage payments, regular interim payments, or a retained payment. 

Advance payment is made to facilitate the mobilisation of start-up costs for the provision of works or services, or the provision of supplies where special or customised items have to be manufactured. Since the general rule on payments under a contract for works, services or supplies is that no payments are to be made to a provider before receipt of the deliverables under the contract (see: Regulation 47 (1) – PPDA (Contracts) Regulations), an advance payment security is required to be made by the contractor before an advance payment can be made by a PDE under the contract (see: Regulation 44 (2) – PPDA (Contracts) Regulations). The requirement for a payment security must be expressly stated in the bidding documents and in the contract. The PPDA (Contracts) Regulations (Regulation 44 (3)) limit the cap of an advance payment to 30% of the contract price. 

Interim and stage payments are regulated under Regulation 45 of the PPDA (Contracts) Regulations. The provision lays down the conditions for making interim or stage payments as follows: 

  • the payment must be linked to specific and verifiable deliverables, contract event, time period or work, which must be stated in the bidding documents and the resulting contract;
  • individual payments must not exceed the cost or value of the deliverable, period, or work to which the payment relates; and 
  • the PDE must require the contractor to provide a payment security if risk or title remains with the provider during the delivery of the works, services or supplies. 

Retained payment is applied for specified works or services under the contract, and the payment is linked to a specific contract event (such as installation or warranty). The contract must state the percentage or amount of the total contract value to be retained, the period or event at which the retention is to be released, and the documents required to prove or certify the period or event relating to the release of the retained payment. However, a contractor may be allowed to substitute a payment security for a retained payment; upon providing a valid payment security, the retained payment is released to the contractor (see: Regulation 46 – PPDA (Contracts) Regulations).

A payment security under Regulation 47 of the PPDA (Contracts) Regulations must be in the format provided by the PPDA Authority and must be included in the bidding documents, must be from an institution acceptable to the Bank of Uganda, must be valid beyond the contract period or expected release date, and – where appropriate – must allow for the progressive reduction of the secured sum. A payment security for the procurement of works must be valid for more three to six months after the final expected transaction date, and that for the procurement of services or supplies must extend for one to three months. The release of the payment security is communicated to the contractor and returned in accordance with their instructions.

Payment and Payment Documents

The payment to a contractor is made to and in the name of the contractor under the contract, unless otherwise requested by the contractor in writing. The payment is made 30 days after certification of invoices, except where varied under special conditions of the contract (see: Regulation 49 – PPDA (Contracts) Regulations). 

Subject to the procurement contract, the payment documents under Regulation 48 (2) of the PPDA (Contracts) Regulations include proof of the following:

  • delivery or receipt of the works, services or supplies in accordance with the terms of the contract;
  • content of the consignments delivered;
  • insurance coverage of the delivered items;
  • successful inspection of the delivered items;
  • origin or eligibility of the delivered items;
  • payment of duties, levies or taxes payable by the contractor under the contract;
  • acceptance of installation or commissioning of delivered items;
  • receipt or acceptance of reports, manuals, guides and relevant documents;
  • actual time period worked;
  • actual works or services completed;
  • payment of sums due to subcontractors; or
  • actual sums paid for reimbursable costs (such as air tickets). 

Where a PDE rejects a contractor’s invoice due to errors, discrepancies, incorrect or incomplete payment documents, the payment request (invoice) is returned to the contractor specifying the reasons for rejection. The contractor is entitled to present a new or amended payment request (see: Regulation 50 – PPDA (Contracts) Regulations).

The applicable laws governing contractor payments are the PPDA Act, 2003 and the PPDA (Contracts) Regulations 2014.

Payments under the procurement contract are made in accordance with the applicable type of contract and payment terms under the contract. The contractor is required to present payment documents in support of the invoice or request for payment. The PPDA Act and the PPDA (Contracts) Regulations clearly require that payment under the various types of contracts is made for actual costs, expenses, agreed unit prices linked to specified outputs or deliverables under the procurement contract. 

Subject to the type of contract applied, the types of costs eligible for reimbursement must be provided for under the contract of procurement. For example, under the time-based contract, payment for reimbursable items is based on actual expenses or agreed unit prices. U~nder Regulation 16 (3) – PPDA (Contracts) Regulations, reimbursable items include subsistence (such as per diem or housing), transport, monies for mobilisation and demobilisation, services and equipment (such as vehicles, office equipment, furniture and supplies), office rent, insurance, printing of documents, surveys, and training (if it is a major component of the assignment), among other appropriate items. In addition, under the cost reimbursement contract (under Regulation 20 – PPDA (Contracts) Regulations), the PDE reimburses the actual cost of the works evidenced by receipts and other appropriate documentation. The reimbursement is therefore limited to the reimbursable costs under the procurement contract. 

The applicable laws governing cost reimbursements under procurement contracts are the PPDA Act, 2003 and the PPDA (Contracts) Regulations 2014.

The PPDA Act and the PPDA (Contracts) Regulations have specific provisions relating to each type of contract. The PDE has the discretion to determine the appropriate type of contract for a procurement (see: Section 88B – PPDA Act, & Regulation 14 – PPDA (Contracts) Regulations), and can combine more than one type of contract. The prescribed contract types and the corresponding provisions of the PPDA Act and the PPDA (Contracts) Regulations are listed below:

Table 1 – Statutory Provisions for the Types of Procurement Contracts

CONTRACT TYPE

STATUTORY PROVISIONS

PPDA Act, 2003

PPDA (Contracts) Regulations, 2014

Local Governments (PPDA) Regulations, 2006

Lump sum contract 

Section 88C

Regulation 15

Regulation 91

Time-based contract 

Section 88D

Regulation 16

Regulation 92

Admeasurement contract

Section 88E

Regulation17

Regulation 93

Framework contract

Section 88F

Regulation18

Regulation 94

Percentage based contract

Section 88G

Regulation 19

Regulation 95

Cost reimbursement contract 

Section 88H

Regulation 20

Regulation 96

Target price contract

Section 88I

Regulation 21

Regulation 97

Retainer contract

Section 88J

Regulation22

Regulation 98

Success fee contract

Section 88K

Regulation23

Regulation 99

Proper keeping of records is key for a contractor, because their payment is dependent upon them presenting all the necessary proper and acceptable documents. The contact manager's assessment of the work done by a contractor relies heavily on the records kept (see: Regulation 106 – Local Governments (PPDA) Regulations). 

In addition, when presenting payment documents or proof of costs for purposes of payment or reimbursement, the contractor is required to present acceptable appropriate receipts and documents in accordance with the terms of the contract (see: Regulation 48 (2) & 50 (1) – PPDA (Contracts) Regulations). The contractor is also bound by the Code of Ethical Conduct in Business for Bidders and Providers (Paragraph 4 (1) on accuracy of information) to provide correct, fair and accurate information during the performance of the procurement contract. Under the standard bidding documents, the accounting records can be subject to external audit by the government, and should comply with internationally accepted accounting principles. 

For example, Clause 31 of the General Conditions of Contract in the Standard Bidding Document for the Procurement of Non-Consultancy Services (Open and Restricted Bidding) provides that “The Provider shall keep accurate and systematic accounts and records in respect of the Services hereunder, in accordance with internationally accepted accounting principles and in such form and detail as will clearly identify all relevant time charges and costs.”

Furthermore, under the General Conditions of Contract of the Standard Bidding Document for Works (Quotation Method) and the Standard Bidding Document for Works (Open and Domestic Bidding Methods) (see: Clause 23.2 in both documents), the Government of Uganda can “inspect the Contractor’s accounts and records relating to the performance of the Contract and to have them audited by auditors appointed by the Government, if so required by the Government.”

Where a contractor fails to maintain proper and accurate accounts in accordance with internationally accepted accounting principles, and presents inaccurate accounting information or records, or where the contractor’s accounts and records are found to be inconsistent after an audit by a Government-appointed auditor, the contractor’s payment may be withheld or suspended, the payment request can be rejected (see: Regulation 50 (1) – PPDA (Contracts) Regulations) and the contractor may be held liable for breach of the Code of Ethical Conduct in Business for Bidders and Providers; gross violations may lead to the termination of the contract by the PDE and the suspension of the contractor from the Register of Providers by the PPDA (under Regulation 56 – PPDA (Contracts) Regulations). 

Whereas there are no express statutory provisions regulating how contractors must accumulate, record and report their costs, nor express provisions on the enforcement of compliance with the former, accountability issues go to the root of performance of the contract and payment of the contractor in accordance with the procurement contract. 

The provisions of the PPDA (Contracts) Regulations on payment of a contractor (see: Regulations 48, 49 & 50), read together with the accountability and record-keeping provisions under the General Conditions of Contract in the highlighted standard bid documents, oblige the contractor to comply with acceptable accounting principles and procedures. The Accounting Officer of the PDE, the contract manager and the User Department, as well as the PPDA Authority, play key roles in ensuring the contractor's compliance with the contractual obligations and the law. 

No other government agencies are directly involved in the overseeing or auditing of a contractor’s compliance with accountability and record-keeping procedures. This is because the management of the contract is vested in the contract manager or contract management committee appointed by the Accounting Officer of the PDE under Regulation 52 of the PPDA (Contracts) Regulations. 

However, where the PDE fails to effectively manage a contract or hold a contractor compliant and accountable, the Inspector General of Government (IGG) or Ombudsperson can investigate the affairs of the PDE. In addition, the Parliament of Uganda has a standing committee on Commissions, Statutory Authorities and State Enterprises (COSASE), which holds government entities accountable. The IGG and the COSASE deal directly with the State entities as opposed to the contractors under a procurement contract, but the contractor may be summoned on such matters under investigation. 

The PPDA (Contracts) Regulations provide for the application of INCOTERMS in contracts for supplies. A contract for supplies is required to clearly indicate the scope of the responsibilities of a provider under the contract, including the supply and delivery of supplies in accordance with the specified INCOTERM (see: Regulation 25 (a) – PPDA (Contracts) Regulations). In addition, the delivery terms for supplies under Regulations 26 of the PPDA (Contracts) Regulations must be in accordance with the INCOTERMS. Furthermore, under Regulation 27 of the PPDA (Contracts) Regulations, the freight and delivery requirements for each procurement must be “specified in the bidding documents by stating the terms using the appropriate INCOTERMS.” The same goes for the contract level of insurance against loss, damage and theft under Regulation 29 of the PPDA (Contracts) Regulations.

Foreign subcontractors are subject to the same requirements as prime contractors. All accounting under the procurement contract must comply with the contract obligations and standards. The foreign subcontractor’s pricing and any subsequent payments must equally conform to the scheduled prices and terms of payment under the (main) procurement contract between the PDE and the prime contractor. The prime contractor retains full responsibility for complying with all the contractual obligations under the procurement contract.

The right to access a contractor’s records is subject to the procurement contract. In most cases, the contractor is required to submit specific documents to the PDE for the specified purposes under the procurement contract. For example, a contractor is required to submit the relevant payment documents under Regulation 48 of the PPDA (Contracts) Regulations for purposes of effecting payment under the contract. 

The right to access a contractor’s records under a procurement contract is generally limited to documents relating to the performance of the contract. The payment documents required under a procurement contract in addition to those provided for under Regulation 48 of the PPDA (Contracts) Regulations relate to the performance of the contract. 

In addition, the sample clause on access to documents under the General Conditions of Contract of the Standard Bidding Document for Works (Quotation Method) and the Standard Bidding Document for Works (Open and Domestic Bidding Methods) (see: Clause 23.2 in both documents) expressly limits the access to accounts and records relating to the performance of the contract.

Whereas there are no provisions under the PPDA Act or any Regulations made thereunder providing for a notice to inspect, access or audit the accounts or records of a contractor, the contract between the PDE and the contractor contains a general provision on notices by one party to the other. The general provision on notices under the contract ordinarily requires the notice to be in writing. The PDE, therefore, has to notify the contractor of any intended inspection, access or audit of the contractor’s accounts or records under the procurement contract.

The sample clause on access to documents under the General Conditions of Contract of the Standard Bidding Document for Works (Quotation Method) and the Standard Bidding Document for Works (Open and Domestic Bidding Methods) (see: Clause 23.2 in both documents) is couched in mandatory terms, requiring the contractor to permit the Government to inspect its accounts and records relating to the performance of the contract, and to further subject the accounts and records to an audit by a Government-appointed auditor if required. 

The audit requirements are ordinarily provided for under the negotiated contract. All prices paid by the government to the contractor under a procurement contract must be verified. A contractor’s invoice must be certified before payment is made; a payment request that has errors, inconsistencies, incorrect or incomplete support documents will not be certified, and is rejected for payment under Regulation 50 (1) of the PPDA (Contracts) Regulations. 

Fixed price contracts that apply to the procurement of requirements completed within 18 months (see: Regulation 39 (1) – PPDA (Contracts) Regulations) and cost reimbursement contracts under which reimbursement is “for the actual cost of the works, evidenced by receipts and other appropriate documents” (see: Regulation 20 – PPDA (Contracts) Regulations), like other procurement contracts, require the verification of payments to be made by the PDE to the contractor. 

Government audit rights apply to all contracts, as the PDE is allowed to combine more than one type of contract. However, the provisions of each contract are more instructive on the audit rights and requirements. A clear example, cited earlier, is the sample clause on inspection and audits under the General Conditions of Contract of the Standard Bidding Document for Works (Quotation Method) and the Standard Bidding Document for Works (Open and Domestic Bidding Methods) (see: Clause 23.2 in both documents). The clause is couched in mandatory terms requiring the contractor to permit the Government to inspect the accounts and records of the contractor relating to the performance of the contract, and to further subject the accounts and records to an audit by a Government-appointed auditor if required. 

The audits can be performed either during the award or post award. Subject to the bidding documents, providers or contractors are required to submit audited accounts during the bidding or proposal process in order to enable the PDE (Evaluation and Contracts Committees) to establish the financial standing of the bidder.

After the signing of the contract (post-award), the contractor is bound to comply fully with the contractual obligations of the procurement contract, which include permitting the Government to inspect and audit the accounts and records, as illustrated in the sample clause on inspection and audits under the General Conditions of Contract of the Standard Bidding Document for Works (Quotation Method) and the Standard Bidding Document for Works (Open and Domestic Bidding Methods) (see: Clause 23.2 in both documents).The audits are designed to establish whether the procurement has been carried out in accordance with the law and generally accepted standards of good practice. Section 8 (1) (c) of the PPDA Act empowers the PPDA Authority to commission or undertake investigations and institute procurement contract and performance audits. 

There is no statutory limitation period within which the Government is required to carry out the audits. However, the contract manager or contract management committee is required to ascertain that the provider has met all performance or delivery obligations and submitted all the required documentation in accordance with the terms and conditions of the contract, and that all contract obligations are completed before closing the contract file (see: Regulation 53 (3) (a) (i), (ii) & (vi) – PPDA (Contracts) Regulations). Subject to the procurement contract, the audit is undertaken and commences as and when required. 

There are no provisions under the PPDA Act or any Regulations made thereunder providing for audit rights. The rights are provided for under the procurement contract between the PDE and the contractor, as illustrated by the sample clause on inspection and audits under the General Conditions of Contract of the Standard Bidding Document for Works (Quotation Method) and the Standard Bidding Document for Works (Open and Domestic Bidding Methods) (see: Clause 23.2 in both documents).

Under Regulation 50 (1) of the PPDA (Contracts) Regulations, a payment request that is inconsistent or discrepant with the terms and conditions of the procurement contract will be rejected for payment outright by the PDE, which returns the payment request to the contractor or provider with specified reasons for the rejection. 

Payments made in excess of the contract price are recoverable under the contract itself. In cases where advance payment or interim and stage payment structures are used, unallowable costs can be recovered as deductions from subsequent interim payments made to the provider by the PDE. Furthermore, the contractor is fully bound by the terms of the contract, and thus an addition of unallowable costs (under the contract) in the contractor’s invoices or request for payment would not only be a breach of the contract but also fraudulent. The contractor’s fraudulent acts can be referred by the PPDA Authority to the PPDA Appeals Tribunal under Section 91J (2) of the PPDA Act, following investigations by the Authority. 

Neither the PPDA Act nor any of the Regulations made thereunder provide for a monetary penalty against the contractor for including unallowable costs. However, where the matter is referred to the PPDA Appeals Tribunal as a fraudulent practice by the PPDA Authority under Section 91J (2) of the PPDA Act, the Tribunal has the power to direct the PDE to cancel the contract of the bidder. 

Whereas the PPDA Act and the Regulations made thereunder are silent on the limitation of claims by the Government under a procurement contract, the general statute governing the limitation of tortious claims is the Limitation Act Cap 80 (Laws of Uganda), which applies to actions by the government founded on contract. Section 3 (1) (a) of the Limitation Act bars the instigation of a claim founded on contract six years after the date on which the cause of action arose.

The resolution of disputes arising from procurement contracts is subject to the dispute resolution clause. The general conditions of contract in the standard bidding documents for the respective procurement methods issued by the PPDA Authority provide for negotiations between the parties, followed by arbitration if interparty negotiations fail. Arbitration under procurement contracts is in accordance with the Arbitration and Conciliation Act, Cap 4 (Laws of Uganda). Neither the PPDA Act, the PPDA (Contracts) Regulations nor the general conditions of contract in the standard bidding documents provide for special provisions on resolving accounting, cost and pricing issues between the PDE and the contractor in the performance of the procurement contract, but the relationship of the parties is fully governed by the procurement contract and the procurement laws. 

The PPDA (Contracts) Regulations' provisions on payment (see: Regulations 41 – 50) emphatically require the contractor to comply fully with the contract payment terms before a PDE can affect payment. The PDE will lawfully reject any request for payment (pursuant to Regulation 50 – PPDA (Contracts) Regulations) that does not comply with the procurement contract due to errors or discrepancies, or that is supported by incorrect or incomplete documentation. The contractor’s accounting as required by the contract must comply with internationally accepted accounting principles, and the costs and pricing must be consistent with the terms of the procurement contract. 

Arbitration in Uganda is administered by the Centre for Arbitration and Dispute Resolution (CADER), established under Section 67 of the Arbitration and Conciliation Act, Cap 4. The CADER is a corporate body that performs the functions provided for under the Arbitration and Conciliation Act, including appointment of arbitrators where necessary. The arbitration award is filed with the registrar of the High Court, and a party objecting to the arbitral award can apply to the High Court to set aside the award. 

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Arcadia Advocates has a team of 15 practising lawyers with formidable experience in procurement law and advisory. The team participate in public procurement processes in the key sectors of the East African economy by bidding for the provision of legal services and advising clients taking part in other public procurement processes. The lawyers specialise in legal advisory on public procurement planning, bidding processes, procurement administrative review processes, contract negotiation advisory, PPP structuring and SPVs, public procurement statutory compliance, and a wide range of related matters. The firm is retained by a national, regional and international clientele. The heavy investment in infrastructure by governments in the East African region, notably in high-value construction projects in the petroleum and transport sectors, continues to expose the team to complex public procurement projects and procedures.

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