The Public Procurement and Disposal of Public Assets Act, 2003 (as amended) (the “Act”) regulates procurement of government contracts in Uganda.
The Act, established to formulate policies and regulate practices in respect of public procurement and disposal activities, grants the line Minister authority to issue regulations, with approval from Public Procurement and Disposal of Public Assets Authority (the “Authority”) and Parliament for purposes of implementing the objectives of the Act.
Twelve regulations have so far been issued by the Minister, five of which directly regulate procurement of government contracts, namely:
Entities subject to procurement regulation are Procurement and Disposing Entities (PDEs). They include:
The types of contracts subject to procurement regulation include:
PDEs may adopt different methods of procurement. These include:
The above listed methods of procurement specify the parties from whom bids or expressions of interest are welcome.
The key obligations on which all public procurement is grounded include:
Advertisement is one of the modes of inviting bidders to participate in a procurement process. The form of the advertisement is categorised into two, dependent on the nature of contract and procurement requirement, that is:
Advertisement for Works, Supplies and Non-consultancy Services
Advertisement for these contracts is through publishing bid notices. A bid notice must be displayed on the website of the Authority and the notice board of the PDE, not later than the date of publication of the bid notice and must be displayed until the deadline for submission of bids.
The bid notice must also be published in at least one newspaper of wide circulation.
The information contained in the bid notice includes, but is not limited to:
Advertisement for Consultancy Services
Advertisements for procurement for consultancy services is through publication of a notice inviting expressions of interest. The notice inviting expressions of interest is published in at least one newspaper of wide circulation in Uganda and where a PDE requires to obtain effective competition, the notice inviting expressions of interest shall also be published in the relevant trade or professional publication.
The information contained in a notice of expression of interest includes:
Other modes of advertisement of contract award procedures include direct invitation, undergoing a pre-qualification exercise and development of a shortlist of providers.
Every PDE has an accounting officer, whose overall responsibility is to execute the procurement and disposal process in a PDE. The accounting officer of a PDE has authority to conduct a market assessment of the price of a procurement item, which may include works, supplies and non-consultancy services and consultancy services.
When conducting the market assessment for works, supplies and non-consultancy services, an accounting officer may take into account the following:
When conducting a market assessment for consultancy services, an Accounting Officer may take into account the following:
PDEs are required to follow prescribed procedures/methods in a procurement and disposal process. The choice of procurement method is determined by the estimated value of the requirement, the circumstances relating to the requirement and the type of procurement, whether supplies, works, consultancy or non-consultancy services. The methods of procurement that may be used to award a contract include:
Open Domestic Bidding
Open domestic bidding is a procurement method, which is open to participation on equal terms by all providers, through advertisement of the procurement opportunity. Unless provided otherwise, PDEs are required to adopt this method of procurement and disposal. Open domestic bidding is used to obtain maximum possible competition and value for money, and is open to foreign or international bidders.
Restricted Domestic Bidding
This is where bids are obtained by direct invitation without open advertisement of the procurement opportunity. It is used to obtain competition and value for money to the extent possible, where the value or circumstances do not justify or permit the open bidding procedure.
Open International Bidding
This is a procurement method which is open to participation on equal terms by all providers, through advertisement of the procurement opportunity and which specifically seeks to attract foreign providers. This mode of procurement is used to obtain the maximum possible competition and value for money, where national providers may not necessarily make this achievable.
Restricted International Bidding
This is a procurement method, which involves bids being obtained by direct invitation without open advertisement, and the invited bidders include foreign providers. It is used to obtain competition and value for money to the extent possible where the value or circumstances do not justify or permit an open bidding method and the short listed bidders include foreign providers.
This procurement method is used for very low value procurement requirements. It is used to achieve efficient and timely procurement where the value does not justify a competitive procedure. The current threshold for micro procurement is the UGX5 million equivalent to USD1,365.
Direct procurement is a sole source procurement method for procurement requirements where exceptional circumstances prevent the use of competition. It is used to achieve efficient and timely procurement, where the circumstances do not permit a competitive method.
Quotation Method of Procurement.
The quotation method is a simplified procurement method which compares price quotations obtained from a number of providers. The quotation method is used to obtain competition and value for money to the extent possible, where the value or circumstances do not justify or permit open or restricted bidding procedures.
Negotiations during the Procurement and Disposal process
Negotiations are not permitted between PDEs and a contractor, in respect of a proposal of the contractor, except where:
Negotiations under the above are only carried out where the best evaluated bid or proposal exceeds the budget of the PDE.
Whereas there exists more than one tender procedure, the choice of procedure is not at the sole discretion of the PDE, but is dependent on the circumstances surrounding the procurement and the value of the procurement.
There are thresholds that determine the method of procurement to be used by a PDE. The applicable thresholds are highlighted below.
Supplies and Non-Consultancy Services
Medicine and Medical Supplies
Special thresholds apply for medicine and medical supplies.
The Act does not impose timing for publication of documents except for those in 2.6 Time Limits for Receipt of Expressions of Interest or Submission of Tenders and 3.4 Requirement for a "Standstill Period".
The Act provides for minimum periods for submission of expressions of interest for consultancy services or submission of bids for works, supplies and non-consultancy services.
Minimum Periods for Submission of Expressions of Interest
The minimum periods of submission of expressions of interest are ten working days where the notice is only published in Uganda, and15 working days where the notice is published internationally.
The period for expressions of interest starts on the date the notice is first published and ends on the deadline for submission of expressions of interest.
The period for submission of expressions of interest is determined by taking the following factors into consideration:
Minimum Periods for Submission of Bids
The minimum bidding periods in respect of each procurement method are:
This method of procurement does not have a minimum bidding period. The period of bidding is determined by taking the following factors into consideration:
PDEs require all bidders participating in public procurement or disposal to meet the qualification criteria set out in the bidding documents, which in all cases shall include the following basic qualifications:
Pre-qualification for Non-Consultancy Services
The Act permits pre-qualification under open domestic and open international bidding to obtain a shortlist of bidders in the procurement of works, supplies and non-consultancy services.
Pre-qualification is used in circumstances where:
The criteria for evaluation for pre-qualification includes:
Note: the Act does not provide for a minimum number of bidders that may be pre-qualified.
Pre-qualification for Consultancy Services
A PDE may elect to shortlist consultants under the following circumstances:
The evaluation criteria PDEs must take into account in preparing a shortlist of consultants includes the following:
Where the consultant is a firm, company, corporation, organisation or partnership, the consultant is required to submit the following documents, with the application to be pre-qualified:
Evaluation Criteria during the Procurement and Disposal Process
The choice of an evaluation methodology is determined by the type, value and complexity of the procurement or disposal.
All evaluations are conducted by an evaluation committee who report to the Procurement and Disposal Unit (PDU). A PDE is mandated to establish a PDU whose function among others is to manage all procurement or disposal activities of the PDE except adjudication and the award of contracts.
The evaluation of bids by interested parties is conducted during meetings of the evaluation committee.
Evaluation of Bids for Procurement of Works, Supplies and Non-consultancy Services
Bids for the procurement of works, supplies and non-consultancy services are evaluated using the technical compliance method.
The evaluation criteria assesses the following:
The PDE is required to state the evaluation criteria used which must not be amended during the procurement process.
Evaluation of Proposals for Consultancy Services
Proposals for consultancy services are considered using the following methods:
The quality and cost based selection method is used for highly specialised assignments, where it is difficult to develop precise terms of reference or the required input and for which a procuring and disposing entity expects consultants to demonstrate innovation in the proposal; assignments that have a high downstream impact and in which, the objective is to have the best consultants; and (assignments that can be carried out in several different ways, where a proposal is therefore not comparable and where the value of the consultancy services depends on the quality of the proposals submitted.
The fixed budget selection method is used where an assignment is simple, can be precisely defined, and where the budget is fixed.
The least cost based selection method is used where the required consultancy service is of a standard or routine nature and where well established practices and standards exist.
The consultant qualifications selection method shall be used for consultancy services of a value as may be prescribed by the Authority.
A PDE is required to disclose the evaluation criteria in the notice of expression of interest.
PDEs are required to disclose the evaluation and qualification criteria. This disclosure is contained in the solicitation/bidding documents issued by the PDE. The bidding documents are issued to interested parties upon the publication of a bid notice in the course of a procurement process.
There is no obligation to notify parties who have not been selected of the reasons for their non-selection in the procurement process.
A PDE is required to notify bidders of a contract award decision. This must be done within five working days of the decision to award to the contract.
Notification of the award decision by the PDE is done by:
During a procurement and disposal process, a PDE is required to not take any action for a period of ten days from the date of the display of the notice of the best-evaluated bidder.
However, this standstill period does not apply to micro and direct procurement and all procurement in emergencies, irrespective of the procurement method used.
Review of Decisions Made by a PDE after a Procurement and Disposal Process
A bidder may seek administrative review of any omission or breach by a PDE or any regulations or guidelines made under the Act or of the provisions of the bidding documents including best practices.
A PDE is required to provide a bidder seeking administrative review with:
The following bodies are responsible for the review of decisions of awarding authorities:
Review by the Accounting Officer
A bidder aggrieved by the decision of a PDE may make a complaint to the Accounting Officer of the PDE. The complaint must be made in writing, within ten working days from the date the bidder first becomes aware or ought to have become aware of the circumstances giving rise to the complaint. The Accounting Officer is required to make a decision in writing, within 15 working days, indicating the corrective measures to be taken, if any, and giving reasons for his or her decisions and submit a copy of the decision to the Public Procurement and Disposal of Public Assets Authority (the “Authority”).
If the Accounting Officer does not make a decision within the prescribed 15 working days, or the bidder is not satisfied with the decision of the Accounting Officer, the bidder may make a complaint to the Authority within ten working days from the date of communication of the decision by the Accounting Officer.
Review by the Authority
Upon receipt of a complaint, the Authority shall promptly give notice of the complaint to the respective PDE, suspending any further action by the PDE until the Authority has settled the matter. The Authority is required to issue its decision within 21 working days after receiving the complaint, stating the reasons for its decision and remedies granted, if any.
A bidder who is not satisfied with the decision of the Authority may appeal against the decision to the Public Procurement and Disposal of Public Assets Appeals Tribunal (the “Tribunal”)
Review by the Tribunal
A bidder aggrieved by a decision of the Authority may make an application to the Tribunal for review of the decision of the Authority. party not satisfied by a decision of the Authority may appeal to the Tribunal. An application to the Tribunal must be in writing in a prescribed form, include a statement of the reasons for the application and be lodged with the Tribunal within ten working days of being served by the Authority with its decision.
A party to the proceedings before the Tribunal who is aggrieved by the decisions of the Tribunal, may within 30 days after being notified of the decision of the Tribunal or within such further time as the High Court may allow, lodge a notice of appeal with the registrar of the High Court.
Review by the High Court
Where an application for review of a decision of the Tribunal is lodged with the High Court, it may make an order staying or otherwise affecting the operation or implementation of the decision, as the High Court considers appropriate for securing the effectiveness of the proceedings and for determining the application or appeal.
The following remedies are available for breach of procurement legislation:
During an administrative review process, the awarding authorities may grant the following interim measures:
The following persons have standing to challenge the awarding authority’s decisions:
The following time limits apply in the course of challenging a decision of a PDE:
Length of Proceedings of an Accounting Officer
An accounting officer, to whom a complaint arising from a procurement process is referred, is required to make a decision within 15 working days and submit a copy of the decision to the Authority.
Length of Proceedings of the Authority
Note: the Act does not provide for the length of proceedings before the Tribunal and the High Court.
Copies of annual reports regarding the number of procurement claims considered by the review bodies are not readily available to the general public.
The costs payable for challenging an award before an Accounting Officer and the Authority are pegged to the value of the procurement or disposal in issue.
The costs payable at lodgement of a complaint before an Accounting Officer and the Authority:
Note: where a complaint is upheld by an Accounting Officer or the Authority, the fees are refundable. Where a complaint is dismissed or withdrawn, the fees are non-refundable
Costs before the Tribunal
A further appeal made to the Tribunal costs UGX300,000 (USD82).
Modification of contracts following their award is permissible in the following circumstances:
A PDE may issue a change order to the provider, requiring the provider to make changes to the general scope of the contracts and in particular, with respect to:
The change order must not be one that increases the cost of the contract beyond 0.1% in the case of a single change or 1% in the case of cumulative change orders, of the original contract price.
Amendment of a Contract
Where a change in the contract increases the price of the original contract beyond 0.1% in the case of a single change or 1% cumulatively, such a change is effected by amending the contract.
A single contract amendment must not increase the total contract price by more than 15% of the original contract price.
Where a contract is amended more than once, the cumulative value of all contract amendments must not increase the total contract price by more than 25% of the original contract price.
The Act permits direct procurement, as a sole source procurement method where exceptional circumstances prevent the use of competition.
Direct procurement as a method of procurement is used in the following circumstances:
Note: The circumstances in the last three bullet points apply where the value of the new works, services or supplies does not exceed 15% of the value of the original or existing contract, and the original or existing contract is awarded through a competitive process.
Where direct procurement is used more than once in the circumstances specified in the second bullet point above, the cumulative value of all new works, services or supplies shall not exceed twenty five percent of the value of the original or existing contract.
For the purposes of direct procurement, an emergency situation is defined to mean:
Walukuba Transporters Co-operative Society V Jinja Municipal Council and Others (Consolidated Miscellaneous Cause 47/2017) Delivered by the High Court on 8 May 2020
The Applicants sought, by way of judicial review, to set aside the decision of the Respondent PDE, when it awarded a contract for revenue collection to another entity other than the Applicant. The Applicant had a running contract with the PDE, slated to end on 31 October 2017. On 10 May 2017, the Respondent PDE advertised a call for bids for the 2017-18 contract period, conducted the procurement process and the revenue collection contract awarded to another entity, which would take effect after 31 October 2017, when the Applicant's contract was to expire.
The Applicant filed a complaint with the Respondent, alleging that the advert and subsequent award of the contract to another entity was breach of contract.
Decision of Court
The Court held that a claim of breach of contract lies in the realm of private law and public law. As such, the Applicant's claim was not amenable to judicial review as there were remedies under private law.
The Court also held, upon an analysis of the facts, that the advert and invitation of bids for the 2017-18 contract period was not a breach of contract and did not in any way flout any procurement laws.
The Court consequently dismissed the Applicant's claim.
There are no legislative amendments currently being considered.