Ghana: Public Procurement

The Public Procurement Authority (PPA) which was established by the Public Procurement Act, 2003 (Act 663) as amended by Public Procurement (Amendment) Act 2016 (Act 914) regulates public procurement in Ghana. There is also the Public Private Partnership Act 2020, (Act 1039) which governs private partnership agreements between contracting authorities and private parties for the provision of infrastructure and services.

Even though Ghana has been a member of the World Trade Organisation (WTO) since January 1995, it is not a member of the Agreement on Government Procurement (GPA). Neither has Ghana entered into any procurement regulatory agreement with the EU. Therefore, the directives of these bodies do not have any direct effect on Ghana’s procurement regime.

However, Act 914 includes revisions made to the UNCITRAL Model Law on Procurement of Goods, Construction and Services in the areas of sustainable public procurement, improved procurement processes, circumstances for the exclusion or suspension of suppliers or contracts, and provisions to facilitate the implementation of framework contracting and e-procurement. The UNCITRAL’s key principles of transparency and non-discrimination are also reflected in the Amendment Act 2016 (Act 914).

The types of procurement contracts regulated in Ghana are the procurement of goods, services and works by ministries and other government agencies, public institutions, e.g universities and hospitals, and state-owned enterprises to the extent that they use public funds.

There are no specified financial thresholds at which public procurement regulations apply, according to the PPA Act 2020.

The Act applies to all goods, services and works financed in whole or in part from public funds regardless of value and there is no difference in the financial threshold depending on the nature of procurement.

The PPA Act, under the Second and Third Schedules, provides different threshold limits above which the procurement process must be carried out by a higher authority and approved by the appropriate entity tender committee. For example, for Goods, Works and Services, the Central Tender Review Committee must approve all contracts above GHS1,000,000.00, GHS 15,000,000.00 and GHS 1,000,000.00 respectively.

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The PPA Act does not make provision for or define complex contracts. However, according to the Organisation for Economic Cooperation and Development (OECD) a complex procurement is one whereby the specifications are difficult to define, competition is restricted by market factors or the bundling of procurement risks.

From this definition, restricted tendering and tenders under a public private partnership agreement may be construed as complex contracts under Ghanaian law.

For restricted tendering, the procurement entity must publish a notice of the selective-tendering award in the Public Procurement Bulletin for a minimum period of two weeks and a maximum period of six weeks for the submission of tenders.

Generally, a procurement entity may engage in what is called a pre-qualification proceeding to identify tenderers who are qualified prior to submission of tenders. Typical grounds for selection of bidders at the prequalification state are as follows:

• Possession of necessary professional skills, financial resources, equipment, managerial capacity, the legal capacity to enter into the contract, be solvent, have fulfilled its tax obligations and social security obligations, have directors or officers who have not in any country been convicted in any criminal offence relating to their profession or misrepresented as to their qualification within a period of ten years preceding the commencement of the procurement process or disqualified due to an administrative suspension.

Depending on what is being procured, a procurement entity shall supply a set of prequalification documents to a supplier. Some of the documents included in the prequalification document are instructions to the tenderer to prepare and submit prequalification applications, a summary of the main terms and conditions required for the procurement contract, documents which show that a tenderer has the requisite qualification, manner and place for submission of the application to prequalify and the deadline for submission and any other requirements that may be established by the procurement entity in conformity with the act and procurement regulations.

There are no differences in methodology between different regulated sectors. The methodologies which can be used are listed under Parts Five and Six of the Act.

Also, the Minister of Finance has the power to direct the use of a different procurement procedure where the Minister determines that it is in the national interest to do so and where the procurement of goods, works and services are to be financed by loans taken or guaranteed by the state, or aid granted under an international agreement that prescribes the procurement procedure to be employed. In these exceptional situations mentioned above, the procurement procedure to be used is to be published in the Ghana Gazette.

Where the bidder does not meet the qualification under Section 22 of the Act, the bidder is not qualified and mandatorily excluded from bidding. Some of the grounds for exclusion under Section 22 are, where the bidder has not fulfilled its tax obligation and has not paid to the State social security contributions. Also, where directors or officers of the bidder have in any country been convicted of any criminal offence in relation to their professional conduct or to making false statements or misrepresentations as to their qualification to enter into a procurement contract within a period of ten years preceding the commencement of the procurement proceedings, they are excluded from the tendering procedure.

Also, per S23(4) (a-e) of Act 663 as amended, the Board may suspend a supplier or consultant from engaging in any public procurement where it is determined after a special audit or by a court that the tenderer is engaged in corrupt or fraudulent practices.

The suspension of a supplier or consultant by the Board shall occur where the supplier or consultant is in contravention of a provision of the Act; the supplier or consultant is debarred from the procurement process of an international agency of which the Republic of Ghana is a member; the supplier or consultant is found to have a record of unsatisfactory performance after investigations by the Auditor-General; the supplier or consultant fails to substantially perform its obligations under the contract; the supplier or consultant is suspended by a professional body for professional misconduct; the supplier or consultant is found to have faulted on its obligation by an Act of Parliament or the supplier or consultant has been convicted of corrupt practices or a fraudulent act under the Act 663 as amended.

Also, a procurement entity shall reject a tender, proposal, an offer or a quotation if the supplier, contractor or consultant that submitted the offer gives or agrees to give, directly or indirectly, to a current or former officer or employee of the procurement entity or other government authority a gratuity in any form, an offer of employment; or any other thing of service or value as an inducement with respect to anything connected with a procurement entity and procurement proceedings.

Furthermore, under Section 58 (4) of the Act, a procurement entity shall not accept a tender if the supplier or contractor is not qualified, does not accept a correction of an arithmetical error made in its document, if the tender is not responsive or if the supplier, contractor or consultant engages in inducement as stated under Section 32 of the Act.

There are no provisions for discretionary exclusion.

A procurement entity may either invite tenders or put out an application to prequalify. The invitation to tender or prequalify is published in the Public Procurement Bulletin and on the website of the Authority and shall be published in at least one daily newspaper of national circulation. The invitation may also be published in a newspaper of wide international circulation in a relevant trade publication or a technical or professional journal of wide international circulation.

The supplier or contractor may request clarification of the tender documents from the procurement entity and the procurement entity shall respond to the request within a reasonable time before the deadline for the submission of the tender.

The procurement entity may modify the invitation documents by issuing an addendum prior to the deadline of submission of the tender and shall communicate the modification to the suppliers or contractors provided with the invitation documents and also the procurement entity may convene a meeting with the suppliers or contractors to clarify or modify tender documents and the minutes taken at the meeting will be promptly circulated to the suppliers or contractors to enable them take the minutes into account in preparation of their tender.

Submission of Tenders

• For international competitive tendering, the procurement entity allows tenderers at least 6 weeks to prepare their tenders.
• If clarification or modification is done or there is a meeting of tenderers held the procurement entity shall, prior to the expiry of the deadline for submission extend the deadline by giving notice of same at least 10 days before the expiry date.
• A tender shall be in writing, signed and submitted in a sealed envelope or may be submitted in any other form specified in the tender documents.
• The procurement entity shall provide the tenderer with a receipt showing the date and time when the tender was received.
• A tender received after the deadline for submission shall not be opened and shall be returned to the supplier or contractor.
• The period of validity for a tender shall be the period specified in the tender documents and subject to other rules stated under Section 54 of the Act.
• The procurement entity shall specify the principal terms and conditions of the required security in the invitation document if applicable and asubject to the guidelines under Section 55 of the Act.

Opening of Tenders

• The tender shall be opened at the time specified in the tender document or if there was an extension of time on that new date, and at the place specified in the tender documents.
• A supplier, contractor or their representative shall be permitted to be present at the opening of tender.
• The name and address of each supplier or contractor whose tender is opened, and the tender price shall be announced to those present at the opening and communicated on request to the supplier or contractor who submitted but was not present.
• The tender price shall be recorded immediately in the record of tendering proceedings.

Examination of Tender

• The procurement entity may ask for clarification from a supplier or contractor in writing when examining submitted tenders.

Responsiveness of Tenders

• The procurement authority considers a tender responsive once it is in conformity with the requirements set out in the tender invitation documents. Also, where the tender document contains minor deviations that do not materially alter or depart from the characteristics, terms and conditions and other requirements set out in the invitation documents or if it contains errors or oversights that are capable of being corrected without touching the substance of the tender, then the tender document is considered responsive.

Evaluation of Tender

• The procurement entity shall evaluate and compare the tenders that have been accepted in order to ascertain the successful tender in accordance with the procedures and criteria set out in the invitation documents.

Repeat Tender Qualification

• The procurement entity may require a successful supplier or contractor to demonstrate their qualification again even if this was done at the prequalification proceedings. The criteria to be used for this process should be stated in the tender documents. Where a successful supplier or contractor who is asked to demonstrate its qualification fails to do so, the procurement entity shall reject that tender and shall select another successful tender from among the remaining tenders.

Acceptance of Tender and Entry into Force of Procurement Contract

• A successful supplier or contractor shall be notified of the acceptance within thirty days of the acceptance. Where there must be a signing of a written procurement contract, the documents shall be signed within thirty days after the notice of acceptance is dispatched to the supplier or contractor. If a successful supplier or contractor fails to sign the written procurement contract within thirty working days of receipt or fails to provide the required security, then the procurement entity shall select another successful supplier or contractor in accordance with section 59(3) of Act 663 as amended.

For all contracts, the procurement entity generally chooses the appropriate methodology and follows the general procedure listed above (see Q8, above) in any procurement process.

Part Seven of Act 663 as amended by Act 914 provides for complaints and administrative review processes to ensure grievances are addressed according to best practices as follows:

• Per Section 86 of Act 663 as amended by Act 914, the Board shall with the approval of the Minister, compile and publish a code of conduct that shall apply to each official of a procurement entity, the members of an evaluation panel, members of a tender review committee, members of the Board as well as tenderers, suppliers, contractors and consultants. The code, among others, shall address conflict of interest, declaration of interest, screening procedures and training requirements.
• Per Section 91 of Act 663 as amended by Act 914, the Auditor-General is given power to conduct audits of the procurement activities of entities, contractors, suppliers and consultants at the instance of the Board. In addition, Article 187 of the 1992 Constitution mandates the Auditor-General to disallow any item of expenditure which is contrary to law and surcharge.
• Per Section 92 of Act 663 as amended by Act 914, a person may be criminally liable for being in contravention of provisions of the Act.
• A supplier, contractor or consultant who does not meet the qualification criteria under Section 22 of the Act is excluded from being a part of the procurement process.

Tenders submitted by tenderers have to be examined and evaluated based on requirements provided in the invitation to tender, including requirements such as company documentation, quality of goods or services, time of delivery and price.

Section 59 of the Public Procurement Act 2003 (Act 663) as amended by the Public Procurement (Amendment) Act 2016 (Act 914) provides that the procurement entity shall evaluate and compare the tenders that have been accepted in order to ascertain the successful tender in accordance with the procedures and criteria set out.

There is a three-step approach to evaluating tenders:

1. At the first stage, the focus is on the validity and qualification of the bidder. The essence of this stage is to ascertain whether the bidder is a company in good standing.
2. The second stage considers technical and quality evaluations. At this stage, factors such as the bidder’s capacity to supply the quantity of goods required, whether the technical specifications and designs of the bidder meet the requirements needed by the procurement entity and whether the goods, services or products can be delivered on time are considered.
3. Price and cost become consequential at the third stage. At this stage, only those bidders who have met the requirements of the first and second stages are considered.

Per Section 29(2) of the Public Procurement Act 2003 (Act 663) as amended, procuring bodies are not required to provide reasons for their award decisions unless there is a court order to that effect. Usually, the bidder will just be sent a letter to let them know whether they have been successful or not.

Unsuccessful bidders have the right to administrative review especially when they suspect that certain misconducts have taken place.

Part 7 of Act 914 gives aggrieved bidders the opportunity to seek Administrative Review when dissatisfied with a procurement process or decision.

The PPA has the power to grant the following remedies, among others:

• Cancel an illegal act or decision wholly or partially;
• Reverse an illegal decision by the procurement entity or substitute with the PPA’s decision;
• Order compensation for reasonable costs incurred (in connection with the procurement process); or
• Order termination of the procurement proceedings.

When a contract is awarded in violation of the procurement law, the Authority is empowered to annul the proceedings and cancel the procurement contract.

The Act provides that the Authority can order the payment of compensation for a reasonable cost incurred by the bidder who submitted the complaint, in connection with the procurement proceedings as result of an illegal decision of, or procedure followed by, the procurement entity.

The courts generally have power to award damages to any bidder who suffers damage owing to the breach of duty imposed either under law or contract and, therefore, can award damages to a disadvantaged bidder.

There are a few cases of public procurement law challenges in the courts of Ghana, prominent among which are Atta Mends v Takoradi Technical University [2019] DLHC 9236; and The Republic vs. Bank of Ghana Ex Parte Vasintel Limited and 2 OTHERS [2017] DLHC 3669. The cases involved disputes over whether or not a procurement contract was valid and contention over the validity of the award process.

Prior to the enactment of the Act, disadvantaged bidders did not file review applications for fear of being victimised by procuring entities. However, this has changed, and recent developments indicate that there has been an increase in the number of review applications to the Authority.

The cost and duration of an application for review will depend on the complexity of the case and the applicable procedural rules of the civil court.

It is difficult to give specific timelines as to how long a procurement dispute will take. This will all depend on the court, tribunal and the parties filing their applications within the specified timeframe.

Civil cases filed in the courts are guided by the High Court (Civil Procedure) Rules. The Plaintiff will be required to file their writ together with a Statement of Claim. The defendant then is required to enter appearance and file a Statement of Defence.

The case may then proceed to trial after a pre-trail settlement is attempted.

It is however significant to note that Sections 67, 68 and 70 of the newly enacted Public Private Partnership Act, 2020 (Act 1039) provides for a Complaints Panel for dispute resolution and settlement.

An aggrieved party is required to submit a written complaint to the Office with a copy to the contracting authority concerned within thirty days from the date the complainant becomes aware of the breach to which the complaint relates.

In the case of evaluation results, only written complaints submitted within thirty days from the date the complainant receives notice of evaluation results shall be considered.

Within ten days of receipt of a complaint, refer the complaint to the Complaints Panel.

Per Section 70, the Complaints Panel is required to resolve a complaint within sixty days after the receipt of that complaint. In addition, the Panel shall, within five days after a decision is made, submit the decision and the record of proceedings to the Committee. The Committee shall, within five days of receipt of the decision from the Complaints Panel, furnish the complainant and the contracting authority with a copy of the decision. A person aggrieved with an order or decision of the Complaints Panel may appeal to the High Court within thirty days after the receipt of that order or decision.

Foreign bidders enjoy the same rights and remedies as local bidders. The PPA is mandated to ensure that public procurement is carried out in a fair, transparent and non-discriminatory manner irrespective of the nationality of the bidder or where they are based. This is to promote a competitive industry and increase the confidence of the various stakeholders in public procurement processes in the country and beyond.

Once a foreign company is validly registered in Ghana in accordance with the Companies Act 2019 (Act 992) and meets all the Ghana Investment Promotion Council (GIPC) requirements for foreign companies doing business in Ghana, the PPA will afford it the same rights and remedies as a nationally owned company.

Currently, there is no specialist court that deals with public procurement issues in Ghana. However, there are administrative dispute resolution bodies under Part 7 of the PPA (Amendment) 2016 and under Section 67 of the PPP Act 2020 (Act 1039). The Section 67 provision establishes the Complaints Panel for handling disputes relating to the bidding process. There is also the Office of Special Prosecutor which is mandated to investigate matters involving alleged or suspected corruption and corruption-related including public procurement claims.

The amendment/variation of a contract post-award does not require a new procedure. However, some changes, such as an increase in the value of the contract, will require approval. Where there will be an aggregate increase in the original contract value by over 10%, the procuring entity must inform the appropriate tender review board of this variation with reasons.

The requirement for prior approvals does not apply in cases of ‘extreme urgency’. However, the Authority must subsequently approve any such emergency procurement.

There are no specific provisions in the Act in this regard. In practice, once a bid is submitted and submission of bids is closed, any change of members of a consortium may be effected only with the consent of the procurement entity.

Direct awards for complex contracts are not common in Ghana. A procurement entity may engage in a direct award with the approval of the PPA. Once the approval is granted, the procurement entity may procure the goods, works or technical services by inviting a proposal or price quotation from a single supplier or contractor.

In Ghana, direct award contracts may be entered into under various circumstances including emergency situations where urgency is required and where goods, works or services are only available from a particular supplier or contractor. Also, where the procurement entity seeks to enter into a contract with the supplier or contractor for research, experiment, study or development and where the procurement entity applies Act 663 as amended, for procurement that concerns national security and determines that single-source procurement is the most appropriate method of procurement.

The PPA has been sufficiently proactive in dealing with the fallouts from the ongoing COVID-19 pandemic. For example, during the lockdown in March 2020, the PPA issued guidelines to aid in the conduct of public procurement. These guidelines among other things advised procurement entities to extend deadlines for submission of tenders, encouraged the use of video conference options where tenderers can log in to observe the Tender/Proposal Opening process in order to promote transparency.

Some of the key challenges that have been faced include the unprecedented disruptions in supply chains as well as financial constraints of many business organizations across the globe.

It is expected that the lessons learnt during the pandemic would inform policy directions to deal with emergency situations in the future.