Procurement During Pandemic: Responses and Failures
Proceedings Report 18 June 2021
BACKGROUND In the wake of the COVID-19 pandemic as well as the subsequent lockdowns put in place to curb the spread of the virus in Nepal, almost all of the key sectors of the economy have remained shut. This has fed into the nation’s reduced incomes, loss of jobs, and stunted economic growth. To help the economy progress from the current dead-lock, the government needs to respond swiftly by providing the health professionals with the resources they need to control and contain the spread of the virus ensuring the lifting of lockdowns and gearing up the economy. On the contrary, while the supply of essential goods, medical equipment, and others should have been more effective, the situation in Nepal has become increasingly grim due to the ineffective and cumbersome response of public procurement methods. With this background, Nepal Economic Forum (NEF) conducted a neftalk titled "Procurement during Pandemic: Responses and Failures" to understand the current state of procurement system being adopted and practiced in Nepal during the pandemic, delve deeper into the hurdles and challenges faced in the procurement process, and provide possible solutions that can serve as a way forward by tackling the current issues at hand and strengthen the state capacity for procurement in Nepal. This session brought together diverse panels from academia, civil society, and the government to paint a picture of the procurement process, deliberate on possible solutions and partnerships, and highlight the critical situation the country is in.
SPEAKERS Kabita Parajuli, Member, COVID Alliance for Nepal Professor Peter Trepte, Member, Public Procurement Research Group, University of Nottingham Rajendra Adhikari, Former Member Secretary, Nepal Council of Arbitration and Professor, Construction Management
MODERATOR Semanta Dahal, Advocate and Partner, Abhinawa Law Chambers
Procurement During Pandemic: Responses and Failures
Kabita Parajuli Member, COVID Alliance for Nepal As a member of the COVID Alliance for Nepal, an allvolunteer crisis-response group working to tackle the pandemic situation, Kabita spoke at great lengths about the intricacy of the procurement process in Nepal in a time of crisis when the global supply chain has been disrupted. She explained how the sheer lack of planning and coordination has further led to subpar medical products being delivered in the country. She went on to underline the importance of data in planning for and effectively handling events like the ongoing pandemic while sharing her experience of witnessing the price of an oxygen concentrator almost triple in the matter of a week. She also emphasized the need to redirect attention towards countries with unused resources rather than merely looking to developed countries for assistance. In this regard, she lamented the lack of proactive assistance from countries with the capacity to help, especially when it came to the dispensation of surplus vaccine supplies. She also attributed the exacerbation of the crisis to the slow response on the part of agencies mandated with certain tasks. According to Kabita, procuring staff for isolation centers has been another hurdle, given the absence of clear provision of insurance for the frontline workers. She insisted that addressing this challenge was only a matter of resource reallocation which the government and private actors namely banks and industries are perfectly capable of undertaking. Lastly, she commented on the importance of recognizing others who have expertise, knowledge, resources, and connection as co-collaborators rather than as threats.
Procurement During Pandemic: Responses and Failures
Peter Trepte Member, Public Procurement Research Group, University of Nottingham As a Professor at the University of Nottingham and a member of the Public Procurement Research Group, Dr. Peter Trepte brought in an international perspective on procurement during unprecedented times. He mentioned that weaknesses in procurement systems stem not only due to legal issues, but also from market failures, and iterated that no country is an exception to this. As the discussion progressed, Dr. Trepte provided various insights on lessons learned from the pandemic and how individuals and institutions can prepare better for such crisis, as they are bound to happen again in future. Elaborating this, he highlighted that the legal issues that the majority of the countries have faced are because of problems with the legislation and absence of emergency declarations which would allow the government to use flexible procurement and direct contracting. He explained that local taxation is extremely crucial in this regard, a system largely absent in many developing countries of Asia where local bodies heavily depend on resources trickling down from the central government. Furthermore, as one of the intervention strategies, Dr. Arab talked about common but differentiated responsibilities, whereby different stakeholders are held accountable at different levels. Lastly, he remarked on the business rationale for switching to sustainable consumption and production (SCP) and CE, explaining how this transition makes good business sense beyond the obvious environmental implications.
Procurement During Pandemic: Responses and Failures
Rajendra Prasad Adhikari Former Member Secretary, Nepal Council of Arbitration Professor, Construction Management Dr. Rajendra Prasad Adhikari, being a specialist in the field of procurement, tabled his expert opinion regarding the procurement scenario of Nepal during the pandemic. He started by explaining how the Government of Nepal and suppliers, despite trying to facilitate procurement of necessary medical equipment, supplies, and vaccines to fight the COVID-19 pandemic, failed, and fell into controversy due to failure in following policies, procedures, government emergency declarations and procurement laws. He further stressed how we need to learn from such mistakes to ensure precise responses to fight the pandemic in the future.
Dr. Adhikari went on to explain how government to explain how government to government (G2G) procurement, although being one of the most appropriate options for the procurement of vaccines, might not always work out, as other governments might not always be willing to share their vaccine stock, or they might not be producing sufficient vaccines. He stressed the necessity of weighing all available procurement options, comparing prices, planning for proper supply chain management, and making a policy decision on the selection of procurement models while keeping in mind the constraints of G2G procurement. Shedding light on how the government accused the agent of charging commissions for its failure to procure vaccines in time, he clarified that the authorized agents were allowed to get a commission if agreed upon in the contract. Likewise, he mentioned how such cases could be avoided if the government followed legal procedures. Lastly, Dr. Adhikari insisted on how numerous successful procurements have been made in the past and urged people not to lose hope in Nepal’s procurement system because of the current failures.
Procurement During Pandemic: Responses and Failures
Semanta Dahal
Partner, Abhinawa Law Chambers Semanta Dahal, the moderator of the session, framed the discourse around current procurement laws and practices of Nepal, the challenges of implementing them, and policies around framing such laws. With the current pandemic exposing the frugality of the Public Procurement Act of Nepal, it remains vital that the loopholes and ambiguities are addressed to avoid confusion and delay in implementing such laws. He also addressed that the onset of COVID-19 is merely a reminder that Nepal needs to be best prepared for the future and learn from international practices. It remains the duty of government entities, civil society, and other stakeholders to aid in capacity building and effective lobbying to help close some of the gaps that have been created by the ineffective response of designated authorities during this pandemic.
Key Highlights: The procurement system in Nepal may highly be regarded as less of a legal problem and more of a market failure and lack of supply. Procurement legislations are of even more significance during emergencies, which is why the key is to ensure compliance with such procurement legislations. Effective monitoring and amendment of such procurement policies to avoid misinterpretation and leakage of resources is equally important. The government needs to start exploring partnerships by looking at stakeholders from different sectors with varied expertise, knowledge, and connections as collaborators. Doing this can capacitate the country and bring much-needed radical change.