Public spending up
by $200 million

Time required to complete a procurement deal is 30 days

Public procurement contracts formed $1 billion in 2012, up from $800 million in 2006, according to a national survey released today by the Basil Fuleihan Finance Institute.

The percentage of public procurement contracts of the total Gross Domestic Product (GDP) has been steady at two percent since 2009. The figures include operations carried out by the Council of Development and Reconstruction and exclude procurement on the municipal level.

The Government spends most on electric establishments, with procurement contracts valued at $55 million, followed by hospitalization expenses, and expropriation for construction and infrastructure works.

According to the study, procurement is carried out according to laws dating back to 1959 that need serious amendments. The minimum time required to complete a procurement deal is at least 30 days, similar to Yemen and Jordan.

The report said that public procurement suffers from many complications, including the lack of unified Standard Bidding Documents that companies buy to participate in public tenders. “The divergence of terms of reference complicates the procurement procedures for suppliers, does not encourage competition, or the involvement of new suppliers,” the report said.

Plans to prepare annual procurement projects are weak. A limited number of Government agencies assess the needs without going through the legal process other countries usually have. A questionnaire distributed in public facilities showed that only half of those who took the sample actually prepare annual plans. This percentage rises to 78 percent, when a public project is funded by donors, not the State.

Based on the study, bidding forms 40 percent of overall public tenders, open tenders form 33 percent, restricted tenders (17 percent), and consensual agreements (ten percent).