Sierra Leone - Country procurement assessment report (CPAR)

21883 SIERRA LEONE COUNTRY PROCUREMENT ASSESSMENT REPORT December 20, 1985  SIERRA LEONE COUNTRY PROCUREMENT ASS7SSMFNT REPORT TABLE OF CONTEN'TS Page No. S.121ARY AND CONCLUSIONS ............ ...................... ili-viii 1.0 General Information ................................. 1 1.1 Date of Report ................................. 1 '.2 Basis of Report ..................... , 1.3 General Commentary... 1 1.4 List of Staff Members Particularly Familiar with Procurement in Sierra Leone, by Sector 4 2.0 Scope of Application of the Regulations on ,overnmert Contracts. 4 2. ]GC-eographical Scope. 4 2.2 Sectoral Scope . 2.3 Contract Price . '.4 V'civers in the Case of International Financing . o 3.0 Procturement 'Methods ...... ................. 6 3.1 Civil 'Uorks .. 6 3._ Goods ........................... 7 3 .3 Consultants ............... . ..... . 8 4.0 Suimmrv Description of Procuremnent Proc-.s 9 I Civil Works Contracts . 4.2 Supply Contracts ................. ........... 11 4.3 Consultants Contracts .............1 4.4 Preferences ............................1...... 5.0 Conditions (Governing Eligibilit-7 to Bid on Contracts ...........................................12 5.1 Sierra TLeone Nationality anO Pegistrcr ...... , 2 5 T.2 Legal and Tax Status .......................... 5.3 Technical and Financial Capacitv . ......Il -.4 Exclusionls ..................................... 15 5.5 Security ....................................... 15  Table of Contents (continued) Page No. 6.0 Elements of Contract Implemientation ...................... 15 6.1 Price Adjustment .................................... 15 6.2 Currency Conversion ................................. 15 6.3 Settlement of Contractual Disputes .................. 16 7.0 Import Regulations, Import Duties and Taxes .............. 16 7.1 Import D)uties and Regulations .. 16 7.2 Other Individual Taxes Applicable in Sierra Leone ........................................ 17 7.3 Tax Applicable OnrI Contractors and Suppliers ......... 18 7.4 Tax TncentiNves ...................................... 18 Annex T : Procurenent E'ublications ard Circulars Anne: 7I : Bank's experience in Sierra Leore in rr-.re-ent *7:tters related to: (i) Credit No. 1129-ST, (Second 'Pi-rhwav 'Project),; (ii) Credit No. 1094-SI, (Eastern Intcg-ited Agricul.tural Development Project) (iii) Credit No. 573-Sf. (Second Education Proscot) ard {iv) Credit 1353-SL (Third 'PduQ3tor, Project)  SIERRA LEONE COUNTRY PROCUREMENT ASSESSMENT REPORT SUMNARY AND CONCLUSIONS INTRODUCTION This Country Procurement Assessment Report represents thle Region's initial assessment of Sierra Leone's procurement lz-!s, regulations and practices. Sectoral experience with the implementation of these rules will be reviewed as part of preparation and appraisal or individual proiects. Mr. K.G. Awunvo (TE WA) and 'r. ).I. Yaiternv (consultaxit) prepared this report under the direction of Yr. A. Amir Ai-Khafaji, Chief, WAPS.'S. Sierra Leone has no up-to-date national procurement cop. A sigrificant r,art o' the procurement actions and prncurement decisions are centralizedi in the Ministry of Finance (MF) which hosts the Central Tender Board (CTB) ard provides office space nnd personnel for a specialized procurement division of MF designated as the (Central Procuremcnrt *rid Supply UTnit (CPSU). The staff oF the Ministry of Finance gives s-'<ministrative support to CTB, advises the beneficiaryr orcanizations Ln procurement matters, prepares documents ror Ca,hinet presentatlon, and per`orms administrative work in connectiorn with ev-ery significant Drocurement action. Mfaior procurement octions are controlled b-Lv fhe CTB which has both advi sory and -upervisor- consultation w;ith the CTB, competiti ie bidding .And negotiar.; KK are prepared by the beneficiary organizations, such as the >mni-,rr i TUork-s and the Mlinistry of Agriculture .-and Natical yezsouroes. Periodic purchases of office supplies and -inor works, e uipment or furnittre procurements for the Ministries and Go-ernment stores are Ientrailned ;n the Central Procurement and Supply Unit ((P''lU). The selection of contractors/s ppl-'iers!'ccnsultants corntract approval and signature procedures are -.'-ryLneffL-o ent -1-nl unreasonably time consuming. These procedures have caused protr.rc-' delays in the implementation of practicall, -i" ^ii/-an'k- protents. Arnex II presents selected samples prepared fr r TcVt; a n the _'ver,;'. legal files based primarily or, the reports of the 3.: perv i,; 3 Missions. The reasons for these inefticiencles and delays nrc l-..e&-u The most apparent factors are the following: (1) The M'inistry of FLinance (MF) .nust prepare a C' o rra-?s or oversee all the procurement actions in F;-e c irt ' highly centralized system.  - iv - (ii) The M'F staff must fill advisory, administrative and supervisory roles. The insufficient MF staff are assigned to multiple tasks and are overloaded with work. They create bureaucratic bottlenecks in the procurement system. (i-i) The role, schedule and procedures of the CTB are insufficiently regulated. CTB should be a supervisory, decision making body. CTB's role should be limited to reviewing procedures and approving the Technical Evaluation Committee (TEC) recommendations when the contractors/suppliers/consultant's were selected according to procedures consistent rith laws and regulations. A technical disagreement between TEC and CTB Fhould be an exception Fard not a routine phenomenon. This follows from a normal divtision of tasks in a hierarchical structure. CTB should net duplicate TEC functions, or if it does, either CTB or TEC is uinnecessary. (iv) The intervention 1/ of the Cabinet in a contract award is an unnecessary duplication of CTB's role. The '.ey ministers of the Cabinet are also members of the CTB. The key Ministers in their role of CTB members can investigate the ippropriateress of procedures and the availability of funds. Therefore, CTB's preRentation of the contract to the Cabinet for approval is an anomaly in the procedures and a likelv cnu,.e of dela. (Annex II). Statutory corporations, which may be elther part-,ally or totallv owned by the State, have their owm procurement procedures. Consequently, they do not interact with or depend upon the Central Tender Board. However, for convenience, these C-overnnent-owneed Enterprises (GOE) often use procedures similar to those kpohiecl in Government procurement. Fut, these G-OEs tavke a11 decisions Ln.errnally about procurement actions unLer the aut,horit- piv.en tc them bv thel4 respective Boards. Board nembers are usuallv --cernent officials 2nd 1/ iNote that at present, the Cabinet should review and 3poro've every contract award when either the ccTltract price -xceeas Leones 5,OO0 or when foreign currency paymerts are involved.  v some of them may also be members of CTB. But, it is not a requirement that CTB members supervise the procurement actions of GOEs. This supervision is reserved to Board members only. Since August 1984, the foreign exchange for imports is again a'located by the reconstituted Foreign Exchange Committee. Import orders may be placed, only after the receipt of import licenses and foreign exchange approval, bv means of letters of credit with local commercial banks. All imports, not specifically exempted by the Minister of Finance, are subject to an invoice entrv fee and to an import licensing fee, both equal to 127 of the CIF value of goods and payable at the time cf importation. Imports from ECOWAS (Economic Community of West African States) countries enjoy a lower (5%) rate. There are both specific and ad valorem duties. Import duties ard ta:es depend on the nature and the country of origin of the goods. Certain priority items are exempted from import duties, while others carrv a concessionary rate and luxury icems have the highest rate. Direct imports from '.Timibia and South Africa are prohibited. To date, the 3ank has been satisfied that this prohibition has been limited to primary boocott and has not precluded effective competition for the supply of goods or works required in 3ank financed projects. r E1. TO BE REFIECTED IN APPPAISAL/PDESIDENT'S REPORTS AND CLEDIT OR LOAN DOCUMENTS The following should be reflected in the above-mentioned doculments: .CB No special exemptions need to be specified in the tFove docunents 'Decause Sierra Leone's procurement practices normal'y allow Bank procurement procedures to take precedence. It -s of interest to point out that no clear waivers exist in Sierra Leone's Constitutincn and laws to give prioritv to international agreemensn. F