Procuring Infrastructure Public-Private Partnerships

The Public Procurement and Concessions Law (2014) has been enacted by the Parliament in Somalia. Later on, the 2015 version was considered in the parliament and alterations were made to this document before the final version was signed on August 9, 2016. The new version was signed in 2016 and became technically law. Although our contributors indicated that the institutions required to be formed by the law have not been created yet, which led the MoF to delay effectiveness, we will use the Public Procurement, Concessions and Disposal Act of November 23, 2015 for purposes of this coding (Hereinafter the "Procurement Law").

With the adoption of Somali's Public Procurement , Disposal and Concession Act in 2015, which the former President endorsed in 2016, also, detailed regulation and guidelines have been developed which is yet to be adopted
Also, the Interim National Procurement Board (INPB)and the Financial Governance Committee have recommended that action be taken to adjust the recently passed procurement law to ensure that it forms an appropriate legal and regulatory framework for implementing PPPs.

According to Article 54 of the Procurement Law about the Procuring Entities:
1. Any public entity that is provided with an administrative structure and a budget and is given responsibility for planning and use of public funds is declared a Procuring Entity.
2. A Procuring Entity shall conduct procurement and disposal in accordance with the provisions of this Act and subject to such other conditions as may be laid down in the regulations and administrative instructions issued by the Minister.
3. The head of the Procuring Entity shall be the Accounting Officer in accordance with this Act and shall be held responsible and accountable for compliance by the Procuring Entity within this Act...
4. The technical departments of the Procuring Entity shall be responsible for preparing schedules of requirements, including cost estimates, specifications, and terms of reference; participating in bid and proposal evaluations, and supervision of contracts; and certifying receipt of goods and completion of contract works and consulting services. The procedure for inspection and acceptance of receipt of goods will be defined in the Regulations.
5. The Procuring Entities shall be listed and published regularly in the Authority’s bulletin and website.

Finally, we note that Somalia has an Interim National Procurement Board which was established in March 2015 as a temporary body until permanent PPA is appointed. The information about the Interim PPA can be found at mof.gov.so while website will be developed for the permanent PPA.

According to Article 61 of the Procurement Law: 1. Every Procuring Entity shall establish a Procurement Unit under this Act.
Additionally, According to Article 121, there is a Concession Technical Unit that was established under the Ministry of Finance

According to Article 122 of the Procurement Law, titled: Functions of the Concession Technical Unit:
1. The general functions of the Unit are:
a) Policy guidance and capacity building– defining concession polices under the guidelines of the Inter`ministerial Concession Committee (IMCC) and processes and building the capacity of agencies to those processes;
b) Concession promotion both within and beyond government – encouraging sector agencies to consider using concessions or promoting the opportunities;
c) Technical support in implementing concession projects including providing hand holding support to responsible implementation teams in ministries or agencies or being directly responsible for some aspects of concession implementation; and
d) Reviewing and overseeing the management of concession projects for efficiency and affordability and approving concession projects or advising on the approval process.

2. The specific functions of the Unit are to:
a) Serve as the secretariat and technical arm of IMCC;
b) Provide technical, financial and legal expertise to IMCC and any Procurement and Concession Unit established under this Act;
c) Serve as a resource center on matters relating to concessions;
d) Conduct civic education to promote the awareness and understanding of the concessions process among stakeholders;
e) Make recommendations on the approval or rejection of projects prior to submission to IMCC for approval;
f) Assist IMCC in formulating guidelines and standard documentation required under this Act;
g) Liaise with and assist the Concession Entities in their roles in the various stages of a project cycle;
h) Ensure, in collaboration with the Public Procurement Authority, that the tendering process relating to a project conforms to the procurement provisions of this Act;
i) Carry out such other functions as may be conferred on it by IMCC and this Act.

Public Procurement Concessions Manual chapter 5.2.5 provides that:
a) Minister for Economic Affairs shall Issue a written approval as the Certificate of Concession (CC) for the procurement of the project as a concession or ...     

Public Procurement Concessions Manual chapter 5.2.6 provides that: If the Ministry issues the CC as per section 5.2.5 (a), shall ensure that the same CC is copied to the IMCC which is responsible for overseeing concessions implementation ranging from concession bid preparations to the final signing of the contract by the winning concessionaire.

According to Article 113 of the Procurement Law, and according to Chapter 2.5.1 2 of teh : Public Procurement Concessions Manual: A Concession Entity and or the Inter - Ministerial Concession Committee (IMCC) may where it is in the national interest, engage private sector entities or experts to advise on any of the processes of concessions other than approvals and such experts shall work with the Procurement Unit for the purposes of the specific concession. 2.5.2 Such experts shall be referred to as transaction advisors and /or specialist advisors and may include the lawyers, financial analysts, financiers, economists, sociologists, and sector specialists to support the CE or the IMCC.

According to Article 125 of the Procurement Law, titled: Inclusion in Economic Development Plan:
1. The Ministerial responsible for Finance shall develop an annual concessions plan for sectors of the economy in which concession may be promoted for approval of the Council of Ministers...

In practice, prioritization is not done in accordance with the provisions of the regulatory framework because, as we understood from our contributors, there are very few PPP projects undertaken in Somalia, and the ministries did not proceede to a formal prioritization of such projects with other public investment projects

Public Procurement Concessions Manual chapter 8.2.1 Table 6 gives a summary of crucial information that should be contained in the concession bidding document including draft contract.
Additionally, Article 143 of the Procurement Law provides that 1. The concession bid documents shall, at a minimum include the following: ... (d) General and specific conditions of contract / agreement.

According to Article 62 of the Procurement Law providing about the Evaluation Committee, we read:
...
2. The members of the Evaluation Committee Procurement Unit shall be persons with the required expertise and may be external to the Procuring Entity.

According to Chapter 8.3.5 of the Concession Manual: In the event that the CBD is approved by the IMCC, the Concession Entity shall publish a General Notice of Investment Opportunity (GNIO), Expression of Interest (EOI), Invitation to Bid (IFB) or all of them in successive order as the context may require in accordance with the bidding document and the provisions of this Concession Manual.

Additionally, Article 144 of the Procurement Law:
1. Upon approval of the concession bid documents , the Procurement Unit shall publish a required , General Notice of Investment Opportunity, Expression of Interest, Request For Proposals or all of them in successive order as the context may require in accordance with the provisions of this Act.

According to Article 135 of the Procurement Law, about International Competitive Bidding, (2) bidders shall be allowed not less than six (6) weeks toprepare and submit bids.

According to the Concession Manual: 9.1.1 The Concessions bidding proceedings shall as a default method follow open competitive bidding method (refer to chapter 10 of this CM).

According to Article 138 of the Procurement Law regarding Restricted Competitive Bidding

1. Subject to the approval of the IMCC, Restricted Competitive Bidding shall be employed where the Concessions Entity has pre`qualified bidders in accordance with the provisions of this Part of this Act.

Additionally, according to the Concession Manual, Concession Entity may use limited or restricted competitive bidding in lieu of open competitive bidding when it has a list of prequalified bidders. with the approval of IMCC

Under Article 17 of the Procurement Law titled Qualification of Bidders, 3. Any requirement established pursuant to this Article shall be set forth in the prequalification documents, if any, and in the bidding documents and shall apply equally to all bidders without discrimination. Only those criteria stated in such documents shall be applied.

According to our contributors in Somalia, the prequalification criteria specified in the tender documents are not respected in practice yet explaining that there has not been PPP projects they were aware of to provide a positive answer

According to Article! 20 of the Procurement Law titled: Clarification and Modification of Bidding and Prequalification Documents
1. A Procuring Entity shall at the earliest possible respond to any request raised by bidders/applicants for clarification of the bidding documents, or the prequalification documents, provided that such request is submitted to the Procuring Entity within the time specified in the bidding or prequalification documents.

According to chapter 10.4.6.1 of the Concession Manual, A pre - application meeting may be held to clarify and respond to questions that the bidders could have regarding the project and the information provided in the EOI. The purpose of this meeting is to provide a forum for any general inquiries about the EOI process. If some clarifications sought may lead to a change in any clause of the EOI, the change shall be incorporated in the EOI and such changes shall be communicated in writing to the entire participants. Depending on the nature of the clarifications, the CE may decide to extend the date for EOI submission ...

According to Article 80 of the Procurment Law, 10. The Procuring Entity shall prepare an evaluation report detailing the examination and evaluation of bids and identifying the recommendation for award of contract in accordance with the evaluation criteria specified in the bidding document.

According to Article 144: Notification of General Notice of Investment Opportunity, Expression of Interest or Request for Proposals
1. Upon approval of the concession bid documents , the Procurement Unit Shall publish a required, a General Notice of Investment Opportunity, Expression of Interest, Request For Proposals or all of them in Successive order as the context may require in accordance with the provisions of this Act.

Additionally, according to 10.4.3 of the Concession Manual: The CE shall publish the intention to award the concession project, describing clearly the characteristics of the project (brief overview of the project and scope of services) and the minimum technical, financial and operational qualifications and requirements for participation.

According to Chapter 10.6.29.1 of the Concession Manual: The CE shall inform the bidders, who have submitted bids, of the technical points assigned to each of them; and shall notify those whose proposals did not meet the minimum qualifying mark that their price proposals will be returned unopened after the contract is signed. The CE shall simultaneously notify the consultants that have secured the minimum qualifying mark of the date, time, and place set for opening the price proposals.

According to Chapter 10.6.29.1 of the Concession Manual: The CE shall inform the bidders, who have submitted bids, of the technical points assigned to each of them; and shall notify those whose proposals did not meet the minimum qualifying mark that their price proposals will be returned unopened after the contract is signed. The CE shall simultaneously notify the consultants that have secured the minimum qualifying mark of the date, time, and place set for opening the price proposals.

According to Article 83 of the Procurement Law, 4. The contract shall not be signed until at least 14 calendar days have elapsed, following the giving of that notice to allow any aggrieved bidder to file a complaint or appeal.

Article 82 of the Procurement Law, titled: Prohibition of negotiations with suppliers or contractors, provides:
1. Pursuant to the exception in this Article, no negotiations shall take place between the Procuring Entity and a supplier or contractor with respect to a bid submitted by such supplier or contractor...
Furthermore, according to Chapter 10.9.3 of the Concessions Manual: Negotiations will be based only on issues that the concessionaire may require further discussions on; or issues that the concession entity may need to make some further clarifications on.

The restrictions of negotiations with the selected bidder between the award and the signature of the contract are respected in practice in Somalia.

According to Article 159 of the Procurement Law about Post Contract Management:
1. The Negotiation Team shall conclude post`contract management arrangements during the negotiations and this shall at least include:
(a) Mechanisms for monitoring performance of the terms and conditions of the agreements
(b) Reports to be submitted on periodic basis and the methods for authentication of the reports
(c) Asset maintenance and improvement requirements if any
(d) Arrangement for handling public complaints

According to Article 157 of the Procurement Law about: Issues to Be Considered At the Negotiations:
1. The negotiations team shall take the following into account, within the context of existing laws, in its negotiations with the prospective concessionnaire: ...(f) Dispute resolution mechanisms.

Chapter 11.5.2 of the Concession Manual provides that: The mechanisms available to resolve disputes and conflicts are a major part of the assessment of contract risks by private investors in concessions projects. The typical dispute resolution mechanisms may include any of the following.
a) Discussion between both parties;
b) Fast Track resolution process;
c) Dispute resolution board;
d) Expert determination;
e) Mediation or conciliation; or
f) Arbitration (In case arbitration between the CE and the Concessionaire is required, shall be conducted in accordance with the rules of procedure for arbitration of the United Nations Commission on International Trade Law (UNCITRAL) as in force on the date of the Concession Agreement. )
g) If the above a) - f) mechanisms of dispute resolutions fails, the aggrieved party could seek for judicial review in the High Court.

According to Article 157 of the Procurement Law about: Issues to Be Considered At the Negotiations:
1. The negotiations team shall take the following into account, within the context of existing laws, in its negotiations with the prospective concessionnaire: ... (q) termination provisions.
Also, according to the Public Procurement Concessions Manual, in its chapter 11.7 titled: Termination of Concession Contracts: (11.7.1) The concession contract shall include detailed provisions dealing with its termination.

The majority of our contributors indicated that although unsolicited proposals are not regulated in Somalia, they do happen in practice