NPC - BRIEF HISTORY

Since good governance is one of the priorities of the Democratic Republic of Timor-Leste, the effective financial management of public expenditure in the country, along with the quality of its infrastructures and services, becomes of paramount importance to this nation.

Brief background

The need to establish a specific legal framework that would ensure the sound management of financial resources has led to the enactment of Decree Law 10/2005 (Legal Procurement Regime), in November 2005, so as to "establish general rules for budget execution, aiming at the purchase of goods and services or execution of works, encouraging the application of transparency, economy and efficiency in procurement procedures.”

By the same time, Decree Law 12/2005 (Public Contracts Legal Regime) was also implemented with “the intention to establish the basic rules applicable to public contracting in the Democratic Republic of Timor-Leste." 

According to Decree-Law 10/2005, procurement was initially centralized in the (at the time) Ministry of Planning and Finance, which was responsible for all procurement of works, goods and services with contract amounts from 10,000 dollars up.

In 2010, the Timorese Government embarked on a significant infrastructure building program aimed at the rehabilitation of existing infrastructure and the construction of new national infrastructure in order to meet people’s needs.

In the meantime, a number of circumstances such as the rapid economic growth of the country, the enhanced capabilities of the ministries to implement their projects, the need to develop local contractors’ capabilities and the desire to decentralize the procurement process, led to some amendments to the Law which have determined significant changes in the procurement course in Timor-Leste.

In early 2011, the Government decided to bring together major infrastructure projects under an Infrastructure Fund and, recognizing the risks involved in the implementation of major projects from technical, fiscal and procurement points of view, the Government decided to establish the Council of Administration for the Infrastructure Fund (CAFI) chaired, at the time, by the Prime Minister and including the Ministers of Finance and Infrastructure as members. Simultaneously, the Government has established three (3) new entities: the National Development Agency (ADN), the Major Projects Secretariat (MPS) and the National Procurement Commission (NPC):

1. The Major Project Secretariat (MPS) works as a Secretariat for CAFI     and also supports the government in project evaluations, in the         establishment of priorities and to ensure the availability of budget         allocations;
2. Technical risks related to major projects also needed greater               attention and caution. Line ministries lacked the technical capacity     to adequately supervise the quality of construction and financial           management systems. In order to resolve this situation, the             National Development Agency (ADN) was then created with a quality     control function to ensure that the technical quality standards of the   contracts were properly fulfilled;  
3.  A third major concern for Government was to establish a  mechanism that would achieve transparency, economy and efficiency in    public    expenditure, particularly in major projects under the Infrastructure Fund. It was observed that the procurement decentralization to the line  ministries - in accordance with the Procurement Temporary Measures under Decree Law 14/2010 – was not effective and therefore the Government decided to renew its effort to create a central procurement agency to handle major projects by establishing the National Procurement Commission (NPC).

About NPC

The National Procurement Commission (NPC) was established on the 30^th of March 2011 by Decree-Law 14/2011, having initiated its functions with only four members (namely Mr. Aniceto do Rosário, Mr. Hermingardo Albano Soares, Mr. Rolito Rillo and Mr. Peter Pease as coordinator) nominated by the Prime-Minister. NPC’s mandate sought to provide procurement services to the line ministries and other public entities in major infrastructure projects and achieve proper transparency for the State procurement process.

In close collaboration with the National Development Agency (ADN), the Major Projects Secretariat (MPS), as well as line ministries, NPC is tasked to:

1. Carry out procurement procedures worth at least US 1,000,000 (one million dollars);
2. Provide technical assistance and advisory to procurement procedures of line ministries until US 1,000,000 (one million dollars);
3. Collaborate with the National Development Agency (ADN), the Major Projects Secretariat (MPS), Ministries and other public entities according to the Law; and
4. Such other tasks as may be provided by Law (e.g. Projects funded by International entities such as: ADB, WorldBank, Jica, European Union, China Exim Bank...)

In its beginning, NPC had to deal with several questions which demanded immediate action. Due to the shortage of national procurement specialists with proper experience and qualification, NPC has thread two different paths: initially, we have hired a procurement firm (through competitive bidding) which was responsible for hiring and managing the number of necessary international procurement specialists for the implementation of procurement procedures. It became necessary to us to work with this  firm in order to develop the proper systems and procedures for carrying out the acquisitions in a swift way, although the firm has always acted under the full control of NPC’s members; by March 2014, the contract with the firm Charles Kendall & Partners had ended and NPC, taking into account the growth of the institution as well as the development and implementation of our own business plan at medium and long terms (2015-2030) – as approved by the Minister of Planning and Strategic Investment – has decided to hire directly its own international procurement specialists and advisors.  

We have also recognized the urgent need to develop our own group of national procurement specialists, and therefore, between 2014 and 2015, we have recruited and hired eight officers and four national procurement assistants and, with an internally designed capacity building program, NPC has been training them so that they become experienced and qualified procurement specialists.

In early 2015, with the establishment of the VI Constitutional Government of the Democratic Republic of Timor-Leste, the National Procurement Commission ceased to be under the direct administration of the Prime Minister, becoming an agency under the Ministry of Planning and Investment Strategic.

NPC’s performance, in terms of management of the procurement process, may be measured by the price of the awarded contracts – upon final approval of the competent entities to authorize procedures - as opposed to the cost estimates - for goods, services and civil works - prepared by the project owners.

• In its initial year of operation, 2011, NPC has awarded contracts amounting to US 196.31 million, compared to the original cost estimate of US 206.83 million.
• In 2012, US 73.31 million were awarded in contracts - by NPC - as opposed to a cost estimate of US 76.21 million.
• In the following year, 2013, NPC has awarded contracts in a total of US 142.74 million, compared to the initial estimate of US 149.13 million.

• In 2014, NPC has awarded contracts amounting US 338.02 million which compared to the initial estimate of US 382.04 million resulted in US 44.42 million of savings for the Government.  

Currently under the direction of Mr. Aniceto do Rosario, NPC runs a team of 45 employees, from different domain areas, who try their best efforts to meet the five internal principles governing NPC (transparency, impartiality, competitiveness, integrity and value for money) as well as the goals defined in the nation’s Strategic Development Plan until 2030.