The federal government has started writing a directive in the hope of bringing about a stringent and speedy procurement process. Drafted by the Public Procurement & Property Administration Agency, it will consider raising the bid bond value requirement and reducing the bid validity date.

The initiative of revising the tender process came after the Public Procurement & Property Disposal Service tabled a proposal following successive bid failures. The Service has conducted an assessment and evaluated the failed procurement processes from last year. Due to the multiple futile attempts, the country is currently forced to import wheat bought through direct procurement without a bidding process.

The latest bid attempt to buy 600,000tn of wheat failed after two companies were hired to supply the grain for 117 million dollars. In November, the Service awarded Rosentreter Global Food Trading to supply 400,000tn for market stabilisation and Martina Mertens to import 200,000tn of wheat for emergency assistance.

After they were awarded the contract, the companies did not show up.

"It wouldn't be wrong to say that we fail in our procurement process," said Eyob Tekalign (PhD), state minister for Finance. "Our procurement procedure has many serious problems."

The study conducted by the Service outlined that the long bid validity date is pushing away potential bidders due to the volatile nature of wheat prices in the global market. It also indicated that the lower bid bond value leads to the participation of companies that are not capable of taking the contract and are likely to disappear after being awarded.

While preparing the proposal, the Service took the experiences of the Ethiopian Sugar Corporation in buying sugar and the World Bank's procurement guidelines into account, according to Turufat Negash, advisor to the director-general of the Service.

The Service tabled the proposal to its board suggesting to raise the bid bond value and reduce the current bid validity period by three-fold. It also proposed to consider a suitable period for the procurement of wheat, such as when the commodity has a lower price in the international market. The board approved the proposal and passed the case to the regulatory agency to prepare a legal framework.

To apply these revisions, there is a need for amending the existing law, according to Tsewaye Muluneh, director-general at the Service, which makes procurements on behalf of over 180 public offices and universities.

The nation's maximum bid security value requirement is half a million Birr, while the maximum bid validity date offered by bidders is designated as 30 days.