METHODS OF DISPOSAL OF PUBLIC ASSETS BY A PUBLIC PROCUREMENT ENTITY

DISPOSAL

  s.3 of the ppda , defines disposal as the divestiture of public assets including intellectual and proprietary rights and good will and any other rights of a procuring and disposing entity by any means, including sale, rental, lease, franchise, auction or any combination however classified

  the disposal process is defined as the successive stages in the disposal cycle including planning, choice of procedure, measures to solicit offers from bidders, examination and evaluation of those offers and award of contract.

   methods of disposal

 s.79 (1) of ppda requires that the choice of a procurement or disposal method must first be approved by the contracts committee

 under s.87 (1) the methods of disposal of public assets include

1. public auction
2. public bidding
3. direct negotiation
4. sale to public officer
5. destruction of the asset
6. conversion or classification of assets into another form for disposal by sal
7. trade-i
8. transfer to another procuring and disposing entity
9. donation

A1. public bidding

  regulation 4 of the ppda (disposal of public assets) regs 2014 states that the method will be used where: the assets is located in a remote area, the asset has a geographically dispersed potentially market, the sale has end user or export restrictions, conditions need to be attached to the sale of the asset or post bid negotiations may be required

  reg 5(3) requires the entity to solicit for bids to dispose of a public asset by public bidding by publishing an invitation notice to the public

  the invitation must be published in at least one newspaper of wide circulation and communicated through other means to potential bidders so as to increase competition. reg 5(4

  the bidding documents must among others stipulate that the asset is sold on an ‘as is where is’ basis or the alternative basis for sale. reg 5(7) (9)

  the minimum bidding period is 15 working days. reg 5(11) and the bid are evaluated using the ‘price only’ methodology. reg 5(12)

A2.   public auction

 it shall be where there is a large number of potential bidders for the asset: value of the asset is low, more than one asset is to be disposed of and the assets are at one location or an site auction is arranged to avoid transport costs. reg 6(1

 the sale under this method must be at a reserve price. reg 6(2

 the entity solicits for bids by publishing an invitation notice to the public reg 7(3) in at least one newspaper of national circulation. reg 7(4) and the notice displayed on the entity’s notice board reg 7(5)

 the entity must appoint an auctioneer and handover the asset to them to conduct the auction on the entity’s behalf. reg 7(6)

 the entity must allow at least 10 working days of the potential bidders to inspect the asset. the period is between the date of publication of notice and the date of the public auction. reg 7(8)

 bidding is made orally at the auction reg 7(9) and the auctioneer will announce the successful bidder who must immediately after the announcement pay at least 50% of the contract price. reg 7(12) and the balance within 5 days. reg 7 (13)

B. direct negotiation

it’s used where national security, public interest, health and safety issues, legal and human rights issues or environmental considerations are served. when the asset is sold to a particular bidder. reg 

  the entity must obtain a valuation for the asset before the negotiations are conducted .reg 10(3)

  the entity solicits for bids by issuing bid documents .reg 10(4)

  the minimum bidding period for disposal by direct negotiations is 3 working days. reg 10(6) and the bid are evaluated using a ‘price only’ methodology

C.   sale to public officers

 it’s used where: the assets are small in number or are of a low value and a sale to the public would not achieve value for money, the use of the asset would directly enhance the performance of the public officer in the execution of his/her duties within the entity. reg 11(1) (a) and (b)

 the sale is done by an independent agent reg 11(2) and the asset is sold to the public officer for their personal use and not for business or commercial use. reg 11(3)

 the independent agent solicits bids by publication of a non-public invitation notice which is displayed within at least 5 pdes which are freely and easily accessible by public officers and on the website of the authority. reg 12(3)

 the bidding period must not be less than 10 working days .reg 12(11) of the bids are evaluated using the ‘price only’ methodology

 D. destruction of the asset

it’s used where: national security, public interests, health and safety issues, legal and human rights issues or environmental considerations will be served and the public asset has no residual value and it cannot be transferred to another pde, converted or classified into another form or disposed of by donation. reg 13(a) and (b)

E.  conversion or classification

 reg 15 (a) and (b) as in reg 13(a) and (b) above

  F. trade in

 pursuant to reg 17(1) and (2). its only used where the asset of the pde will be upgraded in a convenient, economic and efficient way, by trading in a surplus asset of the entity to off set the purchase price of the new asset and should not be used where competition and value for money will not be achieved in the procurement process

 G. Donation

 applicable where the entity cannot obtain payment for the asset using any of the other methods and neither can the asset be transferred. reg 21 (a) and (b

 disposal cycle

a) accounting officer institutes a board of suvey

 reg 3(2

-identification of disposal item

-determination of reverse price

b) preparation of disposal pan

 reg 2(1

-approval of the same by ministry of finance and if disposing strategic assets

C) user department initiates disposal process

 reg 3(1

-preparation of statement of requirements

d) pdu prepares bidding documents 

 - this applies to disposal by public bidding and sale to public officers. reg 5,6,

e) contracts committee approves disposal method ,bidding document and evaluation committee .reg 3(1

f) pdu advertises and invites bids .reg 5(4

g) pdu receives and opens bids

h) evaluation of bids. reg 5(12

I) contract committee reviews evaluation report

j) signing of contract

k) contract management. reg 5(14

-provider pays entity

-entity hands over asset

AHIMBISIBWE INNOCENT BENJAMIN 

(Entertainment Lawyer 🎶)