1.1 WHAT IS A PROJECT?

- WHAT IS PUBLIC PROCUREMENT?

- THEIR RELATIONSHIP

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In the literature project is defined in general as “a temporary endeavour undertaken to produce a unique outcome.”

In more concrete terms, a project exists only after a decision has been made to address a specific need, funding is available to support its execution, and measurable goals and objectives are well defined. A project has a defined start (the approval, or decision to proceed) and a defined end (the achievement of the goals and objectives). It is a one-off activity and would not normally be repeated. All projects are different but they have certain common features which are critical for their success, especially:

A clear and well-defined scope that can be achieved in a limited time
A clear and an agreed deadline for the outcomes to be achieved
Resources that are made available to achieve the outcomes of the project
A project owner who expects the outcomes to be delivered in time and who will be responsible for the management of the investment, bear all related costs, and be liable for the safe functioning
An experienced project team and in particular a project manager whose capabilities match the complexity of the project
Defined and visibly managed processes that are appropriate for the scale and complexity of the project

There are three key dimensions to a project, commonly known as the “magic triangle” of a project, characterised by the following figure:

Figure 1-1: The “magic triangle” of a project

These three dimensions (time, quality, and budget) are interdependent. This means that if the value of one changes then the value of the others will change accordingly. For example, in order to maintain the quality when the time decreases, the budget should be increased. 

Examples for different types of public projects are:

The Public Procurement Directorate (Treasury of the Republic of Cyprus) decided to undertake a project titled: Measures to Develop the Implementing Capacity of the Cypriot Authorities in applying the European Public Procurement Legislative Package until the summer of 2007. The project consists of the following activities:
Improving implementing capacity. This will be achieved by establishing an action plan for the improvement of the national public procurement system, developing a Public Procurement Best Practice Guide/ System and a Code of Ethics manual and finally by developing a Training Strategy and conducting training seminars for people involved in public procurement process.
Harmonization of National Legislation with the European Directives in public procurement.
Preparation of e-procurement study to be used for procuring at a later stage the implementation of the e-procurement system.

       The estimated project budget is € 1.100.000.

A Municipal Sewage Council plans to expand and upgrade the waste water treatment facilities within the next three years in order to cover the continuously increasing drainage needs (extension of Municipalitys region, increase of population, connections and incorporation of new networks), as well as to protect and upgrade the quality of the marine aquatic environment, which is characterised as a “receiver” of industrial wastes. The total budget of the project is estimated at €5.500.000 and the duration of the construction at 3 years.  
The Department of Information Technology Services (DITS) decides to purchase, install and maintain 400 notebooks for various governmental departments and governmental services. The overall project budget, including 5 years guarantee and maintenance services, is €420.000 and the delivery period is 6 months after the signing of the contract.   

The setting-up or design or definition of a public project is closely linked with public procurement. If a public body aims to implement a particular project, e.g. to build a school, to rehabilitate a road, to equip governmental departments with computers, software, to deliver IT training, etc. it will have to purchase works, supplies or services correspondingly.

The term Public Procurement includes all stages of the process of acquiring goods, services or works, involving the use of public money to accomplish specified public purposes, beginning with the identification of a need and ending with the completion of a contract and the disposal of the asset. Public procurement involves more than just purchasing by Contracting Authorities (which are obliged to follow the Laws 11(I)/2006 and 12(I)/2006 of public procurement) from suppliers using defined procurement methods. Generally, procurement begins with a design phase (Chapter 1) in which the needs are identified, investment is appraised, business case is developed, feasibility study is performed, costs, risks and time are estimated, Project Fiche is prepared and approved and Project Management Team is appointed. This is followed by the pre-tendering phase (Chapter 2) which involves the strategic considerations regarding the conduction of procurement. Then comes the tendering phase (Chapter 3 & 4) in which tender documents are prepared, proposals are invited, evaluated, and accepted or rejected. Award of the contract is followed by the implementation phase (Chapters 6) in which the execution of the contract is managed.

 


© 2007 Republic of Cyprus, Treasury of the Republic, Public Procurement Directorate
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