In Ghana, government contracts are a crucial part of the national budget, determining the quality of infrastructure and services for citizens. The process of awarding these contracts is governed by the Public Procurement Act, 2003, and its 2016 amendment, which established the Public Procurement Authority (PPA) to harmonize procurement across the public service. The PPA ensures that procurement is fair, transparent, and non-discriminatory. The Act defines what can be procured, including goods, works, and services, and applies to all government agencies and institutions where the state has a majority interest.
The Public Procurement Act established the PPA to oversee procurement processes, and the Authority has identified areas for improvement, including procurement planning. The PPA's annual assessment found that some entities failed to post their procurement plans on the PPA website, which can undermine transparency. Once a need is identified, the entity selects a procurement method, with competitive tendering being the preferred method. This can be International Competitive Tendering or National Competitive Tendering, depending on the contract's value and complexity.
The tender process involves publishing a notice, issuing tender documents, receiving bids, and evaluating them against stated criteria. The Act prohibits introducing new evaluation criteria after tenders are submitted, ensuring a fair process. The PPA has noted that some entities may try to bypass established tendering procedures by breaking bulk to meet threshold limits, which can lead to irregularities.
In April 2025, the Finance Minister, Dr. Cassiel Ato Forson, introduced a new requirement that no government contract can be approved without prior commencement authorization from the Ministry of Finance. This move aims to enforce fiscal discipline and eliminate financial recklessness. The Minister warned that any breach would attract serious consequences, and the Ministry would no longer take the fall for fiscal indiscipline.
The government has also introduced reforms aimed at speeding up contract awards while tightening rules on non-competitive methods. The lead time for national competitive tendering for goods has been reduced from 23 weeks to 8 weeks, and international competitive tendering for works has been cut from 27 weeks to 14 weeks. Competitive tendering remains the preferred method, with sole-source procurement permitted only under exceptional circumstances.
After a contract is awarded, the PPA's Contract Administration Manuals provide guidance on contract management. For technical services, a Contract Administrator is appointed to monitor performance, collect information, and measure delivery against agreed specifications. Documentation is a core requirement, including official contract copies, modifications, and progress reports.
The contract administration process also involves managing risks, such as scope not being achieved despite payment, unjustified variations, and substitution of inferior products. The manuals note that a diary may become evidence in court proceedings, so diarists should record only facts, leaving out conclusions and opinions. Effective contract administration is crucial to ensuring that government contracts deliver value for money and meet the needs of citizens.
Key points
- The Public Procurement Authority (PPA) regulates government contracts in Ghana, ensuring fair, transparent, and non-discriminatory procurement processes.
- The Ministry of Finance now requires prior commencement authorization for all government contracts, aiming to enforce fiscal discipline.
- The government has reduced the lead time for national and international competitive tendering, aiming to speed up contract awards.
