Public Procurement in Ghana is regulated by the Public Procurement Act, 2003 (Act 663) as amended by the Public Procurement (Amendment) Act, 2016 (Act 914) (referred to as the "PPA Act").

The PPA Act applies to the procurement of goods, works and services financed in whole or in part from public funds; the disposal of public stores, vehicles and equipment; procurement with public funds including loans procured by government, grants, foreign aid and internally generated funds. All government agencies and institutions in which the Government of Ghana has a major stake are under an obligation to comply with the Act.

The Public Procurement Authority (PPA) is the regulatory body responsible for the effective implementation of public procurement laws in Ghana. The PPA is mandated to ensure fairness, transparency and non-discrimination in public procurement in Ghana.

The PPA Act specifies several procurement methods such as sole source procurement, price quotation, restricted tendering and competitive tendering. This article focusses on Single Source Procurement (also commonly referred to as 'Sole Source Procurement' or 'Sole-Sourcing').

Single-Source Procurement refers to the procurement of goods, products or services from a single supplier or contractor. For single-source procurement to be used, it is essential that certain "exceptional circumstances" exist to justify such an approach in order to obtain the PPA's approval.

A Procurement Entity may engage in Single-Source procurement where:

  1. the product, goods or services it seeks to purchase are only available from a particular supplier or where that supplier has exclusive rights in respect of the product and a reasonable alternative does not exist;
  2. there has been catastrophic event that has resulted in the urgent need of a product or service and it is impractical to use any other method of procurement;
  3. a Procurement Entity has procured goods or services from a supplier but determines that additional supplies need to be procured from that supplier for purposes of standardization, or that there is a need for compatibility with the existing purchased goods from that supplier;
  4. a procurement entity seeks to enter into a contract with the supplier or contractor for research, experiment, study or development, except where the contract includes the production of goods in quantities to establish commercial viability or recover research and development costs;
  5. the procurement of products or services in the interest of national security; and
  6. there is an urgent need for the goods, works or services and engaging in tender proceedings or any other method of procurement is impractical due to unforeseeable circumstances giving rise to the urgency, which is not the result of negligent conduct on the part of the procurement entity.

Under the PPA Act, a procurement entity that wishes to engage in Single Source Procurement must obtain the approval of the governing body of the PPA. Once approval is obtained, the procurement entity may proceed to invite the approved entity to submit a proposal or price quotation. In practice, most procurement entities considering this option will have requested a proposal or price quotation, which will also be attached to their submission to the PPA for approval.

In addition, where the procurement concerns national security, or affects the encouragement of employment of domestic suppliers, the extent of local content, economic development potential or the balance of payments position and foreign exchange reserves of Ghana, the Procurement Entity, apart from obtaining approval from the PPA, must also issue a public notice stating of its intention to resort to single source procurement. After issuing the said notice, the Procurement Entity is enjoined to give the general public the chance to comment.

In conclusion, under Ghanaian law single-source procurement is an acceptable method of procuring goods and services where certain exceptional circumstances exist.

Originally published 21 March 2020

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.