Indonesia
Answer ... Under Indonesian law, the procurement method for a construction project depends on whether the project:
- uses private sector funds; or
- is funded by the state budget or a regional government budget (public procurement).
However, in our experience, a tender is the most commonly used procurement method.
The Construction Law is silent on the procurement method for construction services using private sector funds. However, if a construction services user intends to engage an affiliated contractor to undertake construction works for the public interest, it must do so through a tender selection or an electronic catalogue.
The procurement methods for the public procurement of construction services providers include:
- e-purchasing;
- direct procurement;
- direct appointment;
- a quick tender; or
- a tender.
Meanwhile, the public procurement methods for consultancy services include:
- selection;
- direct procurement; and
- direct appointment.
Presidential Regulation 16/2018 also acknowledges procurement in emergency circumstances which is undertaken to protect Indonesian people either at home or abroad. Examples of emergency circumstances include the following:
- a (non-)natural disaster or social disaster (including a standby emergency, a response emergency or an emergency transition to recovery);
- a search and rescue mission;
- damage to (state-owned) infrastructure or a facility which may affect public services;
- circumstances relating to a political or security situation abroad or the implementation of a foreign government policy which directly affects the safety of Indonesian people abroad; or
- the provision of humanitarian aid to other nations due to a disaster.
If international parties are involved in public procurement, the procurement method must be conducted through an international tender/selection. An international tender/selection can be aimed at:
- procuring goods or services funded by an export credit guarantor agency or foreign private creditor; and
-
procuring goods or services with the following minimum values:
-
- construction services with a value of at least IDR 1 trillion;
- consultancy services with a value of at least IDR 25 billion; or
- other goods or services with a value of at least IDR 50 billion.
The above value restrictions can be waived if no qualified local services or goods provider is available.
Indonesia
Answer ... The advantages and disadvantages of the public procurement methods for construction services are as follows.
e-Purchasing:
- Advantages: The process is straightforward.
- Disadvantages: The method is available only for goods or services which are already listed in an electronic catalogue; and (from the point of view of the construction services user) a performance guarantee is not mandatory.
Direct procurement:
- Advantages: The process is straightforward.
- Disadvantages: The method can be used only for the procurement of construction services up to a maximum value of IDR 200 million.
Direct appointment:
- Advantages: The process is straightforward.
- Disadvantages: The method is allowed only in certain circumstances (eg, where the goods or services can only be provided by one provider; or where the required goods or services are confidential in the state’s interest).
Tender:
- Advantages: From the point of view of the construction services provider, the method is competitive and transparent; and from the point of view of the construction services user, the method delivers competitive offers from potential construction services providers.
- Disadvantages: The method involves a lengthy procedure and many requirements.
Quick tender:
- Advantages: The procedure is more straightforward that a tender (a quick tender does not require pre-qualification or post-qualification assessments, as required in a tender).
- Disadvantages: Only qualified potential construction services providers listed in the Vendor’s Performance Information System are eligible to participate.
Emergency (special) procurement:
- Advantages: The procedure is more straightforward, as the government will appoint the closest vendor which can provide the required goods or services.
- Disadvantages: Emergency procurement is possible only in very limited circumstances.
Indonesia
Answer ... As explained in question 2.1, the following factors may influence the choice of procurement method:
- the source of funding for the project (whether the procurement is deemed to be public procurement);
- the value of the goods or services (for public procurement);
- the types of goods or services procured (for public procurement);
- the participants in the procurement procedure – for example, whether international parties are involved (for public procurement – for example, whether international parties are involved);
- the public interest; and
- other circumstances (eg, if the goods or services can only be provided by one provider or the goods or services required are confidential in the state’s interest).