Provider Selection Methods on Procurement

1. The types of method to select provider

In terms of selection method, President Regulation on Government Procurement divides the type of selection based on the types of good or services that will be the object of the procurement itself. Article 4 of President Regulation on Government Procurement regulates that the object of procurement are consists of Goods, Construction Project, Consultation Service, and Other Services. The types of selection method will be determined by the nature and the needs of each object. Therefore, each object might have different types of selection method. The selection method will be defines as follows;

Object	Providers of goods	Providers of Construction Project	Providers of Services
Method	Article 35 (2) of President Regulation on Government Procurement stated that the selection of good’s providers is done by; Public Tender; Limited Bidding; Simple Auction; Direct Appointment; Direct Procurement; or Contest	Article 35 (3) of President Regulation on Government Procurement stated that the selection of Construction Project’s providers is done by; Public Tender; Limited Bidding; Simple Auction; Direct Appointment; or Direct Procurement	Article 35 (3a) of President Regulation on Government Procurement stated that the selection of other Service’s providers is done by; Public Tender; Simple Auction; Direct Appointment; Direct Procurement; or Competition (sayembara).

From the table above we can see that basically the types of selection methods are consists of Public Tender, Limited Bidding, Simple Auction, Direct Appointment, Direct Procurement, Contest and Sayembara. Such methods will be more elaborated as follows;

1. Public Tender

Article 1 (23) of President Regulation on Government Procurement defines public tender as a method of selecting the provider of goods or construction project or other service for all the work that can be followed by all providers of goods or construction or other services which are eligible. Article 36 (1) of President Regulation on Government Procurement also explained that the public tender for selecting the provider of goods or construction project or other service is done post qualification.  It means that the offer of the providers must come first then it will be selected based on the Procurement document.

Furthermore, Article 36 (3) of President Regulation on Government Procurement regulates that the public tender of such object must be announced at least in the official website for the society, and the National Procurement Portal by LPSE, so that the society and the business worlds which are might be interested and qualified can join the tender. In its elucidation, it explains that if deemed necessary, ULP can add the media to inform by radio, television, or inviting the providers of goods and services which are considered eligible. In addition pursuant to Article 6 (4) of President Regulation on Government Procurement this method do not include the existence of price negotiation.

2. Limited Bidding

Limited Biding Pursuant to Article 1 (24) jo Article 36 (2) of President Regulation on Government Procurement are a method of selecting the providers of goods and construction project which the object of goods and construction project are deemed more complex and only some providers considered eligible to join the biding.

3. Simple Auction

Pursuant to Article 1 (25) jo Article 37 (1) alphabet a of President Regulation on Government Procurement the simple auction is a method of selection for providers of goods and other services which the object is cost under five billion rupiahs. This types of selection also conducted post qualification as mentioned in Article 37 (2) of President Regulation on Government Procurement. The announcement of Simple Auction regulated in Article 37 (3) of President Regulation on Government Procurement which requires to be announced at least in the website of the Ministry/Institution/Official Body/Regional government, official bulletin board for the society, and the National Procurement Portal by LPSE. Article 37 (4) of President Regulation on Government Procurement also do not allow price negotiation in this type of selection.

4. Direct Procurement

Basically the regulations regarding Direct Procurement are the same with simple auction, however, the difference is in the object of the procurement which is pursuant to Article 1 (26) of President Regulation on Government Procurement the object of direct appointment is Construction Project.

5. Direct Appointment

Pursuant to Article 1 (31) jo Article 38 (2) of President Regulation on Government Procurement Direct appointment is a method of selection by directly appointing one provider of goods or services which considered eligible. Furthermore, Article 38 (1) requires that direct appointment can be done in certain circumstances and the object of the procurement (goods, construction project and other services) is special on its nature. The criteria further explained in Article 38 (4) such as emergency situation, preparation sudden international conference, activities concerning the country's defense, activities which is secret in nature, and such specific activity can only be conducted by certain provider. However, in this type of method the price negotiation is may conducted as regulated under Article 38(3) of President Regulation on Government Procurement.

6. Contest

Contest Pursuant to Article 1 (30) jo Article 35 (4) of President Regulation on Government Procurement defines as a method of selection of goods providers which competing goods/ specific goods which has no market price and cannot be valued with per unit price.

7. Sayembara

Sayembara Pursuant to Article 1 (29) jo Article 35 (4) jo of President Regulation on Government Procurement defines as a method of selection of service providers which competing original idea, creativity and innovation which the price cannot be valued with per unit price.