PROCUREMENT LAW ASSIGNMENT

Name

: Noorila Ulfa Nafisah

Student number

: 031311133081 (A-3)

Provider Selection Method based on Presidential Regulation No. 54 of 2010

as Alterered Fourth Time to Presidential Regulation No. 4 of 2015

I. Resume of Provider Selection Method

Based on Presidential Regulation No. 54 of 2010 on Procurement of Government
Goods/Services as Alterered Fourth Time with Presidential Regulation No. 4 of 2015,
provider selection methods are regulated in Chapter VI, Third Part, First Paragraph
concerning Ruling of Method Provider Selection of Goods/Construction Work/Other
Services. Working Group ULP (Procurement Services Unit) or Procurement Officer
composes and determines the method of selection. There are some methods in selecting the
provider, such as:
1. Public Auction
Public Auction is the method of selecting provider of goods/construction works/other
services for all works that can be joined by all eligible providers of goods/ construction/other
services. Principally public auction is done with post-qualification and no negotiation on
technic and price. Such selection must be announced at least in Ministry/Agency/Local
Government/Institution, official notice board for public and National Procurement Portal
through LPSE (Electronic Procurement Services), so that all of people and undertakings who
are interested in and satisfied with the qualification can be taken part.
2. Limited Auction
Limited Auction is the method of selecting provider of goods/work construction which
shall be chosen if the number of providers capable in performing believed to be limited and a
complex work.
3. Simple Auction

It is the method of selecting provider of goods/other services for work which has the
highest value of Rp5.000.000.000,00. Simple auction is done in the process of postqualification and announced the same way as in public auction. Besides, there is no
negotiation on technic and price.
4. Direct Selection
It is the method of selecting provider of construction work which has the highest value
of Rp5.000.000.000,00. Simple auction is done in the process of post-qualification and
announced the same way as in public auction.
5. Contest
It is the method of selecting provider of goods by way of holding competition of certain
object/goods with no market price and on which the price/fee could not be assigned based on
Owner Estimate. ULP/Procurement Officer determines the administrative and technical
requirement for those who wants to participate.
6. Prize Contest
It is the method of selecting provider of other services and consultation service by way
of holding competition on certain result of original idea, creativity, innovation, culture and
certain implementation method that the price/fee cannot be determined by Owner Estimate.
ULP (Procurement Services Unit)/Procurement Officer determines the administrative and
technical requirement for those who wants to participate.
7. Direct Appointment
It is the method of selecting provider of goods/construction work/other services by way
of appointing directly one provider of goods/construction work/services. This method can
only be used in certain condition and/or procurement of special goods/construction
work/other services. What considered as certain conditions and special criteria of
goods/construction work/other services is set forth in article 38 (4) and (5). The one qualified
provider is invited and negotiated for technical and price so that the acquired price is pursuant
to the prevailing market price and technically such procurement can be justified.

The procurement of consultation services can also be done in direct appointment on

certain conditions specified in article 44 (2). It is performed by way of pre-qualification
towards one consultation service provider.
8. Direct Procurement
It can be performed towards procurement of goods/work construction/other services
with the highest amount of Rp200.000.000,00 by conditions that those are the operational
needs of K/L/D/I, simple technology, small risk, and/or performed by individual and/or small
business entity of goods/services provider and small cooperatives. Direct procurement is done
based on owner estimate. Budget User or the Proxy may not use this method to separate
procurement package to some packages in order to hinder auction.
Direct Procurement can also be done for procurement of consultation service with the
highest amount of Rp50.000.000,00. It is performed by one Procurement Officer. Budget
User or the Proxy may also not use this method to separate procurement package to some
packages in order to hinder selection.
9. General Selection
It is the method in selecting provider of consultation service for work that can be
attended by all qualified consultation service providers. It shall be announce the same way as
public auction method. Short list of general selection consists of 5 to 7 consultation service
providers.
10. Simple Selection
It is the method in selecting provider of consultation service in a simple way for
consultation service with the highest amount of Rp200.000.000,00. Simple selection can be
done if general selection method is deemed to be inefficient in its cost. It shall be announced.
Short list of general selection consists of 3 to 5 consultation service providers.

II. Case Analysis:

Case that will be analyzed in this assignment regarding the ongoing legal proceeding
of President Director of Pelindo II, Richard Joost Lino (R. J. Lino) on procurement of quay
container cranes in 2010. Such case is handled by Corruption Eradication Commission (KPK)
based on the report from Labor Union of Pelindo II.
In 2010, Pelindo II held an open auction for the procurement of 10 units of mobile
crane with a budget of Rp 58.9 billion in order to increase productivity. The procurement was
held in Pontianak, Palembang and Lampung. In particular to boost speed of handling of
goods at the port. The procurement process follows the Board of Directors of Pelindo II
Decree (SK Direksi) on procedure and procurement of goods and services within Pelindo II.
Basic use of SK Director is Government Regulation No. 45 of 2005 and Regulation of the
Minister of State Owned Enterprise No. 5 of 2008. Through several times of conducting
general auction but failed to choose, he finally used his authority as Director to order
procurement of three quay container cranes in 2010 by direct appointment solely to HDHM
company (PT Wuxi Hua Dong Heavy Machinery. Co. Ltd.) from China as a goods provider.
He claimed that the purchased mobile crane was already booked since 2007 but since 2007
the auction process always failed until he took measures to perform direct appointment. In
addition, he stated that their provisions provided that if an auction is failed, we could use
direct selection. And if the direct selection is failed, thus there will be direct appointment.
The analysis of this case will be merely restricted based on Presidential Regulation
concerning Procurement of Goods and Services and Head of Governmental Goods/Services
Procurement Policy Institution (Perka LKPP). Method of provider selection by direct
appointment is specifically stipulated under article 38. Basically direct appointment can only
be done in case there are certain conditions and/or special procurement of special
goods/construction work/other services.
First, the criteria of certain conditions are not satisfied in any way. Certain
conditions comprising emergency handling which cannot previously be unforeseen and the
work period shall finish soon or may not be delayed any longer; organizing urgent conference
preparation to held international commitments and attended by the president/vice president;
activities concerning the national defense stipulated by the Ministry of Defence as well as
activities pertaining to security and public order established by the Indonesian Chief of
Police; confidential activities for intelligence purposes and/or the protection of witnesses; or
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specific goods/work construction/other services which can only be performed by one

provider. Based on those conditions, it is clear that there is no condition is satisfied in
pursuance to the RJ Lino conduct. The procurement of mobile crane is solely for the purpose
of business and public infrastructure enhancement. Such chronology signifies that there is no
emergency situation appeared, since the procurement process itself can take longer time more
than three years while what is called by emergency needs a very narrow time. Any other
criteria of specific conditions also obviously do not cover such action.
Second, the criteria of specific goods which can be done direct appointment is not
fulfilled either. The criteria of specific goods/work construction/other services, in brief,
consist of:
a. Goods/other services based on official tariff determined by government;
b. Building construction work which is a unit construction system and the unity of the
responsibility for the risk of failure of buildings that can not be calculated in advance;
c. Goods / construction / other services that are complex;
d. Procurement and distribution of drugs and medical devices;
e. Procurement and distribution of improved seed;
f. Procurement of vehicles with special pricing for government;
g. Rental accommodation/hotel/conference room tariff is open and accessible to the public;
h. Continued lease of buildings/offices and advanced lease open spaces or other enclosed;
i. Provision of infrastructure, facilities and public utilities in the housing for low-income
communities.
Since the object of the procurement done by PT Pelindo II is quay container crane, hence
such goods cannot be classified into any of above criteria. Crane can be procured by lots of
provider of goods since it does not have a complex technology.
Third, according to Perka LKPP No. 6 of 2012, concerning Technical Guidance of
Presidential Decree No. 70 of 2012, the provisions do not indicate that changing into direct
appointment done by PT Pelindo II cannot be justified. In the case of the repeated auction is
failed, the Working Group of ULP can perform Direct Appointment upon the approval of the
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PA (Budget User), with due regard to the principles of efficiency, effectiveness and
accountability, with the following provisions:
(1) The results of the work can not be delayed;
(2) Concerning interest/public safety; and
(3) Not enough time to conduct the auctions and the implementation work.
Those provisions neither of them can cover the PT Pelindo II case. Even though there is a
repeated auction, they cannot, especially the Director suddenly using his power, directly
change the method of selection into direct appointment.
Therefore, based on those provisions, the conduct of PT Pelindo II on choosing
solely PT Wuxi Hua Dong Heavy Machinery. Co. Ltd to be the provider of quay container
cranes cannot be justified. However, there must be further examination done by the judge to
know the detail about the chronology about the case. Direct appointment, once again, can
only be conducted to one provider of goods/work construction/other services on certain
conditions and specific goods/work construction/other services.

News Sources:
http://nasional.kompas.com/read/2015/12/19/08294421/RJ.Lino.Nilai.Penunjukan.Langsung.
dalam.Pengadaan.QCC.Tidak.Salah
http://www.jpnn.com/read/2015/11/10/337719/Kronologi-Kasus-Mobile-Crane-yangMenjerat-RJ-Lino-