eBusiness Weekly
Note from ZNCC
Proper and successful Government procurement rests on certain core principles of behaviour which are of interests to all stakeholders involved, including the private sector, procuring agencies and the Government itself.
Some of the principles include; value for money, open and effective communication, ethics and fair dealing, accountability and reporting and equity.
Issues surrounding value for money and ethics and fair dealing have been on top of the charts in recent years, particularly in Zimbabwe.
The Procurement Regulatory Authority of Zimbabwe (PRAZ) is holding a Symposium in Masvingo from July 26 to 28, 2023 at the Clever’s Lake Resort.
The symposium, targeting junior procurement practitioners, procurement officers, buyers, procurement clerks, and internal auditors, is running under the theme; “Achieving Value for Money Outcomes”.
The Zimbabwe National Chamber of Commerce is participating in the symposium.
When one scrolls through the Public Procurement and Disposal of Public Assets Act (Chapter 22:23), one can actually pick that what bidders expect is provided for in the Act.
The Act is in place to ensure that public procurement and disposal of public assets is effected in a transparent, fair, honest, cost-effective, and competitive manner.
Thus, the Act provides for an open and competitive framework in public procurement and bidders expect to witness an effective implementation of such provisions.
Red tape hampers dealers from bidding, delivering goods and securing payment of bills. Resolving such issues is critical for the Ease of Doing Business and reaching optimal outcomes in public procurement.
There are always conflicting and diverse interests in public procurement and accordingly, bidders expect the independence of PRAZ to be a given and it is critically fundamental. In this regard, the decisions of the board should always be free from any political interference.
Section 6 (2) states that; “The Authority shall exercise its functions impartially and without fear, favour or prejudice and shall conduct all its activities in a clear and open manner so as to give the fullest effect to the objectives of this Act set out in Section 4.”
There is a perception among the public that graft and political favouritism form a large part of government purchasing. Bidders expect that contracts will be awarded based on merit not political affiliation or bribes.
In the 2022 ZNCC State of Industry and Commerce Survey, it was reported that there has been a proliferation of briefcase companies, most emerging during the Covid-19 period.
Such companies are said to be getting contracts and this is part of the sentiments shared with the Zimbabwe Anti-Corruption Commission (ZACC).
For effective functioning of the public procurement system, the rule of law should also be allowed to take its course. This entails that contracts must be enforced, and the Authority’s autonomy in decision making is respected. This is judged to be a key enabler to the realisation of efficient outcomes in public procurement.
Once a contract is agreed upon and signed by all parties following the due diligence procedures, the agreement should be implemented. Section 82 of the Act talks about payments in that they should be done within the time-limits as set out in the contract.
Indeed, it is important for the authorities to demonstrate due process when engaging contractors and awarding contracts, in an endeavour to improve on service delivery and quality of Government’s projects.
Procurement Officers should do adequate and proper due diligence before allocating projects to ensure that projects are done effectively and efficiently.
Validation of invoices and assessments of cost build-ups should be done before awarding contracts and not when the project has been completed especially in some cases where private contractors use their own resources in anticipation that government will pay later.
In any issue of public interests, stakeholder consultations are always crucial. The Authority, as per Section 26 of the Act, stresses on the need for market consultations.
PRAZ is always compelled to consult the market on issues relating to public procurement and engage the private sector and other stakeholders for a multi-stakeholder buy-in and implementation.
From the market, the expectation is that losing tenderers must be given opportunities to learn how they missed the opportunity so that meaningful competition is encouraged in the next bidding in promotion of the value for money.
On a positive note, the Chamber has been in constant engagement with PRAZ and the private sector will continue engaging the Authority in various forums like the ongoing
Symposium and also collaborate in educating the business community on the rules and regulations in line with the Act.
In public procurement, equity entails the application and observance of Government policies which are designed to advance persons or categories of persons disadvantaged by unfair discrimination.
Accordingly, Section 29 of the Act is centred on issues to do with ownership including gender, business size, and whether domestic or foreign owned enterprise.
Such issues that prefer domestic in certain projects must be taken into serious consideration. There is a law provision which requires that a quota be set aside for women and youths and bidders in that category expect to see this being implemented and mega companies being excluded in minor projects, say the manufacture of face masks as an example.
Another critical issues that is often ignored is premised on effective communication as per Section 55 of the Public Procurement and Disposal of Public Assets Act (Chapter 22:23). The call for bids, the reasons for the rejection of bids, and justification of awarding the contract to a certain bidder must all be communicated effectively.
Departments need to apply effort and research to get the best possible outcome from the market by ensuring that: potential suppliers have reasonable access to procurement opportunities and that available opportunities are notified at least in the Government Tender Bulletin; where market circumstances limit competition, departments recognise that fact and use procurement methods that take account of it; adequate and timely information is provided to suppliers to enable them to prepare and bid; bias and favouritism are eliminated; the costs of bidding for opportunities do not deter competent suppliers; and costs incurred in promoting competition are at least commensurate with the benefits received.
All in all, a good and vibrant public procurement system is achievable with adequate set of policies, a strong and effective PRAZ, and an overseer and adjudicator to assure compliance.
While the rules and regulations on public procurement attempt to plug loopholes for corrupt practices, there seem to be a gap in the implementation of the enabling legal framework to allow bidder’s enforceable right to review the contract when public entities breach the rules.
Act does provide bidders with a legal basis to challenge the actions of public procurement officials when they breach rules.
PRAZ should have sufficient number of competent and dedicated procurement staff that is able to execute their duties effectively.
The overseer is charged with the overall responsibility of ensuring that the system is properly functioning and that all the statutes of the law are being complied with.
Parliamentary Investigative Committees (such as the Public Accounts Committee) have such responsibilities. Also, there has been political will to capacitate the Zimbabwe Anti-Corruption Commission as part of the oversight bodies in public procurement. The expectation is that offenders will be prosecuted.
Government is the biggest client for construction works and most of its infrastructural projects are funded through Treasury and the National Budget. Many companies that started businesses in the construction sector were looking for projects coming from public tenders and most of them are being awarded the projects.
The local private sector is grateful to be participating in public tenders. However, the issue of non-payment and/or delays in payments for projects undertaken is a particular concern as it also affects viability.
Time is of essence, and as already been alluded to in line with the Act, payments must be done within the timelines specified in the contract.
Time management not only helps to ensure that deadlines are met in accordance with the job specifications, but also the safety of workers and the general citizenry.
In the instance, this also ensures reasonable returns for contractors especially in a volatile economic environment as timely payments enable them to reduce or eliminate costly overruns and prevent wasted time, resources and opportunities elsewhere.
In conclusion, if projects are not completed on tie due to non-payment or payment delays midway, it increases project costs.
Keeping projects on track, meeting deadlines and ensuring quality are all facets of effective time management that can assist in reducing labour and material costs.
It is, therefore, important for contractors to beat time and work within reasonable timeframes according to the bill of quantities and design. Overall, bidders expect to be consulted, effective communication, domestic preference, and the rule of law in public procurement.
This article was prepared by the Zimbabwe National Chamber of Commerce for Business Weekly.
