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procurement system can be the major killer, above all, the killers that can be identified.
For instance, how many people die in road accidents caused by poorly maintained roads because a tender was awarded to an incompetent service provider?
How many people die because they could not respond to drugs administered them because the drugs are expired or counterfeit? The list is endless, and even if you survive death, there will be a big call on your pocket.
Have you ever thought of why you pay US$1 per hour to park your car in CBD of Harare?
Have you ever wondered why you pay high electricity and water bills even if you go for extended periods without the services? Answers to these questions can only be found when we examine some aspects of the public procurement system.
Various researches show that procurement expenditure constitutes over 65 percent of total expenditure of modern day businesses.
Also, research has shown that organisations with properly constituted procurement functions achieve up to 25 percent savings on cost.
At the core of a procurement unit’s objectives is the desire to achieve the least possible total procurement costs.  This objective is not on the list of objectives of procurement departments of most Government departments and parastatals.
One reason for this could be the fact that these institutions do not need to achieve a profit or loss in their financial statements. Clearly there is no motivation to make cost savings in their operations.
It is public knowledge that Government departments, parastatals and other public institutions such as hospitals, universities and municipalities’ procurement practice is governed by the State Procurement Act.
Purchase transactions that exceed the US$10 000 threshold pass through the State Procurement Board.
The State Procurement Act had a noble objective of creating opportunities for companies owned by formerly marginalised races, especially black indigenous people.
Those purchasing for public institutions appear to be complying with the provisions requiring them to support indigenous companies while behind the scenes taking advantage of the weaknesses of the same provisions to the disadvantage of the public.
One writer once argued that an indigenous company is not a briefcase company. An indigenous company is a company owned by indigenous black people engaged in the production of goods or services.
This company helps create employment opportunities for indigenous people and contribute towards the GDP of the country. This definition does not include commodity brokers who in most cases employ one person who happens to be the owner. There is no problem for tenders to be awarded to any competent indigenous company as I have defined above.
However, problems arise when a product cannot be produced by indigenous companies, let alone local companies. The next logical thing to do is to look for the product beyond our borders. The State Procurement Act does not strictly prohibit public institutions from importing directly from foreign suppliers provided they apply for a certificate to import.
With an import certificate, they are automatically exempted from paying duty for the imports.
This means there will be phenomenal savings for the institutions. Having said this, those who procure for the public institutions appear to be supporting Government efforts by strictly awarding tenders to indigenous companies, but, alas, that is not the case.
To better explain this, let us look at this hypothetical scenario. Imagine Zesa wants to buy a component which is not locally produced and the component can only be imported. Zesa flights a tender advert in the newspapers and the responses are overwhelming.
The most suitable respondent is offering to supply the component at US$2 million. Most tenders are won in the majority of cases by submitting the required documents only. In my experience, I have noticed that one-man-owned companies are very good at responding to tenders. Let’s take, for instance, the cost of the component is US$700 000 when buying directly from the supplier.
This means the company, after smuggling the component by paying bribes, will make a profit of at least US$1,2 million. Obliviously, Zesa will factor in the cost of the component in the electricity tariffs.
It will also fail to pay its imports for electricity, leading to public sufferings. The question is, who does the public procurement system seek to benefit?
If, for instance, Zesa were to import directly, they would save up to US$1,2 million, which can be used to pay electricity imports than to benefit one person.
In the case of the poisonous water treatment chemicals ,we ask again, why did the Harare City Council opt to use a third party instead of buying directly from the foreign supplier? If the council had gone to buy directly, they could have made enormous savings let alone buying the correct product. It emerged at the beginning of the month that councillors were paid bribes.
This brings to the fore the issue of how procurement systems are structured. Who is responsible for procurement in public institutions? How can we explain the fact that most public institutions have no executive appointments for purchasing professionals given their huge expenditure budgets? What it means is that the institutions have no strategic purchasing plans.
l Bongani Edwin Mushanyuri is a purchasing and supply chain management professional with the Bindura University of Science Education.