EDITORIAL COMMENT: Public procurement prevents corruption

26 Oct, 2021 - 00:10 0 Views
EDITORIAL COMMENT: Public procurement prevents corruption

The Herald

Public procurement gives one of the largest gateways to corruption and yet can be the major tool to clamp down on corruption and largely end it: a lot depends on how procurement is done.

Corruption becomes possible when suppliers can bribe officials making orders, or confirming orders. And it is a lot easier to do this if you can assemble a quick briefcase company when an order is about to be placed. Then you can get the problem of favouritism and worse, when a decision maker insists on awarding a contract to a friend or relative. All problems have been ventilated in charges before the courts.

During 2018 a whole new system was put in place in Zimbabwe as the Second Republic took a deep breath and decided to tackle the problem at source. That system incidentally that drew a lot of praise from the World Bank, who had provided technical assistance is setting it up and if implemented fully by all in the public sector would largely eliminate a large swathe of corruption. 

If you cannot cheat then you cannot be corrupt. This is the easiest way of eliminating corruption and favouritism, simply by making it as near impossible to do as is humanely possible.

The new procurement process has three stages. Potential suppliers need to register with the Procurement Regulatory Authority of Zimbabwe way in advance of any orders or tenders. The authority then has plenty of time to do all the vetting and checks. And these can be quite lengthy.

A supplier needs to be properly set up under the Companies Act. It needs to be compliant with the tax authorities. It needs proper premises for whatever business is doing, and even the smallest business needs something more than a briefcase. Someone needs to check who the directors are and if necessary find out who the beneficial majority shareholder is. And it is useful if none of them are in jail.

The vetting will also give an indication of how large or small a business is. There are some orders where anyone can bid, but others where you really have to have some muscle. This is not a problem so long as every potential supplier on the lists has these sort of details recorded. 

As businesses register they are vetted and when they pass they are listed as approved suppliers for whatever goods or services they listed in their application. And these lists are kept up to date. Just because you are listed does not mean that you will win a Government or private sector contract or order; It just means you can put your bid in when tenders are called. If you are not on the list forget it.

The second stage of procurement, choosing a supplier, is done by the relevant ministry, council or other public entity. This is when the detailed specifications for goods or services or both are laid out and made public. Only those vetted by the Procurement Regulatory Authority of Zimbabwe can put in a bid, so the operational unit does not have to spend weeks checking everyone out. 

It can now evaluate the responses to the tenders, looking at price, availability of stocks or delivery units. And any other relevant factors such as location, quality, and the like. As relatives of politicians and officials are allowed to own and run businesses, this is when decision makers declare these ties so that they are not involved in the final selection.

A detailed process is in place for these operational units. The regulator does not do the tender evaluations and selection of the winner, but lays out the way the process must work and can check if the operational unit has done it properly. Keeping the regulator and the operational unit separate is always a good move in enforcing standards.

In any case a regulator is unlikely to have the expert knowledge required to decide if what is offered is the best product

The final stage is the acceptance of the order by the Ministry of Finance and Economic Development, which has to make the payments. The Treasury has to do a brief check that the contract gives value for money. The Treasury is not expert on what is ordered or the purpose, but can query the pricing or other financial details if there seems to be something that does not make sense.

Even for emergency orders the system should work well. One example that came up late last year was when NatPharm, after its management was fixed up, needed emergency supplies. NatPharm grabbed the list of approved suppliers for what it needed, sent out tender documents by e-mail to the whole lot, with two days to reply. And then officials worked through a weekend evaluating the replies and marking them up against the criteria and the decision makers could then make a swift decision. The process was speeded up significantly in the emergency, but the process was followed in full.

It is this sort of compliance that is required. PRAZ held a compliance workshop at Victoria Falls last week, partly because a significant block of public enterprises were not fully compliant. The workshop was opened by Vice-President Constantino Chiwenga whose office has a stake in this factor and he laid it on the line.

After more than two years, even with Covid-19 emergencies, he reckoned that lack of compliance could no longer be excused. Everyone should now be on board and be sufficiently aware of what was required for the whole procurement process to run smoothly, efficiently and in line with the rules.

PRAZ itself has now put in on-line learning materials so that everyone involved in public procurement can became totally familiar with the processes required, meaning that there are fewer and fewer acceptable excuses. In fact the PRAZ comments suggest that while the level of total compliance is still too low, a lot of the gaps are relatively minor and can be fixed quite quickly.

But VP Chiwenga’s insistence that they are fixed promptly needs to be highlighted. The Second Republic has made far too many gains for lazy or ignorant procurement officer to mess around.

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