The Procurement Regulatory Authority of Zimbabwe will from this month, publish a weekly column entitled Public Procurement Matters to provide clarification on public procurement related matters. It is Public Procurement Matters in that it discusses issues relating to trade with the public sector. Public procurement matters in that when done well, the general public is assured of efficient and effective public services.
Background to Public Procurement Reforms
The debate on public sector management reforms and the promotion of good governance became the centre of discussion among donor agencies and citizens in Zimbabwe since the late 1980s and early 1990s. Since then several reforms have taken place with mixed degrees of successes and failures.
Regrettably public procurement reforms have only occupied a peripheral position in the broad public sector reforms in Zimbabwe since the late 1990s.
According to the World Bank, public procurement reforms point to review of the existing systems make them more responsive. It transforms organisational, institutional, and legal structures that manage public procurement processes to create responsive systems that encourage effective and efficient performance of the public sector.
Zimbabwe’s current reforms culminated in the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] on August 4, 2017, which became operational on January 1, 2018. The Public Procurement and Disposal of Public Assets (General) Regulations 2018 were gazetted through SI 5 of 2018 of January 19, 2018.
Repealing of the Procurement Act [Chapter 22:14]
The procurement reforms in Zimbabwe took approach of repealing of the Procurement Act [Chapter 22:14]. This inevitably comes with some unavoidable transitional challenges.
Transitional Arrangements: Section 103
In order to provide clarification with regards to the execution of procurement contracts that were initiated before January 1, 2018, the new Act under section 103, provides for the transitional arrangements between the repealed Act and the new Act. Under the new Act, the “transitional period” means the period of two years from January 1, 2018 to December 31, 2019.
Sub-section (3) of the new Act further states that property or assets and any obligation which, immediately before January 1, 2018, vested in or, as the case may be, had been incurred by the State Procurement Board established under the repealed Act shall on and after this date be property or an asset or obligation of the Authority. From the onset it is imperative to note that the “transitional provisions” should not be misconstrued to mean a two-year period during which Procuring Entities are expected to fully comply with the law.
This is a misinterpretation of section 103 of the new Act; the new law became operational on 1 January 2018 and from that date onward all public procurement processes are expected to be in compliant with the provisions of the new Act.
Consistent with the spirit of avoiding the retrospective application of the Act, subsection 4 states that any procurement proceedings that commenced before January 1, 2018, shall be completed in accordance with the repealed Act, and any reference to the State Procurement Board being construed as a reference to the Authority: Provided that the Authority may, by written notice to the procuring entity concerned, direct that any provision of this Act that is specified in the notice shall apply to the proceedings, and that provision shall thereupon apply accordingly, subject to any modification stated in the notice.
This last provision implies that the Authority has the discretionary power to subject implementation of a contract enacted under the repealed Act to the provisions of the new Act.
Any direction or order which was given by the State Procurement Board under the repealed Act and which, immediately before January 1, 2018, had or was capable of acquiring legal effect shall continue to have or to be capable of acquiring, as the case may be, the same effect as if it had been given by the Authority.
Every procuring entity that wishes to conduct procurement proceedings for which authorisation is required in terms of section 15 shall, as soon as possible after January 1, 2018, apply for authorisation in accordance with the Third Schedule.
This means that with effect from January 1, 2018, certain procurement first need authorisation before being conducted.
Section 10 (1) of the Public Procurement and Disposal of Public Assets Regulations (SI 5 of 2018) provides that a procuring entity would need to be authorised by Praz to conduct procurement where they want to procure construction works above US$200 000.00 or equivalent; goods above US$100 000.00 or equivalent and services above US$50 000.00 or equivalent.
Failure to comply with this requirement has sanctions specified in Section 94 (1) of the same Regulations. Procedures for seeking authorisation to conduct procurement are contained in the Third Schedule of the Act.