Tackling the capital city of corruption

Tackling the capital city of corruption

Finance Minister Patrick Chinamasa has described public procurement as the “capital city of corruption”. Below, lawyer Mr Tazorora Musarurwa gives suggestions on how the tender system can be made more efficient.
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In his first State of the Nation Address under the new Constitution, President Mugabe outlined a 10-Point Economic Plan “to maintain economic growth and especially the creation of jobs”.
To further his plan, the President said new legislation was being planned, which includes a Bill to amend the current Procurement Act Chapter 22:14.
The Procurement Act is based on the Model Law on Public Procurement of the United Nations Commission on International Trade Law of 2004. This model law has seen been replaced with a new Model Law that was agreed to and adopted by UN members in 2011.
That there is need to bring the current Act in tandem with international best practices is not debatable.
What is debatable is the exact manner in which the law should be changed to suit Zimbabwe’s specific needs.
This article focuses not on the general aspects of procurement, but specifically on how disputes should be resolved in a new procurement dispensation.
It is submitted herein that procurement disputes should be resolved in terms of the Constitution of Zimbabwe and in line with the 2011 Unictral Model Law.
Litigating procurement disputes in any country is not for the faint hearted. High value tenders have several millions of dollars at stake.
Those who bid for these tenders put a lot of effort in meticulously compiling lengthy and voluminous documents.
In a number of instances much money is invested in coming up with these documents.
The money spent on finalising the document may well be spent in a casino as one will be gambling with the unknown when investing in a bid.
When one wins a tender, the last thing that they need is a loser challenging the outcome.
At the same time, a procuring entity may be in urgent need of certain goods or services which will then be prolonged by a matter being locked in litigation.
On the other hand, you have the loser who genuinely believes for one reason or another the tender should not have been awarded to the declared winner.
In some cases, there is evidence that adjudicators were corrupted or made a genuine mistake in the manner in which they reached their decision.
There are a plethora of reasons why one would challenge a tender result.
In several cases our courts have reversed the decision of the State Procurement Board.
Emphasis in procurement has been in ensuring that the rules create a transparent process that motivates investment.
Those rules, however, are meaningless if they are not complemented by a dispute resolution mechanism that is able to enforce those rules when those tasked to do so fail.
The current mechanism of State procurement dispute resolution seems specifically designed, both in theory and in practice, to dissuade aggrieved parties from challenging any SPB decision.
Section 43 of the Act provides that any person who is aggrieved by the decision of the SPB shall lodge an appeal with the Administrative Court.
But the Act does not distinguish between the concepts of “review” and “appeal”.
Review is when one has an issue with the processes and procedures; whilst appeal is when one takes issue with the substantive issues or the facts.
For instance, if one takes issue with the fact that an adjudicator had an interest in the matter and was therefore biased, one seeks a review.
If one takes issue with the fact that a tender was awarded to a bidder that was not compliant, one seeks an appeal.
Legislation reform needs to return this distinction rather than lump everything under the word “appeal”.
Section 43 of the Act requires an appeal to be noted by lodging a notice of appeal with the Registrar of the Administrative Court and with the SPB within 20 days from when the appellant was notified of the decision.
A notice of appeal is normally a document not longer than three pages which contains the grounds upon which the appellant is aggrieved.
Section 44 provides that once a notice of appeal has been filed all procurement proceedings have to be suspended for seven days.
In practice, there may be a suspension of these proceedings but they are immediately resumed when the seven-day period lapses.
There is no logical connection between the seven-day period and the time it takes for a matter to be heard.
As such, in practice, one will always have to utilise the procedure mentioned in Section 44(4) and apply for extension of the seven-day period up until the matter is finalised.
To apply for this extension one needs to be able to show that the appeal is not frivolous or vexatious.
Case law does not at present specify what would satisfy the court in granting an extension.
Legal practitioners have relied on the “prospects of success” doctrine in the absence of any guiding jurisprudence.
At the time when one needs to apply for extension of the seven-day period, the record of proceedings may not have been compiled.
When it is compiled the record costs US$900 to obtain from the SPB regardless of its length.
For high value tenders, such an amount is a drop in the ocean but for low value tenders, this is quite a hurdle.
Effectively, State procurement litigation is big boy business and has no room for those that are not cash rich.
Such prohibitive costs infringe upon the right to access justice.
For the Administrative Court to be the adjudicating body of first instance in this kind of litigation is clearly ill-advised.
The Administrative Court is mostly a court of appeal for quasi-judicial bodies or bodies that would have acted in a quasi-judicial role.
The way in which the State Procurement Board makes decisions is not quasi-judicial at all.
The SPB ensures all bidders meet tender requirements in a check-list fashion. It concerns itself with commercial requirements.
When it comes to technical compliance this is mostly done by the procuring entities who establish a committee to deal with such matters.
Any queries regarding technicalities are handled by this team.
Further, the manner in which they decide who wins the tender is not quasi-judicial at all.
There is, therefore, need for a quasi-judcial body to first entertain appeals in the strict sense of factual issues before an aggrieved party approaches a court. This body will act as the body of first instance in entertaining all complaints against procuring entities.
It must also be noted that in the procurement process there are a number of issues that may arise which do not necessarily need the intervention of a court of law.
For instance, one may be aggrieved that a tender has been denied because it is alleged that it was late when in actual fact officers of the SPB failed to formally stamp it and acknowledge that it was received well within time.
This should be an issue that need not be litigated; but with the current law, any decision of the SPB with which one is aggrieved by has to addressed to the Administrative Court.
The South African Competition Commision is an administrative body that makes decisions like our SPB.
Those aggrieved by its decisions appeal to the Competition Commission Tribunal. This is a specialist court that deals with issues emanating from the commission.
Appeals from the Tribunal lie to the Competition Appeal Court.
Dispute ajudicators in public procurement need to be specialists. The Administrative Court’s current set-up is a far cry as to what is required both in terms of the constitution and the model law as an effective institution for settlement of public procurement disputes.
An analysis of judgments emanating from the court over the past four years reveals a dearth of local legal authorities and international jurisprudence relied upon in decision-making processes.
The short judgments, which are not reported in any of our local law reports including Internet law reporting, do not show a clear understanding of procurement processes, legislation and international law upon which the legislation hinges on.
One will not find a single case which quotes foreign case law.
It would seem reliance is placed entirely on the wisdom of the presiding officer and assessors as is done in traditional-customary legal systems.
At the end of the day, while there can be little doubt that new legislation will be crafted in terms of UN General Assembly Resolution 66/95 of December 9, 2011, without a proper localisation of the law the current adjudication problems are likely to remain.
Lawmakers either need to remove public procurement disputes from the realm of the Administrative Court or alternatively ensure that the court is constituted by individuals capacitated to properly adjudicate complexities emanating from the contentions of high value litigation involved in public procurement disputes.
◆ Tazorora Musarurwa, LLB (Fort Hare) and LLM (Pretoria), is the managing partner at a leading law firm in Harare. He writes in his personal capacity.

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