SPB deals cost Treasury millions

27 Apr, 2014 - 00:04 0 Views
SPB deals cost Treasury millions

The Sunday Mail

us dollarsKuda Bwititi and Lincoln Towindo
The State Procurement Board (SPB) is riddled with serious problems ranging from understaffing, poor oversight and slack monitoring systems for the tender process with experts estimating that between 60 to 70 percent of tenders that are awarded through the SPB “raise stink”.
Due to decentralisation, about 80 percent of public tenders are facilitated through accounting officers of Government ministries and parastatals, such as permanent secretaries and local authorities while the SPB handles the remaining 20 percent but still the board is overwhelmed as it is operating with a skeletal workforce.

Reports say the SPB has a workforce of not more than 30 officers, most of whom are said to be under-qualified. This means the SPB chief executive officer and the under-qualified staff are mandated to evaluate an average of 1 500 tenders each year.

Procurement expert and lecturer at the University Of Zimbabwe School of Business Studies Mr Taurai Matanhire said the State could be losing millions of dollars every year as a result of the murky deals at the SPB.

He said research has shown that the inflation of prices by over 50 percent was the foremost method used to cheat the system.
Mr Matanhire said the qualifications and integrity of all SPB officials should be assessed regularly to ensure deals are struck procedurally.
“A rough estimation would show that between 60 and 70 percent of all the tender deals that go through the SPB are not clean.

“Most of the deals have been compromised through overcharging and this has resulted in the country losing millions to corrupt officials.”
Only this year, the public has been alerted to several high-profile cases of tender malpractices that have resulted in alleged theft of public funds.

In one of the cases, Harare City Council officials are alleged to have pocketed more than US$100 million after inflating prices of equipment used for the rehabilitation of the city’s water and sewage treatment plants. An independent verification of the US$144,4 million loan obtained from China and tendering process by consulting engineer Mr Peter Morris in December last year unearthed anomalies where, in some cases, prices of equipment charged by the contractor, China National Machinery and Equipment Import and Export, were five times higher than the prevailing market charges.

City officials are believed to have pocketed the loot. Only last week, the SPB came under fire for its alleged role in awarding a US$2 million security tender to two companies owned by one person.

Trust Me Security and Tragic Security, which are linked to Mr Trustmore Dzinoruma, were awarded the tender to provide security services at more than 21 Zimbabwe Revenue Authority stations countrywide.

Losing bidders allege Zimra and SPB officials were bribed and have since lodged written complaints to the board.
Although these and other cases are yet to be prosecuted, economic observers believe Government continues to lose millions each year, as the tenders are funded by Treasury.

Concomitant to that, questions are being raised on whether the institution’s seven board members are suitably qualified in procurement and tender evaluation processes.

The SPB team comprises the chairman, Mr Charles Kuwaza, his deputy Ms Florence Erina Ziumbe, Ambassador Buzwani Mothobi, Mr Tinaye Chigudu, Mr Steven Chifunyise, Mr William Kurebgaseka and Mr Simon Pazvakavambwa.

The institution’s glaring understaffing, which has been further exacerbated by the Government recruitment freeze, has reportedly compromised the proper evaluation of tenders.

This has resulted in dozens of tenders being controversially awarded to undeserving bidders and blatant inflation of prices of goods and services going unnoticed and bleeding Government, local authorities and parastatals millions of dollars.

So bad is the situation that various stakeholders are calling for an immediate overhaul of the SPB, which is charged with procuring all goods and services for Government, parastatals and local authorities.

Responding to written questions from The Sunday Mail last week, SPB executive chairman Mr Charles Kuwaza conceded that the board does not have the capacity to superintend and evaluate all submitted tenders owing to staff shortages.

He said understaffing was seriously compromising the institution.
“While we can also investigate as SPB, we only have a dozen odd professionally qualified officers, and unless we stop all other work, we cannot be expected to cover the whole spectrum of the public sector.”

Investigations by this news crew revealed that the majority of the procurement officers at the SPB were fast-tracked into their positions at the height of the country’s economic slowdown in 2008, when a massive human resource flight crippled operations.

As a result, inexperienced junior officers were prematurely appointed to oversee the evaluation of multi-million-dollar tenders, thereby exposing the process to corrupt malpractices.

It has also been established that some of the officers are corruptly providing “consultancy” services to bidders by personally drawing up the tender applications for them to meet the required specifications.

In return, they reportedly receive kickbacks, which vary with the size of the tender, after the bidder would have won the tender.
Sources revealed last week that high-ranking politicians are also using their clout to influence the junior officers to give favourable recommendations to tender applications from companies they are linked with.

Recently, the Minister of Energy and Power Development, Mr Dzikamai Mavhaire, and his deputy, Engineer Munacho Mutezo, torched a storm following allegations that they handpicked Powertel to supply pre-paid electricity tokens to Zesa.

The company went on to expose its shortcomings by failing to provide the required service on time.
In recent statements to Parliament and reiterated to The Sunday Mail, Mr Kuwaza blamed accounting officers, who include permanent secretaries of ministries, chief executives of local authorities and top management of parastatals for violating tender regulations.

Mr Kuwaza said informal tenders, which constitute 80 percent of all public tenders and comprise purchases of between US$10 000 and US$300 000, are managed by top executives of public enterprises.

“The State Procurement Board has received a lot of complaints regarding delays in the tender process. On investigating these complaints, it was observed that a number of accounting officers were, in fact, not observing the 15-working day rule within which to adjudicate tenders.
“Some, who were the most vociferous, took as many as 60 days before submitting their recommendations.

“Further inquiries revealed that some accounting officers were using consultants to carry out adjudications. These consultants, the board was told, gave scant regard to the time limits set out in the procurement regulations.”

According to Statutory Instrument 171 of 2002, which gave birth to the SPB’s current procurement regulations, small committees of junior officers receive tender applications from the office of the chief executive and evaluate individual tender applications before making recommendations to the seven-member SPB board.

The board then has 10 days to examine the recommendations before determining the tender.
Such tenders are not subject to verification by the SPB, thereby raising the possibility of abuse.

The lack of independent oversight has led to allegations of shady deals involving members of the workforce and individual board members.
Despite infrequent audits by the Comptroller and Auditor-General, the SPB is free from any oversight, audit and certification.

In some other African countries, public procurement boards are housed under the Finance Ministry.
The board is decentralised, operating in districts across the country, and subject to independent oversight.

The Sunday Mail was last week denied access to the soft copy of the official tender register following a visit to the SPB offices at the Old Reserve Bank Building.

Instead, the news crew was led into a large storage room where hard copy files of all the tender documents were stacked, before later being told that they could not peruse the files because they were “confidential.”

Reports indicate that some individuals are being awarded multiple tenders by using different shelf companies to bid for lucrative contracts.
This information can only be confirmed by looking through the tender register.

Pressed on the staffing levels at the SPB, Mr Kuwaza said: “What is the purpose of your question? Unless you live under a stone, you should be aware that the fiscus is currently stretched to the limit with various proposals to reduce expenditure.

“We can only review staffing levels as and when fiscal space allows. Dreaming as to optimum staffing levels will not assist us at the moment. We have more pressing issues to handle.”

However, Mr Kuwaza recently admitted that procurement officers were, in some cases, deliberately delaying the tendering process.
For instance, on January 30 2014, the SPB considered 16 tenders for new business. Of these, 10 were deferred.

Mr Kuwaza said then that despite the challenges, the SPB used procedures that ensured all public tenders were handled professionally.
He said the law was clear that anyone aggrieved by the tender process was free to challenge the SPB at the Administrative Court for the possible re-tender.

Efforts to access appeal case documents at the Administrative Court were fruitless as the responsible official who could release them was said to have been off duty.

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