Why we are refining our public procurement system

29 Aug, 2021 - 00:08 0 Views
Why we are refining our public procurement system

The Sunday Mail

Clever Ruswa

THE Public Procurement and Disposal of Public Assets (PPDPA) Act [Chapter 22:23] was operationalised through Statutory Instrument 152 of 2017 on January 1, 2018.

From the experience gained in implementing the Act, it has become evident that its existing provisions are not adequate to meet the current needs of the citizenry, the requirement for flexibility in an ever-changing economic environment and international good practice.

As the public procurement system is such a critical pillar of Government’s delivery of public services, it must be designed in such a way that it plays a major role in fostering public service efficiency while contributing directly to greater public trust and the achievement of a prosperous and empowered upper middle-income society by 2030.

Therefore, a proposal was made before Cabinet to approve principles for the amendment of the PPDPA Act with a view to aligning the legislation to the requirements of the Constitution of Zimbabwe, the current needs and demands of general citizenry and international standards.

The recommendation is borne out of existing shortcomings in the PPDPA Act identified by stakeholders in the new law and the need to provide for flexibility.

In order to achieve efficiency in the public sector, procurement processes must be clear and seamless.

This therefore requires some amendments to certain provisions of the PPDPA Act. The authority undertook stakeholder engagements for the whole of March 2021 calling for proposals to the amendments of the PPDPA Act.

The approved changes

When the Procurement Regulatory Authority of Zimbabwe (PRAZ) started implementing the PPDPA Act, it was discovered that there were areas not aligned to the Ease of Doing Business.

There is therefore a need to adjust some sections and clauses to align with Ease of Doing Business reforms, international best practice as well as the new way of doing business.

The main objective is to have an efficient and effective public procurement system as some sections and clauses will hinder the authority’s ability to achieve efficiency and effectiveness in the system hence the realigning of the PPDPA Act and regulations.

The shift of responsibility in procurement decision making introduced a paradigm shift in the administration of public procurement.

The authority provided a two-year transitional period that was meant to have procuring entities learn and adapt to the implementation of the PPDPA Act and regulations. However, this learning period resulted in reduction in the level of compliance by procuring entities to the detriment of the integrity and confidence of the public in Government administrative systems.

The PPDPA Act provides for exclusions or exemptions for procurement, but is yet to speak to procurement related to State-owned enterprises operating in competitive markets.

It also provides for penalties for violation of procurement laws, but there is a need to provide for civil penalties for violation of procurement laws by procuring entities.

The three years that PRAZ has been in operation witnessed stakeholders implementing the PPDPA Act and regulations and just like any new legislation some gaps were identified during the implementation which needs to be attended to for the good of the economy.

SEPs operating in competitive environment

In accordance with international best practice recommendations on public procurement, the Act applies equally to state enterprises and parastatals (SEPs).

However, some of the Act’s procedural provisions designed to promote transparency place SEPs operating in competitive markets at a considerable disadvantage in their competitive rivalry with their private sector peers.

Section 3 (7) of the Act does allow the regulator to exempt some procuring entities from the application of any of its provisions but this is not sufficient to put the SEPs referred to on an equal competitive footing with their private sector peers who are not subject to the same legal constraints.

It is felt that the provision of limited disclosure of the procurement or disposal of some construction works if so doing would prejudice security, or national interest of Zimbabwe be extended in scope to encompass not only construction works but also goods and services as well as strategic  procurements undertaken by SEPs operating in competitive markets.

In addition, the inclusion of an enabling provision under section 3 to allow for further prescription of exemption through subsidiary legislation.

Refining the chief executive’s role

The provision in paragraph 12 (5) of the First Schedule to the Act states that the chief executive officer shall serve as secretary to the board and shall be responsible for keeping the board’s minutes of all proceedings of and decisions taken at every meeting of the board and of every committee.

This provision is not only contrary to international best practice but also to the guidance given in paragraph 132 of the First Schedule to the Public Entities and Corporate Governance Act [Chapter 10:31], which recommends “the Board should appoint a suitably qualified, competent and experienced company secretary capable of maintaining a cordial but arm’s length relationship with members of the board at the personal level.”

This recommendation is to delete the section that provides the same.

Incorporating SMEs, women in public procurement

Section 29 of the Act was intended to promote the growth of Zimbabwean suppliers and manufacturers through a preference for domestic production over imports.

However, the noble public policy objective is thwarted by the wording of the section which makes it optional rather than mandatory for procuring entities to accord domestic providers of goods, services and construction works preferential treatment during the evaluation of public procurement bids.

The Act should, therefore, be amended to allow for mandatory preferential treatment of local public procurement bids by all procuring entities.

Furthermore, with respect to the procurement of construction works, the Act should also make the engagement by foreign suppliers of local contractors as well as technology and skills transfer mandatory.

The amendment would like to have proper definitions of Small to Medium Enterprises and Women-owned business.

The Act intends to align with its stakeholders especially the SMEs in line with the Small to Medium Enterprises Policy.

In order to stimulate domestic players across all fields relatable to public procurement within Zimbabwe, there is a need to look at prescribing domestic preference in the country’s legislation to a greater extent than is already prescribed, specifically, by expanding some of the provisions of the PPDPA Act.

Under Section 29 of the PPDPA Act, to further the stimulation of growth of local/domestic players in the procurement field, the proposal is also to include not only preference on all procurement of goods, construction works and services to local players, but, offer greater subsidies and in addition offer sustainable long-term direction.

Removal of the Auditor General from the SPOC

The PPDPA Act Section 54 (2) espouses that for the purposes of scrutinising contracts and exempted contracts there shall be constituted a Special Procurement Oversight Committee (SPOC) which shall consist of:

a.) The Attorney-General

b.) The Auditor-General

c.) The Accountant-General

d.) The Principal Director of Works

However, the Auditor-General recused herself in 2018 after realising that there was conflict of interest as the Auditor-General cannot participate in processes which the Auditor-General will audit hence the regularisation.

The removal of the Auditor-General is in line with best practice in order to achieve an efficient and effective public procurement system.

Contract award

In terms of the PPDPA Act under Contract Award, a contract shall not be signed until at least fourteen (14) days have passed following the giving of notice to the successful bidder of the proposed award and the time within which the contract must be signed, subject to any intervening challenges.

This fourteen-day period is known as the stand-still period and is prescribed in Section 55 (2) of the Act.

Procuring entities have voiced their concern that the period is long and adversely affects the delivery of supplies by lengthening the procurement cycle.

It is, therefore, proposed that the relevant sections of the Act be amended to allow for the amendment of the stand-still period through regulations.

For instance, we have the Covid-19 situation where entities apply for a shorter bidding period to address the emergency situation. The regulations will provide for these emergency situations in terms of the procurement and the award process.

This will bring a quick turn-around in emergency situations and thereby bring effectiveness and efficiency which is envisaged in public procurement.

Disposal of public assets

Section 93 of the Act prohibits the disposal of an unserviceable, obsolete, or surplus asset to any of the procuring entity’s employees, members of its board and any of its committees.

However, in its current wording the section leaves room for “close family members” of the categories of persons cited to manipulate the disposal of public assets process.

Accordingly, section 93 of the Act is proposed to be amended by broadening its coverage to include “close family members” of a procuring entity’s employees and members of its board as well as any of its committees.

It will be necessary to define “close family member” to include spouses and near relatives of employees as well as members of a procuring entity’s board and any of its committees.

In this regard, it will also be necessary for the Act to require persons intending to procure public assets on disposal to declare any known relations with any employee of procuring entity and members of its board and any of its committees prior to participating in the disposal process.

Persons meeting the definition of “close family members” will then be disqualified from procuring the assets being disposed of.

A proviso to the revised provision should however, allow the disposal of public assets to employees if the benefit is provided for in their contracts of employment.

In addition, Section 94 of the PPDPA Regulations provide for sanctions to procurement of a criminal nature.

Recommendations are being made that Section 94 also include administrative sanctions.

This move is in order to promote increased compliance with the implementation of the Public Procurement and Disposal of Public Assets Act as administrative deviation will call for penalties.

Clever Ruswa is the PRAZ chief executive. He was responding to questions from The Sunday Mail’s Senior Reporter, Leroy Dzenga.


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