Source: Promoting public procurement integrity, good governance | The Herald May 1, 2018
Public procurement is central to government service delivery and it plays a significant role in the economy. Zimbabwe spends about 40 percent of its gross domestic product on government procurement in different sectors and local authorities, which involves huge sums of money.
Given this situation, high value transactions attract the risk of fraud and as a result, this makes the procurement process more vulnerable to corruption than any other sector.
Over the years, Zimbabwe has endured serious unprofessional conduct in the local bidding system, which resulted in firms awarded tenders failing to kick start or complete projects due to lack of capacity. Public officials would award tenders to themselves through a third party or companies that are non-existent. Also, bids were advertised for a very short time so that a few potential bidders got the opportunity.
This worked in the favour of the corrupt officials as it was a way of reducing competition against their favourites who might have known about the coming advert well in advance. All these corrupt activities have led to poor governance in the procurement sector. In effect, the impact on the nation has been big loses and reduced strategic development.
Now that Zimbabwe is open for business, it is prudent that public procurement be done fairly, transparently and at the same time realising the value for money. Both public and private entities should maximise transparency in competitive tendering and take precautionary measures to enhance integrity in order to promote fair and equitable treatment for potential suppliers.
Government should create tight procurement oversight mechanisms on departmental procuring entities and the Procurement Regulatory Authority of Zimbabwe (PRAZ). All stakeholders must be educated on the value for money concept underlying public procurement systems, so that they are empowered to report any form of graft without fear.
Clause 257 of the Public Entities Corporate Governance Bill (the Bill) clearly states that there is a strong connection between corporate governance and whistle blowing. Chapter 4 of the National Code on Corporate Governance (ZimCode), in Clause 255, also asserts that a whistle-blowing system that is independent, trusted and anonymous is key to the effective implementation of an ethical corporate culture and fraud risk management strategy. Therefore, it should be mandatory for the procurement entities to have clear whistle blowing policies, the procedures must be well documented and each employee should be given a copy. Dealing decisively with public practitioners found guilty of flouting procurement procedures may go a long way in restoring confidence in the public sector and this might also help woo more investors.
Public officials involved in procurement must be trained adequately so that they carry their mandate efficiently and effectively. The new Public Procurement and Disposal of Public Assets Act (the Act), which took effect early this year, will require procurement professionals to be licensed.
Also compelling central government, state owned enterprises and local authorities are now required to establish procurement management units (PMUs) to ensure that decisions are free from undue influence. This will help strengthen procurement professionalisation and it will result in improved planning and management and public officials will also make well informed decisions.
The Act puts procurement officials in the same league as other professionals, such as lawyers and accountants, who are licensed to practice. This will further ensure that competent personnel regulated by a code of ethics are employed. All procurement officers will be legally required to obtain a licence to practise and they should also pass government procurement licensing examinations.
These developments will enhance professionalism in the public sector thereby leading to a reformed and sustainable procurement system which will also yield to efficient government expenditure utilisation, better quality and timely service delivery to the citizens.
Record management is a must if there is to be good governance in the public procurement sector and the tendering process. In cases where records are not well managed this could lead to business claims or poor governance. Therefore it is of importance for the procurement entities to have good electronic management practises. Feedback mechanisms should be put in place as this will provide for increased disclosure and transparency in the entire procurement cycle.
Boards shall on request give reasons for their decisions to interested parties, and losing tenderers must be given opportunities to learn how they missed the opportunity so that meaningful competition is encouraged in the next bidding.
Public procurement is a critical tool for industrial development and it lies at the crossroads of both the public and private sectors. It is a fact, that the local government has increased its spending over the years.
This increased expenditure should directly benefit the local businesses, manufacturing sector and the general population. Moreover, public procurement markets are very vital for small-to-medium enterprises and have potential to provide these small businesses with critical sustainability and growth.
Human nature is not going to change tomorrow, so we cannot totally eliminate procurement scandals, but the nation will require combined efforts from both the public and private sectors through governance structures, whistle-blowing practices, setting the right tone at the top and so on, in order to curb corruption in government procurement.
Good corporate governance in public procurement promotes competition, reduced prices, minimised incentives for corrupt practices and, importantly, reduces the cost of doing business. As a result this will serve as a competitive driver of efficiently managing the scarce public resources and this will further benefit the society at large.
This article is prepared by Zimcode (Joint Secretariat of ZIMLEF, IoDZ & SAZ). For more information on the Zimcode contact: email@example.com