eBusiness Weekly
Hebert Zharare and Africa Moyo
Parastatals and local authorities’ bosses, who exploited loopholes in previous procurement laws to make mega bucks for personal gain, are defying the requirements of the Public Procurement and Disposal of Public Assets (PPDPA) Act to register with the Procurement Regulatory Authority of Zimbabwe.
This comes amid indications that a measly 70 out of more than 250 procuring entities have submitted applications to register with PRAZ.
PRAZ is a new authority that plays a supervisory and monitoring role to ensure Government entities comply with the new procurement law.
Previously, the State Procurement Board (SPB) was responsible for facilitating public procurement but concerns arose following reports of rampant corruption in the awarding of tenders, even for projects that never took place.
Now that the SPB has been disbanded and PRAZ merely oversees the implementation of the PPDPA Act, awarding of tenders is now being done by accounting officers in various State departments and companies.
Reluctant to comply with the Act
However, information gathered by the Business Weekly shows that parastatals and local authorities are reluctant to comply with the PPDPA Act, particularly as regards registering with PRAZ. PRAZ chief executive officer Nyasha Chizu, confirmed this week that the appetite to register was low.
“Procurement entities are taking time to adapt,” said Chizu.
“The requirement of the law is that a procuring entity is authorised to conduct procurement by the regulator and so far only less than 70 out of over 250 procuring entities have submitted applications. The unfortunate thing is that any producing entity that conducts procurement above the stipulated threshold without approval would have committed a criminal offence in terms of the law.”
Offenders to face heavy penalties
Section 94 of the PPDPA Act says any officers that procure above the threshold without approval face a minimum of level 6 fine and imprisonment not exceeding six months.
Corporates found guilty of the same offence face a level 10 fine. The maximum punishment for both individuals and corporates is level 14 fine.
Chizu believes procuring entities are not keen to take the responsibility of procuring decisions and “still want the comfort” of the dissolved SPB, approving tenders thereby diluting or transferring their procurement responsibility to the authority that would have approved their decision. Parastatals and local authorities have two years to register with PRAZ. However, the two years elapse in December next year and barring a last minute rush, many institutions would be caught wanting.
The entities defying P R A Z
Asked if the institutions are not registering because of lack of knowledge, Chizu said: “The authority has engaged in massive sensitisation programmes to increase the procuring entities understanding of the new law.
“So I would like to dispel issues of ignorance because in January, every authority was invited so it could be an issue of defiance. The issue of accountability is what they are afraid of but we are enhancing sensitisation programmes.”
Corruption is endemic in the public sector, particularly during the previous administration led by former President Robert Mugabe, and procurement was seen as the “epicentre”.
Officials in the SPB were accused of soliciting for bribes to award tenders mainly for mega projects such as electricity generation.
President Mnangagwa has called for a new culture of work both in the public and private sectors.
President declares war on corruption
The President has taken advantage of various fora to declare war against corruption, warning that culprits would face the full wrath of the law.
Chizu said the PPDPA Act was expected to stem corruption in the public sector, principally in the procurement process.
The Act provides a number of interventions such as a code of conduct for public procurement officers; licensing of procurement officers while those who breach the code of conduct will lose their licences, and the violation of the Act has specified criminal charges and appropriate penalties.
This makes the prize of corruption too high. The law also requires all public sector suppliers to be registered with PRAZ, just like the “Know your customer” adopted by the banking sector.
The registration in terms of Section 4 provides eligibility to bid and be awarded contracts by procuring entities.
Previously, suppliers for low value procurement only were required to register.
The requirements for registration have been streamlined, with bidders only required to submit company registration documents as opposed to the previous requirements that demanded numerous credentials.
Nature of corruption in procurement
Competition is swayed to favour a particular company or person and this is achieved through limiting the number of people who access the adverts that carry the requirements.
Further, specifications can be tailor-made to limit competition and such specifications are them waived at the time of awarding the contractor.
The process of evaluation is also used by corrupt officials to eliminate other bidders as some officials may place verge evaluation criteria deliberately aimed at eliminating completion.
Through contract management, some companies might seek advance payment and be denied so that they opt out of the contract and if that happens, some individuals or companies related to them will be awarded the tender and advance payments can be made.
