eBusiness Weekly
The Public Procurement and Disposal of Public Assets (PPDPA) Act (Chapter 22: 23) was passed in 2017, principally to address the concerns that emanated from how the State Procurement Board (SPB) operated. The new Act has seen the establishment of the Procurement Regulatory Authority of Zimbabwe (PRAZ) to oversee the implementation of the procurement law. Business Weekly’s Africa Moyo (AM), recently caught up with PRAZ chief executive officer Mr Nyasha Chizu (NC) and discussed a range of issues. For more, read the excerpts . . .
AM: You were recently appointed CEO of the PRAZ and the Public Procurement and Disposal of Public Assets (PPDPA) Act (Chapter 22:23) makes reference to public procurement being effected in a manner that is transparent. How are you managing it?
NC: PRAZ is overseeing public procurement in a manner that is transparent through a number of measures outlined in the PPDPA (Chapter 22:23). Each procuring entity is now responsible for managing its procurement where the value of the procurement requirement is below the prescribed threshold. For procurements above the prescribed values as a first step procuring entities are supposed to get written authority from PRAZ subject to terms and conditions specified by the Authority. Responsibility for compliance with the PPDPA Act now devolves upon the entity’s accounting officer.
To promote a transparent public procurement system, procuring entities are now compelled to establish procurement management units (PMUs) which shall be responsible for managing all the entity’s procurement activities in accordance with the Act. The PMU according to the Act is headed by the accounting officer. The PMU is now compelled to plan the procuring activities of its procuring entity and come up with a yearly procurement plan. The PMU is also responsible for securing the adoption of the appropriate method of procurement, prepare bid documents in compliance with provisions of the Act, designing contract specifications and the evaluation criteria. The PMU will also be responsible for preparing bid notices and short-lists, manage bid process and evaluation and any post-qualification negotiations required. To ensure transparency in the procurement process, accounting officers are compelled to form evaluation committees for each procurement above the prescribed threshold in which one member of the procurement management unit shall attend the meetings of the evaluation committee as an adviser without the right to a vote on any issue decided by the committee.
All these proceedings are supposed to be recorded and the Authority has the right to access the procurement proceedings of any procuring entity. The formation of the Special Procurement and Oversight Committee for certain sensitive or especially valuable contracts outlined in the Act also ensures transparency through checks and balances of procurement that is classified valuable and sensitive.
To manage transparent public procurement, the Authority is currently conducting sensitisation workshops through its Capacity Building Division to ensure that all these new measures are abided with by procuring entities and bidders. The Authority’s operations division is providing technical assistance to all those requiring assistance in terms of the Act. To ensure there is compliance with the Act by procuring entities and procurement management units, the Authority has a Monitoring and Evaluation Division that monitors compliance and performance to ensure that these measures are abided with.
AM: What is the major difference between the repealed Procurement Act (Chapter 22:14) and the new Act?
NC: The PPDPA Act (Chapter 22:23) (the new Act) and the repealed Procurement Act (Chapter 22:14) (old Act) have major differences. In terms of the new legislation, public entities are responsible for their own procurement after they obtain written approval from the Authority. The Authority in addition, is now responsible for setting standards, monitoring and evaluating as well as regulating procurement activities conducted by all public entities.
The Authority also has the powers to issue directives to procurement entities or order them to provide information about procurement among other issues, to ensure compliance with the law. The Act clearly provides for the nature and manner of publication of invitation to tenders, standard form requirements for bids and proposals, criteria for evaluation of bids and proposals, access to relevant information and official documents, description of goods, services and work being put to tender, provisions for security deposit and other matters.
In the new Act, Accounting Officers in Government departments now face jail if they flout laid down procedures while Ministers, Permanent Secretaries and Board Members who interfere with tender procedures will also be prosecuted. Where there is interference from whoever, Accounting Officers are now required to inform the Chief Secretary to the President and Cabinet. The penalties are outlined in Statutory Instrument 5 of 2018.
AM: The PPDPA makes reference to the establishment of procurement management units (PMUs) within public entities. How is PRAZ ensuring Professionalisation of the PMUs?
NC: The Act provided a 2-year transition to among other things, achieve full professionalisation in public procurements. The first step was the provision of a Code of conduct for procurement officials that is outlined in the 2018 Regulations of the PPDPA. The Code of conduct clearly outlines the general conduct that is expected of procurement officials and entails issues of accountability, transparency, integrity, exercising impartiality, making fair and equitable decisions without bias or prejudice and carrying out their duties according to the law and lawful Government policies among others.
To reinforce the code of conduct, the Authority is working towards a Procurement Council where all procurement officials are registered and examined over a particular period. The procurement professional is now being regulated just like such professions as lawyers, accountants and engineers, among others.
AM: Tell us the percentage of PMUs and procurement officers have been licensed to date?
NC: There was great improvement in licensing of PMUs in the second quarter of the year (2018)than in the first quarter and we believe this is due to the sensitisation programs that PRAZ is undertaking. As the sensitisation programme is ongoing we are expecting more procuring entities coming to register with the Authority and be licensed. According to PPDPA Act Government Ministries, Commissions, Parastatals, State Enterprises and Local Authorities are supposed to register with PRAZ and have their PMUs licensed. The Authority is mandated to report to Parliament every year and this is when those public entities that did not register with PRAZ and have their PMUs licensed will be named and shamed.
In addition, there are penalties as outlined in Section 94 of Statutory Instrument 5 of 2018. The Authority’s Monitoring and Evaluation Division will also be out in full throttle and it will find out those procuring entities who are procuring above their stipulated threshold but without licensing their PMUs and with these appropriate action shall be taken.
AM: Companies, contractors and consultants wishing to do business with public entities are now required to register with PRAZ, how has been the response to the new requirements from January to date?
NC: The response has been quite overwhelming and I should hasten to say that the Authority is still taking registrations. Those companies willing to do business with public entities are requested to approach the Authority for registration which is now easier to do unlike in the past where it was cumbersome because of the documents that were required. It should also be noted that registration of companies, contractors and consultants is only done at PRAZ offices as we do not have agents that register on behalf of the Authority. The registration is valid for a period between January and December each year. The fees are US$110 for initial registration and $100 for renewal.
AM: We note that bidders are now only allowed to submit documents as opposed to the previous requirements that demanded numerous credentials. What documents are bidders now supposed to bring and what has been the impact in the public sector procurement process?
NC: The following are mandatory for a bidder or contractor to be considered for registration as a registered bidder or contractor to be able to do business with public entities. The requirements are payment of registration fee, Certificate of Incorporation, list of directors showing relative extent of Zimbabwean and Foreign shareholding of the Company (CR14 Form), Articles of Association and Company profile for companies. For partnerships, syndicates and joint ventures the following applies: payment of registration fee, Partnership Agreement showing list of partners, controlling members/manager, business physical address, contact details (e-mail and telephone, detailed Curriculum Vitae and proof of qualifications.
The impact has been quite impressive. Now companies are registering categories in response to tenders and I am glad to say every week the Authority is dispatching more than 250 letters of registration to companies, contractors and consultants intending to do business with public entities. The registration process is ongoing meaning a lot more companies can still come and register with PRAZ. Registered suppliers eligible to bid or be awarded contracts in the public sector are published quarterly in the Government Gazette and can be viewed at www.praz.gov.zw.
AM: Awarding of tenders will now be done by accounting officers in various state enterprises and departments, but are the accounting officers and procurement officers in these enterprises and departments trained in the new system? What are the requirements of establishing PMUs?
NC: Section 17 of the PPDPA outlines the requirements for registration for PMUs. Accounting officers are supposed to establish a procurement management unit which they head and the PMU shall be responsible for managing all the entity’s procurement activities. The accounting officer of a procuring entity shall determine the size, location and structure of the entity’s procurement management unit, taking into account the entity’s procurement requirements and the availability of trained and experienced persons to staff the unit.
Where the level of procuring entity’s procurement activity does not justify the entity creating its own procurement management unit the entity’s procurement activities shall be carried out by its parent body. If the entity’s parent body is unable to carry out the entity’s procurement activities, the entity’s accounting officer must ensure that his or her procuring entity has funds available to pay for the services provided by other procuring entity or independent procurement agent. The procurement management units are licensed after meeting these specifications according to classes determined by the Authority and a fee prescribed by the Authority.
AM: To what extent is the Authority resourced and capacitated to undertake the policy compliance and monitoring role to ensure public entities comply with the new law?
NC: I am glad to say the Authority is fully resourced now and has a structure with four divisions namely; operations, capacity building, ICT and monitoring and evaluation divisions. These divisions have filled in positions with a team of motivated and professional staff raring to go.
AM: How far have you gone in achieving value for money in public procurement?
NC: we have made significant savings because of this intervention in public procurement. PRAZ has applied Section 47 of the Act on tenders that provides for historic documents after tender closing. The use of procurement plans has made it easier for procuring entities to plan and manage their cash flows and avoid unbudgeted expenditure.
AM: There is talk of e-Government Procurement, please tell us how far you have gone in implementing the new system and how will it benefit the treasury and bidders?
NC: The electronic Government Procurement (e-GP) is in the pipeline. The initial stage of reforms in public procurement providing for e-GP in the Act and development of the strategy has been done and now the Authority is moving towards operationalising e-GP which we expect to be done in phases as well. The initial plan for the Authority is to assist procuring entities to comply with the law first so there are a lot of activities around capacity building. After the issue of compliance has been addressed the focus will be on efficiency of public procurement to ensure that every transaction achieves value for money in compliance with the Act. Therefore, the next phase for the public procurement reforms is having an electronic Government Procurement (e-GP).
Work is currently underway to acquire and implement a fully-fledged e-GP system. The e-GP is part of the ease of doing business reforms and also eliminate deficiencies in the recently amended provisions. Procuring entities use of e-GP for contracts awards and contract management will achieve benefits as it will increase efficiency and cost savings (faster and cheaper) in government procurement and improved transparency (to reduce corruption) in procurement service.
The e-GP project is part of the country’s larger e-GP efforts to better serve its citizens and businesses in the digital economy. The e-GP system also manage tenders through the website. This can be accessed globally and greatly improves the accessibility of tenders. It also improves transparency as both the bidding and awarding of tenders will be done electronically with all those wishing to see the whole procurement cycle from entities procurement plans, bid adverts, selection of bidders and winning companies, contractors and consultants being able to access it on the PRAZ website.
AM: Briefly, tell us about yourself.
NC: I am the CEO for the PRAZ since January 2018. I have over two decades of supply chain management experience spanning the private and public sector handling different portfolios in procurement, stores and logistics management. I have done a series of supply chain consultancy and was the procurement consultant for World Bank for the Country Integrated Fiduciary Assessment (CIFA) of Zimbabwe that produced the Country Procurement Assessment Report (CPAR) that is guiding the Public Procurement Reforms.
I am a Fellow of Chartered Institute of Purchasing Supply (CIPS), a member of the Institute of Directors Zimbabwe and a member of the International Research Group in public procurement. I am a CIPS Graduate Diploma holder, a Post Graduate Diploma in Management for Executives and Masters’ Degree in Business Administration from University of Zimbabwe and Master’s Degree in Public Procurement Law and Policy from University of Nottingham.
AM: Would you have any additional information before we conclude?
NC: Yes. The Procurement Regulatory Authority of Zimbabwe takes pride in being one of the public entities established in line with the mantra of fighting corruption within the public sector through promoting efficient, fair, transparent, cost effective and value for money public procurement in Zimbabwe.
The Authority has already activated a structure and systems that will eradicate all forms of corruption in the public sector procurement processes. The Authority has managed to recruit professionals who underwent the interview process and rigorous vetting to ensure getting professionals with high integrity. The Procurement Regulatory Authority is ushering in a new culture of public procurement that brings in value for money in public procurement. In this regard it is re-branding to be a professional entity with high integrity officials and it will be launching its logo soon as its first stage in the re-branding process.
