This article focuses on the legal instruments that are available to regulate the procurement profession especially in the public sector.
The State Procurement Act (SPB) (Chapter 22:14) and its subsidiary legislation, the Procurement Regulations 2002, (SI 171/2002) were enacted to regulate public sector procurement and protect public funds.
The Urban Councils Act (Chapter 29:15) Sections 210 and 211 provides guidelines to the composition of the municipal procurement board made up of elected councillors.
The SPB Act is modelled along the United Nations Commission on International Trade Law on Procurement of Goods and Construction.
The two pieces of legislation therefore compliment the UN Global Compact’s 10 principles, the anti-corruption principle stating businesses should work against corruption in all its forms, including extortion and bribery.
The SPB Act clearly states the functions of the Board. It conducts procurement on behalf of procuring entities for procurement of a class prescribed in the procurement regulations; it supervises procurement on behalf of procuring entities; it investigates and takes action pertinent thereof; and the body is independent under the Act. According to the Instrument, the entities that are regulated are:
l Ministries, departments or other divisions of the government,
l Statutory bodies such as parastatals and public enterprises according to Section 34;
l Local authorities or other persons declared in terms of subsection 2 of section 2.
The Instrument goes further to classify public procurement categories of competitive bidding, informal tenders, and formal tenders.
The categories are determined by the value of the individual purchase that needs to be undertaken.
The procedures for undertaking formal tenders are clearly stated and include the preparations of specifications, advertising, tender document costs, evaluation criteria, opening of tenders, and comparison of tenders.
The board is responsible for authorising tenders and contracts and standard terms and conditions of contracts are included in the tender documents.
The SPB Board members according to the Act play a dual role, they are regulators and at the same time are heavily involved in the operationalisation of the Act.
They are directly involved in the formal tender process of government departments and parastatals. In my opinion, the regulatory responsibility is compromised by the direct involvement in such procurement processes.
The Act only regulates the process of procurement which operates in a highly sophisticated system that includes procurement personnel, the buyers. Only one element of a sophisticated system is regulated, the public procurement process.
There is no professional criteria of appointing an/or employing personnel to work in the SPB.
This in my opinion is critical given the fact that procurement is strategic and technical such that people involved must have relevant qualifications and skills to perform the critical function.
In the Urban Councils Act, the municipal procurement board is responsible for reviewing and recommending to full council procurement decisions made by council officers.
Although the SPB Act puts the urban councils under the remittance of the Act, the Urban Councils Act does not mention any relationship of the piece of legislation to the SPB Act.
This might be the reason why the minister responsible for urban councils is now advocating to put the Urban Council’s procurement under the remits of SPB Act.
The Urban Councils Act, like the SPB Act, also regulates the local authority procurement process leaving out the critical elements of the system, the personnel responsible for purchasing. Councillors are involved in the day to day operations of councils at the expense of corporate governance, separation of management and control.
To build a purchasing and supply system that has integrity, morals and ethics, the legal aspect has to provide for that critical foundation.
The legal framework has capacity to accommodate and handle UN Global Compact principles 7-9 on the environment.
Principle number 7 states that businesses should support precautionary approach to environmental challenges; principle 8 emphasise the need to take initiatives to promote greater environmental responsibility, and; principle 9 encourage the development and diffusion of environmentally friendly technology.
It shall be easy for the government to implement these principles on preservation of the environment if the procurement laws adopt green procurement.
Various recent “red flag” reports in procurement in the media highlights the rate at which the system is highly sophisticated. Organised crime and corruption are shaped by the lack of strength of the control mechanisms of the state and civil society.
Corruption and organised crime are much more than an isolated phenomenon.
Theoretical and applied research have shown the interdependent links between the political, socio-economic, criminal justice and legal domain. Corruption in the public sector affects the socio-economic factors.
Socio-economic factors include the wealth of a country, the distribution of national income and how the public revenues are invested in the overall structure of the state, which fundamentally shapes the quality of life of the population.
This also involves the private sector. Procurement is recognised as a high-risk area since it frequently involves huge sums of public monies flowing to the private sector based on decisions by public officials.
It is regrettable that in some cases, corrupt transactions are the norm as a result of common institutional failures that could be avoided.
l Nyasha Chizu is the chairman of the Chartered Institute of purchasing and supply