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NewsDay

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Equal opportunity in procurement

Comment & Analysis
In my many articles, I have highlighted that procurement is more than a business process or a business department; it is a development tool. Development and empowerment of local businesses is achieved through effective procurement management. Such development is not only limited to the public sector, the private sector has a role to play. This […]

In my many articles, I have highlighted that procurement is more than a business process or a business department; it is a development tool.

Development and empowerment of local businesses is achieved through effective procurement management.

Such development is not only limited to the public sector, the private sector has a role to play. This article will focus on how to create equal opportunities through procurement to achieve emancipation of the marginalised.

Notices of procurement need to be advertised in a manner that is visible to all prospective participants. The choice of the media has significance in the readership targeted.

Where many media houses exist, it might be wise to use all of them to ensure maximum response. However, financial implications might need to be considered. Where the product is not likely to be available from local sources, use of embassies and international journals for advertising might be the option.

The size and presentation of the advert has significance in attracting the reader and this must also relate to the value of the purchase.

Time allowed for submitting bids affects equal opportunity in tendering. Some tenders fail to get responses because the time allowed to respond might be inadequate to allow presentation of responsive bids.

Product availability and the scope of the works might be determinants of the time required to allow for responses.

Equal opportunities are shattered by the way specifications are designed. Specifications include qualification criteria and product specifications. Qualification criteria refer to the minimum presentations expected of a bidder. Too much is sometimes asked for menial projects.

On the other hand, to allow protection of certain industries, maintenance of quality or management of warranty, some mandatory licensing and registration are requested. Product specifications might be crafted in a manner that unnecessarily limits competition.

Good quality specification would include acceptable range of a product, that is, specifying the minimum and maximum limits and not precise dimensions with the exceptions of spare parts that have to fit at specific places.

An evaluation criterion is an important tool for equal opportunities. Every prospective bidder must understand the criteria that they are going to be evaluated against.

A window for entertaining queries must be precise, allowing prospective bidders to question both the criteria and specifications.

Conditions of contracts may be used as a means of discrimination. Ordinarily, payment terms follow certain business practices, if a supplier request for advance payment, a bank guarantee for the advance payment is required.

In the contrary, if a buyer wants to delay payment after signing a contract, a bank guarantee must be raised in favour of the buyer.

Basis of awarding tenders must not be discriminatory. Discrimination in business might be on the grounds of race, creed, colour, political affiliation, religion, tribe, etc. There are, however, issues that might need some level of protectionism. In other sectors, such protectionism is referred to as black economic empowerment or indigenisation. Such policies are acceptable internationally if they are known to all participants.

The Zimbabwean procurement law so far, allows for a 10% preference margin, meaning that a local supplier can be awarded a contract if their price in the range of 10% above the price of an international supplier.

The situation can be improved by developing local participation, ring fencing certain classes of purchases to indigenous players, developing favourable payment terms that promote local industries, giving tax incentives to partnership arrangements that promote local industry.

If public procurement is effectively used, it can be an effective tool for development through affording equal opportunity to participants.

Nyasha Chizu is a fellow of CIPS and the branch chairman for CIPS Zimbabwe writing in his personal capacity. Email: [email protected]