Procurement is the conduit with which goods and services are acquired within public and private organisations.
Purchasing & Supply with Nyasha Chizu
Public procurement, therefore, is the interface of the public institutions and the private sector suppliers of goods and services.
Procurement accounts for between 65% to 80% of organisational and national expenditure. It also accounts for 11% to 17% of gross domestic product in most countries.
With the exception of the salary bill, all the organisational expenditure is rightfully under the remit of procurement. Public procurement is, therefore, critical in that it directly impacts on the livelihood of ordinary citizens.
Public procurement is funded by public funds through statutory levies and taxes that are collected from individuals and corporates. Since every citizen contributes towards national Treasury, there is, therefore, need to ensure that public procurement systems are transparent.
To achieve transparency in public procurement, standard procedures are applied. Standard procedures provide guidelines as to how public procurement decisions are arrived at.
Since public procurement provides the gate between the public and private sphere — a sphere with huge corruption risks — good regulations and transparent procedures are necessary to minimise these risks.
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It also creates a market of tenders that if effectively managed, government procurement becomes effective and fosters competition at the same time.
Transparent systems also try to manage tender manipulation. Procuring agents may leak insider information to chosen bidders or tailormake specifications and qualification criterion to suit certain companies.
Some opt to split tenders to avoid thresholds that require stricter procedures.
Uniformity in the procurement process is critical across all public entities. Government departments, statutory bodies, parastatals and local authorities form Zimbabwe’s public sector.
The objectives of public procurement are to ensure that the application of standard procedures across government agencies is achieved.
Uniformity implies that the private sector suppliers participate on the same rules and regulations in the public sector. This implies that solicitation of tender documents, advertisement, bidding documents, tender opening, evaluation and award are done in a uniform style to the confidence of all stakeholders.
Another critical element is the achievement of economy and efficiency in the procurement of works, goods and services. Economy implies that principles of opportunity cost are achieved in a tender process.
Public procurement, therefore, needs a balance in the process of eliminating fly-by-nights and application of efficient criterion in a tender process.
Efficiency, on the other hand, takes into account that public procurement decisions are undertaken in consideration of time factors. Delaying a procurement process has effects that are the same as a non-economical purchase. Schedule delays and total acquisition costs are important factors in a public procurement process.
Another similar objective to efficiency and economy is the desire to ensure fair and equal access to legitimate suppliers for works, goods and services. Public procurement systems must allow for equal opportunity for all suppliers. Discrimination of supplier must be just, backed by economic, legal and technological requirements of a purchase.
Since public procurement systems are reviewed in line with the ever-changing environment, oversight role of public procurement agents also require strengthening to achieve the discussed objectives.
This is in light of the fact that public procurement accounts for a substantial part of the domestic and regional economy. It is important to note that the legal framework alone cannot stop misconduct and corruption in public procurement.
Transparency minimises criminal abuse of public procurement systems. Nyasha is a Fellow of CIPS writing in his personal capacity. [email protected]
