THE Office of the Auditor-General will engage the State Procurement Board to address low-balling that was rampant in tender processes amid concerns government was losing millions of dollars through the practice, a senior government official has said.
Speaking at a workshop in Harare yesterday for the International Public Sector Accounting Standards, Auditor-General Mildred Chiri said various suggestions were being looked at before new tenders were floated.
Low-balling is a persuasion and selling technique in which an item or service is offered at a lower price than the actual price.
“Low-balling is done when tender charges are at a low rate to win a tender. The effect is that at times the job done may not cover all the other areas because the fees are low. Or immediately as soon as the firms win the tender, they come back for a high fee to say they made an underestimation. For the tenders, it’s becoming rampant compounded by high competition. In the past, we had 10 to 15 firms who were able to share the cake equitable, but now there are 62 firms,” Chiri said.
“We are working on proposals and by November we will engage them (State Procurement Board) with the proposals before new tenders were floated.”
She said people should not expect parastatals to make profits as they are supposed to deliver services and meet the Environmental Management Agency requirements.
Chiri said there were problems of governance in parastatals as some of them do not have properly constituted boards.
She said the reports for 2011 and 2012 for parastatals have not yet been tabled, but they were sent to the Ministry of Finance. She said the main challenge of parastatals was however, under-capitalisation.
“The performance is not what has been expected due to the economic downturn and some of the issues of finance are beyond the companies’ control,” she said.
Chiri said the preparation by parastatals for financial statements had improved, but they were still lagging behind on producing annual reports.
In an interview, Public Sector Accounting Standard Committee chairperson Emilia Chisango said the training would help the central and local government to have a framework that was acceptable everywhere unlike the cash basis that they were currently using.