Procurement in COVID-19 times – Transparency issues


guest column:Tapfumanei D Java

THE Public Procurement and Disposal of Public Assets (PPDPA) Act 22:23 was enacted to ensure that procurement is effected in a manner that is transparent, fair, honest, cost-effective and competitive among other objectives in section 4 of the PPDPA Act and section 315 of the Constitution. The objectives of the PPDPA Act clearly demand that public procurement must promote the integrity of, fairness and public confidence in procurement processes.

The promulgation and operationalisation of the PPDPA Act in 2017 and 2018 brought so much hope that the nation was moving away from the archaic Procurement Act 22:14 which had been overtaken by time as well as not in sync with the global procurement best practices. The past two years in the implementation of the Act have been marred with teething problems both at the Procurement Regulatory Authority of Zimbabwe (PRAZ) and procuring entities levels with the latter resisting change while PRAZ only realised that it could not fully enforce the provisions of the Act on entities. There have been many tests to the effectiveness of the PPDPA Act like the Cyclone Idai emergency procurement and the economic environment in general where PRAZ has been issuing guidelines and increased capacity building, however nothing of the COVID-19 pandemic magnitude has been experienced as yet.

The pandemic
The COVID-19 pandemic brought about unprecedented times upon every nation in the world affecting the conduct of business, disrupting supply chains and exacerbating corruption in the way. The global supply chains have been adversely affected thereby calling upon governments to intervene both in the private and public domains. The effects of COVID-19 lockdowns meant that private sector spending was drastically reduced but at the same time public spending spiralled as governments across the world strove to strengthen their public health systems.

Devex, a development consulting organisation, reported that the pandemic sparked panic procurement globally which was not only limited to consumers but governments scrambled to secure masks, personal protective clothing while also trying to respond to the supply chain disruptions within their health systems.

The increase in public spending meant that transparency was needed than ever before as emergency procurement contracts increased thereby exposing various governments to procurement risks. Most countries temporarily suspended public procurement procedures to allow for emergency procurement but accountability and reporting mechanisms were not followed. In Zimbabwe, PRAZ issued guidelines for procurement of COVID-19-related procurements under circular number 1 of 2020. Though the efforts by PRAZ were laudable they, however, lacked a follow-up and monitoring mechanism, leaving the whole system open to abuse and mis-procurements. The local newspapers have been filled with reports of COVID-19 procurement malpractices, particularly the National Pharmaceuticals of Zimbabwe, Health and Child Care minister and Drax International, which is before the courts. The above-mentioned case is just a tip of the iceberg compared to the issues that have not been reported or will come out after a proper monitoring by PRAZ through procurement returns.

The post-review of COVID-19 procurement records requested by PRAZ through circular number 3 of 2020 will unearth a lot of procurement irregularities in most public institutions provided that they are done to the book. PRAZ should be given more teeth to effectively monitor public procurements at any stage and the public should also know how much of public funds were spent on COVID-19 procurements. In the Ecuador the public procurement agency created a platform to allow the public to monitor public spending, report any signs of corruption, raise complaints and hold the government accountable. The EU through Directive 2014/24/EU allowed for a negotiated procedure without prior publication for public procurements under emergence cases which was permitted only “ insofar as strictly necessary where, for reasons of extreme urgency brought about by events unforeseeable by the contracting authority, the time limits for open or restricted procedures or competitive procedures with negotiation cannot be complied with [and where the circumstances] invoked to justify extreme urgency [are not] attributable to the contracting authority”.

The directive and guidance by the EU to its member States to take advantage of the flexibilities with the procurement law has not gone without procurement-related challenges emanating from the misinterpretation or incorrect reliance on the guidance. The same issue has also been experienced by most Zimbabwean public procurement professionals who failed to interpret the PRAZ guidelines on COVID-19 procurement.

The UK government issued a number of procurement policy notes (PPNs) to procuring entities to assist them to support their supply chains during the pandemic.
The PPDPA Act of 2017 as read with SI 5 of 2018 and SI 49 of 2020 provide for instances where emergency procurement procedures can be instituted particularly section 33 of the PPDPA Act on direct procurement but still without a proper monitoring mechanism at the country’s procurement regulator all this becomes a fallacy.

It is imperative to note that the guidelines do not change the law and the procuring entities and other stakeholders like suppliers should be cognisant of the risks of procurement challenge. The major risk identified was the direct awarding of contracts to companies with no track record or ability to deliver as in the Drax International case. The Health ministry evaluated and recommended suppliers for the supply of personal protective equipment (PPE) materials for COVID-19 response dated April 20 which was addressed to the PRAZ CEO which was littered with suppliers with no track record in manufacturing or supply of personal protective equipment.

The public procurement and spending of public funds challenges under emergence situations like the COVID-19 pandemic are not only peculiar to Zimbabwe, but closer home in South Africa, the R500 billion grant for COVID-19 relief has been marred with a lot of irregularities. The Gauteng health director reported that the spending under COVID-19 for PPE only amounted to R2,5 billion and there are transparency issues already raised. The balance between the law and emergency has become a real challenge for most countries and it will call for review of a number of public procurement laws.

PRAZ has already initiated the process of reviewing the PPDPA act to accord it more powers to police and bring to book violators of the procurement law. It, however, remains to be seen how the new monitoring guidelines for public procuring entities will be enforced by the regulator given also the harsh economic environment which has distorted the annual procurement plans.

The COVID-19 pandemic is likely to be around for the greater part of 2021 with the new waves being experienced governments should strengthen their public procurement institutions to foster transparency and reduce procurement-induced corruption. Closer home in Zimbabwe, transparency in public procurement is a yardstick to any investors that their investments will be safe hence all stakeholders in the public procurement domain must always know that they have a part to play in national development.

The global corruption watchdog, Transparency International says that corruption is not only about money but the reduction of quality of service, acquisition of counterfeit drugs among other issues. Good procurement systems must be seen through, anchored on global procurement best practices and institutions that enforce them while providing accessibility to information for all stakeholders including effective complains mechanisms. Zimbabwe has been in the implementation phase for the past two years since the operationalisation of the Act and PRAZ has done so much in capacity building, but there is so much that still needs to be done to ensure transparency in public procurement while instilling public confidence in the public procurement systems.

Transparency in public procurement is not only the regulator’s responsibility but all stakeholders including the very actors, who are procuring entities, should ensure that their procurement activities are lucid and open to the public. Publication of procurement contracts awarded is being done in the local print media and Government Gazette as stipulated in the Act but the regulator supported by its development partners should expedite the online portal to allow publication of procurement plans and contract awards.

The monitoring by PRAZ is also still behind despite the regulator having been very instrumental in capacity building and ensuring the operationalisation of the Act through establishment of competent procurement management units in all procuring entities. The returns submitted to PRAZ are still way below the requirements of PRAZ as most procuring entities do not have the capacity to complete the returns or submit incomplete information.

The economic environment has also influenced the effective monitoring mechanism by the regulator as the procurement plans submitted to PRAZ in the beginning of the year have been eroded by the hyperinflation but very few entities have submitted reviewed procurement budgets to the regulator as required in Part IV of the PPDPA Act. The submission of procurement returns must be done on the portal not on emails as the current case just like how the Zimbabwe Revenue Authority e-filing works and the regulator must also accelerate the operationalisation of the online portal.

In conclusion, Transparency International developed the Integrity Pact in 2001 to promote transparency and integrity in public procurement and use of public funds. The Integrity Pact also presses upon bidders to commit to good procurement practices and avoid colluding, corruption and bribery. The responsibility for transparent public procurement systems rests with bidders, the regulator, politicians, Zimbabwe Anti-Corruption Commission, the procuring entities and public procurement professionals.

All stakeholders must walk the talk to achieve transparency in public procurement systems and not shift the blame to anyone, as it is a collective effort. Transparency and accountability are the hallmarks of good public procurement systems and the public has the right to know what and how the public funds are being used.