FINANCE Minister Dr Bwalya Ng’andu has proposed the Public Procurement Bill No. 8 of 2020 before Parliament, which seeks to impose sanctions o procurement entities that certify non-existing suppliers.
And Parliamentary and Public Accounts Committee (PAC) chairperson Howard Kunda has described the Bill as progressive saying he hopes it will stop the tendency of inflating of prices in public procurement, if passed.
Speaking when he presented the Bill for Second Reading in Parliament Tuesday, Dr Ng’andu said it had been proposed to address weaknesses in the current Procurement Act to close unnecessary loopholes traditionally used by bidders to abuse procurement tenders.
“Mr Speaker, procurement in the public sector accounts for a significant portion of the nation’s economy. This includes procurement of goods, works and services. It is, therefore, imperative that value for money is attained and wastage for scarce public resources through, among others, sub-standard work and over-pricing that have been observed as weaknesses in the current Act are curbed. As a result of these inherent weaknesses, the current Public Procurement Act has been proposed and a Public Procurement Bill further intends to harmonise conflicts within other Acts,” Dr Ng’andu explained.
Dr Ng’andu said the Bill sought to introduce price benchmarking, which aimed at ensuring that prices paid by government were market-based and achieved the principle of value for money.
“The key features of this Bill, Mr Speaker, includes the following: introduction of price benchmarking on standard market prices. Mr Speaker, the Bill under Section 12 introduces price benchmarking, which aims at ensuring that prices paid by government are market-based and achieve the principle of value for money. It is evident that prices for government departments and agencies are charged for various goods and services vary and are normally much higher than what would be charged to private entities. Price benchmarking will, therefore, be introduced and will be attained through ZPPA producing a Quarterly Market Price Index that procuring entities will be required to adhere to. For example, in instances where items to be procured are not covered in the Quarterly Market Price Index, a procurement entity will be required to undertake a price reasonableness analysis as prescribed in the regulations to be developed,” he added.
Dr Ng’andu said the Bill also restricted office holders and their relatives from participating in the procurement process.
“Mr Speaker, the Bill, under Section 15, has restricted the participation in the procurement process for office holders and their relatives. This will avoid conflict of interest on the part of office holders that may lead to mispricing and tender manipulation, if allowed. The mandatory use of information and communication technology: Sir, it is the feature of the Bill intended to make the use of electronic government procurement system mandatory for all procurement entities when engaging bidders or suppliers in the acquisition of goods, works, consulting and non-consulting services. This measure will increase transparency, reduce the time taken in the bidding process. The Bill provides for a transitioning period of three years for those procuring entities that will be assessed not to be ready to use the electronic government procurement system,” Dr Ng’andu said.
“National comparative bidding: Sir, the Bill under Section 39 (2) provides for national comparative bidding gives priority to Zambian citizens. It is also intended to encourage Zambian bidders to bid in partnership with other Zambians where individually, they may have insufficient skills or capacity to successfully bid for a given tender. Where a partnership of Zambians is still in need of additional capacity for which a foreign entity may be required, the Zambian partnership will sub-contract the foreigner. This will bring an end to the unnecessary sub-contracting of Zambians by foreigners. In other words Mr Speaker, we want a system where Zambians are sub-contracting foreigners, rather than the current practice where foreigners are sub-contracting Zambians, even when it is not necessary.”
Dr Ng’andu said that the Public Procurement Bill will equally prohibit the variation of contracts beyond 25 per cent.
“Mr Speaker, the Bill prohibits the supplier from fronting on behalf of another. Further, it prohibits one whom a contract has been awarded to assign the contract to a third-party as has been the case in the past. A supplier, who contravenes this Section commits and offence and is liable to a fine or prosecution. Mr Speaker, the Bill [also] proposes to prohibit any amendments or variation to contracts beyond 25 per cent of the original contract price. Variations beyond 25 per cent of the original contract price will require a new tender to be undertaken. This provision is intended to prevent abuse of the tender process through under-bidding to win tenders followed by price escalations and contract variations that result in abuse of public resources,” Dr Ng’andu said.
“Sir, the Bill under Section 93 makes it mandatory for procuring entities that embark on international bidding to sub-contract citizens. The provision will require that a foreign bidder or supplier should by law sub-contract a percentage of the total value of the procurement in accordance with the prescribed threshold to citizens, bidders, and suppliers. The percentage threshold to be sub-contracted will be prescribed in regulation.”
And Dr Ng’andu said the Bill would further introduce sanctions for procurement offences like certifying non-existing suppliers, among others.
“Mr Speaker, the Bill has introduced sanctions for offences to safeguard public resources. These offences include certification of sub-standard goods or works, certifying incomplete works, certifying non-existing suppliers or whose quality is below the specifications contained in the contract. Other offences include: conspiracy to raise prices, gaining advantage by using one’s position and tampering with the bid, including any document or items submitted in the bid. Sir, this Bill is long overdue. I call upon the House to support the Bill as it will start the process of recreating wealth among our people by empowering local citizens in public procurement and building capacity among citizens in undertaking huge public works. The Bill also aims at strengthening the existing regulatory and enforcement mechanism required to promote transparency, accountability and efficiency in our public procurement system. It will be a deterrent to procurement fraud and save government of the much-needed resources for interventions in important sectors, such as education and health,” said Dr Ng’andu.
Meanwhile, Kunda said the Bill was progressive.
“Mr Speaker, in scrutinising the Bill, the Committee consulted various stakeholders, including professional bodies and Non-Governmental Organisations (NGOs). Sir, all the stakeholders consulted are in support of the Bill despite raising some concerns, which are highlighted in the Committee’s Report. Sir, the Bill introduces the provision in procurement pricing and makes it mandatory for procurement entities to procure standard goods and services and works in accordance with the Quarterly Market Price Index. This is very progressive and is very commendable. It is hoped that this provision will stop the tendency to inflate prices in public procurements and prevent procurement entities from procuring goods and services at exorbitant prices. Further, this will ensure that government obtains value for money in public procurement,” Kunda said.
But he proposed that the Bill should also address the administrational gap of the lack of a specific office to superintend the whole process by including the Office of the Procurement General.
Kunda also said his Committee disagreed with the Bill’s proposal to allow the Finance Minister to be the one to appoint the chairperson and vice-chairperson of the board of the ZPPA as the mandate should be left to the board members.
“Mr Speaker, Clause 7 (2) provides that that the Minister shall appoint the chairperson and the vice-chairperson of the board of the Zambia Public Procurement Authority (ZPPA) from among the members of the board. The Committee does not agree with the provision. It recommends that the board members should be given latitude to elect the chairperson and the vice-chairperson to ensure that the board operates without any political interference from the Minister or perceptions thereof. Mr Speaker, one of the reasons for engaging in direct bidding as provided for under Clause 46 is the existence of an emergence. This provision is progressive. However, the Bill does not define what constitutes an emergency. The Committee contends that if the word emergency is left undefined, the provision could potentially be abused by procurement entities. The Committee, therefore, recommends that the word emergency be clearly defined,” said Kunda.