THE value-for-money (VfM) concept set by the Procurement Regulatory Authority of Zimbabwe (PRAZ) has helped to plug loopholes in the public procurement that was characterised by forward and overpricing of goods and services to Government, parastatals and local authorities.
Following arbitrage and unscrupulous behaviour by some suppliers and contractors, Government through PRAZ introduced value for money measures to curtail such behaviour and save millions of dollars.
VfM is part of a holistic procurement structure easily understood as “not paying more for a good or service than its quality or availability justifies” and it entails cost minimisation, output maximisation and full attainment of the intended results.
Public procurement is explained as the process by which public sector organisations — ministries, parastatals and local authorities — acquire goods and services.
It is central to Government’s service delivery and involves large sums of money – about 25 percent of the national budget – thereby making it imperative for procurement systems to be transparent and high performing to guarantee cost-effective delivery of goods and services.
The principle was introduced to weed out fly-by-night suppliers and contractors after it emerged that the procurement procedures and guidelines meant to ensure a fair process that provide value for money tend to provide opportunities for abuse and malpractice for some procurement officials.
This was due to lack of strategic recognition of the procurement function and procurement policy; lack of professional, managerial and leadership skills and lack of accountability in the procurement process.
Procurement processes in Zimbabwe are now governed by the Public Procurement and Disposal of Public Assets Act (PPDPA) and other regulatory frameworks.
If religiously implemented, the process will reduce costs, benefit from specialist expertise, promote transparency, protect public funds, challenge corrupt tendencies, use public funds efficiently and provide service delivery through the use of fair competition.
Already, 19 unscrupulous companies have been recommended for debarment and disqualification from the public procurement process for various shortcomings that detract service delivery.
PRAZ chief executive officer (CEO), Mr Clever Ruswa revealed this at a media training workshop that sought to sensitise journalists on the provisions of the reformed Public Procurement and Disposal of Public Assets Act and clarify its objectives.
PRAZ was last year criticised for sleeping on duty after overpricing by suppliers to Government became rampant, with businesses trying to beat the impact of inflation.
This prompted Treasury to put a blanket ban on supplies from firms that practised forward pricing on August 3, 2022.
A condition to scrutinise all such invoices before payment was also put in place.
Mr Ruswa said PRAZ has made inroads in curbing the rent-seeking behaviour by suppliers. He said the value-for-money principles have instilled some sanity in public procurement.
“As a regulator, we did our due diligence and our investigations where three out of 19 are now cleared, while the remaining are still battling to justify the wayward behaviour they were engaging in. I am happy that from where we seat as a regulator working with other arms of Government and other statutory bodies, we are now putting our efforts to curb this kind of behaviour.
“Monetary and Treasury authorities want to bring stability in the country as some were trying to use procurement as a gap for their short-term gains. Some of the contractors and suppliers are also aware of the consequences of not following the value-for-money principle, so it also helping,” said Mr Ruswa.
PRAZ capacity building director, Mr Cliff Gondo said the regulator had come up with a strict sanctions framework against corruption and malpractices by public officers.
“There are now sanctions, and we now have a list of blacklisted suppliers, some now even have permanent debarment. Whatever they will do, the company will never be able to supply Government, and this serves as a warning to other would be errant bidders,” said Mr Gondo.
He said PRAZ is working hard to ensure fair evaluation and competition among bidders.
“Bidders must be given equal opportunities. Everyone must be afforded an opportunity. It is about capacity and equal opportunities to allow people to participate. Businesses must be given an opportunity to participate,” he said.
PRAZ succeeded the State Procurement Board (SPB).