Public procurement headache

Public institutions are constantly procuring goods and services.

In 2022, the Reserve Bank of Malawi reported that government spent K636 billion on procurement.

To entrench accountability, Parliament enacted public procurement laws and regulations.

The Public Procurement and Disposal of Assets Act of 2017 established Public Procurement and Disposal of Assets (PPDA) Authority.

The law seeks to ensure that there is efficiency, transparency and accountability in public procurement.

Unfortunately, the three principles are not being satisfactorily met and the nation at large suffers and the economy gets stifled.

Procurement processes pass through multiple stages before being duly approved.

There is clearance by the institution’s internal procurement committee and then approvals at the PPDA Authority.

At the regulatory authority, clearances are granted by several external agencies, including the Anti-Corruption Bureau, Ministry of Justice and Office of the President and Cabinet before approval is granted.

It is this layer of clearances that is usually blamed for delays.

In procurement of works, it has become common for procurement processes to take a calendar year to the award confirmation.

Routine road maintenance works have fallen victim to this delay. These include routine works that must be conducted at specific times of a year such as cutting grass along road edges. You cannot do it during the rainy season just as you cannot clear drains during the dry season.

A delay in awarding such works means that the works will miss their target and ultimately fail to serve the nation.

Procurement specialists have blamed institutions for having poor procurement plans whereas the procuring agencies blame PPDA  Authority for delays.

A strategy of ensuring that work procurement delivers the desired objective is correct choice of contract to be signed.

The regulation allows various contracting methods to ensure that a competent party is assigned the responsibility of carrying a risk of a project.

Some of the challenges faced in Malawi point to poor contract choice. Where an entity implementing a project lacks capacity to design or supervise works, they would engage an independent professional body to help.

Thus prior to accepting the works contract, PPDA Authority should take time to appreciate how the works will be designed or managed and the capacity to do the same.

We have on numerous occasions seen a disconnect in the awarding of these professional contracts versus the works contracts relate to.

In some cases, we have seen works being implemented by offices with little capacity to handle them, leading to implementation problems.

We have had cases where an entity wishes to procure multiple services of a specific discipline and these get floated together as lots.

It becomes surprising when one bidder or a few bidders get awarded multiple lots in a bidding process involving tens of bidders.

The argument provided is that the winning bids were so good. That might be true, but there is another thing that is overlooked: Risk management.

How is the procuring entity managing its risks when all its procurements are lumped into a single bidder or a few bidders?

What happens if for any reason the contracted bidder fails to perform according to standards and timelines?

Procurement entities should be spreading their risk to ensure continuity in case a problem arises.

Transparency of the procurement process dictates that on completion of an evaluation, a notice of intention to award is publicly floated for any credible objection to be raised and adjudicated on.

The expectation at this stage is that the evaluation has been thoroughly undertaken thus there is no point to have several months between an intention to award and the actual award. Unfortunately, we have had numerous cases of drawn-out awards after an intention has been floated.