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Kenya: Youths, Women, PWDs to Benefit From New Procurement Rules


AllAfrica.com

By Capt. (RTD) Collins Wanderi

OPINION

On 18th June 2013 the Cabinet Secretary for the National Treasury published the Public Procurement (Preference & Reservations) (Amendment) Regulations 2013.

The objective of these regulations is to accord the youth and other disadvantaged groups in Kenya preference in the supply of goods and services to the government. This is in line with one of the key promises of the Jubilee government to give the youth, persons with disability (PWDS) and women at least 30 percent of all supply contracts to the government.

The significance of these regulations is that the National Treasury and all the Treasuries in the 47 county governments shall be required to register and maintain a database for all Small or Micro-Enterprises (SME) or disadvantaged groups that wish to participate in public procurement.

The regulations also seek to favour local businesses by granting exclusive preference to local contractors who supply motor vehicles, electrical goods, furniture and other items which are fully assembled or manufactured in Kenya. Road works and electrical installations of below Sh1 billion, other public works of below Sh500 million and supply of goods and services of below Sh100 million and Sh50 million respectively are now exclusively reserved for Kenyans.

When these regulations come into effect the government and all its agencies will inevitably become the largest promoters of the motto, “buy Kenyan, build Kenya”.

The regulations also make it possible for procuring entities to divide supplies in lots of goods, works and services into practicable quantities which the youth, SMEs and other disadvantaged groups can afford. A new Regulation 31 enjoins the National, County governments and other agencies of government to allocate at least 30 percent of their procurement to the youth, SMEs and other disadvantaged groups.

To enhance compliance with this regulation these procuring entities will now be required to make budgets, issue tender notices and award contracts with at least 30pc participation by the youth, SMEs and other disadvantaged groups. They will also be required to submit quarterly reports to the Public Procurement Oversight Authority for compliance audits.

To participate in the new preferred and reserved public procurement scheme, the youth, women, persons with disability, SMEs and other disadvantaged groups are required to register their enterprises with the relevant government body e.g Registrar of Companies, Business Names, CBOs, NGOs etc.

The membership of such registered bodies may have 30 percent members at most who are not youth, women or PWD but their leadership must be 100 percent youth, women or PWD. Procuring entities will be required to pay for supplies made under this scheme within 30 days. A delay beyond 30 days requires the entity to make 50 percent part-payment and explain the delay in writing.

Regulation 33 which deals with financing is of great importance. While young people often have the benefit of fresh ideas, energy and vigour they are seriously deprived while in competition with older people who have the advantage of time, experience and money. Procuring entities will be required to authenticate Tender Awards and Local Purchase or Service Orders (LPOs & LSOs) and enter into agreements with relevant financing institutions with an undertaking that the contracted enterprise will be paid through the account opened with the financier.

Banks, Deposit Taking Microfinance Institutions (DTMs) and other lenders licensed by the Central Bank of Kenya must also come up with very innovative ways to help the government, the youth, PWDs, Women and other disadvantaged groups achieve the objectives of the new regulations.

The youth, women and PWDs need these contracts but on the other hand government agencies require assurance that the contracted enterprises will perform their part of the bargain and with the requisite skill and expertise. One method to ensure satisfaction of reserved and preferred public procurement contracts may be through the doctrine of cession which is widely used in South Africa.

The law has created a new spectrum of proprietary rights for the youth, PWDs & women by dint of their status in society. These rights are exclusive, reserved and can be quantified in economic and monetary value once a procuring entity has authenticated a tender award and issued an LPO or LSO.

Once an enterprise owned by the youth, PWDs or women gets a contract to perform certain obligations for the procuring entity, such an enterprise acquires a right of claim for payment in anticipation by virtue of regulation 33. Consequently in terms of the doctrine of cession in anticipado, the future right to claim payment may be ceded. This way the youth, PWDs and Women owned enterprises (cedent) would retain ownership of the contractual rights but only surrender to a limited degree the ability to enforce those rights.

An agreement to cede would be in writing and a formal document known as the Instrument of Cession will have to be executed. A cession as opposed to delegation or sub-contracting would be the best method to facilitate access to finance and specialist expertise by the youth, women and PWDs who want to benefit from the preferred and reserved public procurement under the new regulations.

Wanderi is the chairman-Kenya Institute of Forensic Auditors (KeIFA)

CORRUPTION WATCH:Procurement law must be simplified


Mar 31, 2013 | Corruption Watch

Is our government just really bad at procurement, or is there a deeper problem with the law that applies to tendering?

IT SEEMS that every other week there is a different scandal involving procurement. Most tenders seem to land up in court, with service providers squabbling over the spoils of government spending. Is our government just really bad at procurement, or is there a deeper problem with the law that applies to tendering? Perplexed

Dear Perplexed

We believe that it is a bit of both. While there is no denying that some of the bureaucrats responsible for procurement are corrupt (as are some of the private companies that bid for contracts), the law governing public procurement has become increasingly complicated.

In our view, procurement law has now become so complicated that it may be undermining service delivery. For example, many organs of state are unable to spend their budgets and infrastructure grants. The complexity of procurement law contributes to this problem by paralysing civil servants who become hyper-cautious in their desire to avoid infringing the law.

Part of the problem is that there are so many different levels of procurement law.

A well-intentioned and honest administrator will find that the following layers of law govern procurement:

Section 217 of the constitution expressly deals with government procurement. It provides that when an organ of state contracts for goods or services, it must do so “in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”.

The award of a tender constitutes administrative action in terms of the constitution. As such, the award of tenders is subject to review under the Promotion of Administrative Justice Act.

Various pieces of legislation govern the budgeting process, internal controls and the requirement that people historically disadvantaged by unfair discrimination be favoured.

Each organ of state has its own supply chain management policy, which must be followed by its bureaucrats when engaging in procurement.

Any information held by an organ of state relating to the tender process is potentially affected by the Promotion of Access to Information Act, and may be the subject of requests for information by other affected parties.

The contract between the relevant organ of state and the service provider is governed by the common law of contract.

As a result, innumerable pitfalls await even the most well-intentioned administrator.

The competitive nature of tender processes and the enormous financial benefits to be gained from contracts for government procurement are a powerful incentive for unsuccessful parties to litigate, which they often do.

Their lawyers scrutinise every step in the process for compliance with the various laws and procedures, and pounce on every real or perceived irregularity. Very few administrative processes are entirely free from any misstep, and when one is found, litigation soon follows.

In addition, bureaucrats are required to account to government oversight bodies in respect of expenditure, including internal accounting officers and the Treasury. The procurement process may also be subjected to scrutiny by the auditor-general and the public protector.

Even where litigation by disgruntled parties fails, or investigations by other organs of state result in a clean bill of health, the effect of such litigation and investigation is to delay the provision of the service in question.

Procurement processes are often suspended while disputes are resolved, which can mean delays of years in service delivery.

We are therefore of the view that legal reforms to simplify and speed up procurement are justified. Any reform would have to ensure that accountability mechanisms remain in place, and that the law retains proper safeguards for detecting corruption and maladministration.

That would require careful balancing between swift, effective service provision and a functioning oversight mechanism.

* This article was first published in Sunday Times: Business Times

 

Ghana: Government Urged To Implement Sustainable Public Procurement Policy


Mr. Samuel Sallas-Mensah - CEO of Public Procurement Authority

Mr. Samuel Sallas-Mensah – CEO of Public Procurement Authority

Mr Samuel Sallas-Mensah, Chief Executive Officer (CEO) of the Public Procurement Authority (PPA) has appealed to government and procurement practitioners to embrace and implement Sustainable Public Procurement (SPP) policy.

He said SPP factored economic, social and environmental impacts in procurement decision making which would ensure effective sustainable development.

The CEO was speaking at an opening session of a five-day pilot training for procurement practitioners on SPP in Koforidua on Monday,

“Waste management and economic use of resources are some obvious challenges we face and sustainable public procurement can help address them to a large extent,” he said.

Mr Sallas-Mensah said the SPP makes room for increased participation of women entrepreneurs in government procurement processes which would be a boost for national economic growth and for their immediate families as well as their communities.

“A policy that seeks to improve incomes for women businesses through government contracts is a wise one and must be embraced since it results in poverty alleviation and wealth creation,” he said.

Mr Sallas-Mensah appealed to the government to set aside a percentage of all its contracts for Small Scale and Medium Enterprises (SMEs) to enable Women-Owned Small Businesses (WOSBs) to have a quota.

In her welcoming address, Nadia Balgoben, the Swiss Representative, implored Ghana’s policy makers and procurement practitioners to take the training serious and make it a point to implement the SPP policy for the country to attain full sustainable development.

Mr John Afari Idan, CEO of Biogas Technologies Africa Limited, reminded the participants of the need to understand that their role in public procurement is not all about buying but adding value to what they buy.

The pilot training is a collaborative effort between the Government of the Swiss, to train procurement practitioners and policy makers in the public sector in order to strengthen their monitoring and evaluation capabilities which would in turn foster sustainable development.

Source: GNA

Related posts:

  1. Ghana to start piloting implement e-procurement system
  2. Ghana prepares draft amendments of Public Procurement Act
  3. Ghana As From 2014 Will Operate An Electronic Procurement System
  4. PPA reveals non-compliance of public procurement law
  5. Public Procurement Act Is A Tool To Fight Corruption
  6. Government to implement strategies for public sector reform
  7. Sallas-Mensah joins Advisory Group
  8. Local firms urged to develop CSR for sustainable national development
  9. ISD And IPR Trains Government’s Public Relations Officers In Various Ministries
  10. Public-private partnership policy approved
  11. Gov’t urged to continue implementation of National Youth Policy
  12. Ghana to undertake over $1.5b ambitious projects under public-private partnership policy
  13. Ghana government approves new forest, wildlife policy
  14. Government to implement inclusive education in 2015-Minister
  15. Government to use Public Private Partnership for low-cost efficient service delivery.
  16. Ghana begins electronic procurement system 2014 (ghanabusinessnews.com)

South Africa: Western Cape government to slash red tape


SupplyManagement

By Adam Leach

August 5th, 2011

Procurement bureaucracy is to be stripped away to allow companies in the Western Cape of South Africa to generate more business.

Speaking at the launch of the Western Cape Government’s red tape programme yesterday, Alan Winde, who is the economic development member of region’s executive council, announced the formation of a dedicated unit to identify the most damaging areas of bureaucracy and regulation and remove them.

If red tape is not addressed, it will remain an insidious threat to Western Cape businesses,” he said. “By placing unnecessary blockages in the way, it inhibits large enterprises, as well as those smaller enterprises that are so important to our economy.”

He went on to emphasise that rules and regulations that are found to be “beneficial” to industry would remain.

The two-fold process to make things run more smoothly will see the new unit “reduce or eradicate” needless legislation governing procurement while also adapting existing regulations and processes to make them more efficient both in terms of cost and the amount of time they take up.

Describing one of the key actions he said: “As part of this initiative, we will complete Regulatory Impact Assessments on procurement and supply chain management functions that constrain business. As they are completed, we will receive options for policy changes that ease red tape.”

The plans will also see the provincial government run a series of networking events and forums to work closely with industry. These events included twice yearly supplier days where government officials will meet with current and potential suppliers. Special events will also be held with small and medium enterprises to help them overcome the specific challenges they face with red tape.

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