Some contractors of complex works, or tenders, will have to spend their own money when implementing the projects and be paid later after work is completed using a new innovative procurement method, Uzziel Ndagijimana, the Minister of Finance has disclosed.

The provision is proposed in the new draft law governing public procurement whose relevance was approved by the Chamber of Deputies and is now before a parliamentary committee for further scrutiny. Lawmakers are basically doing a revision of a 2018 law.

As noted, the proposed "pre-finance in procurement for complex works or tenders” method will ensure that contractors do not abandon works. It will also help the government when there is not yet an available budget to execute some projects.

"We have to agree with the contractor on two things. One is the cost of the construction project. Secondly, this is like a loan because the contractor will use their own money and even be paid in the long-term,” the Minister said.

"Therefore, we have to agree on a way to pay them including looking at loans they can take from banks for the project, and prices on the market, among others. This method can work for us especially when we need to fast-track a project at the time we do not have enough money,” he said

This procurement method is among four methods which the government seeks to legalize. Ndagijimana said that the other new procurement method to be legalized is the "Turnkey project” method.

A turnkey project is a type of project that is constructed so that it can be sold to any buyer as a completed product. Designing and executing are completely into the hands of the contractor and this, among others, helps in producing a better quality of work.

"To implement the project, the company designs and constructs and then hands over the facility to the person who provided the tender when fully complete,” Ndagijimana explained.

The other new procurement method is the "design and build” method. This is a procurement route in which the main contractor is appointed to design and construct the works, as opposed to a traditional contract, where the client appoints consultants to design the development and then a contractor is appointed to construct the works.

The approach strengthens the owner’s control of the process since they have one point of contact throughout the project. Financial risk is reduced because one partner is responsible for the success of the project.

Ndagijimana said: "The contractor must design and build but the institution which provided a tender establishes a way of supervising the project.”

Another method is procurement for innovation which, the Minister said, "involves tenders for innovation and ICT including awarding those who bid with innovative ideas.”

Addressing loopholes for corruption

Ndagijiamana said that the law, if amended, could address loopholes for corruption.

The law is expected to resolve the issue of frequent amendments of procurement contracts as well as minor and major deviations – which increased costs – because it is noted as a major loophole for corruption. If the law is amended, the percentage beyond which the contracting entity cannot conclude an amendment to the procurement contract was reduced from 20 percent to five percent as a key anti- corruption measure.

According to the Ministry of Finance, the current law lacks provisions relating to the new emerging concept of sustainability, green procurement, innovative procurement, and professionalism in public procurement, among others

The amendment of the law is also based on the failure to award tenders during emergency and force majeure situations such as the outbreak of the Covid-19 pandemic as well as inability of the present law to efficiently regulate procurement in public institutions with a commercial mandate.

Other gaps to be addressed include lack of provisions regulating procurement aligned to specific mandate of state-owned companies as well as lengthy procurement processes which constrain efficiency and lead to frustration of procuring entities.

The revision of the law also looks to improve the legal framework to support growth of domestic industries and local content by redefining applicability of exclusive preferences during tender awarding.

MP Pierre-Claver Rwaka requested the Ministry to guarantee there will be strong measures when it comes to the provision of paying contractors after they complete work.

"There are worries that contractors can increase prices because they know the government could pay them after such a long time,” he said.

MP Aimée Sandrine Uwambaje expressed concerns over rising prices on the market as a challenge to the contractors.

"We need to know if having reduced the cost increase limit from 20 percent to five percent during contract amendment could not affect contractors especially amid the global rising prices, and lead them to abandon works,” she noted.

MP Gloriose Uwanyirigira recommended that there be a study on all avenues of corruption during public procurement to be considered in the law.