The Minister for Justice, Johnston Busingye, has issued fresh guidelines to heads of all government institutions regarding public procurement. 

The fresh guidelines seek to plug the loopholes that have previously resulted in misuse or misappropriation of public funds.

The development comes just a few days after the 17th National Leadership Retreat which resolved that all efforts must be made to implement Auditor General’s recommendations aimed at improving the management of public funds.

The new instructions require all public institutions to be more open and vigilant both during issuance of public tenders and execution of tenders.

In a letter addressed to cabinet ministers, governors, mayors and all heads of government institutions, Busingye recalled a similar memo he issued in March last year over poor contracting and contract management in relation  to public tenders.

This, he said, presents potential loopholes that lead to loss of public funds.

"Contracts from conception to execution still present loopholes and it is costing our country dearly in terms of different resources, and delayed or abandoned development projects. We need to close all loopholes and remain on our guard throughout the life of the entire contract,” Busingye said in last week’s memo.

The minister pointed out that some of the issues that affect government contracts stem from failure to undertake basic due diligence, failure to conduct needs assessment and unclear definition of the scope of work or terms of reference or technical specifications.

Busingye, also the Attorney General, said there was a failure on the part of procuring entities to observe fundamental principles governing public procurement, such as transparency, competition, economy and fairness.

In his two-page letter, a copy was seen by The New Times, Busingye noted that contract management has been marred by challenges, including deviation from the initial purpose of the contract, execution of additional works without a prior written addendum and additional works exceeding 20 per cent (of the original cost).

"There has been issues of delays by procuring entities to respond to contractors notices, delayed or partial payment which cause delays in execution of contracts and failure or delays by procuring entities to take measures in case of contractor default,” the notice reads in part.

Classified contracts ‘an exception’

Going forward, he said, government institutions are required to put in place effective control systems that enable them to ascertain whether all requirements or conditions for a sound contract have been met prior to signing a contract.

Once a contract has been signed a procuring entity is required to ensure that a manual or electronic contract management file is opened so all that actions, timelines and any other events regarding the implementation of the contract are performed, known in real time and the appropriate actions or decisions are taken, he said.

For best results, Busingye recommend quarterly self-appraisals of the procuring entities regarding the performance of the contract in a comprehensive way.

In the unlikely event that a dispute regarding a contract comes up, or a legal opinion is sought, the Office the Attorney General will require the contract management file as a priority document in order to understand the role of the institution in prevention of such dispute.

Each public institution is also required to establish a contract management team with the sole purpose of strengthening the contract management system. This is in addition to internal tender committees.

PAC recommendations

In a bid to promote transparency, accountability and integrity, in contracting and contract management and to plug any possible loophole that may lead to corruption or other malpractices, procuring entities shall, going forward, make available, on their websites, all ongoing contracts.

"In case the media seek to have access to contracts, all documents showing how they were awarded or how they were being managed, the institution shall provide the information the media seeks. Classified contracts will be an exception,” Busingye said in the notice.

Last year, the parliamentary Public Accounts Committee (PAC) handed the Ministry of Justice a list of recommendations on the issue following their assessment of the AG’s reports with regard to possible abuse of public funds. PAC’s assessment concluded that public funds had been misused through contract management, tendering procedures and lack value for money.

The assessment ended in October last year resulting in identification of 13 tenders that were issued illegally and PAC asked the ministry to ensure that those responsible be held to account.

According to the Rwanda Public Procurement Act, a public entity is expected to issue a tender notice for any purchase exceeding Rwf100, 000, inviting contractors through an open bidding process. And, for any firm to bid for the public tender, they must fulfil given requirements, including capacity to do the job.

Blacklisting companies

In December 2018, RPPA blacklisted 197 companies, accusing them of breaching contracts during procurement processes.

The list is composed of companies that the Government cannot work with for a period ranging from six months to five years. One of the companies was indefinitely debarred for fraud and entering a joint venture with a blacklisted company. 

RPPA’s investigation officer, Harriet Umutesi, told The New Times that the blacklist is made public to prevent cases of government entities engaging errant firms again and as a form of deterrence.

"The idea is to cut out contractors who don’t honour their contractual obligations and those who use forged documents like bank statements and proof of contract performance to win public tenders,” she said.

She also pointed out that, should the company feel that they were being unfairly treated, they were free to go to court to have their name cleared.

"You can appeal through courts of law and, if you win, we remove your name from the list. We blacklist people based on thorough information but it is true that we have had some few cases where we have had to remove some names from the list on court orders,” she said.

Disregard of AG recommendations

Over the years, the Auditor General, Obadiah Biraro, has consistently criticised public entities for their reluctance to implement his annual recommendations designed to ensure value for money and accountability in public expenditure.

Last year, the Government lost a staggering Rwf5.6 billion in delayed and abandoned contracts, idle assets and payment of non-existent employees.

The Auditor-General blamed continued mismanagement of public funds on incompetence, indifference and recklessness.