comments : Complex procurement affects competition and transparency

Overly-burdensome public procurement processes can affect competition and transparency. In addition, well drafted and comprehensive tender documents are critical for bidders to compete effectively. Rwanda has made significant progress putting in place comprehensive public procurement rules and regulations, but it is still possible to comply with these procedures and remain both non-transparent and uncompetitive. How does this happen? Last week’s article discussed the future model for public service delivery. The model is based on empowering citizens with information on suppliers, putting in place effective decision-making structures and establishing an effective supply-chain. One of the practical steps to this model is the development of effective commissioning skills which can be achieved by avoiding overly complex and burdensome procurement processes which works against some suppliers and reduces the level of competition. This week’s article discusses procurement processes that limit competition and transparency. In Rwanda, many public sector institutions have made commendable progress implementing public procurement procedures in order to ensure transparency and competitiveness. But there are several factors that organisations should still pay attention to, particularly in relation to procurement of professional services. The first critical factor is whether the terms of reference clearly outline the scope of work, deliverables and timelines. Ambiguous and poorly-drafted terms of reference can lead to inaccurate scoping by bidders resulting in either over- or under-quoting. Worse still, the assignment and deliverables may not meet the expectations of the organisation, because they are based on an incorrect or unclear scope of work. The second factor is including requirements that are not relevant to your organisation. This is a common mistake that results from copying terms of reference from other organisations. An incorrect scope of work and other irrelevant requirements can result in either over- or underestimated bids or assignments that do not meet the requirements of the organisation. Closely related to the second factor are errors and typos that can alter the interpretation of the scope of work or terms of reference. These common mistakes may result from direct translation of bid documents from one language to another and other errors that can be easily detected by thoroughly proofreading the terms of reference. Again the danger is the misinterpretation of the scope of work and required outputs. Another area to look out for is onerous administrative requirements that may not be critical to the performance of the assignment or may increase the bid price. For example, a Master’s degree may not be required for some assignments and professional qualifications and experience may be more important. Another common administrative requirement that may not be necessary is stamping a cover letter that is already on the bidding company’s official letterhead. Obtaining certificates of good achievement at times is not always a guarantee that the bidder will perform just as well. The requirements and circumstances of the particular assignment may be very different from the assignments where the bidder has obtained certificates. A final example is requesting for bid guarantees upfront during the bidding stage instead of during the contracting stage. The bid price is likely to change during contract negotiations and bid guarantees are most relevant where advance payments are made. Organisations must pay attention to the drafting of requests for proposals to ensure the requirements, scope of work and outputs are clear. The terms of reference should not be drafted by the procurement team but by subject matter specialists within the organisation. They should also be reviewed by a senior official to ensure they accurately reflect the requirements and expectations of the organisation. Florence Gatome is a Senior Manager with PwC Rwanda Limited.