Getting it right in public procurement

As a veteran journalist who has been reporting on the evolution of the legal framework on public procurement, reporting on procurement and commenting on policy issues in this space, I as a patriotic citizen- will also be submitting my own views to the National Treasury.
When I started reporting on this subject, we did not have a procurement law.

The Public Procurement Oversight Authority (PPOA) and the Public Procurement Review Board did not exist. We didn’t have a Director of Public Procurement as we do today. Procurement was based on a document known as the Supplies Manual.

Read:  Patronage politics and graft in Kenya

If a government department wanted to purchase common user items such as furniture, printing material, desks and computers, it procured the goods from a specialised agency known as Supplies Branch.

Bigger ticket procurement involving millions were procured centrally by an entity known as the Central Tender Board. Although there were ministerial and district tender boards, these entities had no powers over multi-million deals.

What was the most important lesson learnt from procurement laws and institutions of that ancient regime? It is that when you give bureaucrats too much discretion and monopoly power in making procurement decisions involving billions of shillings, the regulatory bodies you create will morph into bribery extraction checkpoints.

Sitting on a body like the defunct Central Tender Board was very lucrative in those days.

We- in the business press- greeted the arrival of new procurement law when it came into effect in 2006 with a great deal of excitement.

The first person to occupy the position of Director General of Public Procurement- one Luke Obiri- instantly became a darling of the business press, giving interviews and trumpeting the positive things about the transition. I thoroughly enjoyed covering the very first proceedings of the Public Procurement Appeals Board.

Enough of history. What has been the experience? What should we change? One of the reasons why contracts are expensive in Kenya is because contractors build in procurement risks associated with delays and uncertainty around our procurement appeals systems in their financial models.

Yes, the procurement regime is built around delivering fairness, transparency, cost effectiveness and prevention of conflict of interest. But its flip side is that the system puts too much emphasis on complying with procedures, than on completion and timely roll out especially of large infrastructure projects.

Today, a disappointed contractor who has lost in a bidding process can hold a project for years through the appeals and courts systems.

Indeed, our procurement appeals system resembles gambling in a casino: if you are dissatisfied with the outcome of a tender, you double your stakes and lodge a case at the appeals board, if you are still dissatisfied, you treble your stakes and go to the High Court.

If you are still unhappy, you go to the Court of Appeal.

In 2020, Kenya Power’s operations almost came to a standstill because a tender it had floated for meters could not be concluded because of court cases. An upsurge in public interest litigation and parallel investigations by multiple and parliamentary investigations also end up exacerbating procuring risks.

Here are the broader issues. Can we go back to that past practice of procuring common user items through a specialised state agency? With a central procurement agency in the Image of the GSA in the USA, you can leverage on scale to procure goods and services for all government bodies at a discount off the market price.

And, we can use the budget for uniforms for the police, NYS, prisons and the department of defence to promote the growth of the local textiles industry. We should be using the budget for police and military boots to stimulate the local leather industry.

Yes, transparency and prevention of corruption and conflict of interest in public procurement must remain the overriding objective of our procurement law.

But a supermarket owner who obsesses with preventing shoplifting instead of addressing reasons why stock on shelves are dwindling, is a sure candidate for failure and insolvency.

Economic growth can only happen sustainably if it is based on investment paid for by savings and forgone consumption.

The writer is a former managing editor at The EastAfrican