Kigali — In The New Times issue of Monday 11th April 2005, I read the clash between the City Mayor and the NTB Boss over delays in awarding a contract for the City Hall. The story was full of accusations and counter accusations between the two distinguished officials. What struck me as the crux of the matter is that this is a longstanding issue which goes to show inefficiency.

The response of the NTB Boss that evaluations can take forever was very worrying. It was a sad reminder that such inefficiency continues to hinder the national development initiatives. Ever heard of the animal "lack of absorption capacity"? If one has heard this and keeps imagining that it is just an excuse for donors not to provide the much needed aid, then the sage mentioned above could provide clarity as to what those who often use the term actually refer to.

In this article, my wish is not to justify the way some of the donors approach development assistance, but rather to portray the cost of delays in public procurement to the national development objectives.

Many people have this one track mind which leads them to imagine that for as long as one has conducted a competitive bidding process, the time element is elastic and therefore conclusion of the proceedings can take forever. Public Procurement is much more than advertising tenders and comparing bids.

Public procurement can be defined as procurement of commodities, goods, works and professional services by the government and its agencies to enable them perform their functions. Public procurement involves the use of public funds, or in other words, revenues generated by taxes and other levies, by virtue of the government's sovereign power.

The fundamental objective of any procurement in the private or public sector is to get the best value for money. This can be defined as "economy" and can be achieved through competition among those who can provide the goods or services. The second objective is to accomplish the process within minimum time and administrative cost. This is defined as the "efficiency" objective. The third requirement is "equity", which means opening up business opportunities to all qualified suppliers and contractors in the country. The next element is "transparency", which means providing the public with all information pertaining to business opportunities as well as the award processes. Lastly, the establishment of procedures through which aggrieved bidders can file their complaints is extremely important because it provides a self propelling mechanism for transparency and accountability.

In simple terms therefore, the basic tenet of public procurement is fairly straight forward, acquire the right goods, works, and services, at the right price and perhaps most importantly at the right time.

It is important to note here that the above requirements of a procurement process are mutually supportive and should always be on an even keel. The absence of one of the requirements makes the procurement system ineffective. For example, suppose that the Ministry of Agriculture intends to buy seeds for distribution to farmers. Suppose further that these seeds must be planted just before the rainy season so that they can benefit from the rain water for their germination and growth. In this case, it is be important to advertise the tender for competition because it will be the best way to find the best seeds available and at a good price. At the same time, the process of procurement should be completed at the right time because if the process is not complete until after the rains have stopped, the seeds will be useless and the loss that the government will suffer will be higher than the potential gains from the competitive bidding process. Thus without efficiency an equitable and transparent procurement system does not work well.

One of the major obstacles to the Rwandan procurement system has been Centralization. Centralization has led to inefficiency principally because the procurement function has in the past been left for one institution the NTB which can never have the capacity to conduct all tendering proceedings. This has led some officials to view the time taken to conduct procurement proceedings as the problem. However, this is completely untrue. Time for procurement proceedings perse does not lead to inefficiency, but rather the fact that the process was conducted by only one organ of government whose capacity could not adequately match the task assigned. Centralization of procurement in Rwanda is based on the lack of trust for public officials. This is in my view is a misconception. Decentralization coupled with effective accountability requirements and capacity building for procuring entities is the best approach towards fixing a system.

Just as officials are entrusted with running departments, it makes sense to impose accountability obligations which necessarily incorporates sound procurement practices into their management function. Taking responsibilities away from them in the name of mistrust is not the solution. Corruption is not a genetic condition that makes some people corrupt and others not. It all depends on the strength of the accountability requirements.

The Government has realized this and embarked on the decentralization of the function and this is a very good development. However, the mechanisms put in place undermine the decentralization, simply because the NTB still exercises award functions. Evidence of this is the current impasse between the City Mayor and the NTB Boss. For as long as the NTB in this case still has the award function, Decentralization can not flourish and this will always be at the expense of efficiency.

The NTB can foster more transparency if it were not part of the proceedings and instead remained available as an appellate body to which aggrieved bidders and contractors could submit grievances. The NTB as an organization has no capacity to efficiently conduct all the procurement but can very efficiently perform the function of setting policy and monitoring compliance. In other words, the system currently makes the NTB undertake a task that can be performed better by the direct beneficiaries of the procurement. The NTB, on the other hand, is in a better position to act as an organ with the responsibility to monitor and control their activities.

Of course, a decentralized system can not succeed without well trained procurement officers in all of the procuring entities. Today the procurement function is performed by low caliber personnel and this is due to the failure to appreciate the important role that should be played by the procuring entities in the procurement process. Setting up a good public procurement system involves more than a mere formulation of rules and procedures. It is equally important that the officers responsible for applying them are adequately trained to carry out their mission. The quality of the personnel in charge of bidding documents is fundamental to the credibility of the public procurement system. Again, this is one area where the NTB can be very effective but this is impossible when it has to be done simultaneously with the award function.

Time and again, we have heard of the animal "lack of absorption capacity" and for many it sounds bizarre that a country as poor as Rwanda, we can have external finance by way of loans and grants and fail to utilize them. The answer to this puzzle lies in inefficiency of the Public Procurement System. Addressing inefficiencies is just as important as transparency and the efforts towards the former should be no less. Our national aspirations will not be addressed until this is done. It is for that reason that I chose to use the title "corruption is the ugly cousin of corruption in public procurement" so that this can be viewed as a scourge of the same magnitude as corruption or HIV/ Aids.