22 April 2014

Rwanda: New Law to Ease Public Procurement, Crack Down On Shoddy Contractors

A new ministerial order on procurement enacted last month is likely to improve the ability of public servants to oversee public tendering and implementation process of public works, officials at the Ministry of Justice have said.

The Ministerial Order establishing regulations on public procurement, standard bidding documents and standard contracts was gazetted on March 10.

It came just around the same time the government resolved at a retreat to investigate reasons behind the slow implementation of some significant public projects and put in place more policies to ensure effective service delivery.

The new regulation gave public servants responsibility to be more involved in implementing contracts for public works, saved advertising charges for public calls for bidding, and allowed the use of Informational and Communication Technology (ICT) among other changes.

The Internal Tender Committees (ITCs) are now empowered to provide advice about the preparation of the tender document, approve tenders to be awarded through other method than open competitive bidding but also it is involved in contract execution. the empowering of the ITC aims at avoiding all kinds of malpractices that might occur during the awarding of a tender.

To accelerate procurement process, it is now allowed to award a tender through single-source method if the value of a tender does not exceed Rwf300,000. In the repealed Order the threshold was Rwf100,000.

In an interview with The New Times, Jean Pierre Kayitare, the Assistant Attorney General in charge of Legislative Drafting Services at the Ministry of Justice, shed light on the new powers examined the relevance of the new powers given to Internal Tender Committees (ITCs) in different government institutions.

"The empowering of the ITC will help eliminate loopholes in the tendering process," he said last week.

Richard Mugisha, a lawyer and Managing Partner at Trust Law Chambers in Kigali, agrees that the strengthening of internal tender committees is useful and recommends that members of the ITCs be trained so that they discharge their duties properly.

Mugisha further said reforms are also needed to elevate the procurement function in the public service if efficiency in public procurement is to be achieved.

The lawyer recommends that the official in charge of procurement be elevated to the level of "Director" just as there are directors of finance and other important positions.

"This would enable procurement officers to easily engage with others (in the procurement process). The procurement function has slightly improved but more needs to be done," he said.

The new guidelines have eased the process of writing government contracts by coming up with more standard templates.

Also notable among the requirements in the new procurement instructions is the obligation for every individual or legal entity participating in the bidding process to register with Rwanda Public Procurement Authority (RPPA).

"This helps RPPA to know who is competing for a public procurement deal and whether they are up to the task or not," Kayitare said.

But Mugisha said the requirement for bidders to first register with RPPA is inappropriate because it puts unnecessary burden to businesses and "goes against competition".

"I do not see how it addresses the potential bidders' seriousness or lack thereof. It may instead bar some businesses from public tenders that are not attractive," he said.

Officials at the Ministry of Justice have said the new law will help reduce the risk of public works being poorly delivered and cases where government loses money in different procurement-related litigations.

Without counting the amount of money paid by districts and other autonomous entities, figures from the Ministry of Justice show that between 2008 and 2013, the government lost Rwf2b to contractors due to mismanagement of public contracts.

The money the government lost during the same period could have shot up to Rwf39b if it were not for lawyers that saved Rwf36b through representation in civil litigations either in courts or through amicable settlement out of court.

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