The Macmillan Essential Dictionary gives three meanings of the word "maze”.
- An arrangement of closely connected paths that are separated by tall bushes, walls, or trees that is designed to be difficult to find your way through,
- A set of many small streets or paths that is easy to get lost in,
- A set of closely connected but complicated rules, issues or ideas.
The authors of the public procurement legal instruments, in Rwanda, did not intend to make them a maze. However, it appears that to some procuring entities, these instruments are a maze. In fact, it is not uncommon for some procuring entities to blame the lack of achievement of their objectives or annual action plans on them. In addition, such procuring entities can hardly achieve the objectives of public procurement itself which are: the acquisition of goods and services for the smooth running of their affairs, value for money, integrity, and accountability. The main reason behind this situation is a lack of adequate understanding of the legal instruments which leads to and enforces what can be termed as "Prosecution Phobia.”
Procurement staff and managers of some procuring entities are overtaken by the Prosecution Phobia and their ability to interpret the legal instruments in the interest of their entities is eroded. Hence they concentrate on avoiding being prosecuted at the expense of achieving their institutional objectives or action plans as well as the objectives of public procurement. Below is a practical example of an inadequate understanding of the public procurement legal instruments in Rwanda.
In July 2021, two procuring entities published similar tenders, one each, (ref: Umucyo e-procurement system) for the supply of electricity within the same period from the date of publication to the date of opening (32 days). The act of advertising these two similar tenders by each of the procuring entities displayed an inadequate understanding of the law governing public procurement. Among methods that are provided by this law to procure goods and services are open competition and direct contracting (single source). Open competition is used when the product or service is offered by many suppliers while direct contracting is used when there is a single supplier or in other situations defined by the law. Using direct contracting allows procuring entities to save time and avoid transaction costs incurred when open competition is used.
Intriguingly, both procuring entities chose to use the open competition method as opposed to direct contracting (single source) to procure a product that is known countrywide to be supplied by a single supplier: Rwanda Energy Group (REG). In doing so, these entities incurred unnecessary transaction costs and delays in acquiring the product.
Information from REG concerning the need for competition when it is a sole supplier indicates that it has delegated suppliers of electricity known as "supper dealers” who in turn have sub-dealers who deal with final consumers of electricity (some final consumers deal directly with the super dealers). The price of electricity is determined by RURA. Therefore, the supper dealers are paid by REG a commission deducted from the price they collect from the final consumer and they pay the sub-dealers from the commission they earn.
What could be certain from this arrangement is that the procuring entity may not pay more than the price determined by RURA. However, it is not certain that they will pay less. On the other hand, the amount of transaction costs involved in advertising and processing these tenders and the cost in terms of time it takes to acquire the product obtained by other buyers in a matter of seconds using mobile money could be enormous.
Therefore, a procuring entity with an adequate understanding of the legal instruments would ask itself whether the best procurement method to use to acquire a product from a single supplier is open competition or direct procurement (single source). It is not right to argue that the super dealers and the sub-dealers are different suppliers and therefore, according to the law governing public procurement, using the method of open competition is mandatory. In fact, at the policy level, the government should (if it has not done so) examine if it should not embrace acquiring some goods and services using mobile money for efficiency purposes and actually as a means of fighting fraud and corruption. We should ask ourselves if it is any safer to give signatory powers on accounts sometimes with up to billions of francs to government officials than giving them powers to use mobile money for transactions worth up to just a few million.
The writer is an independent observer and can be reached at seminegaa1@gmail.com