Committing procurement practitioners to Coinventing good policy and regulation intents into outcomes and outputs.
1.0 INTRODUCTION
It is a widely accepted view that private sector is the best engine for job creation and inclusiveness. In the recent past, a well-known Revland Walter post on his face book page pointed to the fact that a government that employs more than 10% of its citizen is in trouble, which seems to be the case in Zambia.
In Zambia more than 90% of the private sector is made up of micro and small medium enterprises. Public procurement practitioners need to focus on developing this sector is they are to meaningfully contribute to job creation and inclusiveness. Public procurement is a vital force for fostering local and national economic growth and laying the groundwork for sustainable SMEs or private sector development efforts. Public procurement legislation and policies provides the intent and framework within which procurement practitioners should operate, aimed at distributing economic opportunities to micro, small and medium sized enterprises.
To this end, Government of the Republic of Zambia enacted procurement legislation and polices that provides for preferential scheme for local suppliers and contractors intended to facilitate promotion of local industry and economic development- opening up new opportunities for SMEs to develop and contribute to economic development.
2.0 LEGISLATIVE PROVISIONS AIMED AT EMPOWERING LOCAL SUPPLIERS
The procurement legislation that aims to foster economic growth prospects through controlled distribution of economic opportunities by procurement practitioners include those covered in paragraphs below. These are tools controlled or influenced by procurement, making procurement one of the most indispensable elements in the economic growth prospect of the country.
However, there seems to be a lack of deliberate planning and action to turn policy intent into reality. More often than not, good intent creates no value, unless those entrusted with the responsibility to turn them into reality, undertake deliberate required corresponding actions. Intentions have to be acted upon to achieve the desired impact.
There may be a myriad of reason why such provision continues failing to achieve the intended outcomes. However, many of such reasons can be attributed to procurement practitioners that lender such provision useless, through choosing a path of least resistance in the application of the legislative intents. For example, regulation no. 226 of the Public Procurement Regulation of 2022 (PPR), which states that a solicitation document shall state— (a) whether qualification criteria apply to lead suppliers, subcontractors or partners in a joint venture, consortium or association; often than not, the practitioner will choose to impose a qualification criterion that applies collectively to each supplier, subcontractor or partner regardless of the different capabilities of bidders that come together for the purpose of bidding because it is likely to make the evaluation work shorter and easier.
Another example, would be at the stage of (pre-) qualification, stringent financial and non-financial conditions and requirements that structurally hamper SMEs can be introduced in the bidding documents, such as having statements proving an active bank account, having won previous contracts, having audited accounts, offering adequate reference letters which are difficult for SMEs. Most of such inclusion of clauses can be considered standard practice but punitive or restrictive to SME or Start-ups participation in tender opportunities
Another major reason for failure is lack of follow-through by procurement practitioners. For example, the well-structured bidding documents could include requirements for skill transfers, but no follow-up effort undertaken, exacerbated by there being no means by which the transfer of skill is measured-the term skill transfer can mean anything to different people.
Furthermore, implementation of such provision may also mean addition workloads and procedure for those already stressed by the day-to-day operation. Implementation of such provisions may incredibly increase expenses in terms of material cost, staff and time, through additional administrative burden of planning, managing, and monitoring interventions, making it difficult especially where practitioners involved are not clear about the expectations and are not incentivized. For Example, Section 91 (4b) of the Public Procurement Act No8 of 2020 (PPA) adds additional administrative burden by demanding that the objectives of the preference scheme and the means of measuring its effectiveness in achieving the intended outcome be stated.In other word demanding Impact feedback of the provision after being acted upon, adding post review of transactional procurement activities.
It is important to note here that choosing a path of least resistance won’t create jobs and give us an economic recovery we so much desire, only a well-planned, and well executed intervention plan will.
2.1 SME CAPACITIES BUILDING LEGISLATION,
The legislation intent being made by policy makers which demands for innovation and follow through by the procurement practitioners aimed at empowering, building capacities of local contractors and job creation include the following;
- Section 93 of the PPA as amended inthe Public Procurement (Amendment) Act, 2023 requires a foreign or local bidder or supplier to subcontract a percentage of the total value of the procurement of works exceeding the prescribed thresholds to citizen bidders and suppliers. Regulation 20 of the Public Procurement regulation of 2022 provides further details on subcontracting.
- Section 89 (1h) of the PPA as amended requires that a foreign bidder shall only be eligible to participate in a procurement if that bidder partners with a citizen supplier.
- Regulation 19 (1) of PPR also urges bidders to form a consortium to increase their capacity and competitiveness for solicitation purposes.
It is important to note that similar mandatory legislations were introduced as far back as 2012 by the government, unless a new focus and zeal is adopted, nothing will change and the subcontracting provision render infective.
2.2 COMMUNITY PARTICIPATION
Community participation involves awarding contracts to community-based grass root contractors and suppliers. Section 53 of the PPA No.8 of 2020, expresses the intention of policy makers for community to participate in public procurement through the adaption of procurement procedures, specifications and contract packaging for purposes of project sustainability or to achieve certain specific social objectives of the projects.
Regulations 52 to 58 of the PPR provides the framework through which procurement practitioners can engage the community. Without any deliberate planning and resourcing around these provisions, the legislation will remain but mare intentions.
One critical hindrance to community participation – that of lack of institutional or formal structure by local communities – has been addressed by government through encouraging communities to form cooperative to make them eligible to participate in public procurement opportunities as provided for under section 57 (1) and 89 of the PPA of 2023 as amended. It follows, therefore that, without an opportunity to participate in public procurement opportunities, Government’s effort in cooperative formation will be less worthwhile.
For the policy maker’s intent to be worthwhile, procurement practitioners need to come up with deliberate intervention plans to deliver the desired impact. These interventions can span across all the procurement cycle phases, from need identification, market search, planning and scheduling, developing specifications for the items to be procured, making the final decision on best offer and managing the contracts.
Working with the community will also mean engaging a multi-skilled team in identifying dedicated individuals with the right attitude and orientation through thorough assessments, assisted by a specialized experts and institutions such as the Ministry of Micro, Small and Medium Enterprise development.
2.3 PREFERENCE AND RESERVATION SCHEMES
Preference and reservation schemes involve setting aside contracts specifically for targeted groups and ensuring that these groups have access to economic opportunities through the enaction and implementation of preference and reservation procurement legislation.
The preference and reservation scheme as provided for in Zambian public procurement legislation include the following
- Section 39 and 41 of the PPA of 2023 as amended, which limits participation in open national bidding to citizen and local bidders and a preference margin to citizen bidders in the evaluation of bids.
- Section 91 of the PPA No 8 of 2020, which seeks to grant a margin of preference for the benefit of bids by a target group offering goods, works or services manufactured or performed by the target group; with local content; or reserved or set aside for a target group, by restricting bidding to the target group.
- Regulation 227 to 228 of PPR, which provides frameworks for implementing preference schemes and require that the procurement of goods, works or services be subject to a preference scheme consistent with the Government’s economic and social policies.
Many a time, procurement practitioner are never even fully aware or understand the Government’s economic and social policies and therefore unable to implement preference scheme consistent with policy maker’s objectives.
Procurement concerted efforts, should underscore a commitment to achieving the intended impact of legislative and policy documents and fostering an environment conducive to economic empowerment.
3.0 SUPPLIER (SMEs) DEVELOPMENT
Notwithstanding the policy makers’ intent, it is important to note that the use of public procurement as a policy tool to close social-economic gaps is inconsistent with the ‘main’ objective of public procurement regulation, which is to ensure that public agencies obtain goods, works and services on the best possible (economic) terms. Furthermore, the use of preferential procurement as a policy tool leads to misallocation of resources, especially preferences and reservations favours economically inefficient producers or suppliers.
It is also important to understand that over 90 percent of SMEs in Zambia are very small with limited capabilities, resources and access to latest technology, finance, and managerial practices.
The conflicting position stated in the foregoing paragraphs means SMEs need to be helped to develop and aligned to the main objective of public procurement regulations through other innovative ways.
Supplier or SMEs vary in size, capacity, resources etc, and as such effective innovative approaches that are used across the world to help develop SMEs involves a segmented execution aimed at providing the right levels of support to small and medium-size enterprises. Most of broad-based intervention introduced at wider national level fails for lack of targeted and monitoring efforts
A structured SME development program has to allow for targeted intervention as well as invested personal relationship oversight aimed at setting the SMEs up for success in the various segments or sectors in which procurement practitioner are employed. Since procurement practitioners are closer to the community and better positioned to introduce targeted intervention, the development efforts of the various practitioners across the country can then be amalgamated in order to produce the desired national transformation. Procurement is also better placed to develop a good understanding of SME subsegments and tailor their programs to meet SMEs’ unmet needs.
This will involve developing milestones, education and training, regular check-ins, commitment to dismantling barriers, guidance and helping the SMEs identify areas they need to address. It will also involve procurement practitioners setting expectations and performance guidelines; encouraging continuous improvement in SMEs and growth through knowledge sharing, consortium, partnerships and joint ventures. as well as providing access to additional resources, while ensuring the SME to aligns with the procurement entity’s business/social goals and ultimately the policy maker’s intentions. For example, if a lower capacity SME is selected based a preference margin, such an SME should be required to provide a plan on how it will improve its capacity in targeted or lacking areas during contract implementation.
The long-term objective should be building SME’s capacity to not only participate and compete in local bids, but beyond local or regional market. Building the local value chains will be essential to the nation’s economic transformation. A strong innovative local supply chain base, can act as a launching pad into regional and global markets. Without a strong local value or supply chain, opportunities presented at continental or regional Free Trade Area will elude our country.
This requires considerable efforts of facilitation and nurturing to orient both internal and external stakeholders, (SMEs inclusive) towards a common purpose and to ensure that they follow systems and processes that would deliver the results in an equitable and transparent manner. Where no legislative provisions are readily available to undertake innovative SME’s development intervention, procurement practitioners can rely on section 80 and 91. (6) which provides for circumstance where the Zambia Public Procurement Authority (ZPPA) may prescribe and accredit an alternative procurement system or recommend measures to facilitate private sector participation in public procurement and to further the development of economic capacity in the Republic, as prescribed.
4.0 WAY FORWARD
The legislative framework alone is not enough to turn intent into reality. The legislative framework provides the policy maker’s intent but the implementation of the intention, has much to do with procurement practitioner’s effort and professionalism. At this stage the proactive leadership by procurement at the local level will be instrumental in developing and allowing SMEs or indeed the private sector to adapt norms and practices that lead to a rapid economic recovery of our country.
Procurement practitioner wields the Superiority of resources power that gives them a higher bargaining power in all social interactions compared to those who do not have. This superiority, if well used (not abused such as to intentionally exclude marginalized individuals from procurement opportunities or personal gain) can easily be used for purposes that influence and positively impact the pace at which our economy recovers.
To this end procurement practitioners should be proactive through development of specific intervention plan, lobbying for additional resources and through reinforcing data collection and monitoring mechanisms necessary in providing tangible evidence of the legislative provision’s impact.
Procurement intervention aimed at achieving the desired economic impact will need to be planned differently depending on the sector and development levels of targeted SME or private sectors -Failure to plan is planning to fail. This will entail building a detailed intervention plan around each provision or related provisions stating among other things the following
- The goals and objective the interventionis targeted to accomplish as demanded in Section 91 (4b) of the Public Procurement Act No8 of 2020 (PPA); these goals have to be consistent with government intentions and be Specific, Measurable, Attainable, Relevant, Timely (SMART). This will includea description of what success would look like or how to know if the intervention is successful i.e what the SME should be at the end of the intervention
- Monitoring and evaluating mechanism- it is important to continually monitor each SME.s progress towards the desired outcome. WHAT YOU CANNOT MEASURE, YOU CANNOT MANAGE This will involve looking at the progress each SME is making towards the objectives, while giving SMEs ample opportunities to provide feedback and raise concerns. Procurement practitioners should to take responsibility for any problems along the way and enable continuous refinement of the plan in order to the intervention plan that has real impact on the general outlook of our economy.
- Mobilize Resources– As already stated interventions brings in additional administrative burden of planning, managing, and monitoring and as such can prove to be expensive in terms of material cost, staff and time. The process of creating a solid, detailed and workable intervention means addition workloads and procedure over and above the prevailing stresses of the day-to-day operation. The intervention may also means retraining to ensure that procurement practitioners involved in delivering the interventions are knowledgeable, incentivized, well trained and are clear about the policy maker’s expectations. The interventions won’t be successful without drive and commitment from both the procurement practitioners and SMEs involved- the personal touch underscores all plans.
“You can have the most inspiring vision in the world, a powerful mission, and a great strategy, but if you don’t have the capacity for executing, none of those things really matters very much.” (JEFF COBB)
- Consider Pilot-testing the intervention on a small scale. this will involve using a ‘control group’ of SMEs to test out the developed intervention. The objective should be to learn what does and doesn’t work; share best practices arising from what works.
5.0 CONCLUSION
It is important to note that legislation and policy documents are essential to provides the guiding framework for practitioner, but when one looks back, it will be the actions or intervention that was taken and the impact that will really matter. The government’s intentions to grow the private sector in order to create jobs, inclusiveness and economic growth, as expressed in legislation is critical and cannot be over-emphasized. However, the outcome of a policy intent is in the impact of what really happens or happened as a result of its implementation.
“Intentions won’t shape our economy, society or culture, but our well planned & coordinated actions will.”
It is also important to remember that legislation and policy document set up appropriate processes and systems framework, but will never take the place of procurement practitioners behind them. At the end of it all, it is practitioners to bring the desired outcome and not the process. These calls deliberate efforts on the part of practitioners to; firstly, understand the policy maker’s intentions; secondly act on these intentions in manner consistent with government objectives; and thirdly following-through their action to ensure that the desired impact is achieved, without which such intentions will remain but mare intentions.
Finally, business as usual won’t provide us with new lessons and focus, but implementing planned intervention will provide us with a brilliant learning opportunity, not only for SMEs, but also for procurement practitioners and the other stakeholders. Sharing best practice across professional boundaries will enable learning from what works and does not and also provide valuable feedback from other professionals.
It’s also important to remember that good legislative and policy provisions will set up appropriate framework and processes, but will never take the place of the people behind them. “People will deliver success, not legislation and policy intentions, which without action will remain but intentions,”