Private sector’s experience on public procurement practices in Rwanda

Presented by:Eng. KAZAWADI Papias

Managing Director, Star Construction Company Ltd and Vice Chairman of the Rwanda

Association of Buildings and Public Works Contractors (AEBTP)

Private sector involvement in public procurement

MAIN AREAS: WORKS• Buildings and Public works contractorsSERVICES• Specialized services ie Architects, Engineers,

Accountants, Lawyers etcSUPPLY• Suppliers of various goods/products/services

Challenges in the public procurement practices

• Lack of appropriate legal frame work to regulate professionals in the construction sector like (Architects, Engineers and Contractors registration boards)

• Lack of sufficient training capacity for most players and mechanisms to enforce it

• Lack of motivation and commitment to make continuous improvement by private sector players aimed at best practices and professionalism

Private sector experiences in public procurement practices

• Corruption which is very technical and difficult to prove immediately

• Award of tenders based on poor project studies• Award of tenders to unqualified bidders• Malicious blackmail or elimination in the bid• Mistrust and lack of cooperation• Incompetent staff on the part of the procuring

entities

Experiences cont’d

• Delayed payments of invoices• Delayed responses on queries/issues that

require immediate decisions in the implementation

• Lack of price revision mechanism especially when inflation and rise fuel prices are a reality

• Evaluation and analysis of bidders based on low prices sometimes without conformity to technical specifications

Experiences cont’d

• Some tenders are advertised as only unit rates without specifying the actual quantities required which lead to unusual deals

• Due to the so called urgency some tenders are awarded without being advertised and no contracts which lead to delayed payments/un payments

• Some tenders are advertised and documents are delayed and then given on only unsigned soft copies which lead to lack of evidence especially when there is any bidder who is not satisfied with the results on tender award processes and proceedings

Experiences cont’d

• Payment of taxes on un paid invoices owed by Government and public entities to private entities and when they fail to do so, heavy penalties are imposed on them

• Payment of taxes (VAT) received advances which is always reimbursed as the project progresses

• Private entities are required to provide the guarantee of the money that is never given to them ie VAT and 3% why can’t they put mechanisms that does not affect the private?

Experiences cont’d

• Award of tenders in the IT where the specifications given to bidders are varied in the sense that the one to win the tender is given lower specifications secretly to enable him/her lower the prices while others quoting on the higher prices

• Lack of proper definition for the un-foreseen situations and events “ force mageure” in the law

Experiences cont’d

• Inexistence of the national preference in our procurement law aimed at promoting the capacity of local companies while learning from the experienced foreign companies coming to work in Rwanda

• Lack of reference prices to base on when evaluating bidders leading to always awarding tenders to lowest given prices where sometimes it has become impossible/difficult to accomplish these contracts by them

The way forward/suggestions

• Involvement (participation) of private sector in procurement decisions

• Capacity building of private sector in laws and regulations on procurement

• Classification/categorization of contractors, consultants and suppliers

• Audit and monitoring on the performances of the private sector

Way forward cont’d

• Mandatory projects validation before they are approved for implementation

• Accelerate the provision of appropriate legal frame work for contractors, consultants and suppliers

• There should be no more payments of taxes on advances received and un paid invoices

• Decisions to effect penalties should work two way and equally made easy to both paties