New Procurement Bill Will Harm TSA – World Bank
A new bill seeking to amend the Public Procurement Act, 2007 does not only represent a policy somersault, but will also hamper government’s capacity to provide basic services to the citizenry if passed into law, the World Bank has said.
In a letter to the House of Representatives suggesting amendments to the provisions of the bill, the World Bank said the provision for the payment of 50 per cent mobilisation fees to contractors contradicted the government’s policies on Treasury Single Account and zero budgeting.
According to the bank, paying 50 per cent mobilisation fees to contactors for huge projects that cannot be completed within one year will mean transferring government’s funds to private entities to trade with, while the government will be left with nothing to cater for the needs of the people.
The bank said, “The proposal (50 per cent advance payment) could be termed as a policy summersault. Presently, the government is implementing two major policies to strengthen cash management.
“These are the TSA and zero budgeting, which have significantly improved cash management in the country. Implementation of 50 per cent advance payment in contracting will significantly impact government’s ability to provide basic services.
“Under the zero budgeting policy, MDAs are required to provide in the annual budget for only the portion of a project that will be delivered in the course of the calendar year. Therefore, making payment for services not due and which cannot be delivered immediately is poor use of public resources.”
The bank also picked hole with the proposal to turn the Federal Executive Council into a Federal Tenders Board for the award of major contracts, saying it would demean the FEC, legalise continuing contraventions of the principal Act, serve as a cover-up for wrong doings in the procurement system and weaken accountability.
It also frowned on the proposal for the establishment of different procurement systems for the three arms of government.
It said, “Establishment of two additional parallel systems will bloat government’s recurrent costs and will make it difficult to strengthen procurement institutions and systems in the public sector. The current proposed amendment will require bidders to use three different procurement procedures and practices within the same economy and market.
“Globally, donors and governments are trying to harmonise their procedure to remove bottlenecks and bureaucracy to enhance efficiency and effectiveness of public spending.”
The bank also faulted the proposal to subject procurement audit to the review of the National Council on Public Procurement chaired by the President before submission to the National Assembly.
It said the version of the audit report would vary from the original version, adding that the opportunity being offered to the executive to sit in judgment over its conduct would diminish accountability in the procurement system.
The World Bank also suggested the incorporation of approaches in global procurement approaches. These developments include fit-for-purpose, competitive dialogue, sustainable procurement, and best and final offer approaches.
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