Editor's Comment

Benchmarking prices of goods way to go

FORMER MINISTER of Works and Supply Felix Mutati

INDIVIDUALS and companies who supply goods and services are expensive for one good reason.
They meet certain specification and also go with conditions such as maintenance contracts and insurance.
These may not be there when an individual is buying a computer, for instance, from an ordinary shop.

However, for some bad reasons, they are expensive because middlemen buy from suppliers and add a mark-up, or they give cuts to procurement and other government officers.

Some bidders obtain goods and services from third parties, meaning the bidders or suppliers are not the bona fide producers or original suppliers of these goods or services – so they buy from some other companies.
They may also be expensive because suppliers think Government does not pay on time.
There is also an attitude problem. Some people want to make a kill on Government which is considered a cash cow.
It is perpetuated mostly by some procurement staff who are in the habit of asking for a commission from suppliers if they are contracted to supply.
The practice is that those who refuse or are unwilling to part away with a commission for being helped to get a supply contract are shunned.
Those who succumb to parting away with commissions end up inflating the prices of goods and services as a way to recoup their investments to these procurement officers.
Inflating of prices for goods and services is done with the full knowledge of procurement officers who have vested interests.
That is why some suppliers wonder how their lowly-priced quotations of the same goods and services were ignored for the exceedingly high priced quotations.
It is clear that corrupt procurement officers are working for themselves and not Government.
That is why Government intends to issue a statutory instrument (SI) which will benchmark the pricing index of goods and services.
This is because Government has observed, and rightly so, that it is losing a lot of resources when procuring goods and services.
Minister of Finance Felix Mutati has wondered why a particular item could cost twice its actual price, hence the need to address the issue of government expenditure.
The statutory instrument Government intends to issue is one way of curbing corruption and excessive pricing. However, Government should also abide by the procurement law which stipulates that you only approve procurement when you can confirm availability of funds and pay within agreed periods because then suppliers will be able to plan.
Public procurement elsewhere is an enabler for sustainable development.
The Zambian government has recognised it as a strategic function and as a tool for empowerment of citizens.
That is why a huge chunk of the national budget is expended through procurement. It ranks second to emoluments on government expenditure.
Sustainable procurement helps organisations such as governments to meet their needs for goods, services, works and utilities in a way that achieves value for money on a whole life basis.
However, procurement should endeavour to reflect the true prices of goods and services, not to choke the treasury.

 


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