Good governance in public procurement plays a key role in development

By John Odyek

According to the World Bank the highest percentage of bribery cases occur in the area of public procurement to influence the awarding of public contracts

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The procurement function and the professionals are critical and a vital avenue of promoting sustainable development in Uganda given the huge resource envelope that is allocated and spent by public institutions.

While opening the summit the state minister for works and transport Gen. Edward Katumba Wamala said the increased interaction between different actors in the procurement sector helps devise means of improving the procurement landscape and service delivery to Uganda.

Katumba said this while addressing delegates during the Fourth Annual Procurement Summit 2019 held at the Imperial Royale Hotel, Kampala. It was organized by the Institute of Procurement Professionals of Uganda, the ministry of finance and PPDA.

"Sustainable development encourages public procurement practices that stimulate development and diffusion of environmentally sound goods and services. It also promotes the integration of the three components of sustainable development - economic development, social development and environmental protection - as interdependent and mutually reinforcing pillars," Wamala said.

Government procurement involves a high risk of corruption because of the great size of financial turnover and the complexity of many procurement processes in which businesses interact very closely with politicians and civil servants.

According to the World Bank the highest percentage of bribery cases occur in the area of public procurement to influence the awarding of public contracts. Corruption in public procurement causes inefficiencies and high costs to the public. In order to prevent corruption and to ensure transparency and competition among suppliers, public procurement is subject to legal regulation.

The accountant-general Lawrence Semakula said in recent years governments and organisations have become increasingly interested in how oganisations and their suppliers impact on the environment, society, and the economy.

He said the strategic role of procurement and supply as a lever for sustainable development is much more manifested now than before.

He added that contemporary commercial practices show that business organisatons and business partners are focusing their procurement strategies on reducing the environmental footprints of their procurement and supply chain activities.

He noted that the need to improve organizational efficiency, reduce waste, overcome supply chain risk, and achieve competitive position has made companies to start considering environmental issues from a competitive viewpoint.

He said the Institute of Supply Chain Management of Uganda (ISCMU) Bill 2017 is before Cabinet.  "The Bill has been slow but we shall give all the necessary support so that a law regulating the procurement professionals and practitioners are in place," he said.

The executive director, Uganda Road Fund Eng. Dr. Michael M. Odongo in a keynote address said the procurement reforms have heaped pressure on the procurement professionals to deliver procurement goals more timorously, cost-effectively and to quality.

The procurement challenges in Uganda are likely to continue unless there is a major change in direction. Measures for performance optimization include: use of new practices, e-procurement, PPPs, collaborations, law and policy reforms. There is need to control the convoluted political interference and negation of the illegal committees at ministries, departments and agencies of government that are not recognized in the procurement cycle," Odongo said.

Odongo also called for the ISCMU Bill to be passed and implemented to create a professional regulating body and improve service delivery.

Today public e-procurement is taking shape where various phases of public procurement are done electronically. The purpose of using e-tools is reducing administrative costs by automation. E-procurement can also mitigate barriers to entry for smaller suppliers and the consequent increase of competition can reduce the price of procurement.

Nakuya Grace Musoke Munanura, a procurement specialist with the World Bank said digital transformation is underway throughout the public sector, bringing process improvements, time-savings, and better customer service to various functions across the organization.

Munanura said e-sourcing helps businesses more easily, keeps track of their suppliers and provides more visibility into your procurement operations. "Real conversation with the stakeholders to highlight benefits of e-sourcing is key - consider your stakeholders with careful attention to the platform's user experience, the training requirements, and the level of support offered by the provider," Munanura said.

Munanura noted that Michael Porter's five forces is a model used to explore the environment in which a product or company (or business unit) operates. She said the model analysis looks at five key areas mainly the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.