High non-compliance rate to procurement law hurting public purse

  • as US$10m electronic procurement platform ignored

Research by education and policy think tank, IMANI, in collaboration with Africa Centre for Energy Policy (ACEP), has revealed that non-compliance to procurement regulations among public institutions is very high, a situation identified to be hurting the public purse.

According to the report, in almost all the instances where the procurement law was breached, contracts tend to be overpriced and the nation lost huge sums of money.

Meanwhile, an electronic procurement platform to monitor the processes, which cost the state US$10million, has been ignored by majority of public institutions.

It was discovered the Ghana Electronic Procurement System (GHANEPS), a platform intended to be used for procurement tenders has been almost ignored as only 24 percent of ministries, departments & agencies, public boards, statutory institutions, as well as Metropolitan, Municipal, And District Assemblies (MMDAs) used the system.

“We spent about US$10million to implement a platform, trained over 430 public institutions, and as it stands now, only 24 percent of the institutions are using it. If you check the GHANEPS platform, the number of contracts there are not up to 200 because public institutions are not using it, and the Public Procurement Authority (PPA) is not enforcing usage,” Dennis Asare, Research Consultant, IMANI, said.

The research named three methods of procurement: single-sourced, restricted tender and open-sourced, and indicated that while in terms of numbers, open-sourced contracts seem to be the major method, in terms of financial value, single-sourced contracts tend to be almost about 18 times.

In terms of figures, while GH¢18.70billion contracts were of single-sourced method, the restricted tender was GH¢136.3million, and open-sourced method GH¢1.08billion.

“Out of the about 1,171 contracts examined by the report, the financial value of single-sourced contracts or non-competitive methods tend to be about 90 percent, indicating how vulnerable the procurement system is to political influence. To make matters worse in some instances, people procured through this method without any oversight approval,” Mr. Asare emphasised.

Kwabena Ata-Bedu, Procurement Expert, in a penal discussion, stated that weak oversight of PPA and lack of political will to fully enforce the sanctions in the procurement Act 2016 is the major driver of the increased procurement irregularities among public institutions.

“Clearly what we have seen is that there is a frequent abuse of the procurement act and with these practices, it is hard to achieve value for money, and difficult to ensure accountability, transparency and competitiveness. This is because of the way we have developed that institution’s structure, giving the Executive excessive control over the work of the PPA and, in effect, making sanctioning very difficult.

“If we want to see a change and stop these irregularities, let’s start sanctioning and punishing people,” he said.

He added that a complex system has been created that makes it very difficult to punish, and because there is almost no punishment, people are bravely abusing the law.

President of Ghana Institute of Procurement and Supply (GIPS), Collins Agyeman Sarpong, on his part, agrees that these public institutions are deliberately not compliant with the public procurement law, because sanctions were not applied to entities that breached the regulations and offenders were not made to pay for negligence and corruption.

He added that the weaknesses in the Public Procurement Authority (PPA) board composition and operations are a major challenge that must be addressed.

These infractions were possible due to several factors as identified by the report. Key among them include weak institutional and regulatory frameworks, inefficient quality assurance and measures, cultural tolerance for abuse, and unethical behaviour of public officials.

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