Procurement strategies to serve the public good

The Government of Botswana has, on several occasions, called for greater economic empowerment of its citizens. The Public Procurement and Asset Disposal Board (PPADB) has responded by examining its existing practices and requirements under the PPADB Act. The act allows for reservations and preferential treatment in the public procurement system to be introduced by the board.

A number of such schemes are already used in public procurement and asset disposal in Botswana, such as the Economic Diversification Drive, which aims to procure more from local manufacturers and service providers. Other preferential schemes are based on vendor-company ownership, with variable weighting applied to 100% citizen ownership, majority ownership, minority ownership and, lastly, foreign ownership. This is applied as a price preference for procurement in the construction industry, the information and communications technology (ICT) sector and the medical supply sector.

A reservation scheme is currently being applied to the ICT sector for procurement below BWP 300,000 (US$ 46,000), where the opportunity to bid is reserved for 100% citizen-owned companies. Otherwise, the process is open and only the price preference scheme is applied. Some tenders may be reserved specially for enterprises that manufacture products locally, such as furniture.

Botswana’s public procurement system is based on full transparency and open competition, even when preferential schemes are used. The PPADB Act requires tender invitations to be published in the government gazette and any widely circulated newspaper. After evaluation of the tenders, the results are published in the Daily News and on the PPADB website (www.ppadb.co.bw). The PPADB follows best practice in debriefing the losing bidders, explaining the weaknesses of their bid and how they might improve in the future.

Flexible approaches to procurement and asset disposal

The board is currently assessing how the public procurement system can drive the government’s agenda to eradicate poverty — focusing on women, youth and people with disabilities — and increase economic empowerment, emphasizing rural industries and enterprises.

One approach looks at increasing participation by enterprises owned or controlled by any of the target groups, creating preference or reservation schemes that favour enterprises owned and controlled by women, youth and people with disabilities. The challenge will be to locate such enterprises, but this can be achieved by obtaining information from the departments responsible for each of the target groups, such as the Women’s Department and the Women in Business Association. A database of the target group’s business activities can be kept within the locality and be updated continually. This procurement approach must be within the micro-procurement threshold, where there is flexibility and which is managed by the accounting officer in the procuring institution.

A second approach applies to tenders above the micro-procurement level, up to the threshold of the District Administration Tender Committee, which is BWP 2 million (US$ 310,000). This would establish a price preference in favour of enterprises owned or controlled by the target groups of women, youth and people with disabilities.

Third, the board is considering a quota system, but here one has to consider that the procurement of high-value goods and services must be subject to open competition. Enterprises bidding at this level need to be monitored to ensure they deliver the expected quality of products and have the capacity to meet the demand. They are therefore encouraged to participate in capacity-building programmes. PPADB provides several training programmes or workshops to suppliers on how to respond to tenders. A quota approach would require that bidders declare the gender of the owners and controllers of the company in order to benefit from these preference schemes.

Although the PPADB is still considering how best to shape government procurement to support national objectives, these approaches allow for flexibility, so that different schemes can be introduced depending on the government’s agenda. Monitoring the performance of such a programme is very important because it must show results or be adjusted to ensure it is truly benefitting a target group in terms of poverty eradication or economic empowerment in any locality. Current monitoring of the success of goods and services contracts is mainly conducted through end-of-activity reports and random site visits. To assess the long-term effect of the programme, this needs to be refined to include additional parameters such as performance by target group over extended periods beyond the contract period.