Harare (New Ziana) – Government officials found complicit in overpricing supply contracts and other procurement malpractices will be severely punished as such actions render the National Budget inadequate, a Cabinet Minister said on Monday.
The comments follow revelations that two firms, Blinart Investments and Mid-End computers and hardware, had quoted the Parliament of Zimbabwe highly inflated prices of US$9 200 and US$3 000 each for a laptop and desktop respectively.
This drew the ire of Treasury, which immediately cancelled the tender and ordered the blacklisting of the two companies from future government supply contracts.
Explaining how the practice had taken root, Finance and Economic Development Minister Mthuli Ncube said in another case, a 2 kg pack of chicken was claimed to be worth USD30 when the maximum market prices was USD6.
“We have seen a bag of cement being priced at an equivalent of USD18 per bag on some construction projects. Such, ladies and gentlemen, is the extent of overpricing which is rendering the Government budget inadequate and our position as government is that this is not acceptable,” he said.
“The value for money process will now result in punitive measures being taken against any government officials found to be complicit to overpricing and procurement malpractices while suppliers will be blacklisted and excluded from future supply contracts. All existing contracts are now being subject to a value for money audit before payments are made.”
He said the government would enforce strict adherence to the value for money audit process and embed it into the procurement cycle for all goods and services.
This, Ncube said, was because it had been noted that government Ministries, departments and agencies were not exercising due diligence, especially regarding the value for money in terms of pricing.
“They have merely been following procurement rules without due regard to established value for money practices already enshrined in the Procurement laws of the country. Tenders have been awarded without due regard to price checks on the basis that prices have passed a competitive bidding process,” he said.
Meanwhile, Ncube cleared the air on the suspension of payments on contracts that were based on speculative forward exchange rates.
He said, while the government supply contracts had been undergoing a validation exercise, Treasury had continued to pay up on those that met the Value for Money criteria at least ZWL$84 million having paid to contractors in the last six weeks.
“These payments have been made to various players in the market so it is not a fact that the government is not paying for goods and services. As we move ahead to implement the Value for Money process, we are committed to honouring all our obligations provided that they are priced correctly in the public interest and such payments will not adversely impact the exchange rate and cause inflation,” said Ncube.
The government last month suspended all payments to its contractors as part of measures to tame inflation as most of them were quoting using parallel market rates.