1. TANZANIAEXPERIENCE: ISSUES, CHALLENGES AND SUCCESSES ON PUBLIC PROCUREMENT SYSTEM By Zitto Z. Kabwe, MP Chairperson PAC, United Republic of Tanzania Nairobi - Kenya, November 4 th 2013

2. CONTENTS Reforms in the Public Procurement regime; Success Stories in the Public Procurement; Challenges in the Public Procurement system; Solutions to Challenges

3. R EFORMS IN P UBLIC P ROCUREMENT R EGIME Procurement reforms in Tanzania started way back in 1997. The reforms led to enactment of Public Procurement Act No. 3 in March 2001 (PPA 2001). It became operational in July 2001. In 2002 a Country Procurement Review Assessment was carried out which suggested further reforms from centralized to decentralized procurement System The Reforms culminated in enactment of Public Procurement Act 2004.

4. PPA N0.3 of 2001 PPA No. 21 of 2004 Central Tender Board PPRA Head of PEs chairper son of TB Head of PEs not chairperson of TB but they appoint members Not applicable to Parastatals not receiving Gov. subvention Applicable to all public bodies including those not receiving subvention PPAA has chairperson and Four Members PPAA has chairperson and six members Procurement Thresholds No Procurement Thresholds Major differences between PPA 2001 and PPA 2004

5. SUCCESS STORIES 1.The establishment of the Public Procurement Regulatory Authority (PPRA) in 2004.

6. SUCCESS STORIES

8. 2. The enactment of Public Procurement Act of 2011 (PPA 2011). - The integration of the procurement plan with budgeting process.

9. CHALLENGES 1. Procurement Management Challenges or Compliance Challenges 2. Economic Challenges

10. C OMPLIANCE CHALLENGES Procurement Management weaknesses highlighted in the 2011/2012 PPRA procurement audit report on the performance of Procuring Entities (PEs) and verified by the 2011/2012 CAG’s annual General report are; i. Inappropriate establishment of Procurement Management Units; The audits revealed that the overall level of compliance on establishment and composition of PMUs was averaging 78% (56% in 2010/11) for MDAs. It has not reached 100%

11. C OMPLIANCE CHALLENGES ii. Inappropriate preparation of annual procurement plans; The overall average level of compliance on preparation and implementation of annual procurement plans was 58%. The average level of compliance of 68% was assessed for MDAs in year 2011/12 (54% in 2010/2011). iii. Poor records keeping; The audits revealed that the overall level of compliance on records keeping was 63%. The average level of compliance for MDAs was 68%.

12. C OMPLIANCE CHALLENGES iv. Weak contract management; The audit results indicated average levels of compliance of 55% and 71% for quality control and contracts management respectively. The average levels of compliance for MDAs were 56% for quality control and 72%, for contracts management (64% and 41% in 2010/11). v. Failure to publish contract awards The current audits have revealed that the overall level of compliance on publication of contract awards was 65%. The average level of compliance for MDAs was 65%.

13. C OMPLIANCE CHALLENGES Low levels of Compliance 20 PEs 100 PEs 99 PEs 91 PEs 174 PEs TREND OF PROCURING ENTITIES COMPLIANCE WITH PUBLIC PROCUREMENT ACT AND ITS REGULATIONS SINCE FINANCIAL YEAR 2006/07

14. E CONOMIC CHALLENGES 1. High Government expenditure in Procurement

15. E CONOMIC CHALLENGES

18. 2. Gap between Government expenditure and revenue collection

19. E CONOMIC CHALLENGES 3. Corruption in public procurement. NOTE: “ The worse thing than spending money you don’t have is buying wrong things in a wrong way”

20. E CONOMIC CHALLENGES The 2009 National Governance and Corruption Survey conducted by PCCB reported the following;

21. S OLUTIONS TO COMPLIANCE C HALLENGES Accounting Officers, Tender Boards Chairpersons and Heads of PMUs of the PEs with poor performance to be summoned before the Board of Directors of PPRA to give explanations on the reasons for poor performance and to strategize on measures to be taken to redress the situation. PEs with poor and fair performance to be required to organize training to their staff on the application of PPA and Regulations made under it.

22. S OLUTIONS TO COMPLIANCE C HALLENGES On the weaknesses on contracts management, all entities with poor performance on indicators for contracts management and quality control should be included in the list of entities to be audited in the next value for money audits in order to assess critically the extent, sources and causes of the identified weaknesses and thereafter recommend corrective measures.

23. S OLUTIONS TO ECONOMIC C HALLENGES The enforcement of the Public Procurement Act of 2011

24. Putting in place a system of ensuring capable bidder are getting tenders

29. Keep fighting against Corruption

30. Thank you for listening The End