Rwanda Adopts New Procurement Bill To Improve Tender Procedures

Rwanda Parliament has adopted a new draft law governing public procurement that will enable Rwanda to use international standards and resolve long-standing issues recorded in the tender management.

The proposed draft law, tabled by Minister of Finance, Uzziel Ndagijimana on September 12, 2022, to the Chamber of Deputies is a revision of law N°62/2018 of 25/08/2018- which was enacted with the purpose to cater for use of E-procurement system in public procurement.

Ndagijimana said that the implementation of the current law faced a lot of challenges as expressed by different users (procurement professionals, bidders, tender committees), regulatory and control bodies (RPPA, OAG, Office of the Ombudsman), civil society organizations like Transparency International Rwanda.

Key concerns raised during the implementation of the current law included having many provisions relating to the implementation which would have been delegated to implementing orders, severe loopholes giving room to corruption and misuse of public funds; lack of necessary procurement methods to promote innovation.

Other concerns were the lack of sufficient regulations on the preparation and validation of project studies, leading to significant variations of works and budget overruns, and the lack of provisions relating to the newly emerging international concept of sustainability, green procurement, innovative procurement, and professionalism in public procurement.

To a large extent, the law also has lengthy procurement processes which constrain efficiency and lead to frustration of procuring entities and a generalized regulatory approach where the set deadlines and method are not considering different nature and types of tenders and their magnitudes

“Thus the new bill aims to fill the gaps resulting from the dynamic socio-economic development and comprehensively include all the principles of public procurement, innovation, and professionalism with a comprehensive approach to green public procurement,” Ndagijimana said.

The specifics:

The specific objectives of revising the current law among others include the introduction of new requirements like information on beneficial ownership disclosure during the bidding process to serve as a reference for due diligence in the evaluation process,

It will consider resolving the issue of frequent amendments of procurement contracts as well as minor and major deviations which is noted as a major loophole for corruption;

 

The law will be obliging procuring entities to share information relating to procurement with their supervising authorities; define a clear bids evaluation process that leads to the determination of value for money and reduce loopholes to corruption and this will come with reducing the percentage beyond which the contracting entity cannot conclude an amendment to the procurement contract that has been reduced from 20% to 5% as a key anti-corruption measure.

 

New Models Introduced

One of the interesting aspects is the law will introduce new innovative procurement methods, practiced globally like- reverse auction, design and build, turnkey, pre-finance in procurement for complex works/ tenders, procurement for innovation.

The minister also said that it will strengthen accountability to reduce the loss of public funds by identifying, tracking, and sanctioning actions leading to loss of public funds, especially if the above models of procurement are introduced.

 

On the pre-financing model, the minister said that this will reduce the challenge of some projects failing to get financing or planned without proper sources of funding but also that the long-term repayment will allow the government to handle budget needs and planning.

 

MP Deogratias Minani Bizimana raised the issue of district business owners being blocked from participating in local tenders because the law forbids members of councils to bid for local tenders thus derailing district development as incompetent bidders are the ones who qualify.

 

Minister Ndagijimana explained that the new bill has aspects of conflict of interest and the councils which also control the tenders is a conflict of interest. “However they can bid for tenders in other districts or across the country. This shouldn’t be a problem,” he said.

 

MP Aimée Sandrine Uwambaje asked if the increasing market prices will not result in abandoned projects due to affordability even when this is meant to curb corruption, while MP Phoebe Kanyanje questioned asked why the bill is tabled for revision yet there is no policy in existence.

The Minister said that the new bill provides for negotiation of terms and conditions, especially on pricing models but also that not having the policy will not affect the new bill.

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