Infusing value for money (VfM) into the public procurement system in botswana
| Pages | 281-341 |
| Date | 01 April 2017 |
| DOI | https://doi.org/10.1108/JOPP-17-03-2017-B001 |
| Published date | 01 April 2017 |
| Author | Emmanuel Botlhale |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 17, ISSUE 3, 281-314 FALL 2017
INFUSING VALUE FOR MONEY (VfM) INTO THE PUBLIC
PROCUREMENT SYSTEM IN BOTSWANA
Emmanuel Botlhale*
ABSTRACT. Public procure ment accounts for a big proportion of public
budget outlays, hence, it is important that there be demonstrated Value for
Money (VfM) in public purchases. To ensure VfM in public procurement,
Botswana introduced a modern public procurement system in early 2001.
The system is yet to be subjected to VfM analysis. Using document analysis,
this paper explores two main research questions: (i) what are key public
procurement challenges in Botswana?; and (ii) how can public procurement
in Botswana be improved? It is concluded that the public procurement
system in Botswana is not constructed on a VfM basis. It is consequently
suggested that there is a need for public procurement reforms and the
adoption of various private sector continuous improvement tools such as
Lean, Kaizen and Six Sigma.
INTRODUCTION
Government undertakes a variety of economic activities, chief
among them, taxing and spending public money to produce goods
and services that the market either cannot produce or produces in
insufficient quantities. The purchase or acquisition of goods and
services by the government is often referred to as public procurement
(Arrowsmith, 1998; OECD, 2010a; Warrillow, 1995). What then is
public procurement? Before one defines public procurement, it is very
vital for one to define procurement. In simple terms, “procurement
can be defined as the acquisition of goods or services” (Kerzner,
2006, p. 804). Procurement is a transactional process “between two
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* Emmanuel Botlhale, Ph.D., is Associate Professor of Pub lic Administration,
Department of Political and Administrative Studies, University of Botswana.
His teaching and research interests are: public finance & budgeting,
financial administration, project management, public governance and
research methodology.
Copyright © 2017 by PrAcademics Press
282 BOTLHALE
parties with different objectives who interact in a given market
segment” (Kerzner, 2006, p. 804). Procurement is one of the tools
that are used to deliver the strategy of an organisation, hence the
need to develop an organisational procurement strategy. If there is no
fit between the organisational strategy and procurement strategy, the
former cannot be delivered because the latter is used to drive and
deliver the former. As much as one cannot talk about an
organisational strategy in the realm of government, an argument can
be made that due to efforts to corporatise and run government like a
business à la Gore (1993), governments have instruments similar to
corporate strategies that are, amongst others, driven and delivered by
a procurement strategy. Having a generic definition of procurement,
public procurement must be defined. There are various synonyms of
public procurement such as “purchasing,” “contracting,” or
“acquisition” (Lloyd & McCue, 2004, p. 3). However, in the
mainstream procurement literature, there are frequent references to
public procurement. Several authors, for example, Arrowsmith
(1998), Asian Development Bank (2011), Lloyd and McCue (2004),
OECD (2015), Office of Government Commerce (2007), Prier and
McCue (2009), Uyarra and Flanagan (2010) etc have defined the
concept. This paper adopts the Asian Development Bank’s (2011, p.
4) definition which states that “public procurement is the process by
which national and local public administrations”;
- Establish and determine the needs for which procurement is
required.
- Formulate the appropriate procurement strategy to meet needs.
- Solicit competitive bids from qualified suppliers as a means of
determining best value and price.
- Select the bid according to pre-established criteria.
- Award contracts and ensure the availability of a formal challenge
mechanism; and
- Ensure contract administration focuses on performance, cost and
timeliness.
Public procurement is not an event; it is a process that entails
many sub-processes. This gives rise to terms such as public
procurement cycle (also known as procurement and supply cycle);
from pre-award tendering to post-award phases. Public procurement
INFUSING VALUE FOR MONEY (VFM) INTO THE PUBLIC PROCUREMENT SYSTEM IN BOTSWANA 283
accounts for a significant proportion of the Gross Domestic Product
[GDP] (OECD, 2015). For example, it accounts for approximately 13%
of GDP in OECD member countries (OECD, 2015). Due to the size of
outlays on public procurement and governments’ accountability to
taxpayers and the polity generally, it is subject to extensive legislation
and regulation (Lloyd & McCue, 2004). In this regard, Lloyd & M cCue
(2004, p. 3) hold that “public procurement is one of the most highly
legislated and regulated fields of government”. As observed by the
then Tanzanian Deputy Minister of Finance in October 2012, this is
so because “taxpayers want to see their taxes spent reasonably” (The
Commonwealth, 2012, p. 1). Public procurement is as old as public
finance, so, was not founded in pre-modern times for there are
ancient records of the practice. For instance, Thai (2001) holds that
the earliest procurement order that was found in Syria dates from
between 2400 and 2800 B.C. Despite ancient origins, modern public
procurement is traced to the 1950s when modern project
management matured.
The procurement of goods and services by government agencies
provides needed inputs that enable governments to deliver public
services and fulfil other tasks (World Trade Organisation, 2015).
Public procurement is more than just the acquisition of goods and
services; that is, it serves other non-procurement goals. In a
confirmatory note, Bolton (2006, p. 193) holds that “government
procurement is and has, for example, often been used to promote
aims which are, arguably, secondary to the primary aim of
procurement.” It is used to deliver socio-economic, industrial and
environmental policies (Arrowsmith et al., 2000; Cane, 2004). For
example, in Botswana, the Local Procurement Programme (1997),
covering all levels of public procurement, is aimed at facilitating
citizen economic empowerment. As further exemplification, in South
Africa, the Black Economic Empowerment (BEE) scheme, introduced
in 1993, is meant to redress the inequalities of apartheid by giving
certain previously disadvantaged groups, particularly Blacks,
economic privileges, including preferential treatment in public
procurement (SAinfo Reporter, 2013). In 2007, the original BBE was
revised and renamed the Broad-Based Black Economic
Empowerment (B-BBEE). Similarly, Namibia, a former South African
colony, introduced the BEE policy under the Transformation Economic
and Social Empowerment Framework (TESEF) in 2008 (Gaomab,
2013). In 2011, the BEE was supplanted by the New Equitable
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