Zuma establishes Tender Board to fight corruption in South Africa – why it won’t work

Jacob Zuma, President of South Africa, gave his state of the Nation address recently. One interesting point for us was his comments on corruption – or rather, the fight against corruption. He gave some impressive figures in terms of the crackdown, such as 1542 officials being dismissed from the Public Service and 204 officials being prosecuted.

He also announced a new “central tender board to adjudicate tenders in all spheres of government”.  The argument seems to be that the devolved nature of public procurement decisions means it is hard to identify fraud and corruption, and who might be behind that. So centralising the decision making process though a Tender Board is the proposed answer – the logic being that if things do go wrong, it will be the responsibility of a small and identified group of people!

I can totally understand where Zuma is coming from on this, and support anything that can be done to fight the scourge of corruption – a huge problem for developing countries, and one of the main factors restricting economic and social growth. But I just cannot see how this can practically work.

The major issue is simply one of resource. How many public bodies are there in the country? Several hundred, I would guess. At least.   Even if each on average only let, say 3 or 4 contracts a year of meaningful scale, that could well be a thousand or more contracts for the Tender Board to consider. How on earth are they going to do this?

If the Board does nothing more than briefly review a tentative supplier selection decision made by each buying organisation, it is hard to see how you could do that properly in much less than a working day. Of course, if the Tender Board is actually carrying out the whole evaluation, the resource problem becomes even more  immense.

Another major issue comes with the nature of the corruption. If it is simply choosing the supplier who is not offering the most economically advantageous tender, then the Tender Board might have some chance of spotting a dodgy provisional decision e.g. supplier X is 220% more expensive than Y and is chosen without clear non-price factors to justify this.

But there are two other common enabling routes for corruption in procurement decisions. One is the transfer of inside information to the chosen bidder, giving them an unfair advantage. It is hard to see how the Tender Board can possibly pick this up.

And secondly, there is the use of specifications to tilt the procurement towards a particular supplier – for instance, asking for technical factors knowing that only one company can meet the specification  (I wrote a longer piece on this here for our Plus subscribers recently). Again, it is hard to see how the Tender Board will pick this up unless they carry out really detailed due diligence on all technical and specification aspects of the bid – potentially weeks of work.

So, a well meaning initiative, but it will probably prove both unfeasible in practical terms and, even if implemented in a more limited way, largely ineffective. A much more fundamental set of reforms is needed, but there will be no quick fix to change the culture I’m afraid. It needs hard work over many years.

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