Open Contracting and Transparency in Tanzania’s Public Procurement framework

The concept of open contracting is emerging as a strategy to increase contract transparency and monitoring, with major expected benefits in terms of quality of governance, better value for money, reduced corruption, increased service delivery and better development outcomes. A World Bank survey of 34,000 companies in 88 countries shows that competition was higher and kickbacks were fewer and smaller in places where transparent procurement systems, independent complaints mechanisms, and external auditing are in place . As defined by the Open Contracting Partnership, Open Contracting is about publishing and using open, accessible and timely information on government contracting to engage citizens and businesses in identifying and fixing problems. Other literature points out that, the concept of Open Contracting intends to install transparency from the Pre-tendering Phase, Tendering Phase and Post-tendering Phase. It is an approach that promotes public disclosure of timely information throughout the public procurement cycle, from planning stage to contract award (including the contracts) to payment and delivery . Recently, Open Contracting has gained a lot of momentum and more than 20 countries and cities are working towards publishing open contracting data for business and civic engagement. This has been evidenced from the study conducted in 15 countries, which reviled that, there is a clear appetite for open contracting information across infomediaries in all 15 countries (Hivos, 2016).

Advocacy around open government reforms to date has largely revolved around the intrinsic value of transparency, accountability, and participation. In a resource-constrained environment, development practitioners, policy makers, and citizens have to be more judicious due to the fact that, adopting new methods or tools – such as open contracting mechanisms, open data dashboards, and participatory budgeting – is not free. Up to the moment, the Tanzanian Government has not made any commitment or public declaration of its intentions to adopt the Open Contracting initiative. From the study conducted by Hivos 2016, it is understood that "Actions speak louder than words when it comes to political commitments”. This means that, for the Open Contracting initiative to be successfully implemented in the country, there must be a full commitment from officials at higher ranks of the government. Although political commitment has been ranked as number one prerequisite, for the Open Contracting initiative to succeed, it needs a country to have working e-procurement systems which will provides more accessible and timely data. Furthermore, there should be deliberate efforts to strengthen the capacities of public officials in ICT and other Open contracting tools. It is well known that, the responsibility of any government is to ensure that it provides safety and social wellbeing of its citizens. This responsibility goes together with the duty to protect the natural resources of the country by ensuring that, they are used for the benefit of its citizens. Whether in providing security and social wellbeing or it is utilizing natural resources to generate revenue, any government is likely to do major public procurement transaction. In the budget for the year 2018/19, the government budgeted for TZS 12,007.30 billion to be spent in development expenditure and TZS 3,054.20 billion as other charges (Citizens’ Budget 2018/19). The budgeted amount totaled to TZS 15,061.50 billion which is 46% of the annual budget of TZS 32,476.00 billion. For the government to get value for money in the spending of the 46% of the annual budget, it needs to have an effective public procurement system. In the budget for the year 2018/19, the government budgeted to collect TZS 18,000.2 billion as tax revenue which is 55% of the total budget (Citizens’ Budget 2018/19). The planned revenue will only be collected effectively if the government has proper contracts with collecting agents as well as with all private companies which are extracting natural resources in the country. Generally, the government needs a good public procurement system for it to bring about development in the country. To have effective Public procurement framework in place, several characteristics have to be adhered. Gätjen, J., says that, a good public procurement system must comprise of; Fairness, Delivering Value for Money, Competitiveness, Transparent and Accountable (Gätjen, J. 2014). Furthermore, Brown, C., also identified the five satisfying characteristics for an effective public procurement system as; fairness (no discrimination, no corruption), delivering value for money, competitiveness, transparent and accountable. The main aim of these characteristics is to ensure that public funds are used to satisfy public needs (Brown, C. 2004). In Tanzania Public procurement is guided by the Public Procurement Act No. 7 of 2011 (PPA 2011), which initiated the Public Procurement Authority (PPRA) as a mandated institution to oversee the overall public procurement practices in the country. One of the main objectives of PPRA as per Section 8 (a) is to “ensure the application of fair, competitive, transparent, non-discriminatory and value for money procurement standards and practices”. Furthermore, section 63 (2) of the act provide for the basic principles of procurement and disposal as "Subject to this Act all procurement and disposal shall be conducted in a manner that maximizes competition and achieve economy, efficiency, transparency, and value for money". These cited sections from the PPA. 2011 gives evidence that Tanzania is determined to have a good procurement systems by adhering to the most of the five satisfying characteristics of a good procurement system. This is due to the fact that the cited sections address directly to four of the five satisfying characteristics as listed by Gätjen, J. From the five satisfying characteristics, transparency has been very important due to the fact that, in order for the government to be seen as been accountable and enjoying public trust, citizens need to be aware of what is going on. However, in bringing about transparency in public procurement, Freedom of Information Policies are among the very important determinants. In most countries, there are still uncertainties in terms of what information should be disclosed to whom, and how, and more generally, about the appropriate level of transparency that is required (Chêne, M. 2012). It is from this perspective, the concept of Open Contracting emerged. There are a number of benefits to be enjoyed if the government is to be committed to Open Contracting. 4U Ant-Corruption Resource Centre pointed out four benefits of Open Contracting. Firstly is Public interest in accessing contracting data There is a clear public interest in the publishing contract Information, as such information relates to the use of taxpayers’ money and how it is being allocated and distributed. The distorting effect of lack of transparency and corruption in contracting processes occurs to the detriment of the taxpayer who ends up paying more for less (Evenett, S., 2003). Contracts specify what is to be delivered when, how, by whom and at which price and, as such, contain critical. Secondly, Economic benefits: There is anecdotal and micro-evidence of the economic benefits of procurement transparency. Opaque bidding processes tend to discourage bidders from participating in tender processes, leaving government dependent on bids from a small group of firms, with higher contract prices, lower quality of goods and services, common delays and cost overruns (Evenett, S., 2003). Thirdly, there is a linkage between contract transparency and corruption: Evidence from Japan indicates that improved transparency reduced procurement costs by 3%. Yet, there is a broad consensus that stringent disclosure requirements are potentially a powerful remedy to governance and corruption issues (Kaufmann, D., 2005). Lastly, improved quality of service delivery: There is considerable evidence that transparency and oversight can reduce the impact of corruption (Kenny, C. 2010). For any country to succeed in implementing Open Contracting, there must be three key pre-requests which are; Transparency environment, use of electronic procurement and Availability of Online Infrastructures. Transparency Environment: Through the Public Procurement Act, 2011, the country is determined to install transparency within the public procurement (Section 8 (a)). This has been further emphasized by indicating that, when a public entity is choosing for the best method to be used when is doing any procurement, transparency is among the factors to be considered. Regulation 18 of the Public Procurement Regulations of 2013 ensure there is electronic, machine-readable and free of charge access to public procurement annual plans of all procuring entities or key information included in these documents. The public procurement framework has allowed for transparency at different stages of procurement including the award of contracts, contract implementation, performance measurements and review of the procurement process. Use of Electronic Procurement: The country is determined to ensure that, it maximizes the use of ICT through the use of electronic systems to support public procurement. Section 12 (b) of Public Procurement (Amendment) Act, 2016 state that, "with exception of areas where there is no electronic infrastructure, all procurement information is promptly posted electronically". Furthermore, Section 63 of PPA, 2011 as amended by Section 20 of PPA (Amendment) Act, 2016 state that, “PEs shall ensure that procurement or disposal by tender is implemented and reported through electronic procedures or manually where an electronic facility is not available”. The above-cited sections of the Public Procurement Act emphasize the use of electronic facilities to conduct and manage procurement processes. This has been further enhanced by the public procurement authority through Part XI of Public Procurement Regulation (GN. 446) which stipulates procedures for conducting electronic procurement to all public procuring entities. Availability of Online Infrastructures: It needs a well-formulated infrastructure to support the existing desire of installing transparency in the public procurement and the introduction of the e-procurement. The government has put in place several institutions and online platforms to ensure that, the intended level of transparency is achieved. This is much emphasized in the functions of the PPRA as listed in the PPA, 2011 Section 9 (j) which state that “determine, develop, introduce, maintain and update related system to support public procurement by means of information and communication technologies including the use of public electronic procurement” Some of the online platforms are: www.tenders.ppra.go.tz, www.tenderportal.ppra.go.tz, www.ppra.go.tz, www.ppaa.go.tz Although the spirit of the Public Procurement Framework is to install transparency in the public procurement, most of the information is available to bid participants, related parties and other government entities like PPRA and the like. Most of the information are not availed to the general public to allow for follow up and review by non-state actors. In conclusion, Tanzania stands a better chance of being successful if it decides to fully implement the Open Contracting initiative in public procurement. This is due to the fact that Tanzania is working to install transparency, utilize electronics platforms and create mechanisms to ensure that there is greater access to information and accountability in the Public Procurement. Most of the required information for Open Contracting is available at the offices of different authorities and the online platforms are also available for use. It is high time now for the Government to see the relevance of Open Contracting and consider putting more information at the disposal of the general public for consumption. The Government should consider the cost for transparency and the relevancy of information in selecting what information to share with the general public. Transparency alone is not enough without concrete mechanisms to effectively hold the state accountable. The Government should continue with its efforts to enhance the efficiency of oversight mechanisms in the area of public procurement.