The Sunday News
Vusumuzi Dube, Online News Editor
AN internal Bulawayo City Council audit has uncovered a number of irregularities in the local authority’s procurement and contracts management systems.
According to a council confidential report, some of the loopholes include the failure by the local authority to maintain a suppliers list which creates the risk of the city placing orders with a supplier providing poor services or counterfeit goods.
The audit was conducted with the objective of evaluating if procurement and contract activities were in compliance with relevant law, applicable guidelines and the council’s policies.
“While there is adherence to the law and procurement guidelines, we noted some weaknesses in the way the Procurement Management Unit (PMU) and city departments manage contracts. These contracting weaknesses negatively impact the city’s ability to properly safeguard city resources and ensure efficient and effective service delivery to residents, industry and commerce and other stakeholders,” reads the report.
Some of the weaknesses identified included delays in signing of contracts and commencement of work, lack of involvement of legal section in contract preparation, contractors commencing work in the absence of valid contracts, absence of right to audit contractors, lack of a project mechanism and lengthy dispute resolutions.
“We noted considerable delays from the date of awarding to signing of contract and from signing of contract to commencing work. Based on the contracts we reviewed, 15 percent of the contractors took two to eight months to sign contract. Eight percent delayed moving to sites with some citing challenges in sourcing foreign currency to import resources required for the works.
This poses a risk of price escalation considering the state of the economy,” reads the report.
The audit further identified two contractors who were awarded multiple contracts that were running at the same time with the contractors now seemingly struggling to complete the projects.
“Tzircale Brothers private limited had five running contracts and Aggregate Properties three. This stretches the contractor’s resources with risk of failure to complete all the projects on time, providing substandard work and in cases of unforeseen events the impact will extend to all the contracts awarded to that particular contractor.
“We found no evidence of involvement of the legal section in contracts developed by the PMU. Review of contracts by legal section at the development stage ensures that key clauses meant to protect the city’s interest are included in city contracts. Lack of legal review means some irregularities may go unnoticed and the city may have a weak position to fall back on in the event of litigation,” reads the report.
The audit also discovered that the PMU does not have technical expertise to review a contract’s terms and conditions relating to scope and costs before the contract is signed.
“The section relies on the project manager and any omission or oversight will not be picked up and corrected timely. Omissions of some terms and conditions may be costly to the city in terms of additional time and scope required to complete the contract.
Disagreements may arise which may end up in arbitration disrupting the whole contract like in the case of the rehabilitation of Sauerstown deep section contract where there was an omission and disagreement in scope to dispute that has not been resolved since 2017,” reads the report.
It was also discovered that 13 percent of contracts had commenced without a signed contract with further indications that departments did not effectively monitor contracts to ensure that the local authority received the contracted deliverables and that contractors complied with all applicable contract requirements.
“City departments do not have a project tracking mechanism to manage a project’s life cycle. A tracking mechanism will ensure adherence to timeliness and early detection of deviations, ensuring that corrective action is taken before there is serious damage.
“Resolution of conflicts at times takes longer to be settled exposing the city to huge price variation especially in the current situation and also reduces chances of efficient delivery of goods and services. We noted that this time factor is not enforced with legal assistance sought after more than a year,” reads the report.
Some of the projects that are locked in dispute and have taken long to be settled include the servicing of Highmount stands, rehabilitation of Sauerstown Deep Section and Charlotte Crescent Outfall Sewers, Tzircalle contracts for the servicing of Emganwini, Tshabalala, Magwegwe stands, supply and installation of street lights in ward four and tower lights in ward six. Purchase of ambulances which has since been reported to the police, supply and installation of cremator at West Park, servicing of Woodville stands and the refurbishment of 6,6 kilovolt motors.
“For the completed contracts, we noted that there is no documentation indicating performance of contract closeout and post contract reviews. Final winding up of contract is not documented to indicate work done and final settlement to the contractor.
“Justification of selections we reviewed were that the supplier was the cheapest but quality was not mentioned. Quality of product may be compromised in pursuit of low prices and products with shorter than expected life span may be procured. While the cost factor is important, PMU needs to also pay attention to the quality of the product,” reads the report.
