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The most cost effective and efficient bidder is supposed to get a contract that is tendered. Are tendering rules manipulated at the Ministry of Agriculture and other Ministries to favour particular contractors? There are reports of a return to corruption as happened prior to 2015.
Instruction is reportedly given to bypass tendering rules and award purchasing of equipment and contracts to favored small suppliers from the region where the work is required.
Contractors with specialized expertise, albeit large, are being pushed aside for unqualified contractors. Is this a guise to exact greater contractor taxes (bribes) and or favor certain contractors based on political affiliation? It is discriminatory. And it would inevitably raise government costs and lead to shoddy work and severely impact on productivity. In addition, larger companies would be forced to lay off staff leading to rising unemployment.
While giving small contracts to or purchasing from regional suppliers and service companies may be a laudable goal, it is not a cost-effective way of conducting business. The regional small suppliers and service companies lack the capacity to provide cost effective service. They lack capacity and would have to sub-contract work. And they would have to purchase equipment from the large suppliers to sell to the Ministry. Costs would substantially increase along each step. The small contractor will then be at a disadvantage in terms of price, unable to compete with the larger contractors. It would be cheaper for the Ministry to purchase directly from the agents of suppliers.
Besides price, the small suppliers are at another disadvantage. They lack capacity to service the equipment as they lack the technical skills to train Ministry personnel in usage of the equipment and maintenance. Small contractors lack the requisite diagnostic tools and trained personnel to service heavy equipment. And small contractors are not in a position to offer manufacturer’s warranty that is essential for deployment of expensive equipment such as excavators, pumps, ATVs, etc.
If the small suppliers are pressured to pay hefty contract taxes, their profit margin would decline. To increase their profit, they will have to supply the Ministry sub-standard products. In the end, the Ministry gets shoddy products and the taxpayers are losers because the product would not be long lasting. Ultimately, the nation is saddled with inferior equipment. And the contractor taxes are passed on to tax payers with higher costs. Any policy or instruction to benefit a particular contractor or to violate tendering at the Agriculture Ministry or any Ministry would have devastating results. The ruling party hierarchy must intervene to correct misguided directives at Agriculture and other Ministries.