Stop missing out on lucrative government contracts accelerate your growth

By Phillip Chichoni

The government is the biggest buyer of all products in the market.  From ministries, government departments, state owned enterprises to public institutions like universities and colleges, the state consumes by far the bulk of all goods and services. If you are not supplying to the government, then you are mission on game changing opportunities that can take your small business to the next level.

In order to clarify some opinions that the state was favouring certain suppliers, including foreign companies, to the detriment of SMEs, the Harare Chamber of Commerce invited the State Procurement for a lecture last week.

Mr. S Mutanhaurwa, the Senior Procurement Executive at the SPB made a presentation that provided enlightenment to business owners present in the Harare Chamber board room. His talk was entitled “How SMEs can benefit from the tendering process.”

To start off, Mr. Mutanhaurwa explained how the SPB is government by law in all its operations and processes. The governing law is the Procurement Act (Chapter 22:14) and its regulations, Statutory Instrument 171/2002.

Basically there are three types of tenders:

a)      Formal tenders: where the value of goods or services exceeds US$10 million. These go through the State Procurement Board.

b)      Informal tenders: where the value is between US$2 million and US$10 million. These do not go through the SBP. The procuring entity invites tenders through newspaper adverts, selects the winners and sends a copy of the comparative schedule to the SPB.

c)       Competitive quotations: for value below US$2 million, the procuring entity invites quotations from at least three suppliers, preferably those on their list of pre-qualified suppliers. Government departments, state owned companies, schools, hospitals etc usually maintain a register of preferred suppliers who meet basic requirements as listed below. Whenever they need to purchase low value goods or services they ask firms on the list to submit quotations. In order to be fair and give opportunities to all, procuring entities are required to rotate suppliers and not buy from one all the time.

How to join the list of pre-qualified suppliers

Your business needs to be formalized. This means it must meet the following requirements:

  • A registered private limited company, private business corporation or partnership.
  • It must be registered with Zimra, with a current and valid tax clearance.
  • If it meets the turnover threshold of $60,000 per year, it must be VAT registered.
  • It must have financial statements (preferably certified)
  • It must have a bank account in the name of the business

 

With these requirements met, you then need to approach the SBP and complete registration procedures and pay a small fee. Your company will then be published in the Government Gazette as a registered supplier for specific goods or services.  You will then need to get an account number with the Central Payment office, again for a fee, to enable your banking details to be captured for the purpose of processing payments. The registration procedure with the SPB must be renewed annually.

Once you are registered as a supplier, you will be approached by the various procurement entities to provide quotations and if you win, they will buy from you.

You can also respond to tenders that appear regularly in the Government Gazette and daily newspapers, both formal and informal.

I will you all the best as you accelerate your growth in the coming year.

Phillip Chichoni is a strategic planning consultant who works with entrepreneurs and SMEs who want to accelerate their growth. He has written four business books, including Business Planning Simplified and Three Steps to Developing a Strategic Plan to Grow Your Business.

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