Fresh tender for insurance deal

April 29, 2021

…As Ministry caves in to PRAZ directive


The Ministry of Health and Child Care has opened a fresh bidding process for the provision of insurance services as it caves in to a directive by the public procurement regulator, Procurement Regulatory Authority of Zimbabwe (PRAZ), Business Times can report.

The ministry has been at loggerheads with insurance brokers after it shifted goalposts on a tender to provide insurance cover for motor vehicles, motorcycles and ICT equipment. The tender closed last month.

In a procurement notice published this week, the ministry re-tendered for the provision of insurance services for motor vehicles, motorcycles and ICT equipment. The pre-bids would be done on May 7 at 9am via zoom. The closing date is May 18 at 10am.

Bidders must be registered for a period not less than one year, must have certificate of incorporation, vendor number, a valid registration with PRAZ, have a valid tax clearance and must have VAT certificate.

The re-tender comes after the Insurance Brokers Association of Zimbabwe (IBAZ) lodged a complaint with PRAZ against the discrimination by the ministry.

In February, the Ministry of Health and Child Care published a notice in which it was looking for insurance players to provide cover for motor vehicles, motorcycles and ICT equipment.

The procurement notice stipulated that interested bidders must be registered for a period of not less than one year, must have a certificate of incorporation, must have a vendor number, must be registered with PRAZ and attach proof, must have a valid tax clearance and must have VAT certificate.

Brokers were shocked to find a clause in the bid document which said bidders should be underwriters or insurers and brokers or intermediaries would not be considered. There was also a clause stipulating that a bidder must submit confirmation of credit rating by a ratings agency.

This drew the ire of brokers who approached PRAZ for redress.

In a February 12, 2021 letter to PRAZ acting CEO Clever Ruswa, brokers complained they had been excluded as has become the norm where government departments deliberately excluded brokers when it comes to insurance tenders as discussed during the PRAZ/IPEC workshop of August 18, 2020.

IBAZ said one such instance of exclusion was the tender in which they have incorporated a clause which reads ‘Bidders should be underwriters or insurers. Brokers or intermediaries will not be considered for this tender’.

“As advised by your office, we are to report such practices as they violate the principle of fair competition. We therefore present this case as one of the many cases where government departments are not being fair to us despite the fact that we are professionals in this field and play a very crucial role in the whole insurance value chain,” IBAZ wrote.

“We have had situations like these before, where after all the tender process is finalised, we discover that a big portfolio such as this one would have been awarded to an independent agent to handle at the expense of qualified professionals in this field. One then wonders whether there is some degree of professionalism in this whole issue.”

Ruswa replied in a March 5, 2021 letter that: “The Authority is currently engaging the procurement entity to seek clarity on the restriction, and will revert to you after considering the procurement entity’s submission to the Authority.”

While Ruswa did not respond to the brokers, he told Business Times recently that he had directed the ministry to follow the law. Ruswa said PRAZ had received a complaint from the brokers engaged by the procuring entity (PE) to provide an explanation on the matter.

“The procuring entity provided its explanation and the Authority directed the PE in terms of section 7 of the Public Procurement and Disposal of Public Assets Act [Chapter 22:23] to align the requirements with the provisions of the law,” Ruswa said.

Industry executives told Business Times the re-tender was a victory for brokers and a plus for PRAZ whose mandate is to ensure transparency in public procurement.

Related Articles

0 0 votes
Article Rating
Notify of
Inline Feedbacks
View all comments
Back to top button
Business Times
Would love your thoughts, please comment.x