Rules & Regulations

All Government expenditures above 500,000 ZMW (ca USD 100,000), as well as all Government loan and credit agreements, must go through the Zambia Public Procurement Authority (ZPPA). Government purchases below 500,000 ZMW are handled by institutional tender committees, and these are open to any company that meets the terms and conditions. The ZPPA advertises tenders for procurement of goods and services through the print media and tenders are posted on the website: www.promis-zm.comesa.int/welcome. Complete bidding documents are available against a non-refundable fee, normally 200 USD[1].

The procurement of medicines for government health institutions is done by the Procurement and Supplies Unit of the Ministry of Health. The Head of Procurement reports directly to the Permanent Secretary. The Ministry of Health in its procurement operations is guided by the Zambia Public Procurement Authority (ZPPA) laid down procedures for public procurement. All procurements above the authorized thresholds (US$1,000,000 for MOH) are channeled through procurement methods as per ZPPA guidelines. The procurement method recommended by ZPPA includes: the International Competitive Bidding (ICB); Limited International Bidding (LIB) and; National Competitive Bidding (NCB).

Procurement of pharmaceuticals and related supplies is one of the key roles of the MOH Procurement and Supplies Unit. The storage and distribution of pharmaceuticals and medical supplies is done by the national medical stores (Medical Stores Ltd), a parastatal company owned by the Ministry of Finance and the Ministry of Health. The management of Medical Stores Ltd has been contracted to Crown Agents. Medical Stores Ltd’s mandate is storage and distribution of medicines and allied products to district health offices and hospitals. District management teams in turn distribute to health centers and clinics within their districts.

The Churches Health Association of Zambia (CHAZ) is also involved in medicines supply management as a complementary service (about 20 – 30%) to the government supply system. CHAZ through a revolving drug fund sales essential medicines to member institutions and others not for profit organizations including government health institutions. In addition CHAZ with support from cooperating partners run antiretroviral therapy and malaria treatment programs which includes procurement, storage and distribution[2].

Selection Criteria

In order to be able to compete in Zambian procurements, price will always be an issue. For local companies, perceived thresholds to participate are the requirement in terms of turnover and historical turnover, bid bond and performance bond (typically bank guarantees are accepted).

As for selection criteria, according to the Standard Bidding Documents of the ZPPA, there are possibilities for ZPPA to focus on quality aspects such as "life cycle cost" and not only on price. It needs to be emphasized that the capacity to handle selection criteria such as quality is limited.

For bid comparison purposes, imported products may receive a 15% addition to the price in comparison to pharmaceuticals manufactured in Zambia. However, this preferential treatment of Zambian based suppliers is very seldom put into use by the ZPPA in practice.

Local Practice

One aspect to consider in respect of public procurement is that in practice it would be useful to have a consultant or agent representing the bidder locally.

It should be noted that there is an established practice of granting waivers from terms of the Public Procurement Act to preferred bidders before and after awards. This practice makes the public procurement process unforeseeable[3].

For PPP Projects

Potential PPP projects will not always be known and tendered to the public for submission of bids. It is possible that a PPP project could be initiated by individual enterprises in the private sector where no bids have been requested. Such a proposal from a developer or investor will be treated as an unsolicited bid. The Zambian PPP policy allows for unsolicited bids in line with relevant legislation. It is important to note that unsolicited bids should encourage creativity and innovation on the private sector and lead to quality bids being submitted. Even in situations where an unsolicited bid is an adequate project under the Zambian PPP legislation, there will be a competitive (but potentially limited) process practiced by the authorities[4].

[1] Ibid., p.50.

[2] Disclosure Status of Pharmaceutical Sector Data: Zambia, pp.6-7.

[3] Gustaf Engstrand, Report on the Health Care Sector and Business Opportunities in Zambia, p.48.

[4] Ibid., p.50.