Discussing the pros on the decision of allowing the procurement of used items in public sector (PPA 2011):
* It is economical; This is because of the liquidity crisis and improvements in product quality control hence some governments are opting for secondhand purchases. The current update in this regard is that, According to BBC News (Feb’2009) the Indonesian military is currently negotiating with the US Army to purchase secondhand F-16 fighter jets in a bid to modernize its air power military capability. Mark you Indonesia is the largest economy in Southeast Asia and one of the dynamic emerging markets in the world. The country is also a member of the elite G-20 major economies. Quality control especially technically aircraft never get old as such because they are meet international standards and principles that govern air transport.
* It is affordable to procure at low cost of acquisition, in case of emergencies circumstances to rescue situations especially those of public interest, the
* government should allow procurement of used equipment under exceptional circumstances to serve people, that are evaluated on case by case basis procurement in the need The Bank understands that the decision between the outright purchase and lease arrangements depend on the economic loss and benefits, however, given the potential risk associated with used equipment, the government should consider leasing as the preferred alternative only in emergency.
* It helps and is the way to go if the government is to fulfill its obligations as far as capital intensive investments are concerned. “Purchasing secondhand machines suited Tanzania at the moment because many countries were applying the same strategy on costly machines such as planes, train engines and ships.
* Equipment may be available immediately, that result to shorten procurement process of acquiring used equipment, compared to the time required for the acquisition of new equipment because it involves ordering which took sometimes up to delivery period.
Discuss the cons on the decision of allowing the procurement of used items in public sector (PPA 2011)
* May lead to procure poor quality items that do not meet intended purpose that is performance requirements of the goods, and minimum standards for age, residual economic life, and quality of materials. That might result in massive economic losses this is refer to the economic life cycle of goods procured. Since they will not be expected to originate from Tanzania, it will be difficult to get authenticated record of the time they had been used and condition at the time of sale.
* Failure of getting loans from world Bank at deficit circumstances, this is according to World Bank Procurement Manual Draft (2001)- Procurement of brand new Goods policy, which explain that it the Bank’s general Policy is to finance the procurement of new goods only. Borrower’s procurement should be to the new.
* Procurement of used goods does not correspond to the principles of value for money, since the experience in the country has shown there were no credible personnel to undertake such kind of purchasing with evidence of quality of such used items together with its residual value, relevant to the cost of purchase/money spend on buying.
* Creation of a fertile ground for rampant corruption because the government/institutions functionaries might use this loophole to buy junk equipment through underhand methods thus causes great losses to the taxpayers.
* Higher running expenses, It is cost fully in case of running expenses such as maintenance and service for used item than for brand new equipment, when government institutions decides to purchase used items, will result to incur a lot of money spending on frequently buying costly spare parts and maintenance as a result to high total cost of operation hence less productivity.
The decision of allowing the procurement of used items in public sector have their respective advantages and disadvantages to the national economy and general social welfare issues as follows. The advantages of procurement of used items are; it is economical, It is affordable due to low cost of acquisition, Used equipment may be available immediately, procurement of more items for the same budget, improves transparency and integrity. The disadvantages are Lack of competitive bidding, failure of getting loans from world Bank, May lead to procure poor quality, does not correspond to the principles of value for money, Creation of a fertile ground for rampant corruption, and Higher running expenses.