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Ethiopia: High Court Suspends U.S.$34.3 Million Bid Outcome


AllAfrica

November 9, 2015

By  Dawit Endeshaw

Yet another bidding process in dispute; this time over PPPDS’ handling of tender process.

A 34.3 million dollar technology contract between the Public Procurement & Property Disposal Service (PPPDS) on behalf of the Information Network Security Agency (INSA) and a US company, has been suspended by a Federal High Court order following a complaint by a Chinese company that was bidding for the contract.PPPDS was handling the tender process for INSA, which wanted to procure Digital Video Broadcasting Second Generation Terrestrial (DVB-T2) Network Rollout solutions. There was a minimum precondition for bidders that the purchase should be on a vendor financing basis, where competent bidders would bring partners who would facilitate the credit service with a minimum repayment schedule of 10 years.

The overall purchase was divided in two lots; for the procurement of system, subsystem, equipment & goods and the remaining and, for the supply of signal measurement & monitoring systems. Nine bidders came forward in June 2015, four of which made it through the technical evaluation. Three of them offered for Lot One, consisting of installing the infrastructure that would serve the implementation of the system, and one bid for Lot Two to supply the measurement & monitoring systems. The sole bidder for Lot Two, Giga Communication Ltd. from the UK, got its contract worth 214.7 million Br uncontested. However, the award of the contract for Lot One to GatesAir, an American company known for its work on over-the-air analog and digital radio/TV stations and networks worldwide, which was said to have offered the lowest price of 34.3 million dollars, was not pleasing to Star Software Technology, a Chinese company, which took its case to court.

In its civil suit filed at the Federal High Court’s First Civil Bench, Star Software Technology claimed that it had offered the lowest price and proposed competitive terms of repayment. The Bench then suspended the contract from November 5, 2015, coinciding with the scheduled contract signing, until December 1, 2015.

The claim by the Chinese company mainly revolved around the loan and its respective offer, said Yigezu Daba, director general of PPPDS, while declining to discuss the issue further, saying it is now up to the court.

Lot Two bidder, Giga, is a subsidiary of Ultra Electronics Group, which boasts of “a portfolio of specialist capabilities, generating highly-differentiated solutions and products in the defence and aerospace, security and cyber, transport and energy markets, by applying electronic and software technologies in demanding and critical environments to meet customer needs.” Its clientele includes such media institutions as BBC, CNN and Al Jazeera, according to its website.

The procurement was meant to transform the current analog based television broadcasting systems into digital systems. The purchase was intended to be made while attached with credit schemes where each bidders was obliged to come up with a third party that would facilitate a loan for the purchase.

Established under a mandate of strategic and framework purchase, the service in the past four months has conducted three billion Br worth of purchases. From this, one billion Br was dedicated to the purchase of wheat, 873 million Br for construction and 935.6 million Br for the purchase of iron bars.

Kenyan government makes $104 million procurement from disadvantaged groups


spyghana.com

May 31, 2015

The Kenyan government has procured 104 million U.S. dollars worth of goods and services from women, youth and the disabled in the current financial year, said a senior official on Friday.

Cabinet Secretary for the National Treasury, Henry Rotich, told a procurement forum in the capital Nairobi that “this is a direct result of the government’s Preference and Reservation Scheme.”
“However, this only represents three percent of the total available (procurement) opportunities,” Rotich said during the National Public and Disposal Consultative Forum.
“It is expected that more disadvantaged people will access government procurement due to the enhanced capacity building efforts of the public entities,” the official said.
The public procurement and disposal law came into force in 2013, providing a preference for women, youth and the disabled as it set aside 30 percent of the total government procurement to “disadvantaged groups.”
Rotich urged the “marginalized groups” to take full advantage of the policy and participate competitively in public procurement opportunities.
“The optimum public procurement systems are central to the effectiveness of the development and recurrent budgets of any country,” she said, adding that the public procurement could be used to achieve targeted social economic goals.
Deputy Country Director with the United Nations Women Kenya, Karin Fueg, said her organization has worked with Kenya to promote participation of “disadvantaged groups” in the procurement market.
Fueg said Kenya’s decision to provide preference to disadvantaged group, such as women, represents an unique opportunity for small and medium enterprises to benefit from the government supply chain.
She added that while Kenya has made progress in providing access to “marginalized groups”, the uptake still remains low.
“This calls for concerted actions and effective strategies that will increase the participation of women enterprises in the preference scheme,” she said. Enditem

-Xinhua

Karuma Dam Project: IGG Halts Procurement Process


Namibian government needs to ‘close anti-corruption gaps’


SypplyManagement.com

15 December 2013 | Will Green

A think tank has criticized Namibian government procurement as “not always based on transparency, competition and objective criteria”

The Institute for Public Policy Research (IPPR) said the government needed to “close anti-corruption gaps” to bring it into line with the United Nations Convention Against Corruption (UNCAC).

The IPPR said it had identified a number of areas where there were “weaknesses” in terms of compliance with UNCAC, to which the government is a signatory, including a lack of laws covering whistleblowing, declaration of assets by public servants and access to information; and transparency over finances.

Namibia’s public procurement decision-making is not always based on transparency, competition and objective criteria,” said the IPPR.

Meanwhile, the Public Procurement Bill, intended to overhaul government procurement processes, has been withdrawn from parliament “until further notice” following criticism from parliamentarians, the state-owned newspaper New Era reported.

The Namibian government’s Anti-Corruption Commission did not respond to SM’s request for comment.

Swaziland finance minister announces procurement reform


Supply Management

29 February 2012 | Angeline Albert

This year, the Swaziland government plans to introduce a public procurement agency to oversee the purchasing carried out by public bodies.

In this national budget speech, finance minister Majozi Sithole said that the Swaziland Public Procurement Regulatory Agency will be created in the 2012/13 financial year.

As well as overseeing public purchasing, the agency will provide an independent forum to assess suppliers’ complaints. In addition, a code of conduct for public sector procurement officials will also be adopted.

The changes come as a result of the country’s Procurement Act of 2010, which gained assent from His Majesty King Mswati III last year. The act also disqualifies public sector workers and politicians from supplying government with goods and services.

In his budget speech, Sithole said: “Government understands that improving public procurement can generate savings without compromising services to the public. It is also an area prone to corruption. That is why we have a new procurement act. In 2012, the government will apply the changes required.”

The minister emphasized the need for stronger fiscal discipline in government by investing in cost-saving policies, improving procurement and public finance management and fighting corruption.

Kenya: Youths, Women, PWDs to Benefit From New Procurement Rules


AllAfrica.com

By Capt. (RTD) Collins Wanderi

OPINION

On 18th June 2013 the Cabinet Secretary for the National Treasury published the Public Procurement (Preference & Reservations) (Amendment) Regulations 2013.

The objective of these regulations is to accord the youth and other disadvantaged groups in Kenya preference in the supply of goods and services to the government. This is in line with one of the key promises of the Jubilee government to give the youth, persons with disability (PWDS) and women at least 30 percent of all supply contracts to the government.

The significance of these regulations is that the National Treasury and all the Treasuries in the 47 county governments shall be required to register and maintain a database for all Small or Micro-Enterprises (SME) or disadvantaged groups that wish to participate in public procurement.

The regulations also seek to favour local businesses by granting exclusive preference to local contractors who supply motor vehicles, electrical goods, furniture and other items which are fully assembled or manufactured in Kenya. Road works and electrical installations of below Sh1 billion, other public works of below Sh500 million and supply of goods and services of below Sh100 million and Sh50 million respectively are now exclusively reserved for Kenyans.

When these regulations come into effect the government and all its agencies will inevitably become the largest promoters of the motto, “buy Kenyan, build Kenya”.

The regulations also make it possible for procuring entities to divide supplies in lots of goods, works and services into practicable quantities which the youth, SMEs and other disadvantaged groups can afford. A new Regulation 31 enjoins the National, County governments and other agencies of government to allocate at least 30 percent of their procurement to the youth, SMEs and other disadvantaged groups.

To enhance compliance with this regulation these procuring entities will now be required to make budgets, issue tender notices and award contracts with at least 30pc participation by the youth, SMEs and other disadvantaged groups. They will also be required to submit quarterly reports to the Public Procurement Oversight Authority for compliance audits.

To participate in the new preferred and reserved public procurement scheme, the youth, women, persons with disability, SMEs and other disadvantaged groups are required to register their enterprises with the relevant government body e.g Registrar of Companies, Business Names, CBOs, NGOs etc.

The membership of such registered bodies may have 30 percent members at most who are not youth, women or PWD but their leadership must be 100 percent youth, women or PWD. Procuring entities will be required to pay for supplies made under this scheme within 30 days. A delay beyond 30 days requires the entity to make 50 percent part-payment and explain the delay in writing.

Regulation 33 which deals with financing is of great importance. While young people often have the benefit of fresh ideas, energy and vigour they are seriously deprived while in competition with older people who have the advantage of time, experience and money. Procuring entities will be required to authenticate Tender Awards and Local Purchase or Service Orders (LPOs & LSOs) and enter into agreements with relevant financing institutions with an undertaking that the contracted enterprise will be paid through the account opened with the financier.

Banks, Deposit Taking Microfinance Institutions (DTMs) and other lenders licensed by the Central Bank of Kenya must also come up with very innovative ways to help the government, the youth, PWDs, Women and other disadvantaged groups achieve the objectives of the new regulations.

The youth, women and PWDs need these contracts but on the other hand government agencies require assurance that the contracted enterprises will perform their part of the bargain and with the requisite skill and expertise. One method to ensure satisfaction of reserved and preferred public procurement contracts may be through the doctrine of cession which is widely used in South Africa.

The law has created a new spectrum of proprietary rights for the youth, PWDs & women by dint of their status in society. These rights are exclusive, reserved and can be quantified in economic and monetary value once a procuring entity has authenticated a tender award and issued an LPO or LSO.

Once an enterprise owned by the youth, PWDs or women gets a contract to perform certain obligations for the procuring entity, such an enterprise acquires a right of claim for payment in anticipation by virtue of regulation 33. Consequently in terms of the doctrine of cession in anticipado, the future right to claim payment may be ceded. This way the youth, PWDs and Women owned enterprises (cedent) would retain ownership of the contractual rights but only surrender to a limited degree the ability to enforce those rights.

An agreement to cede would be in writing and a formal document known as the Instrument of Cession will have to be executed. A cession as opposed to delegation or sub-contracting would be the best method to facilitate access to finance and specialist expertise by the youth, women and PWDs who want to benefit from the preferred and reserved public procurement under the new regulations.

Wanderi is the chairman-Kenya Institute of Forensic Auditors (KeIFA)

99 percent of Ugandan contracts over budget


SupplyManagement

2 July 2013 | Adam Leach

Lack of attention to detail and poor market research by buyers are to blame for more than 99 out of every 100 public sector contracts in Uganda last year running over budget, according to the Inspector General of Government.

In its third annual report into corruption within government, the IGG found that the number of procurements that kept to budget had dropped to just 0.7 per cent of those let over the past year. It blamed purchasers for leading to unrealistic estimates of overall costs. The situation also appears to be deteriorating as in 2009, only half of contracts were found to have gone over their original budget.

The report said: “Price increase during execution, through change orders in specifications or cost, may be grounds for corruption. This is a significant red flag of a possible entry point of corruption and calls for integration of risk management into public procurement.”

The report, which covered contracts in 2012, also criticised public sector buyers for taking too long. It found that less than a third of procurements – 29 per cent – were completed when they were supposed to.

Africa needs qualified procurement professionals


Ghana Business News

May 23rd, 2013

Mr Samuel Sellas-Mensah, Chief Executive of the Public Procurement Authority (PPA), has said developing countries need well qualified procurement professionals to manage the challenges in the current global economic environment.

He said: “The current global economic environment, which is evident in high levels of unemployment, increased perceptions of corruption, inadequate hard and soft infrastructure and devastating effects of climate change, makes it imperative for the continent to have well qualified procurement professionals”.

Mr Sellas-Mensah said this when he opened a three-day Chartered Institute of Purchasing and Supply (CIPS) Pan-African Conference in Accra on Tuesday.

The event is under the theme: “The Strategic Role of Procurement Professionals in the Development of Africa.”

He said when public procurement was effectively managed by well qualified professionals, there was bound to be rippling effects that could lead to improvement in the economies of developing countries.

Mr Sellas-Mensah said though most factories in Africa might be as productive as those in China and India, the prices of their goods were normally not competitive due to the poor management of their value chains and the lack of requisite infrastructure.

He said there was the need for investment in the training of well qualified procurement professionals who would be able to eliminate all forms of waste and inject efficiency into their sourcing and acquisition process.

Mr Sellas-Mensah said qualified procurement professionals would provide the continent with efficient, professional, accountable and transparent functions, by using their expertise to negotiate and tap into the global supply chain to fit into the principles of procurement.

He said procurement professionals were able to conduct effective ‘supplier and spend’ analysis that would inform managerial decision and align procurement strategies to organizational goals.

Mr Sellas-Mensah said there was a strong correlation between corruption and bad procurement practices and its debilitating effect on African economies, saying countries practicing effective procurement systems were on the path of curbing corruption.

He said investing in the growth and development of procurement professionals on the continent would be a sure way for Africa to realize its dreams and aspirations.

The Chief Executive of the PPA said his outfit had over the years made some achievements due to the development of new procurement monitoring and evaluation tools, publication of manual to operations of public procurement practitioners and training modules of procurement practitioners and the high ratings by the World Bank.

“Our experiences and achievements for almost a decade can attest to the strategic importance of procurement professionals in national development.

“Since public procurement constitutes 20 per cent of GDP of most developing economies and absorbs 50 per cent of their revenue exclusive of government wage bills, it is believed that the procurement function is critical in delivering both functional and horizontal objectives of any development agenda,” he said.

Namibia: Public Procurement Bleeds Namibia


AllAfrica.com

By EDGAR BRANDT, 2 MAY 2013

Windhoek — Despite a significant increase in public expenditure, public procurement has not brought about the desired outcomes, such as increased employment, improvement in the distribution of economic opportunities, enterprise development and economic growth and development, the Minister of Finance, Saara Kuugongelwa-Amadhila, told a Tender Board meeting held recently in Windhoek.

According to the finance minister the desired outcomes have not been reached for the most part because of leakages out of the economy. “Many tenders are awarded to foreign companies even where local companies have the capacity to perform these tenders. Goods and services procured under these contracts are sourced from outside, and too many expatriates perform work on the projects under these contracts even where locals have the skills to do so. So resources leak out of the Namibian economy as a result of this and opportunities for learning and enterprise development are forfeited,” said Kuugongelwa-Amadhila.

She added that setting tenders aside for local companies and special target groups such as women and youth for economic empowerment could address these challenges.

Additional tools recommended by Kuugongelwa-Amadhila to address these issues include a policy that some tenders should require mandatory sole contracting of Namibian companies and SME‘s, that there should be requirements for local participation in all companies to be awarded tenders and that there should be a mandatory requirement for sourcing of supplies and labour services from within Namibia.

With specific regard to procurement, the finance minister noted there is a significant increase in expectations from the public for the system to help the country overcome the challenges of unemployment and inequities and to support sustainable economic growth. With public expenditure having increased significantly in the recent past, the government’s role in the economy has grown much bigger. “We should also put in place monitoring and evaluation systems to ensure that compliance with bidding commitments are enforced and that the impact of the procurement programmes is evaluated. Companies that fail to honour their bidding commitments should be held to account,” said Kuugongelwa-Amadhila, adding that the current allegations of corruption and court challenges against the decisions of the board do not augur well for the public image of the board.

Also, she encouraged the Tender Board to look at ways to delegate the adjudication of some tenders to state-owned enterprises, local authorities and regional authorities.

She also revealed that a dedicated procurement reform project office has been set up and recruitment of staff is in progress. “The office will help drive the reform process including assisting with the drafting of the regulations for the new (tender) law once passed, and operational guidelines, as well as the setting up of the procurement advisory office and the new secretariat. I encourage the board to ponder on all the challenges and ways and means of overcoming them,” concluded Kuugongelwa-Amadhila.

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