Divide tender pie among SMEs – Katjimune roots for small players

Lawmaker Maximalliant Katjimune says the tender process should benefit more than one company – especially when multimillion-dollar tenders are involved.

“Is it not better that the tendering process and contracts are awarded in such a way that they are divided into smaller amounts and awarded to more companies?” he asked the parliamentary standing committee on economics and public administration yesterday.

Katjimune wants the committee to investigate the challenges of financing small and medium enterprises (SMEs) in Namibia.

The standing committee held a public hearing to investigate the matter yesterday, with Katjimune addressing his fellow lawmakers.

He said more than 70% of SMEs fail “almost immediately after they start’’ due to a lack of funding.

Katjimune wants the parliament to reconsider the procurement awarding system so that it accommodates more than one SME, instead of awarding multimillion-dollar tenders to one individual or company only.

“We recommend that we divide tenders into smaller contracts to allow small companies to compete and to allow greater participation and benefit.

“More often than not we see one company run by two individuals given a tender of N$600 million,” the lawmaker said.

MINOR MILLIONAIRES

The Central Procurement Board of Namibia (CPBN), however, wants the parliamentary committee to investigate whether minors should be able to own companies.

“The pertinent question is whether minors should be permitted, under the Companies Act, to be shareholders in companies,” board chairperson Amon Ngavetene said yesterday.

He was referring to a company of which the five-year-old shareholder scooped a N$1,3-billion medical tender.

The toddler is a 51% shareholder of the company, which has been awarded a government tender to supply pharmaceuticals used in cancer treatment and psychotic disorders.

The contract will span over two years. The parliamentary committee is considering the motion on a comprehensive inquiry into all aspects of the procedures dictating the tender-awarding process.

CONTROVERSY

Ngavetene said the CPBN is not always responsible for all procurement, since thresholds are put in place.

“If it is below N$25 million, be it the procurement of medicines, it goes to the Ministry of Finance and Public Enterprises,” he said.

Last year, minister of health and social services Kalumbi Shangula blamed the Public Procurement Act for the lack of medicine and clinical supplies in public health facilities.

Shangula was questioned on the matter by Popular Democratic Movement parliamentarian Elma Dienda in November.

He previously in the National Assembly said the Public Procurement Act requires the ministry to submit a procurement plan to the finance ministry, outlining pharmaceutical and clinical supplies required by national public health facilities.

The submitted plan is followed by a procurement process managed by the CPBN.

The process, which involves bid evaluations, reconsiderations and performance agreements, can take up to 12 months to conclude.

“It has become clear that the implementation of the Public Procurement Act has significantly impacted the availability of medicines and clinical supplies. “The procurement of medicine in Namibia has become a lengthy and cumbersome process,” Shangula said during yesterday’s National Assembly sitting.

Earlier this year, he said five of the ministry’s bids have been with the board since 2017.

Yesterday, Ngavetene argued the board’s case, saying there are some facts to consider.

“You need to find out the value of the procurement and see if it is sitting with the board or with the public entity.

“For us as a board, we don’t decide on the business needs of a public entity. It is the public entity that would say ‘based on our mandate, based on our role as a public entity, we need to do ABC, and for us to do that this is estimated to cost so much.

“It is outside the threshold, therefore this procurement must be conducted by the board,” he said.

Ngavetene called out the critics of the controversial condom tender who said the board was procuring condoms at a huge cost, while Namibia’s poverty levels are high – highlighting inequality.

“We have been criticised for procuring condoms. But it is not our place to say the ministry of health does not need condoms, while other people are going hungry. That kind of business needs falls within the entity itself,” he said.

Ngavetene said if the public entity can prove it has the funds, then they will “run with it”.

He was referring to a two-year N$650-million government medical supply contract tender won by businessman Shapwa Kanyama’s company, which officially employs three permanent staff members, won this month. This tender was also for the supply of condoms.
This contract is part of the N$2,8-billion batch of health tenders awarded by the board.

“The board does not employ bid evaluation committees. The bid will close. We have a database of more than 300 people who we ask.

“They provide their qualifications and good conduct certificates,” he said.

The board will choose members to serve on this committee to evaluate the bid.

COURT CASES

Ngavetene also referred to the 18 court cases the CPBN won, which looked into previous bids and their procurement processes.
This is out of 28 cases litigated since 2017.

The procurement board also suffered four losses and settled two cases out of court.

A further three matters were withdrawn and one is ongoing.

Meanwhile, Namibia Economic Freedom Fighter Michael Amushelelo also addressed the parliamentary committee yesterday, defending himself against money-laundering claims. He said this was as a result of applying his mind.

“This government needs people with brains. Not people who steal,” he said.

Amushelelo and a co-accused, Gregory Cloete, have been charged with multiple counts of fraud.

The case has been postponed to September.