Tough times ahead for blacklisted tenderpreneurs

The government is set to overhaul existing legislation to crack down on individuals whose businesses have fallen into disrepute with the public tender process.

Under the current framework governed by the Public Procurement Act of 2015, a concerning loophole allows the principal officers or beneficial owners of blacklisted companies to sidestep restrictions and create new entities to secure lucrative government contracts.

However, this leniency is about to change as the government prepares to take decisive action.

“The ministry is aware of this weakness in the current law and intends to address it by amending the Public Procurement Act during the 2024/25 financial year,” finance and public enterprises spokesperson Wilson Shikoto said.

Shikoto said as the government focuses on forthcoming amendments, they are actively exploring alternative methods to prevent blacklisted individuals from participating in the public tender process.

“During this interim period, the ministry will actively seek out alternative short-term interventions,” Shikoto said.

Providing false information, engaging in bid rigging, corruption, price fixing, consistent underpricing of bids, confidentiality breaches, misconduct during contract execution, or convictions for dishonesty, fraud or corruption can result in a company being blacklisted or suspended from government tenders.

Institute of Public Policy Research (IPPR) researcher Frederico Links noted a gap in the act where public disclosure requirements for suspended or debarred bidders or suppliers, including their names, addresses, reasons for debarment, and the duration of their procurement ban, have only been consistently applied to companies and not individuals.

He expressed approval at the government’s decision to tackle the loophole, stating that it is long overdue.

“This loophole that exists is longstanding, it is an issue that has a history. Now you are hearing public procurement officers talking about the need to blacklist the people in these companies, not only the companies. It’s a good thing to hear that there might be some amendments to the act and regulations in this regard,” Links said.

Another point raised by Links is the apprehension that public entities’ relevant authorities, including executive directors, ministers, boards, local and regional councils are failing to hold non-performing or transgressing bidders, contractors, or suppliers accountable.

He said these authorities appear to be neglecting to report such individuals or entities to the review panel for potential debarment or blacklisting.

Links said when it comes to the objectives outlined in the Luanda Declaration on public procurement, Namibia is making commendable progress. However, certain concerns persist.

In May this year, government officials and civil society representatives from various Southern Africa Development Community (SADC) nations gathered in Luanda, Angola, for a week-long conference focused on expediting the implementation of specific elements of the United Nations Convention Against Corruption.

These objectives primarily aim to boost transparency within public procurement systems, stimulate citizen demand for accountability in public procurement, fortify institutional oversight of public procurement, elevate professional standards for public procurement officials, and bolster regional cooperation in the management of public procurement.

“While, in general, Namibia looks to be doing well on paper in terms of the Luanda Declaration commitments, it should be noted that compliance and practice remain serious concerns and challenges,” Links said.

The issue of blacklisting companies recently regained prominence after the health ministry last month said it will from now on blacklist companies that fail to execute projects accorded to them within a specified time frame.

PROCUREMENT PLANS

Meanwhile, in the latest IPPR procurement tracker published last month, it is highlighted that out of around 190 entities responsible for public procurement, only 53 have submitted their annual procurement plans to the Procurement Policy Unit within the Ministry of Finance and Public Enterprises.

Responding to this, Shikoto said the ministry understands the full extent of the root causes causing non-compliance.

“The non-compliance to the act is a major concern to the ministry. The law, section 7 of the act in particular, is clear in terms of sanctions to be applied in the event of non-compliance,” Shikoto said.

This might entail referring the accounting officers of non-compliant public entities to their respective appointing authorities, as specified in the act, Shikoto added.