PPDA suspends three over fake bid security

Jul 13, 2013

The Public Procurement and Disposal of Public Assets Authority (PPDA) has suspended three local firms and their directors from participating in public procurement and disposal activities in Uganda.The trio has been suspended for submission of forged bid security documents purportedly issued by comm

By BILLY RWOTHUNGEYO

The Public Procurement and Disposal of Public Assets Authority (PPDA) has suspended three local firms and their directors from participating in public procurement and disposal activities in Uganda.

M/s Rotaj Enterprises Limited has been suspended for five years. M/s Pearl Shelter Promoters (U) Limited has been blacklisted for two years while M/s Kaaya L. Enterprises Limited was slapped with a one year ban.

The trio has been suspended for submission of forged bid security documents purportedly issued by commercial banks.

All the suspensions were effective June 20.

In the duration of the suspension, the directors of the suspended companies are excluded from participating in any public procurement of disposal proceedings for the period of the suspension in accordance with PPDA regulation 351 (3) (a).

A bid security is a commitment fee that firms pay when bidding for a contract.

It acts as a fallback position for procuring and disposing entities in the event that a successful bidder abandons a contract upon its award. These securities are usually issued by banks.

In a letter to the Uganda National Roads Authority (UNRA), PPDA executive director Cornelia Sabiiti said the suspension applies to the affiliates of the implicated firms.

“The above suspension applies to any successor in interest, which includes any entity that is substantially similar to a suspended entity or which employs or is associated with a partner, member, officer, director, responsible managing officer or responsible managing employee of a suspended business entity in accordance with PPDA Regulation 351 (3) (c),” she said.

Upon the expiry of the duration of the suspension, the firms are free to apply to the procurement regulator and ask to be struck off the blacklisted providers’ list.

The woes of the three firms started last November when the PPDA received a recommendation from UNRA for action following unethical action in the bidding process for the emergency replacement of collapsed bridges at Ntungwe on the Katunguru-Ishasha road and Mitaano on the Rukungiri-Kanungu road.

PPDA then instituted an investigation into the matter and the firms under the spotlight were invited on November 23 and January 29, 2013 to attend a hearing in respect to the above allegations.

However, none of them responded.

A final chance for the companies to tell their side of the story was extended to them on April 5.

Wide spread vice

With the volumes of public procurements increasing over the last decade, doing business with the Government has become lucrative.

In a bid to win highly competitive bids, many local enterprises have resorted to forgery of documents.

By September last year, PPDA had suspended 37 companies, along with their directors. Of these, 23 were apprehended for forging bid securities.

They were all recommended for suspension by the Ministry of Education and Sports.


 

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