Why capable firms keep losing govt tenders

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A growing number of suppliers are losing government tenders not because they lack capacity, but because of repeated compliance failures, particularly in joint venture structuring and documentation errors.

Public Procurement and Disposal of Public Assets Authority (PPDA) officials say many technically competent firms are being eliminated at the earliest stage of evaluation, long before their technical proposals are assessed, due to avoidable administrative mistakes.

The concerns were raised during a compliance training session held on May 25, 2026, at the Office of the President, attended by about 100 government suppliers.

The session was organised by the Ministry of Kampala and Metropolitan Affairs to strengthen supplier capacity and improve understanding of procurement requirements under Uganda’s evolving public procurement framework.

PPDA said the pattern has become persistent across sectors, with joint ventures emerging as the most vulnerable area.

Preliminary administrative checks

PPDA noted that most disqualifications occur during preliminary administrative checks, which are conducted before technical evaluation begins.

According to the authority, common errors include bid securities issued in the name of only one partner, missing or unregistered joint venture agreements, incomplete documentation on environmental and social safeguards, and unclear designation of the lead partner. In some cases, entire bids are rejected because one requirement has not been met by a single member of the consortium.

Sophia Nassali Masagazi, a legal officer at PPDA, said that in one recent procurement exercise involving seven proposals, five joint ventures were eliminated at the preliminary stage due to administrative weaknesses rather than technical shortcomings.

She said the trend shows that compliance now plays a decisive role in determining who proceeds in the procurement process, warning that joint ventures carry significant legal obligations under the principle of “joint and several liability,” meaning each partner is individually responsible for the full contract.

“It’s like a marriage,” she said.

“If the marriage separates, either party must still complete the contract because the procuring entity can pursue any member for full performance.”

She explained that many suppliers underestimate the legal weight of joint ventures, treating them as informal partnerships rather than binding procurement structures. To qualify, firms must submit a registered joint venture agreement with clear liability clauses, designate a lead partner, and provide valid powers of attorney for all members.

Each partner must also submit full documentation, including certificates of incorporation, tax clearance documents, audited financial statements, work history records, and environmental compliance plans.

Environmental and social safeguards, Nassali added, are mandatory pass-or-fail requirements.

“Non-compliance by any member automatically disqualifies the entire joint venture,” she said.

She added that the trend reflects a broader shift in public procurement, where compliance and documentation precision are increasingly as important as technical ability.

“Technical strength alone is no longer enough. A strong firm can still lose a bid because of a missing document or incorrectly issued security,” she said.

She revealed that this has created a situation where capable firms are repeatedly eliminated, not at the evaluation stage, but during the administrative screening phase.

Regulatory compliance

PPDA urged firms to conduct due diligence before forming partnerships, including assessing the financial strength, litigation history, and regulatory compliance of potential partners.

PPDA identified several recurring errors that continue to undermine joint venture bids, including failure to clearly define the lead partner, inconsistent documentation across member firms, incomplete environmental compliance submissions, and improperly issued bid securities.

The authority also warned that environmental and social compliance requirements are no longer optional considerations but mandatory criteria under Section 63 of the PPDA Act.

These requirements include climate resilience measures, labour standards, gender inclusion, local employment strategies, and community engagement plans.

Foreign firms were specifically encouraged to demonstrate meaningful local participation through subcontracting, skills transfer, and local sourcing.

e-GP system

The introduction of the Electronic Government Procurement (e-GP) system, which becomes fully operational in July, is also reshaping how bids are submitted and evaluated.

Under the system, each joint venture member must register individually, and all required documents, including agreements, powers of attorney, financial records, and bid securities, must be uploaded before submission deadlines.

The system automatically rejects late submissions, unsupported file formats, oversized documents, or incomplete applications.

“Don’t wait for the last minute,” Nassali warned, advising bidders to upload documents at least 48 hours before submission.

PPDA procurement officer Esereda Bakisawa said the training was aimed at addressing persistent gaps in supplier readiness, particularly in electronic procurement systems and environmental compliance.

“We’ve noted gaps in e-GP implementation and supplier environmental management,” she said.

“This initiative is intended to improve bidder capacity so we can work together more effectively.”

She revealed that about 90 percent of contractors and consultants struggle with joint venture formation, adding that continued training is expected to improve compliance levels and bid success rates.

Procurement inefficiencies

Monica Edemachu Ejalu, Undersecretary in the Ministry of Kampala and Metropolitan Affairs, said procurement inefficiencies remain a major barrier to effective service delivery.

“The biggest challenge government faces starts with procurement,” she said, calling for stronger discipline and coordination among suppliers.

She also criticised low attendance at the training, describing it as a sign of weak commitment among some firms.

“We Ugandans must learn to sacrifice for the good of our country,” she said.

On governance, she stressed strict adherence to legal frameworks, noting that accountability requirements remain non-negotiable.

“The law is like a Bible for us,” she said.

Ejalu added that effective procurement is central to national development priorities, including industrialisation, tourism growth, and improved public service delivery.

“It is Government of Uganda succeeding,” she said.