‘Uganda’s procurement sector
Jun 15, 2011
ABEBE Contractors, a medium civil engineering firm, is on the verge of collapse. Started five years ago, the firm has failed to make a mark in the lucrative procurement sector dominated by foreign and local big companies.
By Morris Opira
ABEBE Contractors, a medium civil engineering firm, is on the verge of collapse. Started five years ago, the firm has failed to make a mark in the lucrative procurement sector dominated by foreign and local big companies.
This situation prevails almost 10 years since the Public Procurement and Disposal of Assets Authority (PPDA) Act of 2003 was enacted.
However, industry players explain that a lot has since happened, and the sector seems to have taken root and is heading in the right direction despite some challenges.
They cite reforms that have taken place to make the sector more transparent and, hence ensure value-for-money on projects. This has brought about the more-than-moderate growth of the sector.
Phillip Wagamala, a procurement consultant at UPIMAC Consultancies, notes that for the sector to grow evenly, all players must be treated equally. He, for example, calls for waivers to give small and medium firms an opportunity to win government jobs.
Wagamala says big companies should not be allowed to bid for small projects in district.
“This will give a chance to local firms in the districts to get jobs.
“Why should a big Kampala firm bid for a small project in Busia when they are firms in the district that can do it?†he wondered.
He claims that sometimes government departments advertise for projects “as a formality when they already know the companies they will award the tender.â€
According to Dorah Egunyu, the PPDA spokeswoman, transparency in the sector can be witnessed in the way tenders are advertised openly through different media.
This, she argues, has enabled eligible bidders to know about the different opportunities from across the country. Egunyu adds that the bidders have confidence in the law because PPDA is transparent when doing its supervisory and arbitration roles. “We have, however, identified the loopholes in the law, leading to the new Amendment Act 0f 2010 that is currently before Parliament.â€
PPDA has also helped in the creation of an online register of providers.
Collin Mpaata, an official at the Institute of Procurement Professionals of Uganda, however, says there is need of a practitioners Bill, meaning that for a procurement professional to practice, they must have been certified by a professional body.
He notes that in Kenya and Tanzania one cannot practice unless they are certified by their professional body.
Egunyu notes that PPDA has enforced the law to the letter, penalising contractors who abandon or delay projects through suspension or paying fines that would ensure contract is completed.
Dan Alinange, the Uganda National Roads Authority (UNRA) public relations officer, observes that the Uganda procurement sector is growing steadily, but that there are issues to be addreessed.
“About 10 years ago, we barely had procurement professionals in the country. But today, each district and government department has a procurement official. The teaching of procurement at universities and colleges has greatly boosted the industry,†Alinange says.
These (professionals) have enhanced accountability in the procurement sector, he argues.
Alinange, though notes that the current law has been abused by malicious contractors, especially in the road sector. He explains that the administrative review provided for in the PPDA Act delays projects because of anybody can petition PPDA.
“A contractor will pay sh1m required after losing a tender, even when they were the last, and delay a sh100b project. This must be rectified because Ugandans want services and should not be delayed by selfish people,†he argues.
He says some contractors seek PPDA arbitration because they want to show their partners abroad that the Ugandan procurement sector is not transparent. He adds that the sector also has a challenge of quacks, who are threatening the profession.
Alinange appeals to the institute and PPDA to handle the issue of quacks seriously because public money is being lost.
On whether the sector favours bigger contractors over the small firms, Alinange says it would not make sense to award a contract to a company that lacks essential technical capacities, funds and managerial skills. He pointed out that UNRA is, for example, helping local contractors to build their competences, managerial skills and how to draft winning bids.
He observes that most of the major road projects are taken by foreign firms like the Chinese because Ugandan firms cannot handle them since they lack the required competences.
Alinange also accuses the financial sector of letting down the procurement industry by refusing to offer guarantees to local firms to undertake big projects.
However, PPDA needs to put in place tight laws, especially on administrative reviews, enacted laws that suit the electronic era and sensitise people to report the corrupt offficials.
ABEBE Contractors, a medium civil engineering firm, is on the verge of collapse. Started five years ago, the firm has failed to make a mark in the lucrative procurement sector dominated by foreign and local big companies.
This situation prevails almost 10 years since the Public Procurement and Disposal of Assets Authority (PPDA) Act of 2003 was enacted.
However, industry players explain that a lot has since happened, and the sector seems to have taken root and is heading in the right direction despite some challenges.
They cite reforms that have taken place to make the sector more transparent and, hence ensure value-for-money on projects. This has brought about the more-than-moderate growth of the sector.
Phillip Wagamala, a procurement consultant at UPIMAC Consultancies, notes that for the sector to grow evenly, all players must be treated equally. He, for example, calls for waivers to give small and medium firms an opportunity to win government jobs.
Wagamala says big companies should not be allowed to bid for small projects in district.
“This will give a chance to local firms in the districts to get jobs.
“Why should a big Kampala firm bid for a small project in Busia when they are firms in the district that can do it?†he wondered.
He claims that sometimes government departments advertise for projects “as a formality when they already know the companies they will award the tender.â€
According to Dorah Egunyu, the PPDA spokeswoman, transparency in the sector can be witnessed in the way tenders are advertised openly through different media.
This, she argues, has enabled eligible bidders to know about the different opportunities from across the country. Egunyu adds that the bidders have confidence in the law because PPDA is transparent when doing its supervisory and arbitration roles. “We have, however, identified the loopholes in the law, leading to the new Amendment Act 0f 2010 that is currently before Parliament.â€
PPDA has also helped in the creation of an online register of providers.
Collin Mpaata, an official at the Institute of Procurement Professionals of Uganda, however, says there is need of a practitioners Bill, meaning that for a procurement professional to practice, they must have been certified by a professional body.
He notes that in Kenya and Tanzania one cannot practice unless they are certified by their professional body.
Egunyu notes that PPDA has enforced the law to the letter, penalising contractors who abandon or delay projects through suspension or paying fines that would ensure contract is completed.
Dan Alinange, the Uganda National Roads Authority (UNRA) public relations officer, observes that the Uganda procurement sector is growing steadily, but that there are issues to be addreessed.
“About 10 years ago, we barely had procurement professionals in the country. But today, each district and government department has a procurement official. The teaching of procurement at universities and colleges has greatly boosted the industry,†Alinange says.
These (professionals) have enhanced accountability in the procurement sector, he argues.
Alinange, though notes that the current law has been abused by malicious contractors, especially in the road sector. He explains that the administrative review provided for in the PPDA Act delays projects because of anybody can petition PPDA.
“A contractor will pay sh1m required after losing a tender, even when they were the last, and delay a sh100b project. This must be rectified because Ugandans want services and should not be delayed by selfish people,†he argues.
He says some contractors seek PPDA arbitration because they want to show their partners abroad that the Ugandan procurement sector is not transparent. He adds that the sector also has a challenge of quacks, who are threatening the profession.
Alinange appeals to the institute and PPDA to handle the issue of quacks seriously because public money is being lost.
On whether the sector favours bigger contractors over the small firms, Alinange says it would not make sense to award a contract to a company that lacks essential technical capacities, funds and managerial skills. He pointed out that UNRA is, for example, helping local contractors to build their competences, managerial skills and how to draft winning bids.
He observes that most of the major road projects are taken by foreign firms like the Chinese because Ugandan firms cannot handle them since they lack the required competences.
Alinange also accuses the financial sector of letting down the procurement industry by refusing to offer guarantees to local firms to undertake big projects.
However, PPDA needs to put in place tight laws, especially on administrative reviews, enacted laws that suit the electronic era and sensitise people to report the corrupt offficials.