More firms suspended from public procurement activities

By Billy Rwothungeyo

The list of firms suspended from public procurement and disposal activities in Uganda has risen to 121 as the sector regulator steps up its fight against forgery.

The latest list of the suspended providers released by the Public Procurement and Disposal of Public Assets Authority (PPDA) includes firms and individuals suspended by the World Bank.

The firms are listed on the PPDA website.

The firms suspended by the Bretton Woods institutions (World Bank and International Monetary Fund) are M/s Energo (Uganda) Company Limited, M/s B.V.S Construction Limited, Mr. Jayaram Reddy (director of M/s B.V.S Construction Limited, M/s Nexus Uganda Limited and Rogers Segawa (director of M/s Nexus Uganda Limited).

During the suspension period, all procuring and disposing entities (PDEs) are barred from awarding contracts, issue solicitation documents or solicit bids from the companies and individuals.

Entities are also not supposed to enter into any other dealings or communication with the suspended companies except for existing contracts signed prior to the suspension.

Why the rising forgeries?

The majority of the suspended companies have been sanctioned for submitting forged documents, a major vice in public procurement and disposal in Uganda. The biggest chunk of the forged documents are fake bid securities.

A bid security is a commitment fee, paid by bidders as a guarantee that upon being awarded a tender, the contractor shall not deviate from the terms in a contract, such as price and specifications. These securities are usually issued by commercial banks.

In a bid to reduce the cases of forged bid securities, the amended PPDA law, which came into force last year, gave bidders a chance to use bid securing declarations, as opposed to a bid securities; to be used in the case of restricted bidding.

A bid securing declaration, on the other hand, is a written commitment by a bidder that they will abide by the terms and conditions of a contract.

The introduction of bid securing declarations was fast-tracked after commentators in the public procurement sphere argued that companies are compelled to forge bid securities because they are too costly.

So, why then, are firms still forging bid securities? John Etidau, the chairman of the Institute of Procurement Professionals of Uganda (IPPU), argues that the private sector has not been sensitised enough about the alternative way of securing a bid.

“The entities have not encouraged the use of the bid securing declaration. Some bidders have no idea about this provision that would save them from the pain of getting a bid security,” he says.

Etidau says PPDA and the PDEs from across the country should ramp up sensitisation efforts in this regard.

Vincent Mugaba, PPDA’s senior public relations officer, says dishonesty is the reason why many firms try to “cut corners.” “

Some of these companies simply do not have the capacity to undertake these tenders. They want to dupe us.”

Mugaba says the authority is ramping up sensitisation efforts to improve awareness about issues pertaining public procurement in the country.

“We are having training workshops throughout the country. Last week, we were in Jinja, next week, we shall be in Fort Portal. We are also holding talk shows on media platforms throughout the country.”

Other forgeries include submission of fake completion certificates, income tax clearances and manufacturers’ authorisations.