By PATRICK JARAMOGI
KAMPALA-SHIFTMEDIA- Section 50 (1) of the Public Procurement and Disposal of Public Assets that allows for Preference and reservation. Reads
Subject to the economic and social policies of Government and the international obligations of Government, preference shall be given to domestically manufactured goods and Ugandan contractors and Ugandan consultants, in order to promote their development, by giving them a competitive advantage when competing for public procurement contracts, with foreign manufactured goods, foreign contractors or foreign consultants.
But despite coming into force in 2017, the local contractors have continued to cry foul regarding the awarding of lucrative tenders to foreign firms.
The issue of corruption especially regarding ‘kickbacks’ from unscrupulous government officials has even compounded the problem further.
The issue of bribery continues to cast a dark light regarding awarding of road works projects to local firms.
It has come clear that tenders to Public procurement is very vulnerable to corruption, at least as per findings conducted by the PPDA in its fourth procurement integrity survey.
Faith Mbabazi from PPDA said the survey was geared towards measuring the perceptions of corruption in public procurement.
PPDA conducts procurement or disposal audits to ensure transparency and accountability in public procurement.
“The overall perception index about the existence of corruption in public procurement was 76.1 percent in this survey (4th integrity survey), up from 71.8 percent in the previous survey. The survey revealed that this corruption is majorly in form of bribery followed by inflation of tender costs,”Mbabazi told participants attending the CoST Uganda Chapter Fair Business Practice workshop at Protea Hotel in Kampala.
She noted that the low awareness or lack of courage to denounce corrupt behavior and situations is conducive for corruption.
The survey noted that 20% of respondents reported to have ever paid a bribe. “Out of these, 30 percent of suppliers said they have paid a bribe between 10- 20 percent of the contract value,” said Mbabazi.
At what stage is corruption high?
According to PPDA, the vulnerable stage in Public Procurement is at the bids evaluation stage followed by contract implementation stage.
Mbabazi said the issue of conflict of interest and corruption in the evaluation process through; familiarity with bidders over time, personal interests such as gifts, was another factor fueling corruption in the sector.
She said the issue of forgery of documents, especially completion certificates, income tax clearance, Bid guarantee, Bid security, and Powers of Attorney were still rampant among local firms.
“Majority have been suspended after they were found engaging in forgery,” she said.
Gilbert Sendugwa the Senior Regional Manager Africa, CoST said lack of transparency is a major driver of integrity challenges in delivery of quality infrastructure projects.
Why are local firms still crying foul?
While presenting the preliminary findings of the study conducted from engineers and local firms, Joseph Nyende, a Consultant said most local firms still can’t access the 30% threshold offered under the reservation scheme because they are not ‘organized’.
“Some of the local firms don’t have the capacity, while some still have difficulty handling bid processes,” he said.
He tasked the local firms interested in winning international tenders to form joint ventures, increase capacity in handling bid documentations, boost their financial muscle and acquire equipment.
Solutions have to be found for existing challenges. According to Elizabeth Muhebwa the Executive Director Uganda National Association of Building and Civil Engineering Contractors (UNABCEC) Government should urgently address a number of shortcomings in order to introduce and run effective national provider development programs that promote sustainable construction industry including.
“Government should entrench the national reservation scheme with exclusive thresholds in procurement of works; Shs15 billion for all roads and bridge works and Shs10 billion for all other works be given to national providers, Shs15 billion to Shs45 billion for all road and bridge works and Shs10 billion to Shs15 billion for all other works be given to both national and resident providers,” she said.
Muhebwa proposed that the threshold for Consultancy services in construction be increased to Shs15 Billion. She also called for the establishment of a construction industry development fund at Uganda Development Bank.
She asked the regulatory body (PPDA) to issue guidelines to all Procuring and Disposal Entities (PDEs) on fair determination of bid qualification requirements.
She also recommended that the requirement of team experience be revised from 15 to 8 years to help build experience of most of the qualified Engineering Consultants.
What does the law say?
Under the PPDA 2003 as amended section (50) (2) Roadwork’s worth shs45b and below and other public works worth shs10b and below shall be reserved for local firms. Similarly, the procurement of consultancy worth shs1billion and below and procurement of services whose cost shs200 million and below shall be a preserve for domestic firms, for all government of Uganda funded works and those supported by development partners, expect where contract for funding is limited by the application processes.
PPDA Boss speaks out
According to Benson Turamye the acting Executive Director PPDA, local firms must appreciate that over time tenders awarded to them has been on the increase.
In a recent interview, Turamye said some of the “big” projects are funded through loans and these cant be handled as procurement. “Some big projects come in as bilateral agreements and are thus not subjected to PPDA,” he said.
The works where the local firms are entitled to benefit under the reservation scheme are for tenders offered by the Ministry of Works and Transport, Ministry of Defence, KCCA, Local Governments, Ministry of Water and Environment, and Uganda National Roads Authority (UNRA)