Corrupt firms face five-year ban

COMPANIES found guilty of corrupt acts such as bribery, price-fixing or other illegal practices while bidding for government contracts could face a fine of N$5 million and/or a ban of up to five years, according to the new procurement regulations.

These penalties form part of the punitive arsenal of the newly implemented Public Procurement Act of 2015, which aims to improve efficiency and transparency, and to clean up the public procurement system which has been plagued by corruption for many years.

Finance minister Calle Schlettwein filed the public procurement regulations at the justice ministry in February, ahead of the launch of the Central Procurement Board at the beginning of April this year.

According to the procurement law, a company will be banned if it is found guilty of “misconduct relating to the submission of bids, including corruption, bid rigging, price fixing, under-pricing bids, breach of confidentiality, misconduct relating to the execution of procurement contracts, or any other misconduct relating to the responsibilities of the bidder or supplier”.

A company will also be banned, the law states, if it provides false information, or directly or indirectly offers improper inducements to influence a tender process or the implementation of a state contract.

Furthermore, the law states, a person or company found guilty of misconduct faces a fine of anything up to N$5 million, or imprisonment for a period not exceeding 10 years, or both.

The fine and imprisonment exclude the ban of up to five years, which is stipulated by the new regulations. A ban or suspension means the Central Procurement Board or any state body would not be allowed to request or accept bids, proposals or quotations from that company.

The regulations state that a public entity could recommend to the Review Panel – which is also created under the procurement law – that a company be punished with a ban. Also, the alleged corrupt firm should be reported to the Anti-Corruption Commission, the rules state.

The Review Panel would then consider whether the company should be penalised as per the request, and would then inform the company of such a decision, including the period of the ban.

According to the regulations, the Review Panel should issue a decision within 60 days of receiving a recommendation to ban.

“The suspension or debarment proceedings are conducted in such a manner as the Review Panel may consider most suitable. The Review Panel may call for oral evidence to be made by the parties to the suspension or debarment proceedings,” the rules state.

The regulations furthermore state that the Review Panel must keep records of how a decision to ban a firm was reached, and that aggrieved companies can appeal the ban within seven days of being informed of the decision of the panel.

The Review Panel is chaired by Kenandei Tjivikua.

Any state entity may request that an implicated company be blocked from taking part in state contracts while an application to have it banned is being considered, regulations state. This clause has already raised concerns that some state entities might use it to discredit companies by reporting them to the Review Panel in order to exclude them from taking part in state contracts.

Tjivikua told The Namibian on Saturday that procedures were in place to ensure fairness, and that accused parties would get the opportunity to explain themselves.

Government, through its procurement, is the largest player in the Namibian economy.

Even though this new law was born during former President Hifikepunye Pohamba’s last term, the fresh tender rules add a laudable legacy to President Hage Geingob’s administration.

The regulations state that a Review Panel decision to ban or suspend a company must be published on the website of the Policy Unit or elsewhere to inform all public entities that a firm has been banned from participating in state tenders.

The Policy Unit – also a creation of the new law – will be obliged to keep a register of bidders or suppliers banned by the state, which should be open to the public for inspection.

In addition, “a public entity must publish on its website and in any other print media widely circulated in Namibia a notice of every procurement, together with the executive summary of the bid evaluation report, within seven days of the procurement award”.

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