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New tendering procedures most welcome
2006-01-18 07:29:39
By Editor
The government, through its Public Procurement Regulatory Authority (PPRA), is intending to reform some of the current rules and regulations governing the business of public procurement.
The move proposes a waiver of the compulsory financial bond with a view to allowing more stakeholders to take part in tenders.
We consider this new procedure as part of a strategy that objectively looks at positive actions for bringing the indigenous empowerment process into real swing.
It is common knowledge that even after implementing major surgery on the notoriously opaque public procurement procedures, which for years were believed to be the source of corruption, the issue of tender security has remained contentious.
Local firms, especially the start-ups, and those of medium scale, without strong financial clout, found themselves blocked from what was supposed to be a competitive tendering process, simply because they cannot meet the bid securities.
As a result, the majority of fat tenders have mostly sailed into the hands of foreigners, even for the ones for which local capacities are competently and amply available.
For instance, put aside tenders for some civil works which might need evidence about the strength of capital and equipment assurances, a number of tasks of the consultancy character basically require the technical competency of the bidders rather than the financial muscle.
By trying to do away with the tender security issue, the public procurement process will most likely become more competitive as more local firms or individuals would qualify to bid on the basis of their experience and partnership strengths.
Much more importantly, such reforms would also bring about fairness in tendering procedures for an increased number of small and medium companies are expected to compete for domestic tenders.
However, for such outcomes to be realized, foreigners, often with the cash power, should be required to raise their bid securities.
At the same time, in order to avoid rocking the boat, harsh punishment for those who might attempt to flout the tendering procedures must be put into place.
In the past, if a bidder contravened the tendering rules and regulations, the security bid would be forfeited.
For the envisaged new tendering arrangements, such bidders should be suspended for a defined period of time.
About 75 percent of the development budget goes to financing infrastructure projects whose tenders are, with very limited exceptions, taken up by foreign companies.
Such mega projects carry with them lucrative consultancy assignments that can comfortably be carried out by local firms.
One could go a mile further and suggest tasks be exclusively given to local consultants, or foreign bidders must enter into partnership with them while bidding for the tenders.
These suggestion are attempting to ram home the message that the empowerment process has to be carried over to an affirmative stage by manipulating the existing environment to our favour.
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