In a move aimed at saving billions of public resources, blacklisted firms will now be deregistered together with their directors and beneficial owners so they don’t disguise themselves as different entities and continue to do business with government.
Attorney General (AG) Thabo Chakaka-Nyirenda confirmed, in an interview on Wednesday, government is aware of deregistered contractors and suppliers who he said connive with procurement personnel in government ministries, departments and agencies to continue enjoying doing business with them after registering new companies.
AG’s warning also comes at the back of the National Construction Industry Council (NCIC) this week deregistering four firms for various misconducts against Section 27 of NCIC Act.
Previously, authorities were only deregistering errant companies, an arrangement some procurement experts observed was an anomaly as it was giving room for the blacklisted companies to register new firms and continue doing business with government.
Said Nyirenda: “We will be taking strict measures, including criminal prosecution, against procurement personnel that connive with the debarred businesses.
“We are now working hand-in-hand with the PPDA [Public Procurement and Disposal of Assets Authority] to have a register of ultimate beneficial owners of the businesses that conduct businesses with government.”
According to the AG, the register will also include names of directors of such companies, adding that the errant businesses will be debarred together with their directors, shareholders or ultimate beneficial owners.
Government is said to be losing over 30 percent of its national budget resources due to fraud and corruption.
PPDA did not respond to our questionnaire the whole of this week despite the organisation’s public relations officer Grace Thipa promising to do so.
Procurement expert Amos Nyambo, who is former board chairperson for Malawi Institute of Procurement and Supply, observed that errant contractors exploit loopholes in the procurement system.
He said the problem is that government does not do vendor-rating, which he described as an important process that requires coordination between the procuring unit and user departments.
Said Nyambo: “MDAs should provide for feedback mechanism on how the suppliers or service providers performed in a given contract to prevent user departments from going back to procurement units after things have gone wrong.”
Nyambo expert added that the law is clear, in Section 56 of the PPDA Act, on how blacklisted suppliers should be dealt with.
Section 56 (1) reads: “The Director General may exclude a supplier, contractor, consultant or any bidder from participation in public procurement for any misconduct prescribed in this Act in accordance with procedures set out in the regulations.”
Some of the grounds for exclusion, as cited in Section 56 (2), include refusal by a successful bidder to sign a procurement contract or furnish a performance security in accordance with the terms of the bidding documents, supplying false information in its bid and collusion between the bidder and a public official pertaining to the bidding process.
Other grounds include collusion among bidders aimed at fixing prices at artificial and non-competitive levels and conviction of an offence under the Corrupt Practices Act or the Financial Crimes Act, or breach of contractual obligations.
“The law is clear but, perhaps, what is needed is to make this information available. Perhaps, with the coming in of e-procurement, such names or companies would already be in the system so that it automatically rejects the processing of procurement of blacklisted suppliers,” Nyambo said.
NCIC acting chief executive officer (CEO) Gerald Khonje said in an interview the council is aware of the demand for assessing the performance of players in the construction industry and as such it has introduced Infrastructure Projects Technical Audit Services.
He said, on its part, NCIC monitors the conduct and compliance of contractors and consultants in line with Code of Ethics for Consultants in Construction Industry.
“Those that breach the Code of Ethics are taken through a disciplinary process and if found guilty are suspended or deregistered,” he said.
The recently deregistered persons and their companies are Version Hau, trading as Mvaye building and civil contractors; Owings Chawanda; trading as Shimmering Towers Construction; Sailosi Fredson Malunga, trading as Vafosha Construction and Innocent Chapita, trading as Wiprom investments.
A press release signed by Khonje stated that the firms were found guilty of falsifying or permitting misrepresentation of one’s qualifications contrary to General Rules of Practice3 (a)of the Codes and Ethics for Contractors as well as engaging oneself in deceptive acts contrary to Fundamental Principles 5 of the Codes of Ethics for Contractors.