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PROPOSED AMENDMENTS TO THE PUBLIC PROCUREMENT ACT, 2015 (NO. 15 OF 2015)

Ministry of Finance

2021/03/03

PROPOSED AMENDMENT TO THE ACTIDENTIFIED SECTIONS LACUNA/ PROBLEM PROPOSED AMENDMENT

1. Title of the Act The Act reads as the Public ‘Procument’Act. The letters “re” have been omittedand as such the word Procurement hasnot been correctly spelled.

The title on each page of the Act must beamended to read as Public ProcurementAct, 2015.

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PROPOSED AMENDMENT TO THE ACT CONT’…IDENTIFIED SECTIONS LACUNA/ PROBLEM PROPOSED AMENDMENT

2. Section 1:

“Accounting Officer”: In this Act, unless thecontext otherwise indicates,accounting officer means accountingofficer of a public entity

While Section 74(1) reads:

An accounting officer may delegate orassign to a staff member any powers orfunctions conferred upon or imposed onthe accounting officer by or under this Act,except the power to issue contractawards, sign agreements and appointingor recommending staff members forappointment to procurement committee,bid evaluation committee or procurementmanagement unit.

The current definition does not provide foran acting Accounting Officer. If one readsthe definition in Section 1 of AccountingOfficer together with Section 74 (1) ondelegation, it means that an ActingAccounting Officer cannot carry out thetasks required of an Accounting Officer asper Section 74(1) which include thefollowing:

• power to issue contract awards,• sign agreements, and• appointing or recommending staff

members for appointment toprocurement committee, bid evaluationcommittee or procurementmanagement unit

Section 1: In this Act, unless the contextotherwise indicates – “accounting officer”means the substantial accountingofficer or any person acting withcompetent authority as determined bythe board of the Public Entity or theAccounting Officer of a public entity;

In addition to this, and in line with Section2 of the Act which promotes efficiency, anActing Accounting Officer will also notalways be available. In this regard,Delegation of some of these tasks havebeen proposed in respect of small valueprocurement. [Discussions are welcome]

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3. Following further definitions to be inserted in Section 1.

The lack thereof has created ambiguityand challenges in some respects.

Proposed Definitions:a) “Days”” to mean working days

b) “Affirmative Action” as per theAffirmative Action Act 29 of 1998

c) Debarment

d) Suspension

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4. Section 11(1) & (2)

11. (1) The Board consists of nine members - (a) ofwhom not more than five may be of the samesex; (b) who are suitably qualified fit andproper persons having knowledge andexperience relevant to the functions of theBoard; and (c) appointed by the Ministerafter an open, fair and transparentprescribed process of invitation, interviewand recommendation by a recruitmentcommittee.

(2) The Minister must appoint, from among thenine members of the Board appointed undersubsection (1), two members of whom onemust be a female on a five year full-timebasis to serve as –

(a) Chairperson and Deputy Chairperson; and(b) administrative head and deputy

administrative head, of the Board,respectively, and the Chairperson serves asthe accounting officer of the Board.

.

The current interpretation of the Section 11(2)(a)and (b) speaks of two separate functionaries.However, they are currently vested in oneperson, which creates a serious governanceissue.

The Chairperson of the Board will be separatefrom the Administrative Head.

Out of the nine Board Members, the Minister willappoint two to serve as the Chairperson andDeputy Chairperson of the Board.

Additionally, the Minister will appoint separatequalified persons to serve as the AdministrativeHead and Deputy Administrative Head of theCentral Procurement Board. The AdministrativeHead shall be referred to as the Chief ExecutiveOfficer of the CPB. Will serve for a period of fiveyears.

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5. Section 20(4)

Money received by way of a donation forthe benefit of the Board may beadministered on such conditions as maybe agreed on between the donor and theBoard.

This exposes the Board to possibleconflict of interest.

Public scrutiny or public’s perceptions ofbias, where the donor is one of thebidders on one of the contracts to bepresided over by the Board. Transparencyissues are raised.

It has been proposed that the entiresection be deleted.

An alternative option to read as follows:

Money received by way of a donation forthe benefit of the Board must bechannelled through the Ministry ofFinance. [Discussions welcome from Management.]

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PROPOSED AMENDMENT TO THE ACT CONT’…

IDENTIFIED SECTIONS LACUNA/ PROBLEM PROPOSED AMENDMENT

6. Section 21 (2)

(2) The Secretary of the Board mustensure that-

(a) all money received by or on behalf ofthe Board is deposited into its bankaccount as soon as practicable afterbeing received;

(a) a payment by or on behalf of theBoard is made from its bank account;and

(a) money is not withdrawn, paid ortransferred from its bank accountwithout the authority of the Board.

In term of section 11(2)(b) the chairpersonserves as the accounting officer of theboard.

Therefore, the responsibility conferred to the secretary under section 21 (2) (a) and (b) (c) are the core functions of the accounting officer.

The accounting officer is responsible forthe sound management of the board andthus takes accountability should there beirregularities with the accounting affairs ofthe board.

While section 21(2) talks of a secretary ofthe board, there is no enabling sectionwhich talks to the appointment of asecretary of the board.

Therefore, the need to amend section21(2)

By deleting the word “Secretary of theBoard” and substituting it with “TheAccounting Officer”.

*This role to be that of the AdministrativeHead once the Act is amended.

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IDENTIFIED SECTIONS LACUNA/ PROBLEM PROPOSED AMENDMENT

7. Section 21(3)

Cheques drawn on the bank account ofthe Board, or any other form or documentto be completed for the withdrawal,payment or transfer of money from any ofthe bank accounts of the Board, aresigned on behalf of the Board by twopersons authorised for that purpose bythe Board.

The term “ two persons” create ambiguity.Who are these two persons? It furtherraises accountability issues.

New Section to read as follows:

Money drawn on the bank account of theBoard, or any other form or document tobe completed for the withdrawal, paymentor transfer of money from any of the bankaccounts of the Board, are signed onbehalf of the Board by the AdministrativeHead and the Chief Financial Officer.

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IDENTIFIED SECTIONS LACUNA/ PROBLEM PROPOSED AMENDMENT8. Section 25(4)(a)

An Accounting Officer must:- Engage in procurement planning, plan

each step of the procurement processand prepare annual procurement plan.

The Act and the regulations thereto, statethat the Accounting Officers of publicentities should file their annualprocurement plans with the ProcurementPolicy Unit, however there is no datestipulated. This has created discrepancy inthat some entities submit their annualprocurement plans on time while othersnot.

Its therefore proposed that each publicentity must submit their AnnualProcurement plan 3 months before thecommencement of the new financialyear.

Therefore, a proposal to amend section25(4)(a) to read:

“An Accounting Officer must:

Engage in procurement planning, planeach step of the procurement process andprepare an annual procurement plan to besubmitted to the Procurement Policy Unit3 months before the commencement ofthe new financial year.” [Input welcomefrom Management]

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9. Section 25(4)(b)

An accounting officer must certify theavailability of funds before thecommencement of each procurementprocess;

Certifying that funds are available is notsufficient. One must ensure that thesefunds remain available for the intendedcontract.

To be amended as follows:

“An accounting officer must certify theavailability of funds before thecommencement of each procurementprocess and ensure that these fundsremain committed for the duration ofthe contract;”

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10. Section 27(1)(a)Choice of Procurement Methods

(1) Subject to subsection (2), the choice ofprocurement methods available to theBoard or a public entity is

(a) for the procurement of goods, worksand non-consultancy services, by -

(i) open advertised bidding;(ii) restricted bidding;(iii) request for sealed quotations;(iv) direct procurement;(v) execution by public entities;(vi) emergency procurement(vii) small value procurement;(viii) request for proposals; and(ix) electronic reverse auction;

There is currently a need to allow publicentities to enter into frameworkagreements with suppliers forgoods/services needed on a regular basiswithout always having to start a newprocurement process.

Examples: Flight tickets. A public entitycan enter into a framework agreement fora certain period of time e.g 2 years with atravel agent to deal with flights etc. Makesoperations easier especially in cases ofemergencies.

A new method to be added:

(x) procurement under framework agreement

Requirements to be as follows:(1) For the purpose of efficiency gains, a public entity mayengage in prescribed types of framework agreements inaccordance with the prescribed procedures, where it isdetermined that –(a) the need for the subject matter of procurement isexpected to arise on an indefinite or repeated basis duringa given period of time within a public entity or acrosspublic entities; or(b) by virtue of the nature of subject of procurements, theneed for it may arise on urgent basis during a given periodof time.

(2) A public entity must record the reasons andcircumstances upon which it relied to justify the use of theframework agreement and the type of frameworkagreement used.

(3) The framework agreement must be entered into fromthree suppliers.

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11. Section 33(3)Emergency procurement

33(3) For the purposes of this section,“emergency”, includes a situation where –

(a) the country is either seriously threatened byor actually confronted with a natural disaster,catastrophe, or war;

(b) life or the quality of life or environment maybe seriously compromised; or

(c) the condition or quality of goods, equipment,building or publicly owned capital goods mayseriously deteriorate, unless action is urgentlyand necessarily taken to maintain them in theiractual value or usefulness.

Emergency procurement is anti-competitive.There is a need to curtail emergencyprocurement and the current Act does notprohibit self created emergency.

Section 33(3) to be amended as follows:

“(3) For the purposes of this section,“emergency”, refers to a condition giving rise tourgency were neither under the control nor due tothe negligence of the procuring entity and theurgency could not have been forseen, andincludes a situation where -

(a) the country is either seriously threatened by oractually confronted with a natural disaster,catastrophe, or war;

(b) life or the quality of life or environment ornational interest may be seriously compromised;[or] and

(c) the condition or quality of goods, equipment,building or publicly owned capital goods mayseriously deteriorate, unless action is urgentlyand necessarily taken to maintain them in theiractual value or usefulness

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12. Section 50(2)

50. (1) The Board or a public entity must ensure that nodisqualified bidder or supplier is permitted to receive aprocurement contract or otherwise participate inprocurement proceedings.

(2) A bidder or supplier is disqualified from bidding ifsuch bidder or supplier –

(a) is not in good standing with the Receiver of Revenue;(b) is not in possession of a valid certificate of goodstanding with the Social Security Commission or, in thecase where a company has no employees, confirmationletter from Social Security Commission;(c) is not, as required by the Affirmative Action(Employment) Act, 1998 (Act No. 29 of 1998), inpossession of -(i) a valid affirmative action compliance certificate issueunder section 41 of that Act;(ii) an exemption issued under section 42 of that Act; or(iii) a proof from the Employment Equity Commissionerthat the bidder or supplier is not a relevant employer asdefined in that Act; or(d) has not submitted a written undertaking ascontemplated in section 138(2) of theL b A t 2007

1. Currently the Bidding Documents requireCompany Registration as a mandatorydocument (where applicable). However, the Actdoes not list this as a disqualifying factor.

2. In respect of International bidders, themandatory documents do not apply. Issues ofpaying tax become a challenge. To address thisissue, Namibia will require of internationalbidders to open a bank account in Namibia as aprecondition to signing a contract of award. Tax,National Liquidity issues.

Section 50(2) to be amended by thefollowing new additions:

(e) is not in possession of a validapplicable certificate of registration

(f) In cases of international companies, thefollowing pre-condition will apply: Uponsigning the contract of award, the biddermust have opened a Bank Account inNamibia. [Discussions welcome]

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13. Section 52(9)

Every bid is evaluated according to thecriteria and methodology set out in thebidding documents and the evaluatedcost of each bid is compared with theevaluated cost of other bids to determinethe most economically advantageous bid.

Several public entities only compare thecosts of bids but not the qualification ofthe bidders and often even do not preparea respective scoring matrix.

Entire section 52(9) be replaced with thefollowing:

“Every bid is evaluated according to thecriteria and methodology as well as thecosts of each bid and compared with otherbids to determine the most advantageousbid”

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14. Section 55Several new subsections to be inserted

under section 55

14.1. Section 55(4)(b)

An accounting officer must, in theprescribed manner and form, notify-

(a) the successful bidder of theselection of its bid for award; and

(b) the other bidders, specifying thename and address of the successfulbidder and the price of the contract.

Bidders are currently not briefed on theevaluation criteria during the 7 daysstandstill period and thus are not able toproperly challenge the public entity’sintended selection for award. It is crucialthat bidders have access to suchinformation from the onset in order tochallenge such decision.

Section 55(4)(b) to read as follows:

(b) the other bidders, specifying the nameand address of the successful bidder andthe price of the contract, accompanied bythe Executive Summary of the BidEvaluation Report.

Furthermore, new Section 55 (5) to beadded immediately after the currentsection 55(4) and will read as follows:An unsuccessful bidder may apply to theBoard or public entity to reconsider itsselection for award within 7 days of thenotice referred in subsection (4) and theBoard or public entity must inform thebidder within 14 days on its final decision.

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14.2. -> Section 55(5)

(5) In the absence of an application for reviewby any other bidder within 7 days of thenotice referred to in subsection (4), theaccounting officer must award the contractto the successful bidder.

Section 55 (5) introduces a standstill period of 7days within which a contract may not be awarded.This is to allow bidders to challenge theprocurement process.

However Public entities are currently signingcontracts during the standstill period because ofSection 59(2) which states that the application forreview does not suspend the award of a contract.Public entities also do this knowing that once acontract has been signed, the Review Panelcannot set it aside because of Section 60 (c)which prohibits the Review Panel from settingaside decisions that bring a contract into force.

Currently Bidders bring review Applications beforethe Review Panel at a cost, however the ReviewPanel cannot set aside contracts already signed.

A new subsection (6) is to follow the newproposed subsection (5) and will read as follows:

Section 55(6)An accounting officer shall not sign anyagreement or contract during the standstillperiod. Any agreement or contract signedduring the standstill period is void ab initio.

The current subsections (5), (6), (7) and (8) willmove down and become subsection (7), (8), (9)and (10) respectively.

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14.3. Section 55(5)*To become the new section 55(7)

(5) In the absence of an application forreview by any other bidder within 7days of the notice referred to insubsection (4), the accounting officermust award the contract to thesuccessful bidder.

In the proposed amendments, it should beclearly stated that there are two forms ofreview procedures. The first one beingbefore the Public Entity, and secondly theone before the Review Panel. Currentlybidders flock to the Review panel withoutnecessarily having to exhaust internalremedies such as seeking clarification fromthe pubic entity.

New subsection (7) to read as follows:

5) In the absence of an application forreconsideration by any other bidder within7 days of the notice referred to insubsection (4), the accounting officer mustaward the contract to the successfulbidder.

*This will make the process easier as some publicentities may rectify their mistakes and will thus decreasethe number of applications to be brought before theReview Panel.

The word “review” to be replaced by the word“reconsideration” as the public entity must firstreconsider its decision before a bidder takes it to theReview Panel.

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15. Section 59 (1)

(1) A bidder or supplier may, asprescribed, apply to the Review Panelfor review of a decision or an actiontaken –

(a) by the board; or(b) by a public entity

for the award of a procurement contract.

The wording “for the award of aprocurement contract” that comes after (b)must be deleted and be replaced with newwording.

It should come out clearly that anunsuccessful bidder must first apply to theBoard or public entity to reconsider itsdecision. Once the public entity reverts, thebidder must then approach the ReviewPanel for a review application within a setperiod of time after the decision taken bythe Board / Public entity.

New wording to be as follows:

within 7 days after having received adecision of the Board or public entityregarding the application to reconsiderthe selection for award

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16. Section 59 (2)

(2) An application for review made interms of subsection (1) does not suspendthe award unless an application has beenmade and resolved in favour ofsuspension.

The Application for review is done duringthe standoff period. During the stand ofperiod the Board or a public entity has notyet awarded the contract, only a decisiontaken to award. This section gives aninterpretation that an award can be madeduring a standoff period. However, once anaward is made by signing the contract thereview panel cannot suspended the awardas per section 60 (c) thus this provisioncreates ambiguity and absurdity in the law

Subsection 59(2) to be deleted or either tobe amended and read as follows:

An application for review made in terms ofsubsection (1) suspends the award untilthe Review Panel has disposed off thematter.

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17. Section 60(c)

Upon receipt of the application for review referredto in section 59, the Review Panel may –

(a) dismiss the application(b) direct the Board or the public entity that has

acted or proceeded in manner that is not incompliance with this Act to act or proceed ina manner that is in compliance with this Act;

(c) Set aside in whole or in part a decision or anaction of the Board or public entity that is notcompliance with this Act, other than anydecision or action bringing theprocurement contract or the frameworkagreement into force, and refer the matterback to the Board or public entity forreconsideration with specific instructions;

(d) Correct a decision or action by the Board orpublic entity that is not in compliance with thisAct;

(e) Confirm the decision of the Board or publicentity; or

Order that the procurement proceedings beterminated and start afresh.

When one reads section 60 (c), it is clearthat once a decision is made or there hasbeen an action bringing the procurementcontract or the framework agreement intoforce, such cannot be set aside by theReview Panel.

It should be borne in mind that thepurpose of the review is to get a relieffrom the un-procedural process such assetting aside such a decision.

The words “other than any decision oraction bringing the procurement contractor the framework agreement into force”should be deleted from section 60 (c).

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18. Section 66(2)(a)

A staff member referred to in subsection(1) must:

(a) disclose his or her interest or theinterest of his or her close relative, ifany, in terms of section 76, and in thisparagraph, “close relative” meansparent, sibling, spouse, child orgrandchild, having substantial financialinterest in the bidding entity; and

(a) withdraw from the procurementprocess if there is a potential conflictof interests, unless the Board or publicentity decides that the conflict is trivialto affect the impartiality of the staffmember.

The current conflict of interest exists onlywhere a close relative is involved. “Closerelative means: - Parent, Sibling, Spouse,Child or Grandchild, having substantialfinancial interest in the bidding entity.

The above scope is too narrow and needsto be broadened in fighting againstcorruption, bribery and nepotism inprocurement.

Furthermore, section 66(2)(a) talks aboutsubstantial financial interest. The word“substantial” is subject to subjectiveinterpretation.

Section 66 (2)(a) to read as follows:

A staff member referred to in subsection(1) must:

(a) disclose his or her interest or theinterest of his or her close relative, friendsand associates if any, in terms of section76, and in this paragraph, “close relative”means parent, sibling, spouse, child,grandchild, cousin, nephew or niece,having substantial financial interest in thebidding entity.

The word “substantial” to be deleted fromthe sentence.

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19. Section 66

Section 66(3) to become Section 66(4) asa new subsection will be added that has tocome before it. This new subsection willbecome subsection (3).

Section 66 (2)(c)

Some staff members involved in bidpreparations decide to start up companiesof their own while involved in the bidpreparation and later recuse themselvesin order to participate in the biddingprocess of the same bid.

This creates issue of good governanceand transparency

New section 66(3) to read as follows:

A Board member, staff member of theBoard or a public entity that was involvedin the bid preparation process at anystage of a bid and such person indicatesthat he/she wishes to recusehimself/herself at a later stage because ofconflict of interest, such person and theentity he/she is conflicted are prohibitedfrom participating in the bidding processas a bidder or supplier.

All staff members employed in a particularMinistry/Agency shall not conductbusiness/procurement with the samepublic entity.

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20. Section 76(1)(b)

Disclosure of interest76. (1) A member of the Board, Review Panel, aprocurement committee or a bid evaluationcommittee, a procurement management unit andany staff member thereof having any direct orindirect interest in any matter brought before theBoard, Review Panel, a procurement committee,bid evaluation committee or procurementmanagement unit –

(a) must immediately inform, as appropriate,the Minister, chairperson or the accountingofficer concerned of such interest; and

(b) may not participate in the deliberations orany part of the decision- making process inrelation to that matter, unless the Board, ReviewPanel or public entity, directs otherwise afterhaving considered the matter and found theconflict of interest to be of trivial nature orconsequences.

The words “trivial nature orconsequences” lead to different andsubjective interpretations.

What is trivial to one person is not trivial to the next.

Furthermore, the word “may” at the startof subparagraph (b) gives rise todiscretion. This person will be allowed tosit until a determination is arrived at.

Subparagraph (b) to be amended with thefollowing underlined words.

(b) will not participate in the deliberationsor any part of the decision- makingprocess in relation to that matter, unlessthe Board, Review Panel or public entity,directs otherwise after having consideredthe matter and found the conflict ofinterest to be of no bearing on the matter.

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PROPOSED AMENDMENT TO THE ACT

The End.

2021/03/03

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