Minister cautions companies on procurement fraud

June 21, 2018 in Business, Companies, Policy by Editor

June 21, 2018—Finance minister, Matia Kasaija, has said the government will not tolerate companies that use dubious means in bidding for public sector contracts and those who do will be dealt with accordingly.

“We will not tolerate contractors who use tricky means to secure government contracts. Under the new Public Procurement and Disposal of Public Assets Act, any acts of corruption will be heavily punished by banning or blacklisting from participating in any other public bidding for two to five years,” Kasaija said during a bidders covention hosted by the Public Procurement and Disposal of Public Assets (PPDA) in Kampala in mid-week.

The PPDA Act 1 of 2003 set up the Public Procurement and Disposal of Public Assets Authority as the principal regulatory body for public procurement and disposal of public assets in Uganda and the latest amendments are intended to close loopholes that prevent an even playing field for all bidders. Bid-rigging, false claims and bribery are some of the most prevalent aspects of fraud in Uganda’s public procurement. Three years ago PPDA carried out a survey to spotlight the weakest points of regulation and found that the Evaluation Stage is when malpractices occur the most.

The convention was intended to update potential bidders of the current regulations regarding government procurement which provides, in many cases, the bulk of income for several hundreds of local companies. PPDA officials also advised participants on the proper ways winning government contracts.

The Minister said the government will blacklist and ban contractors who bribe public officials or forge certificates and accounting books in order to secure public/government contracts. However, he made no mention of the insider dealing usually initiated by civil servants who then solicit for bribes by auctioning confidential information.

But Kasaija did caution government accountants who procure goods from private businesses and fail to immediately pay, saying they will be punished.

According to PPDA officials, there are some 125 companies already blacklisted for forgeries of registration certificates and bribing public officials with 24 companies blacklisted in 2017 alone.

Not long ago, the African Development Bank (AfDB) was in talks with China’s Sinohydro Corporation who were disbarred for three years after a probe concluded that fraud was involved in the tendering process for the AfDB-financed Road Sector Support Project in Uganda during 2013.

Some of the participants asked the government to help them access low interest loans so that they can compete with Chinese contractors who they say are often backed by the Chinese government.

Kasaija said at the moment this is not possible because the government is prioritising infrastructure development. “The only thing Government can do is put in place a conducive environment for the local contractors to compete. We have also recapitalized the Uganda Development Bank, but the money there cannot be enough to service the entire private sector. Maybe if our priorities reduce, we may consider providing cheap capital to them,” he said.