John B Nakuta
The national public discourse is currently dominated by the selection of the Amnics Trading bid for the lucrative medical supplies tender by the Central Procurement Board of Namibia (CPBN).
Note: selection not awarded.
Put differently, no procurement contract has yet been awarded to Amnics Trading. Something else which, similarly, warrants clarification is the call on the President to intervene and cancel the tender.
The President has no prerogative powers to do so. The notion of prerogative powers as clarified by our superior courts is a misnomer in our constitutional order, based on the rule of law and the principle of legality.
The Public Procurement Act provides ample opportunities for redress. The Act provides two compulsory internal avenues of redress to challenge the tender in question.
Firstly, aggrieved bidders are granted a seven-day ‘standstill period’ within which to apply to the board, and request it to reconsider its selection for a bid for the award. Importantly, no contract may be awarded nor may any agreement be signed during the standstill period. The standstill period for the given tender ended on Friday, 20 January 2023 at 17h00. Several unsuccessful bidders reportedly invoked their right to request a reconsideration. The board is granted seven days to consider the applications for reconsideration, and to notify the aggrieved bidder(s) of its decision. If the board does not respond within the stipulated time, or if its decision or action is deemed unsatisfactory by the aggrieved bidder(s), such a bidder may then apply to the Review Panel for the review of its decision or action.
With that said, the obligation to exhaust internal remedies is ongoing. This explains the CPBN’s insistence that no tender has been awarded. The current public outcry is, therefore, strictly speaking, based on misinformation. Be that as it may, the selection of the Amnics Trading bid raises serious administrative concerns. Specifically, 1) the failure of the CPBN to carry out basic due diligence 2) the potential misinterpretation of Section 28(2) of the Act; and 3) the rationality of the board’s decision. The chairperson of the CPBN reportedly conceded to a New Era reporter that the entity ‘has no capacity’ to carry out basic due diligence to verify bidders’ information, including that of Amnics. It, therefore, primarily relies on the documentation submitted by bidders. This presupposes that no verification was undertaken to establish whether the
chosen bidder indeed has a manufacturing plant to produce condoms and surgical gloves.
This, whilst the records show that a certificate of registration of a factory was reportedly issued to Amnics Trading less than three months after the tender was advertised. Surely, this must have raised the proverbial alarm bells.
The question arises whether such a relatively young company would have the requisite skills and equipment to deliver fully on such a massive tender. Common sense dictates that the CPBN should have taken steps to verify the successful bidder’s claim to deliver. Especially because the Act enjoins board members to "exercise a reasonable degree of care and diligence in the performance of their functions".
Due diligence in procurement is the process of independently verifying a supplier’s capability to deliver fully against their contract. The excuse of lack of capacity to comply with its statutory obligation of due diligence is feeble and indefensible, to say the least. In fact, by relying on the mere say-so of bidders, including Amnics Trading, the CPBN failed to properly apply its mind to all the relevant facts.
This renders the board’s decision potentially inconsistent with the requirement of lawful administrative action. Furthermore, section 28(2) of the Act grants a public entity discretionary power to confer an advantage or preference to Namibians in the procurement process. It is worth noting that the section makes no mention of costs. It appears that the board interpreted the section in a peremptory manner, coupled with a reading which seemingly pays scant attention to the tender amounts where Namibians are involved. It is difficult to reconcile such a reading with the stated objective of the Act, namely to “maximise economy and efficiency in public procurement to obtain the best value for public expenditures”. The board, arguably, misinterpreted this provision. If this is indeed the case, the board’s decision amounts to an error in law, rendering it unlawful. Lastly, how rational is it to select a bid for the award that is astronomically more than the next highest bidder? This, in the absence of evidence that the selected bidder indeed has a manufacturing plant. Such a decision, in administrative justice parlance, is regarded as irrational. In this context, the CPBN’s decision cannot rationally be justified, and may well fall foul of the requirement of reasonable administrative action. The CPBN, as noted earlier, is seized with the task to consider the applications for reconsideration of the Amnic bid. As a good constitutional citizen, the CPBN should do some serious introspection and self-correct, as provided for in the Act. In fact, the principles of administrative justice demand no less! As citizens, we are all frustrated. Rightfully so! But, this frenzy of miscommunication doesn’t help either.
John B Nakuta is a social justice academic affiliated with the University of Namibia.
He is a life activist on justice, human rights, the rule of law and governance. This article is written in his personal capacity.