DCEC probes PPADB tenders
| Tuesday October 14, 2014 08:00
Mmegi has it on good authority that two weeks ago, DCEC entrusted two agents to commence investigation on what is believed to be fraudulent award of tenders. A significant number of employees, including a very senior member of the board, have been implicated in the scam
The DCEC was informed earlier this year about the bid rigging and fraudulent award of tenders at PPADB orchestrated by certain employees and cabal of company directors to influence the outcomes of the tenders.
Mmegi has information showing how a number of companies owned by closely related directors consistently won tenders they did not qualify for by conspiring with PPADB employees. This also shows how PPADB’s procurement system has been manipulated by tenderprenuers through bid rigging. So far four companies, whose names are known to Mmegi, have been listed. There are suggestions there could be many.
The four companies have been winning tenderes they did not qualify for since 2009, and indications are that the directors connived with PPADB staff to grade the companies higher, whenever their qualifications fell short of the requirements.
PPABD has a contractor grading ceiling in which companies are graded into different categories depending on the experience of the company, qualifications of its employees and equipments/assets which the company owns to determine the magnitude of tenders they can be awarded. In the construction category, which is currently under DCEC investigations the grades are; OC, A, B, C, D, and E. The threshold for tenders a company can be awarded are; Grade OC (P1.5 million), Grade A (P4 million), Grade B (20 million), Grade C (P40 million), Grade D, (P85 million) while Grade E has unlimited threshold.
Essentially, this means that, a new company, with no or little experience will be graded at Grade OC which is the smallest and gradually climb into other grades as it gains experience over the years. However, this has not been the case at PPADB, as new companies have mysteriously found themselves in higher grades, and therefore winning tenders they did not qualify for.
Mmegi has it on good authority that the implicated companies have used means such as hiring or borrowing, the registering equipment which they did not own so as to meet grading requirements. The equipment is then de-registered and returned to the owner after the company succeedes in attaining the grade they wanted.
Conflict of interest has also been the order of the day at PPADB as far as corporate governance is concerned. The PPADB board of directors is made up of eight members, five of whom serve in the executive management. The executive chairperson, executive director-works , executive director-services, executive director-supplies and the board secretary all serve both in the board of directors and executive management. The executive chairperson is also the board chair. This in essence means that they play an oversight role over the same decision they would have taken at management level.
Last year, the World Bank raised its concern about Botswana’s procurement process. An assessment carried out by World Bank officials during their visit to Botswana then, showed that the country’s public procurement system provided opportunity for corruption by those in higher government positions and their associates.
The assessment, carried out on the Ministry of Finance and Development Planning, which PPADB falls under revealed that the government’s procurement system was not made public, with the result that those privy to the information were able to use it to their advantage and help their associates win tenders from the government regularly.
The concerns found by the assessors were that the country’s procurement system lacked transparency, and consequently provided opportunities for misuse of the contract awarding process through corruption or other patronage arrangements.
The World Bank report also noted that the current system may allow those in the private sector to collaborate with the public institutions to benefit from the current flawed systems. The argument is that by the time the tender is advertised for bidding process, its competiveness would merely be a formality. In other countries, government is required to make its procurement plan public so that, companies wishing to bid for tenders may have access to all government tenders in that calendar year. Both the PPADB and DCEC were not available for comment at press time