In the first two quarters of the year, the Central Procurement Board of Namibia (CPBN) approved the cancellation of three bids valued at N$1.1 billion.
Bid cancellations are provided for under Section 54 of the Public Procurement Act before a bid is accepted, under specific circumstances such as non-responsiveness, irregularities, or exceeding cost estimates.
“Bid cancellations are kept to a minimum, as they are considered a last resort to avoid disrupting service delivery and ensuring the benefits of procurement processes reach the intended end users. When a bid is cancelled, the Board typically recommends initiating a Restricted Bidding process with a shortened timeframe to ensure timely completion and reduce the impact on public entities and end users,” CPBN said during a media engagement last week.
During the reporting period, the Board approved ten competitive procurement awards worth N$1.2 billion. Notably, 80% of these awards, amounting to N$849 million, were awarded to Namibian entities. This demonstrates the Board’s commitment to empowering Namibians and creating jobs in line with Section 2 of the PPA. The remaining 20% of the awards went to Namibian companies in joint ventures with foreign entities and a South African firm, reflecting both local empowerment and international collaboration.
“The breakdown of procurement awards, categorized into competitive and direct procurements, is detailed in the table below. Direct Procurement ranks highest due to the Ministry of Health and Social Services (MoHSS) procurement from the Namibia Institute of Pathology (NIP), valued at N$2 billion. This procurement was conducted without competition, as the public entity had the capacity to provide the required services, in line with Section 34(g) read together with Section 36 of the Public Procurement Act.
“The Open National Bidding process comes in second place, reinforcing the Board’s efforts to promote job creation and economic empowerment through competitive procurement methods. This is consistent with the Board’s focus on fostering local participation and meeting national development goals,” said the Board.
A total of thirteen contract extensions to the value of N$176 million were approved by the Board, of which six were in Q1 to the value of N$75 million and seven to value of N$100 million in Q2 of the same financial year.
Contract Extensions are provided for in the PPA (section 62(3) and necessitated by various reasons among them, the need to complete the procurement process and avoid disruption of service while the public entity is working on the new procurement, refining the specifications and/or embarking on benchmarking exercise(s).
During Q2 of 2024/25 FY, the Board approved five (5) Variations/Price Increases to the total value of N$46,042,499, of which one (1) to value of N$8,092,852.00 was in Q1 and four to the value of N$ 37,949,647 were in Q2. The surge in Q2 of 80% is attributable to price increases, escalations and extension of time with costs in works projects currently underway in various regions of the country.
“Contract Variation Orders and Price Increases are provided for in the PPA as well as in the respective contracts. Variation Orders are necessitated by change in scope due to unforeseen or changed circumstances (increase, decrease or extension of time with costs etc). Similarly, Price Increase or adjustment is also provided for in the PPA and respective contracts and are triggered by any unexpected increase in prices due to commodity and fuel inflation, logistical costs and/or force majeure e.g. COVID-19 impact on Supply Chains worldwide. There are already formulae in the contracts which are used for price adjustments. (Contract Price Adjustment Factor (CPAF) for fuel in civil contracts, Haylet formula for building contracts and NCPI for Goods and Services),” explained the Board.