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CMST PPE deals in capacity bind

Central Medical Stores Trust (CMST) move to award K5.3 billion personal protective equipment (PPE) contracts to indigenous Malawian owned firms could backfire since some of the preferred bidders may not have capacity to deliver.

Black Indigenous Business Network (BIBN) chairperson Kettie Kamwangala—whose grouping’s protests forced CMST to cancel the initial tender award, because majority of indigenous Malawian-owned firms were left out—stated this week that while they are elated to be part of the new PPE deals, they are worried that some of the suppliers may not have capacity to deliver.

She has since asked government to help the indigenous firms to access capital, if they are to effectively participate in public sector tenders as desired by the Public Procurement and Disposal of Assets (PPDA) Act.

“If you look at the CMST [contracts], the smallest order is [K47 million]. Who is [that indigenous] Malawian who can have that amount in bank account. Malawians will fail to deliver if they are not financially supported,” Kamwangala said.

CMST has awarded PPE procurement contract to 23 firms

On February 19 this year, the trust cancelled the intention to award contracts that followed what it called “Emergency Invitation for Bid” for supply of Covid-19 PPE through national competitive bidding.

Following the protest, CMST re-advertised the tender on April 30 targeting only the country’s micro, small and medium enterprises (MSMEs).

On May 12, the trust awarded the new PPE contracts to 23 firms—a list of successful bidders that Human Rights Defenders Coalition (HRDC) last week said included a company that was named in the investigative audit into the K6.2 billion Covid-19 funds as being involved in mis-procurement.

The coalition—in a letter that Weekend Nation saw last week—wondered why PPDA was not debarring the company as per President Lazarus Chakwera’s order.

The President had directed that companies involved in suspicious Covid-19 transactions should be kicked out of government tenders.

Thus, apart from lack of capacity, some of the companies making the CMST list could be debarred from supplying to ministries, departments and agencies.

Due to HRDC pressure the PPDA will on Tuesday and
Wednesday next week conduct disciplinary hearings on suppliers who were allegedly involved in Covid-19 related mis-procurements.

Meanwhile, procurement experts have said that while they support the move to promote indigenous businesses’ participation in government tenders, they have urged CMST and other public sector procuring entities to maintain merit as basis for award.

In an interview yesterday, a procurement expert Philip Kamangira said the process of identifying suppliers in any contract should ensure that only those with capacity should be given the job.

He said: “The indigenous community must be prepared to deliver as per guidelines because government might have goodwill to support Malawians, but in turn, it is the same Malawians who disappoint government by not supplying what was agreed, thereby making government to get foreign nationals to supply.”

Section 27 (10) of the Procurement Act says a procuring entity should give 60 percent preference to indigenous Malawians.

Another procurement specialist Amos Nyambo said local supplier development is needed in specific sectors to avoid the struggle that local companies face.

“There is a need of trainings or economic empowerment. During the training, issues of going into partnership can be tackled and also discussing the capacity aspect,” he said.

In an interview yesterday, CMST spokesperson Herbert Chandilanga said the proposed awardees individually met the criteria of the bidding document.

“Should they [BIBN] want to engage government on funding, that would be a matter CMST would best leave to the [network] and government,” he said.

But capacity challenges among indigenous firms have made it harder for locals to deliver as evidenced last year in the inaugural Affordable Inputs Programme (AIP).

At the height of the AIP crisis, in which most selling did not have enough fertiliser, the Ministry of Agriculture admitted that apart from network glitches, the majority of indigenous firms that had won the tenders failed to supply due to both financial and logistical capacity to buy and distribute the products.

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