SSC violates public procurement regulations – awards N$500 million asset management tender

Ester Mbathera

The Social Security Commission (SSC) has been accused of flouting public procurement rules by awarding a tender outside the mandated thresholds for public entities.

The commission awarded an asset management tender worth N$500 million to entities that did not undergo the required competitive bidding overseen by the Central Procurement Board (CPBN).

The incubation program allocation is equivalent to 33% of the SSC’s assets.

Under the Procurement Act guidelines, the SSC falls under category three, requiring the board to oversee bidding processes for contracts exceeding specified thresholds.

For consultancy services, the threshold stands at N$10 million, while for non-consultancy services, it is N$5 million.

The act by the SSC raised questions about the integrity of the procurement process.

The SCC’s chief executive officer, Milka Mungunda did not respond to questions sent to her.

Wilson Shikoto, the spokesperson of the Ministry of Finance and Public Enterprises said there are no public entities that are exempted from procuring services through the Central Procurement Board (CPBN).

“All public entities operate under specified procurement thresholds in accordance with the regulations outlined in the Public Procurement Act,” he said.

He explained that when a procurement surpasses the threshold, the entity is required to engage the CPBN or the procurement process, as mandated by Section 8(a) of the Public Procurement Act and Regulation 2(1) of the PBid evaluation was also done outside the Procurement thresholds rules for public entities which states that the board must conduct the bidding process on behalf of a public entity for the award of a contract that exceeds the threshold for such a public entity.

“Exceptions to this rule occur only when a Public Entity has formally applied for an exemption to the Minister of Finance and Public Enterprises, following the provisions in Section 4(1) or 4(2). The grounds for granting exemption are stipulated in the Act. If such an exemption is granted, the Public Entity is then authorized to procure beyond the established threshold,” he said.

ETHCapital Pty Ltd, owned by Development Bank of Namibia’s head of credit risk Erastus Hoveka, and Pyxis Investment Management Namibia (name pending confirmation), owned by Jerome Thobias, a former investment analyst at Catalyst Investment Management emerged as qualified contenders for the program.

Hoveka also confirmed that his company was awarded the tender.

Thobias confirmed that his company has entered into an agreement with the SSC for the incubation Asset Management Programme.

He, however, declined to comment further on what experience his company has in asset management and how long the company has been in operation.

“We are bound by the confidentiality clauses in our agreement with the SSC. With regards to any queries you may have around the incubation asset management program or the selection criteria used by the SSC for the RFP, please refer all your questions to the office of the CEO and/or the Senior manager Investments of the SSC,” he said.

Numerous fund managers who have been in the industry for some time were disqualified during the selection process due the criteria.

The criteria dictated that applicants must not possess existing mandates with the Social Security Commission and should not be incubated by any other institution.

A significant portion of these excluded candidates reportedly participate in the Government Institutions Pension Fund incubation program.

Furthermore, one of the specified requirements is that the current assets under management for the selected companies should not exceed N$1 billion.

No notice of selection was issued in this regard as per the procurement rules.

According to the rules a notice of selection should be issued to all the contenders with reasons as to why they did not qualify.

The unsuccessful contenders would then have seven days to appeal.

However, this was not the case as contenders were only issued with letters by Mungunda, stating that their bids were unsuccessful.

“Following the strict evaluation process, your offer in relation to the expression of interest as advertised in the local newspapers was unsuccessful,” reads the letter.

Documents seen by Windhoek Observer also show that the bid valuation was done by Bryan Hoveka, who is the managing director of Managing Director Multi-Wealth Management.

In 2016, his company was controversially awarded a tender to set up and bring into operation the SSC’s envisaged National Pension Fund.

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