The Office of the Director of Public Procurement (ODPP) is lobbying traders to use Bid Securing Document (BSD) as an alternative to Bid Security for all procurement-related matters under National Competitive Bidding proceedings
BSD is a non-monetary bid security which is used as an alternative to the bank guarantee or bank certified cheque for bid security.
Before 2009, the practice in the procurement under National Competitive Bidding was that bidders were requested to submit together with their bids security guarantees for their bids usually in form of bank certified cheques or bank guarantee.
Due to the magnitude of financial resources involved in securing the securities with banks, many potential local bidders were not able to participate in the tenders.
In order to encourage equal participation and also to get many small and medium enterprises (SMEs) to participate in tenders, the ODPP in 2009, came up with a provision of another acceptable security mechanism in form of a Bid Securing Declaration.
The call for the use of the BSD coincides with recent calls by experts in engineering and construction to have the bid security waived as a way of promoting competition among bidders.
Acting Director of Public Procurement, Arnold Chirwa, said following the introduction of BSD in 2010, the ODPP has noted that some Procuring and Disposing Entities (PDEs) are resisting this improvement and are only demanding and accepting bid securities.
“This is contrary to the spirit of fairness, competition and value for money enshrined in our public procurement legal framework.
“Therefore, in order to address this anomaly, all PDEs and the business community are hereby advised that with immediate effect, all procurements under National Competitive Bidding, by default, carry provision for both Bid Security and Bid Securing Declaration,” Chirwa said.
He explained that the effect of the provision is that whether a PDE has requested for only bid security or bid securing declaration, a bidder shall choose to complete either of the two regardless of what the PDE has demanded.
Chirwa said the PDE shall not disqualify a bidder under the pretext that such a bidder has chosen to include a bid securing declaration instead of a bid security as stipulated in the bid document and vice versa.
“The business community is hereby requested to be vigilant and report to the ODPP any entity that has failed to provide for both forms of security in its invitation for bid or invitation to tender notice.
“Similarly, all PDEs are required to adhere to this guidance to avoid prolonging the period for adjudication of tenders. On its own, the ODPP will continue checking all invitation for bid or invitation to tender for PDEs adherence to this and other requirements,” he said.