Contract CIF members for construction work

The Construction Industries Federation of Namibia (CIF) is concerned that many government projects over the last years, were abandoned before completion, as well as that the quality of the workmanship on many of the projects were regarded as very poor and below desired standards. Accordingly, the CIF wants to encourage buyers of building and construction services to be extremely careful and prudent when selecting service providers and awarding contracts accordingly. The organisation points out that this is as a result of there not being a statutory regulatory body, such as a construction council – in place; and highlights related disadvantages; as well as recommends that in the interim, buyers only appoint contractors that are CIF members, since they have to adhere to the federation’s Code of Conduct.

With the lack of a regulatory body in the construction sector, such as a construction council, there is not a single statutory body that has the mandate to monitor and police the performance of contractors in this sector. With the absence of such a body, buyers of building and construction services –mostly government authorities, are not in the position to accurately evaluate tenders before their respective awards.

Repeatedly, since 2006, the CIF has lobbied Government so that a Construction Council would be established. With no statutory regulatory body in place the following can occur:

Tenders are awarded to contractors that do not have the experience to do the job and therefore are not in the position to complete the projects;

Secondly, tenders are often awarded to Namibian so-called tenderpreneurs, who subcontract to other contractors, many of them foreign companies;

In addition, if a contractor has not completed a project or has delivered below par work, and consequently has been barred to do further work for a specific authority, they often open up and operate under a different business name;

Furthermore, many business owners create more than one – often up to three companies – only for tendering purposes; and

Lastly, the occurrence of nepotism and potentially fraud, is much more probable in an unregulated environment.

Inefficiency

“Without an appropriate regulatory body in the construction sector, the scope for fraudulent and corruptive practices is much bigger, which can lead to a very inefficient public procurement system”’ says Bärbel Kirchner, chief executive officer of the CIF.

With a construction council in place, all businesses operating in this sector will have to be registered with the council. Details that would have to be disclosed are ownership, citizenship, previous work undertaken; as well as criteria such as turnover and cash flow, qualification and size of the workforce. Essentially, the criteria will be determined by the council itself. Based on this, companies would be categorised and projects could be sized so as to also meet the developmental needs of businesses in the sector.

Bärbel Kirchner says: “We really cannot understand why after 17 years of lobbying our Government, there is still no council. We were very hopeful that after the pledge was made by Government at the Namibian Investment Summit in 2019, organised by the High Level Panel of the Economy, that by end of the financial year; i.e. 28 February 2020, the bill would have been tabled in Parliament and eventually promulgated.

“Not having a council is essentially a very wasteful use of government resources, and ultimately taxpayers’ monies, as unqualified businesses are getting contracts.

“At the same time, the procurement processes are incredibly long and therefore very costly. With a register of prequalified contractors, a lot of bureaucracy can be cut out. This saves everyone’s time – both the time of civil servants as well as the precious time of contractors”.

However, in the absence of a council, the CIF wants to encourage every buyer of building and construction services to only appoint contractors that are members of the CIF. Whilst the CIF has no legal authority to monitor the performance of just any business in the sector, it can demand that its members adhere to the Code of Conduct of the CIF.

Agreement to honour the Code of Conduct is one of the requirements for membership of the CIF. In a sense it allows a degree of self-regulation of members of the CIF. However, should any member be in contravention of the Code of Conduct, he/she can be asked to rectify the problem or indeed loose the membership of the CIF.

Kirchner says: “As a stakeholder in the construction sector, we want to see that the sector is optimally regulated. This is in the interest of the development of country, the development of our sector and ultimately, will help to better utilise scares financial resources. However, in the absence of that, we want to call everyone that is buying or funding building and construction services, to establish first whether the service provider is a member of the CIF”.