Whenever the public sector needs goods, works or services that exceed a certain contractual value, it is obliged to publicly announce this need and encourage companies to compete for the opportunity. This process is known as Public Tender. In the public procurement process in Mozambique, the term “Public Tender” refers to an advertisement that is published by a public institution inviting companies to compete for the provision or supply of goods, products, works or public services that are necessary, with the final decision to be made based on price and quality.
According to the World Bank, governments around the world spend $9.5 trillion a year on purchasing goods and services. The construction of schools, the purchase of hospital supplies, the renovation of vehicle fleets for public transport, the construction of roads or the security of computer systems in public buildings are examples of the wide range of sectors covered by public procurement. According to the same data, developing countries spend US$ 820 billion a year in obtaining these goods and services from the private sector, making the public procurement market a great business opportunity for companies around the world.
In Mozambique, with the introduction of the new 2010 Procurement Regulation, all public works, goods and services acquired by the government at all levels (national, provincial, district and municipal, as well as companies in which the State holds 100% of the capital , when the financial activities of any of the aforementioned entities are linked to the State budget, must be carried out in accordance with the requirements set out in the Procurement Regulation, which provides for the Public Tender as the only means of bidding.
The Procurement Regulations require that all procurement procedures comply with a number of principles, including legality, public interest, transparency, openness, equality, competitiveness, impartiality and sound financial management. In addition, procurement processes should be decentralized wherever possible, as indicated by the UFSA (Functional Procurement Supervision Unit), and should strive to optimize the benefits of procurement.
The Public Tender proceeds according to a logical sequence of phases, which provides for the preparation; the release; the submission and opening of bids and qualification documents; the evaluation of proposals and qualification documents; sanitation; the classification; the Jury’s Recommendation; the decision; followed by a complaint and appeal (in case of any anomaly); and finally the award.
The Bidding Documents may require, as a condition of acceptability of the proposal, the provision of guarantees, which may be definitive or provisional, and their value meets the maximum limits stipulated in the Regulation. Bank guarantees are normally accepted; cash security; certified check; public debt securities; and guarantee-insurance. The price proposal must be presented in national currency, the Metical, except in the exceptional cases provided for in the Tender Documents.
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Entities or persons that can apply for public tenders in Mozambique:
Eligible to compete for the contracting of works, supply of goods or provision of services to the Mozambican State are natural or legal persons, national or foreign, who demonstrate legal, economic, financial and technical qualification and who are in a situation of tax compliance.
In terms of qualification requirements, there is a need for proposals to be accompanied by, among others, the following documents: commercial registration certificate and updated statutes; declaration signed by the competitors that they do not incur any impediment; consortium project or consortium formation agreement (in the case of groupings of companies); periodic declaration of income and annual declaration of accounting and tax information; certificate proving registration or enrollment in a professional activity compatible with the object of the contract in question, license or equivalent document issued by the competent entity.
National/Foreign
For the purposes of the Regulation, a “national” competitor is considered to be a natural person who has Mozambican nationality; or a legal collective person that has been incorporated under the terms of Mozambican law and whose share capital is held in excess of 50% by a Mozambican natural person or by a legal collective person whose share capital is majority owned by more than 50% by a Mozambican natural person.
The Contracting Entity may restrict the Tender to the participation of national competitors, whenever it is a contract whose estimated value is less than 5,250,000,000.00 Meticais, in the case of public works contracts, and 2,625,000,000.00 Meticais , in the case of acquisition of goods and services.
The foreign competitor, whether or not he is authorized to carry out his activity in Mozambique, must comply with the general rules set out in the Regulation and must, in addition: have a resident attorney domiciled in the country, with special powers to receive summons, subpoena and respond administratively and judicially for his acts, joining the relevant instrument of mandate with the documents determined in the Regulation; prove their legal, economic-financial, technical qualification and fiscal regularity in the country of origin; prove the inexistence of bankruptcy or bankruptcy petitions in Mozambique and in the country of origin and finally; proceed with the delivery of documents written in Portuguese.
Competitors formed in a consortium or associations are always allowed to participate in the Contests, however, members of a consortium or association cannot participate alone or as part of another consortium or association in the same Contest.
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Publication
The tender process starts with a public notice, which is published by a public sector body to generate bids from competitors that meet the specific requirements defined in the tender notice. It is mandatory to publish the Notice of Tender either in the press or at the headquarters of the Contracting Entity, and in the case of an “International Tender” the disclosure must be made through the Republic Gazette and/or website (www.concursos.co.mz ).
Bid Evaluation and Decision Criteria
Regarding the evaluation criteria, the foreseen rule is the lowest price. Consequently, in general, the lowest price offer is the one chosen for the award. In case of a tie, the final classification of the proposals is determined by drawing lots. The Regulation also provides that, exceptionally, the award criterion may take into account the technical evaluation of the proposal and the respective price. In situations of tie in the evaluation of the proposals, the best technical proposal prevails.
Tender Decision Criteria for Concession
The decision of the Tender for the concession of works or provision of public services may be adopted, observing, individually or jointly, the following criteria: higher price offer for the concession; lowest tariff or price to be charged to users; better quality of services or goods made available to the public; and better service and demand satisfaction.
Contracts – Applicable Rules
The contracts provided for in the Regulation will be set out in writing and must comply with the models contained in the Tender Documents, which must, obligatorily, be submitted to prior inspection by the Administrative Court, within a period of 5 days after their execution. Due to the administrative nature of the Contracts in question, the Regulation provides for certain clauses, designated as essential, such as the Identification of the parties; Object of the contract; Start and end dates; Warranties; Payment terms and conditions; Estimate of the total charge; Applicable sanctions; Judicial or other forum, for the resolution of disputes; Anti-corruption clause; and Other conditions that the parties consider essential for the proper performance of the contract.
The Contracting Entity must demand, when provided for in the Bidding Documents, that the Contractor provide a definitive guarantee, adequate to the good and timely fulfillment of its obligations; and its presentation is a prerequisite for the conclusion of the contract, therefore, payment of an advance without presentation of a guarantee of the same amount is not allowed – with the exception of rare exceptions provided for in the Regulation and subject to certain admissibility conditions.
In general terms, this is the main information about Public Procurement in Mozambique, a country with several potentials and enormous challenges and needs for the execution of mega-projects of public nature, especially in the area of energy, construction of infrastructure , exploration of natural resources and railways.
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