FACULTY OF MANAGEMENT SCIENCES

DEPARTMENT OF MARKETING & LOGISTICS

COURSE CODE: PSS811S COURSE NAME: Procurement and Supplier
Relationship Management
NQF: LEVEL 8 Total marks: 100%
DUE DATE: 12 June 2020 MODE: Part-Time

GROUP MEMBERS

1. TRUST MHLANGA 215092465

2. KLEOPHAS NAMPADHI 214038734
3. MAGDALENA NANGOLO 216071496
4. SINTE MUFWAMBI 215064755
5. ELI-ZETTE N NANGOLO 215031423
6. LUKAS KAISHUNGU 215077962
7. GOTLIEB THOMAS 213086077
8. AMUKOSHI MARIINA 215033647

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Table of Contents
1.0 INTRODUCTION.............................................................................................................. 2
2.0 DISCUSSION...........................................................................................................................3
2.1 Question 1A........................................................................................................................3
2.1.1 Is the procurement act fostering strategic relationships in public procurement?............3
2.2 Question 1B........................................................................................................................7
2.2.1 Analyse and apply the UNEP Sustainable Public Procurement (SPP) Implementation
Guidelines to the Public Procurement Act, 2015......................................................................7
2.3 Question 1C......................................................................................................................10
2.3.1 Suggest an implementation for an e-procurement system for the Namibian public
procurement............................................................................................................................10
2.4 Question 2A......................................................................................................................21
2.4.1 Choose a Public entity of your choice and design a relationship based
procurement approach, by addressing below.....................................................................21
2.5 Question 2B......................................................................................................................26
2.5.1 A supplier evaluation metric that incorporates Sustainable Public Procurement
Practices (SPPP)..................................................................................................................... 26
3.0 CONCLUSION.................................................................................................................30
4.0 Recommendations..................................................................................................................31
REFERENCE...............................................................................................................................31

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1.0 INTRODUCTION

In this ever-changing globalized village we live in today, the most successful companies are the
ones who are agile and flexible enough to adapt to constant changes in the way business is
conducted. Different organizations across various industries have developed policies and
procedures that aid as a guiding tool when they conduct the procure-to-pay processes.
Companies within the private sector ensure that they formulate and document working
documents that are utilized daily to serve their procurement needs. Public entities on the other
hand, rely on the Public Procurement Act of 2015 and the Public Procurement Regulations to
guide them through the procure-to-pay process. The act is aimed to regulate the procurement of
goods, works and services (both consulting and non-consulting), to provide procurement
methods and bidding processes as well as to provide preferences to categories of persons within
public procurement (Public procurement act of 2015). The act is seen as policy and procedures
for the public entities. This paper will provide answers on whether the Public Procurement Act
(PPA) promotes strategic relationships with in public procurement, analyze the UNEP
Sustainable Public Procurement (SPP) implementation guidelines to the public procurement act
of 2015 as well as suggesting an implementation plan for an e-procurement system for the
Namibian public procurement. Furthermore, an analysis case study was done for NAMCOR on
how they can formulate a supplier evaluation metrics that incorporates Sustainable Public
Procurement Practices (SPPP) and relevant recommendations to better manage public
procurement in Namibia.

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2.0 DISCUSSION

2.1 Question 1A
2.1.1 Is the procurement act fostering strategic relationships in public procurement?

Procurement is an act of acquiring the purchase of goods or services. Procurement can be as

simple as buying a pencil and it can also be as huge as buying a farm. It can also be public or
private, whereby private procurement is the purchase of goods or services purchased for a private
entity while public procurement is done for the government or public entity. Public procurement
is the process by which government departments or agencies purchase goods and services from
the private sector (Wisegeek, 2019). Procurement then follows a process for it to be transparent
and consistent, whereby the one party seeking to buy something enters into a contract with a
supplier that has or is able to provide that product or service. There is then a law drawn up that
all parties involved in the procurement process are supposed to abide by, that is called the
procurement act.
The procurement act applies to both private and public procurement, but public procurement uses
it the most. When it comes to the procurement act and public procurement act, the government
enters into a contract with a supplier either in or outside the country in order to get the product or
service they might need. The contract is then drawn up and suppliers are allowed to bid and
submit their bids for evaluation, once the evaluation is done, the successful bidder is then chosen
and notified. The winning bidder then submits what the government has asked for and payment
is done. The contract entered between these two parties stipulates how the contract is to come to
an end be it after a few years or once the job is done. After the contract comes to an end, should
the government want the same product or service again in the future, they go back to the same
process and start all over again. This then comes to the question whether the procurement act
fosters strategic relationships in public procurement or not, hence the answer will be given
below.

Constitution of board

According to the public procurement act of 2015, there is a central procurement board that is

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responsible for the procurement of government purchases, they decide when and how to buy
what the government needs. These board consists of nine members, but amongst all these
members, the act says nothing about one of them having to come from a procurement back
ground. According to the act, the members of the board are appointed by the minister, depending
on what? we are not really sure. The point here is that, the people on the procurement board
hardly have procurement knowledge so they apply what they think they know and possibly, not
what could make procurement more efficient. So certainly, one would not expect much of a
relationship to be built in this instance.

Strategic relationship defined

Strategic relationship is an agreement between two or more entities to conduct specified

activities or processes, to achieve specified objectives such as product development or
distribution (Business dictionary, 2020). A strategic relationship ensures that that both parties
benefit from the contract entered into and it is built over time, it is not just a onetime thing. Both
parties that want to build a strategic relationship are actively involved in the relationship and
they form a bond that they both contributed to. With regards to procurement, both the supplier
and the buyer know exactly what they want and they work together to ensure that each one gets
what they want out of the relationship. It is a long term relationship and it does not come to an
end just instantly or just because there are other suppliers offering the same service or selling the
same product.

The procurement act certainly does not encourage strategic relationships in public procurement
because the government and the supplier do not work on nurturing the relationship they have
apart from pure delivery and payment-kind of relationship. The relationship between the two
entities is strictly business and no relationship is formed in most cases. When the contract
between the two parties is entered into, the supplier is instructed to deliver what the government
wants without trying to build any mutual relationships because the contract will come to an end
anyways, and be given to another supplier should the need arise again. Public procurement is
more concerned with acquiring the goods or service needed for as long as it corresponds with the
budget, regardless whether it is good quality or not. For example, the procurement of the

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TransNamib Locomotives posed to be just a transaction relationship and if it was a strategic
relationship, the procuring entity was going to ask for after sales service such as training,
learning to service and use the product and agree on terms if the product posed threats and for the
guarantee to be sustained with repairs if the product had problems.

The bidding process and bidding documents

For the government to procure a product, the board must first prepare an invite to bidders, then
they host a pre-qualifying proceeding for bidders and then select the successful bidders that can
then submit the bidding documents. Where pre-qualifying proceedings are conducted, the Board
or a public entity must provide pre-qualifying documents to all bidders responding to the
invitation for prequalification, so as to provide them with the information required to prepare and
submit applications for pre-qualifying (public procurement act of 2015). The whole process just
seems so complicated and long that it discourages potential suppliers that could build good
relationships with the government. Additionally, the documents usually asked for to be included
in the bidding document are too much and so unnecessary, not all the documents submitted are
looked at.

Procurement on its own is supposed to help build relationships whereby it can build credibility
between the buyer and the seller. To create credibility and confidence in the procurement
process, businesses need to build business relationships both internally and externally (National
Council for Public Procurement and Contracting, 2017). However, this is not achieved in public
procurement because there are no internal or external relationships built in public procurement.

Despite whether the organization that won the government tender offers good quality or not, they
do not really put in an effort with the state because despite it, the contract will come to an end
anyways. They are only worried about delivering what they are asked to deliver without
worrying much about whether it is worth the price or not. The procurement act also looks more
on empowering local businesses by giving them opportunities of delivering goods or services for
the state, regardless whether the company is good at doing the work needed or not. This only
promotes laziness on the local businesses that think they are privileged and think they should get

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opportunities because they are locals and not because they deserve it. This clearly shows that
there are no relationships built between these businesses and the government, apart from the fact
that one should just win the tender because he/she is local or whatever the case might be.

Furthermore, once the government wants a product they once bought before, they do not check
where they got it from before, what the price was and if it was good or bad quality. However,
they instead go on and advertise it again and invite suppliers to apply for the tender again. The
fact that they do not go back to how they previously got the product in the past shows that there
was no relationship built between them and their previous supplier and this is because the
procurement act does not promote strategic relationships to be built between the buyer (the state)
and the supplier. The only relationship built between the supplier and state in public procurement
is a transactional relationship. Fenza (2012) defines a transactional relationship as a once off kind
of relationship whereby involved parties are only interested in what they are getting out of the
relationship, better yet the transaction taking place, both parties are in it for themselves. This
simply means that the state and the supplier are both in the contract for their own benefits, they
do not care whether the other party is satisfied with the outcome or not. The supplier in this case
is in for the money and will try to get out as much money as possible and the state in most cases
only worries about getting the product they want and this is how the government loses money in
deals that are not even worth what they are paying for. He further says that transactional
relationships usually have a lot of rules that both parties need to follow and adhere to and this is
the case with public procurement. Public procurement follows a set of rules as stipulated in the
procurement act, not matter whether they do not apply to the transaction at hand, they have to be
followed. This however does not have to do with relationship building, it is just an agreement
between two parties that they have to follow.

There is not much relationship to be built between a pencil seller and the buyer because one can
buy a pencil from almost anywhere, but there has to be a relationship between the government
and a car dealer. This is so because when the government wants to buy a specific car, they can
negotiate on the price and the dealer will also know which kinds of cars the Namibian Defense
force, for instance, likes. This does not only help with price negotiations but with timely delivery
also, the car dealer will not want to delay the delivery of cars to one of their friends.

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With all being said above, it is clear that the public procurement act of Namibia does not
promote or foster strategic relationships.

2.2 Question 1B

2.2.1 Analyse and apply the UNEP Sustainable Public Procurement (SPP) Implementation
Guidelines to the Public Procurement Act, 2015

In many developing nations, procurement constitutes to about 30% of national spending (Amoo
and Dicken, 2013). Utilizing this buying power, as per national arrangements and needs, assumes
a key job in accomplishing this through a nations Sustainable Development Goals (SDGs) and in
tending to the three elements of sustainable improvement which lay on the environment, social,
and the monetary baselines (triple bottom line). Every one of the three measurements are
reflected seventeen SDGs of the United Nation's Agenda of 2030 (Stoffel, Cravero, La Chimia
and Quinot, 2019). The three components acquired their direction onto open obtainment and are
consolidated under one umbrella term of economical open acquisition.

The SPP Approach defined 'Feasible Procurement' as a process for associations to discourse their
issues for products, utilities, works and administrations to achieve an incentive for money on an
entire life premise as far as developing benefits not only for those associations but to the entire
society, the economy, while reducing harm to nature (O'Rourke, Leire and Bowden, 2013).

Through SPP, governments can meet ecological objectives, for example, decreasing ozone
depleting substance discharges, improving vitality and water productivity and supporting reusing
of which all this must be preached on the procurement guidelines and in supplier selection and
evaluation. The social advantages of SPP may include destitution decrease, enhance value and
regard for center work measures. SPP can produce salaries, lessen expenses and bolster the
exchange of aptitudes, creativity and innovation on the monetary perspective.

As far as SPP entails, a portion of the central purpose of government strategies include:

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  Achieving value for money, decency, responsibility non-segregation, verifiability and
rivalry
 Generating benefits to the community while lessening negative social impacts
 Considering the impacts of an item being purchased over its entire life-cycle
 Pursuing financial fund reserves and efficiency in assets
 Aim for cost improvement, including permitting life cycle costing and its techniques
(O'Rourke et al, 2013)

For Namibia, the Public Procurement Act, 2015, part 1 segment 2 characterizes the object of
acquisition as being, "to advance uprightness, responsibility, straightforwardness, serious
flexibly, viability, effectiveness, reasonable managing, responsiveness, educated dynamic,
consistency, lawfulness and combination in the acquirement of advantages, works and
administrations including, among others" (Public Procurement Act 15, 2015). As per the UN
Environment Global Review of SPP, 74% of the countries manage financial and ecological
factors together, while the other outstanding 26% consider natural factors (Wierzbicki, 2017).

So far the procurement act’s demonstration on the triple bottom line incorporates them as one of
its items in Part 2 of the Act where,

 to progress, encourage and fortify steps to realize the strengthening and the
industrialisation strategies of the Government which incorporates specific treatment in
the designation of acquiring agreements to Namibian enlisted substances that advance
the earth’s security, keeping up environments and feasible utilization of assets (Open
Procurement Act 15, 2015, Republic of Namibia. 2015).

Notwithstanding, Public Procurement Act 15 (The Act), 2015 and the rules that empower the
execution of the Act does not give any further subtleties on how these natural contemplations are
to be operationalized. Much consideration is given to social and monetary thought. The Act is
overwhelmed by social issues, for example, the advancement of underestimated gatherings.
Section 2 (b), (iv), (e) of the Act states that special treatment is given to individuals who are

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monetarily or instructively obstructed by past racial oppressive practices and laws. Case of other
social measurements found in the Act are the activity creation for Namibian residents by giving
preference to private local companies. Point to note on this, is that the Namibian nationals get
special treatment in granting of tenders much of the time while they miss out on enormous
universal organizations who do not have staff limit or potentially the money related assets to
rival greater global organizations in different businesses. Therefore, there is additionally an
absence of help from the legislature.

The Act likewise advance social parts of economic improvement through advancement of
preparing of acquirement staff. The Act sets out obligatory preparing gauges, limit building and
capability levels, confirmation prerequisites and expert advancement ways for obtainment
specialists in Namibia under the Functions of Policy Unit area. The Act likewise settled a
Procurement Policy Unit in the Ministry of Finance (built up as far as Section 6 of the Public
Procurement Act, 2015). One of the orders of the approach unit is to arrange workshops and
classes to improve the abilities of obtainment experts.

Third supportable advancement measurement is financial. The financial effects of economic

improvement can incorporate productive acquirement of merchandise and ventures requiring
little to no effort through the use of progressively proficient advancements, asset and vitality
sparing, drive gracefully chain effectiveness and creating market seriousness, development and
limit and of nearby crude materials, neighborhood work, decrease of carbon impression.
Segment 6 of The Act advocates for the advancement of major standards of acquirement, for
example, straightforwardness, uprightness, serious flexibly, viability, efficiency, reasonable
managing, responsiveness, educated dynamic, consistency, lawfulness, mix, and responsibility as
characterized in area 6, subsection 2 of The Act. These standards are in accordance with
monetary goals of SPP as directed by UNEP. Segment 7 of The Act in accordance with SPP
UNEP rules energizes the utilization of innovation as a method of diminishing obtainment costs
(Amoo and Dicken, 2013).

Taking everything into account The Act is for the most part ruled by the monetary and social
component of practical turn of events. Less center is given to ecological effects of reasonable

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acquirement. The UNEP rule supports that administration attempt spread all the three elements of
feasible turn of events (United Nations Environment, 2017), it is in this way basic for the
legislature of Namibia to survey its obtainment strategy, change its law on open acquirement and
make a SPP Action Plan for practical open acquisition. The Action Plan would bring about the
reinforcing of the legitimate system, energize the usage of SPP rehearses, limit building,
correspondence and mindfulness raising efforts, and checking and assessment of SPP execution.

2.3 Question 1C
2.3.1 Suggest an implementation for an e-procurement system for the Namibian public
procurement.

What is E acquirement?

Throughout the years, acquisition process has kept on developing in both private and open part.
The customary manual obtainment process has as of late got a facelift to electronic acquirement
process graciousness of the progression in Information Communications Technology (ICT) that
has had the option to give an electronic interphase in acquisition forms.

Improved worldwide availability and system speeds have extraordinarily expanded the volume
of business directed by means of the Internet. E-obtainment is appeared to build efficiency and
straightforwardness while diminishing expenses. E Procurement, otherwise called electronic
obtainment or provider trade, is the buy and offer of provisions, hardware, works and
administrations through a web interface or other organized framework (Business word reference
2014). E-Procurement began during the 1980s, when electronic information exchange (EDI) was
created. EDI permits records and reports to be shared between individuals in business and, at that
point, it was progressive. Organizations no longer needed to truly send archives, as rather they
could be sent electronically. Neef (2001) depict e/obtainment and states that e-acquirement
prepares for the advancement of the all-inclusive venture, where the gracefully chain transforms

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into progressing, and continuous procedure which stretches out from an organization through
accomplice providers. For this situation, e-acquisition is considered as probably the greatest
driver for gracefully chain the executives.

The objective of the open obtainment process is to fulfill the requirements of individuals in a
way that is reasonable for business and spares and maintains a strategic distance from misuse of
open assets in a way that protects government's authenticity and credibility.3 In Namibia, the
acquirement of products and enterprises for the legislature is the order of the Tender Board as
laid out in the Tender Board of Namibia Act (1996).

Open Procurement Act of 2015

In mid-June 2018, in what was the main proper media commitment of the Central Procurement
Board of Namibia (CPBN), director of the board, Patrick Swartz, expressed that the principal
year of activity of the board had been a hard learning experience. This self-appraisal was
supported up by episodic proof that exhibits that open segment acquirement in Namibia keeps on
attempting to become effective and still works under thick billows of contention.

In 2006 previous Minister of Finance Saara Kuugongelwa-Amadhila presented a framework that

the legislature can use to deliberately oversee open budgetary assets called the Integrated
Financial Management System (IFMS). IFMS is an Information Communication Technology
based, planning and bookkeeping framework that oversees spending, installment handling,
planning and detailing for the Namibian Government. The foundation data towards presentation
of the Integrated Financial Management System (IFMS) is that already the Namibian
Government had a framework called the Financial Management System, which was utilized for
both the administration of the open money related assets just as for the administration of the
dynamic in Government; in any case, this framework had been insufficient in term of being
dependable. The lack of quality of the past frameworks was affirmed by the then Minister of

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Finance, Honorable Saara Kuugongelwa-Amadhila (2006) at the starting of the new framework,
the Minister expressed that the old framework neglected to convey on two chief requests, in
particular; on practicality and exactness. With regards to the announcement by the Minister of
Finance, the old framework appeared not to have the correct components to deal with the
Government reserves, which could be a danger and support for defilement.

E-obtainment module coordinated with the Integrated Financial Management System (IFMS)
would upgrade productivity in arranging, planning, acquisition, consumption the board and
detailing in the National and County Governments. The business case for actualizing the e-
acquisition framework that will incorporate; the conceived improvement in straightforwardness,
responsibility, recognizability everything being equal, anticipation of defilement and
misrepresentation, arrangement of review trail, decreased acquirement time and upgraded an
incentive for cash among others.

Open acquirement being a Government business framework, is worried about the Government
obtainment procedure, for example, planning venture detail, mentioning, getting and assessing
offers, granting agreement and installment. Subsequently, to accomplish an incentive for cash for
the citizen, well viably oversaw open acquirement that are appropriately arranged and executed
are fundamental (United Nations, 2011). Executing an e-acquisition framework in open
substances has been irrefutable through: noteworthy improvement in straightforwardness and
responsibility, upgrade of significant worth for cash and improvement of work proficiency. The
open segment acquirement has been filled with charges of extortion, defilements and wasteful
aspects emerging from more vulnerable controls in obtainment forms. E-Procurement has
become a typical topic of numerous associations for the advancement of straightforwardness and
great administration in acquirement for some created and creating countries. It has likewise
become a successful instrument for founding acquisition changes and building up a completely
straightforward and open acquirement condition. Governments need forms that are increasingly
straightforward and responsible.

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Offering and agreement granting is one of the most helpless phases of open acquisition process
where most defilement happens in creating nations (McPheraon and Searraigh, 2007).
Defilement in open acquirement effectsly affects the wide scope of open level including nearby,
local, and national (Ampratwum, 2008). In particular, it impacts the open fitness and riches in a
nation and increment Government activity cost. To defeat these issues, open e-obtainment can
assume a significant job for limiting the danger of defilement in open acquirement process as it
improves the straightforwardness and uprightness out in the open help, for example, offering,
sourcing, requesting, and selling (OECD, 2008). Polished methodology in open acquirement
takes into account usefulness, straightforwardness and huge investment funds in open
consumption.

This is express sign that the Unit will be essentially seized with the issue of the upkeep of an
expert acquirement condition and that solitary those gathering the suitable guidelines in
experience and capabilities will be permitted to work altogether inside the allotment, to the
extent it is conceivable to accomplish the ideal degree of specialization.

Components Necessary for Implementation of E-Procurement System

Thai (2001) demonstrates that open obtainment is a significant capacity of government and that it
needs to fulfill prerequisites for merchandise, works, frameworks, and administrations in an
opportune way. Besides, an e-acquisition activity will at last depend on a scope of variables, for
example, the association's capacity/powerlessness to re-engineer its obtainment forms, the
nearness/nonattendance of the suitable abilities among its workers, the fittingness/unseemliness
of the association's way of life and the accessibility/inaccessibility of proper measures. (Min and
Galle, 2003; Hawking and Stein, 2004; Bartezzaghi and Ronchi, 2004)

Basic factors that impact e-acquisition execution accomplishment in the open part have
distinguished the elements, for example, User contribution, support/correspondence preparing;

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Supplier e-status, reception methodology and correspondence plan, providers instruction,
consistence to best practices with substance and list the board; Information coordinating, sending
and accepting of continuous data to other data frameworks; Infrastructure validation and
approval, privacy and honesty, security necessities; Transparency improvement, robotized
receipt installment and compromise, consistence with buying strategies and standard (Vaidya,
Sajeev and Callender, 2006)

These arrangements do appear to miss the mark concerning the broadly acknowledged
understandings of straightforwardness and responsibility as supported for in the domain of open
obtainment and with Namibia mulling over the drafting of access to data.

The Malaysian government on the execution of e-obtainment recommend the significance of

both framework particular and usage the board as it picks up sway on e-acquirement framework
particularly in changes to administration structure, changes to add up to cost of securing and
changes to hierarchical attributes. Programming coordination and information the executives in
framework is crucial particular for the significance of turn out technique in usage the board. In
framework particular, there ought to be coordination between current e=procurement with money
related frameworks that are actualized. As per Aman and Kasimin (2011) information the
executives ought to be identified with numerous section focuses and reliable item coding,
information trade and furthermore identified with restricted information passage field.

The e-acquisition ought to be redone to explicit necessities. Staff ought to be well outfitted with
IT abilities as e-acquirement framework requires government staffs to play out their acquisition
jobs through the web.

As per Neef (2001) on e-acquirement: from technique to usage, it is fundamental to concur clear
destinations with senior administration; characterize the messages and information to be utilized;
characterize the PC systems, PCs and programming to help the abovementioned; Where an

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organization or its exchanging accomplices incorporates an ERP framework (Enterprise
Resource Planning and Management, for example, SAP or Oracle it will be basic to know about
the specific structures and offices; Examine cautiously issues of security for example potential
information defilement, hacking, digital security among others and cautious assessment of issues
identifying with between operability particularly where heritage databases are included.

Empowering agents of E-Procurement Implementation

Open part e-obtainment execution is basic in light of the fact that getting elements need to
completely survey the eProcurement empowering agents that are probably going to impact the
achievement of e-acquirement usage in the open division (Tonkin, 2003).

The e-acquirement empowering influences include:

1. End-client take-up and preparing

E-acquirement remembers new advancements and changes for conventional acquisition draws
near, subsequently the need to prepare staff in obtainment rehearses and the utilization of e-
obtainment instruments are basic to the achievement of an e-obtainment activity (WB, 2003).

A framework wide absence of skill and polished methodology is plainly at the core of why the
open obtainment framework is failing to meet expectations and generally useless.

Limit building is one of the issues that raised itself as worried of successfully actualizing the
Public Procurement Act of 2015. Since April 2017 when the law was operationalized, the
Namibian open segment needs fundamental abilities and aptitude and expert staff across
institutional courses of action to run a cutting edge and effective open acquirement framework.
PM Saara Kuugongelwa-Amadhila at the July 2019 elevated level "Workshop on the Challenges

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confronting Public Entities in the Implementation of the Public Procurement Act" featured that
limit at all degrees of the foundations ought to be reinforce. The Minister of Finance through the
Procurement Policy Unit facilitated preparing of partners on the usage of the Public Procurement
Act and is drawing in establishments of higher figuring out how to make a field concentrate on
open acquirement the executives.

As per the Public Procurement Act, the Procurement Policy Unit (PPU) is answerable for giving
or directing preparing and guaranteeing proficient gauges inside the framework. PPU itself is
seriously under capacitated. All things considered, its lawful command is clear, explicitly: "to get
ready and lead preparing programs and affirm preparing educational program on open
acquirement; to set compulsory preparing principles, limit building and capability levels,
affirmation prerequisites and expert improvement ways for acquisition professionals in Namibia.

Medium Term Plan

While the Accreditation Program tends to the momentary necessities to guarantee a smooth take
off for the usage of acquirement changes attempted by the legislature, the professionalization of
the acquisition and flexibly works necessitates that officials ought to get preparing on the expert
angles at tertiary level.

Long haul Plan

The neighborhood colleges which will begin the Recognition and BSc courses in Obtainment
and Flexibly The board may begin an Ace Degree program in Acquirement and Gracefully The
executives with center around methodology, strategy, initiative and administrative abilities, and
imaginative practices.

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2. Security and validation

Because of the affectability of the Administration information and the legitimate idea of requests
and installments, security of information is basic in e-acquisition frameworks. The framework
must have instruments for distinguishing and validating the client who puts in a request with the
goal that the provider realizes it is sheltered to satisfy the request. In an e-acquirement condition
(Birks, Bond and Radford, 2001) relate the security prerequisites at the e-offering stage to
confirmation, contending that e-buying frameworks and procedures need insurance since they
include a budgetary exchange and might be helpless against misrepresentation

1. Re-structuring the procedure

E-obtainment ought to be seen as an empowering component to make the procedure of

acquirement progressively proficient as far as cost, time, and accomplishment of significant
worth for cash (ECOM, 2002).

Difficulties of E-Obtainment Usage

Understanding the difficulties and constraints of e-acquisition execution especially in

Government division is significant because of the complexities of Government arrangements and
administration.

While the Open Acquirement Demonstration of 2015 should be a defining moment in open
acquisition administration, by mid-2018 all the proof highlighted a framework still in profound
emergency, during a period that Namibia was encountering tremendous financial and monetary
difficulties. The Open Obtainment Act was assumed "to advance honesty, responsibility,

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straightforwardness, serious gracefully adequacy, effectiveness, reasonable managing,
responsiveness, educated dynamic, consistency, lawfulness and coordination in the acquisition of
advantages, works and administrations". It is against these targets that the functions of the new
open acquisition framework presently must be estimated. One issue that has reliably raised itself
as worried of and upsetting viable usage of the Open Obtainment Demonstration of 2015 to date,
is limit.

At the end of the day, it has gotten progressively clear since April 2017, when the law was
operationalised, that the Namibian open area seriously does not have the fundamental aptitudes
and ability – essentially able and proficient staff – across institutional courses of action, to run a
cutting edge and effective open obtainment framework. This issue was in actuality enunciated
and featured by and by at the July 2019 significant level "Workshop on the Difficulties
Confronting Open Elements in the Usage of the Open Acquirement Act". As indicated by the
Open Acquisition Act, the Obtainment Strategy Unit (PPU) is answerable for giving or managing
preparing and guaranteeing proficient principles inside the framework.

The Legislature of the Republic of Namibia is changing the open acquisition framework to adjust
it to its vision of a productive and straightforward open acquirement framework which
accomplishes an incentive for cash and fills in as a vital device to accomplish financial targets.
The Open Acquisition Act, 2015, is established on universal acquirement best practices. Its
fruitful execution requires another variety of acquisition experts.

Usage challenges of e-procurement system

• Large-scale absence of responsibility for botching or mal-regulating acquirement forms;

• Significant absence of comprehension and misapplication of the law;

• Corruption in obtainment procedures, exchanges and agreements;

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• Absence of an open acquirement execution appraisal component;

• Absence of combined open obtainment information;

• Delays in handling obtainment endorsements and acquirement offers;

• Absence of key offering records and standard agreements;

• General absence of straightforwardness all through the open acquisition framework,

particularly concerning exclusions and crisis acquirement exchanges.

This is significant in light of the fact that proceeding onward a long time since usage and right
around a long time since order, the Open Acquirement Act (2015) stays a hazardous system for
government to adjust to, and the hazard is run that the mal-execution of the law and its guidelines
could altogether subvert or for all time debilitate the productivity, straightforwardness,
responsibility, uprightness and incentive for cash parts of the structure.

Legitimate and organization strategies were noted as the key difficulties in framework detail
because of numerous inheritance framework, various information configurations and complex
procedures (Subramaniam and Shaw, 2002). Legitimate, arrangement; financial establishments
and long haul subsidizing were the primary obstructions in e-government venture as indicated by
Scholl and Klischewski (2007). Tight lawful and organization methodology added to framework
contrariness with the current online obtainment lawful prerequisites (Kassim and Hussin, 2010).
Neef (2001) takes note of that as much as advantages might be collected in execution of e-
acquirement, there are likewise issues to defeat while actualizing e-acquisition.

Advantages of Electronic Acquisition Execution

Joined Countries Report (2011) concurs that the business case for actualizing an eProcurement
framework has likewise been certain through: Noteworthy improvement in straightforwardness,
discernibility everything being equal, powerful for forestalling extortion and debasement, gives

20
review trail; Upgrades an incentive for cash, upgrades rivalry through improved openness,
decreases acquisition expenses and exchange costs, encourages on-line inventory based buys, for
example, structure contracts, improved market knowledge and asset portion the executives,
Improved work productivity, diminishes debates, better implementation of guidelines,
diminished obtainment time, normalization and smoothing out of acquirement process.

Somewhere in the range of 2016 and 2020 Namibia will be surveyed as far as its consistence
with parts II (Preventive Measures) and V (Resource Recuperation) of the Unified Countries
Show Against Debasement (UNCAC).

One of the section II appraisals will take a gander at to what degree Namibia's open acquisition
framework is in consistence with UNCAC. The important UNCAC arrangement in such manner
is Article 9. Article 9 (Open obtainment and the board of open funds) states:

1. Each State Gathering will, as per the key standards of its lawful framework, find a way to set
up fitting frameworks of acquirement, in light of straightforwardness, rivalry and target models
in dynamic, that are viable, bury alia, in forestalling debasement. Such frameworks, which may
consider suitable edge esteems in their application

Neupane, Take off, Vaidya, and Yong (2012) on the job of open e-acquisition innovation to
diminish debasement in Government obtainment have recognized the different advantages of
utilizing open e-acquirement in the open area. These incorporates: Kills the immediate human
communication on offering and other work and administrations, debasement is diminished
fundamentally, and inside productivity increment in Government offices, (Ndou, 2004). e-
acquirement has changed the elements of the buying and flexibly the executives calling. This can
be noted through advantages, for example, The programmed preparing and selling of requests
and of related exchanging reports and information; Improved work process of the inside
acquisition process; Utilization of conceivably increasingly proficient and less expensive

21
availability techniques; Network to outside wellsprings of data, for example, databases, lists and
entries; Network to outer gracefully chains - for instance, extranets and permitting shared
ongoing data; Availability to inner frameworks and wellsprings of data.

2.4 Question 2A

2.4.1 Choose a Public entity of your choice and design a relationship based procurement
approach, by addressing below

(a) Sustainable strategic relationship plan with key suppliers and functional teams.

Many organizations either private or public entities are focusing on relationships building with
key suppliers. Hence, relationship based procurement strategies is key to value added supply
chain through developing better longer term supplier relationships with key suppliers(Davis and
Walker, 2004). Social capital is defined as the web of affiliations between people who live and
work in a society, permitting efficient and effective functioning. The rationale behind
relationship base procurement is to generate for supplier chain partners intangible assets such as
joint learning and better problem solving that concentrates on finding solutions that better satisfy
a wider range of areas.
Sustainable strategic relationship with suppliers is vital to an organization’s sustainability in
achieving the triple bottom line such as achieving sustainability in economics, environmental and
social behavior which both are profoundly depends on an organization’s supply chain and the
sustainability performance for every supply chain network partner of the supply chain and they
are key to transforms an organization’s goals and objectives into quantifiable activities that can
be sued to plan, budget and manage the procurement function within the organization with a

22
definitive goal to bring about positive results in an organization processes and cultural settings.

By using a relationship based procurement approach we are going to create a sustainable

strategic relationship plan with key suppliers for National Petroleum Corporation of Namibia
(NAMCOR). NAMCOR is a legally enacted entity under the Namibian Companies Act of 1973.
The Namibia government is the sole shareholder. (Ministry of Mines and Energy, 2017).

Under the Petroleum Act of 1991, NAMCOR roles is to carry out seeking, discovering and
production operations for own or for partnership with other organizations in the petroleum
industry. NAMCOR has two major operational components comprising the upstream and
downstream activities. The upstream, which is our major focus area comprises seeking for
possible underground, underwater oil or gas fields, drilling of exploratory wells, and the
subsequent operation of the wells to discover and extract crude oil and raw natural gas to the
surface, (NAMCOR, 2019).

The oil and gas exploration and production in emerging countries involves risks and uncertainties
making it a somehow complicated industry in which NAMCOR operates in. The industry bring
together the government as the regulator and owners of natural resources with operators,
investors of private capital, technologies and equipments essential for resources development, it
is a single one of the sector where risks and uncertainty while profit margins could be possible
very high. So, to achieve their corporate objective, procurement plays a key role. For entities
such as NAMCOR, procurement strategies are enablers in achieving organizational goals,
mission, vision and mission hence, there is a dire need to align their procurement strategies to the
organizational values and goals. The procurement strategy should also support the necessities of
all key stakeholders and should be designed proactively with the involvement of all echelons and
elements of the entity.

A strategic supplier relationship plan can be organized around a set of core corresponding
processes. Such processes are in forms of supplier segmentation, SRM governance, supplier
performance management, and supplier development (Deloitte, 2015).

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Supplier segmentation and selection

Supplier segmentation can be defined as the process of categorizing and classifying suppliers
grounded on a distinct set of measures in order to identify and recognize the best key strategic
supplier to engage with. NAMCOR has many suppliers of different products and services which
means it will be nearly impossible to have a special kind of relationship with each and every
supplier on the list. In their selection process, it is important that not all suppliers require the
same level of focus. It is important for NAMOCR focuses its energy and resources on a limited
number of key strategic suppliers that are crucial in the supply chain link. The supplier
segmentation will be done according to spend and criticality. The most prioritized area will be
the biggest spend group and is those that bring significant value to NAMCOR for example those
with similar missions such as sustainability and diversity approaches.
Example of strategic suppliers with a lot of wealth experiences in explorations is Total which is
considered to be a deep-water pioneer is relevant strategic partner whose joint a collaborative
relationship to NAMOR is of great experience. Total Block 2913B and Block 2912. According to
(Mulunga, 2018) NAMCOR will top a challenging charge in its ability as Operator of the blocks.

Other strategic partners include storage facilities private owners and construction companies
responsible for constructing oil storage facilities and others who constitute the some of the
biggest spend of NAMCOR. Examples include CHEC, Babyface CC and RCC.
NAMCOR uses the Public Procurement Act for the selection of its key suppliers. For example, in
November 2019 when it was selecting fuel storage partners (Ogone, 2019), NAMCOR used the
Procurement Act to appoint these partners and it short listed companies like Bachmus, Oil Vitol
SA, Vivo Energy, Total and Gunvor Middle East DMCC.

Governance of Relationship with Strategic Suppliers.

The procurement strategy is the heart of procurement and should be aligned to organization and
business strategies and objectives. NAMCOR needs to define their values and what is profound
around the organizations value through a structured approach of value mapping. The next
process is to align internal processes to be positioned with suppliers. Governance committees

24
entailing purposeful teams can be established to define and drive the strategic roadmap together
with the suppliers. Top level strategic objectives with prioritized strategic suppliers are to be
mutually agreed at the top level on both sides in the supply chain. The objectives are significant
in driving the system of operational measures to be monitored as part of the performance
management process. Relationship based procurement systems depends on high levels of trust
and obligation of entities functioning as coherent teams to realize mutual objectives (Verweij,
2013).
According to Ogone (2019), one of the strategic objectives of NAMCOR is to ensure a secure
and reliable supply of liquid fuels and other petroleum products. Before the completion of the
Walvis Bay Bulky Storage facility, Namibia had had storage capacity of 15 days. Construction of
Walvis Bay storage facility was expected to increase it to 45 days which will be within the thresh
hold of Namibia’s current strategy in terms strategic fuel reserves.
Given this strategic goal and the importance of it thereof, NAMCOR should find a competent
high level strategic partner who share the same mission mantra and capable of sustainably
delivering on the shared strategic objectives.

Performance management

Balanced score cards is an important performance measurement tool to date. It is can be used to
monitor supplier performance against a collective set of defined measures (Verweij, 2013). The
supplier score cards should be checked frequently through review meetings with the key
suppliers. Any deviancy from agreed performance requirements should be addressed
straightaway by identifying the root cause and putting in place corrective measures.
One of the key basics of relationship based approach is the sharing of information and
knowledge that distress the organization’s ability of meeting objectives (Deloitte, 2015). In the
Namibian oil industry, it is imperative for example for NAMCOR to share information and
knowledge that affect the delivery capacity of suppliers because they are communicating more as
teams than as individual in addressing joint enterprise through joint problem solving and joint
value creation. Procurement officers can expand their competencies by building skills and
relationships around commercial and engineering groups such as setting up cross-functional
teams, sharing information on an online platform or hosting focused idea-generating sessions

25
(Mohammad, 2003). The aptitude and keenness to conjointly solve delivery problems permits
better understanding of each partaker’s restraints, possible support and potential collaborations
(Davis & Walker, 2004). Sharing of information and knowledge can assist NAMCOR reduce
cost associated with late deliveries by its suppliers and can help functional teams of all
stakeholders to coordinate and resolve an issues timeously. This can also facilitate considerable
collaboration and cooperation that can take place in collaborative and cooperation projects
NAMCOR may undertake.

Supplier Development

Strategic procurement options such joining alliances, associating and multiple supplier partners
highlights the importance of breeding and building social capital (Davis and Walker, 2004)
which in turn has the prospective of reducing overall costs to the organization resulting in cost
saving. Once strategic relationships are established with key suppliers, joint business
development with these suppliers can follow. Examples, include the Joint Operating Agreements
(JOAs) with Total E&P Namibia BV (Total) and Impact Oil and Gas Namibia (Pty) Ltd (Impact)
signed in Cape Town, South Africa in November 2018 (The Staff Reporter, 2018). The supplier
relationship typically encompasses sharing of plans between the two entities and defining long-
term programmes, such as market penetration, mergers, acquisitions and joint ventures, or
strategic alliances, collaborations and partnerships. Innovation is encouraged under the
relationship based procurement approach and enabled because it offers for shared risk taking to
be more systematically stimulated and rewarded (Verweij, 2013). Innovation is key in delivering
increased value to NAMCOR stakeholders.

In conclusion, recognizing the strategic value of an organizational purpose entails that for public
entities like NAMCOR’s, leader’s needs to understand how the procurement function contributes
to the realization of organization’s objectives, enable and align the function for maximum results,

26
and set performance expectations that direct the abilities of the procurement function. It became
obvious that organizations that only recognize their procurement function based on getting the
lowest price purchase order, such organizations miss the greater value of a professional
procurement organization. Integrating procurement into the organization’s strategic value driver,
preparing procurement officers with the tools that permit them to execute at a specialized level
and setting opportunities accordingly. This is key to realizing value to government and
communities. It also ignite greater trust and greater success. Therefore, relationship based
procurement has a capacity to deliver a win-win situation for stakeholders in the supply chain.

2.5 Question 2B
2.5.1 A supplier evaluation metric that incorporates Sustainable Public Procurement Practices
(SPPP).

Supplier evaluation refers to the process of assessing and refining potential suppliers by the
means of quantitative assessment. It aims;
 To ensure a range of best suppliers are available for use.
 To measure and observe performances for the purpose of ensuring contract compliance,
reducing costs, mitigating the risks and delivering continuous improvements. According
to Baily, Crocker, Farmer, Jossop and Jonas (2008, p.205-212) Supplier selection and
evaluation includes Quality, capacity, location, environmental regulation compliance,
long term relationship potential and service after sale.

Incorporating the Sustainable Public Procurement Practices (SPPP) in the supplier evaluation
metric is crucial. According to the SPPP, when evaluating suppliers, “it is possible to use
weightings for precise sustainability standards as well as to the suppliers’ entire sustainability
performance in supplement to traditional procurement standards.” Therefore, the metric for
Namcor will incorporate this, the criteria in which the company will evaluate its suppliers, the
weight in terms of evaluating the supplier and the vendor section.

The criteria of supplier evaluation will include:

27
 1. FEATURES
Quality of the product

Quality refers to the ability of a product or service to constantly meet or go above customer’s
expectations. There is no doubt that quality is one of the fundamental factors used to evaluate
suppliers. The quality of NAMCOR’s supplier products needs to be exceptionally consistent
because customers think poor quality is from the organization but not its suppliers. Poor quality
product have major effects on downstream sectors as it increase rate of return by displeased
customers, fees of inventory, profit margins and ruin business reputation. According to the
public procurement act section 55, subsection 1 it states that ‘’The board or public entity must
award a procurement contract to bidders having submitted the lowest evaluated substantially
responsive bid, which meets the qualification criteria specified in the pre-qualifying or bidding
documents, following the steps outlined in subsections (3) and (4).”So if the suppliers meet all
the criteria specified, they can stand a good chance to be part of the supplier base of NAMCOR.

Capacity
The firm may need to consider if that certain supplier has the capacity to fill orders to meet
customer requirements and the ability to fill large orders if needed. Tlhage (2018) states that’ ’the
facility in Walvis Bay will have a total storage capacity of 75 million liters, which will be able to
store five million liters of diesel 500, 40 million liters of diesel 50, 20 million liters of unleaded
petrol, five million liters of heavy fuel oil and five million liters of aviation fuel.’’ This simply
mean when NAMCOR evaluate the bidders they must look at the suppliers who can supply the
product at the required volume without compromising on capacity.

Environmental regulation compliance of the product and company operations

According to step 7, sub step 7.5 of sustainable public procurement implementation guidelines ‘’
When practicing sustainable procurement, certain sustainability risks could be mitigated by
selection of supplier. In this regards when NAMCOR is awarding the contract they look at the
suppliers that use environmental friendly conducts to extract the oil from the place of origin by

28
making sure that the equipment used are not emitting too much Carbon monoxide into the
atmosphere which contributes to global warming. If the supplier extracts the oil from the sea they
have to ensure that no splitting of oil drop into the sea which is dangerous to the aquatic animals.
When they are procuring stationary from companies like Waltons, they first check if the
stationaries like printing papers are recyclable, does the company that made papers meet an
environment management system standard or sustainable forestry certification system?

Lastly when NAMCOR is evaluating the supplier they look at supplier that will supply them
with products that are conforming to environmental law, regulations, standards and other
requirement such as operating permits to operate, pre-processing, performing calculation and
validating the data for compliance with any alert or reporting level. (Immanuel, 2019 p.1) states
that “Namibia does not use oil from Angola because it contains Sulphur levels of 2000 parts per
million [ppm], way over the international standards of 500 pmm”. According to sustainable
public procurement guideline mentions that national government have a significant
environmental impact through their purchasing practices by implementing a sustainable
purchasing policy that can help to reduce the impacts across a board spectrum of environmental
aspects, from climates change, to water quality and waste.

2. VENDOR SECTION
Size of the company in terms of number of years in experience and customer base the
supplier has
No customer would like to procure their product from the suppliers that have been in the market
for some times but they have one/ few customers. Number of customer a certain supplier has is
one of the evaluation factor NAMCOR consider when they are evaluating bids. Examples,
during the bid evaluation if BP won the tender the procurement department of NAMCOR have to
look at the quantity of companies that BP serve. If BP has a lot of customer that mean he serve
his customer well that’s a reason their customers do not leave to other suppliers.

Supplier location
Location is one of the factors that plays an important role in the evaluation of suppliers.
Depending on the types of products or services the supplier renders, that serves to determine
whether their distance from the company affects it in any way. NAMCOR has a lot of

29
international suppliers from all over the world, who enables their operations to run smoothly.
Since the world has become a globalized village, distance is longer so much of a stumbling block
as intermodal transportation makes it possible to NAMCOR to receive a machine spare part from
e.g. China to Namibia within a day. However, they do have to consider local suppliers for goods
that are available locally and conform to the same international standards to save on transport
costs.

Company financial stability

Donohe (2019) states that ‘’financial stability refers to the ability of the company to generate
enough money from their operation to pay for their regular business expenses and feeling that the
long-term of financial success of the business is secure.’’ He stated that financial stability is
significant to the company because:
 It helps the supplier in time when sales slowdown in recession, the company should
be able to tap into emergency fund to pay for the bills until sales can improve. In this
situation when NAMCOR press an oil order the supplier can’t give an excuse that the
company did not drill enough litres because supplier have enough money to pay the
production.
 It provides opportunity for the business (supplier) expansion and growth. When
example BP sees increasing in profitability, they can afford to add to its product line
which is going to be good to NAMCOR because they can get more products
example, machinery and safety gears from the same supplier. This simply mean the
number of supplier base will decrease and the NAMCOR will be able to work with
few suppliers.
 It also help landers, business partners and investors. If the suppler ever need financial
help like loan, the landers usually want to see the statement of financial stability that
shows that the supplier has sufficiency cash flow.

Strategic plans
A strategic plan is a document used to address the organizations goals, the actions needed to
achieve those goals and all the other critical features developed during the planning exercise. As
the success of the company depends upon the success of the whole supply chain, it is very

30
important for all team players that form part of NAMCOR’s supply chain to be strategically
aligned and working towards the same supply chain goals. That is possible through effective
communication and building of collaborative relationships with key suppliers. All players will be
required to play their parts and discuss process from time to time.

Investment in Research and Development

R&D is a process meant to create new or advance technology that can provide a competitive
advantage at the business, industry, or national level. While the rewards can be very high, the
process of technological innovation is complex and risky. Having suppliers that work towards
improving their own internal processes through R & D. while the inventions are important, the
development of existing products is of equal significance as the consumer preferences are
continually changing. It is very important, especially in the oil industry that suppliers strive to
ensure their operations are sustainable, that is not causing harm to the environment, giving back
to societies in which they operate whilst still making profits.

3. SUPPORT SERVICES
According to business dictionary support service refers to activities or function required for
success completion of a process, program, or project. NAMCOR awards the contract to
companies that have license. Example, if BP get the contract he must have the documentation
like license that permit the supplier to operate.

1.0 CONCLUSION

The current public procurement system in the country has many loopholes. In mid-June 2018, in
what was the initially formal media meeting of the Central Procurement Board of Namibia
(CPBN), chairperson of the board, Patrick Swartz, stated that the first year of operation of the
board had been a hard learning experience. This self-assessment was sponsored by anecdotal
evidence that revealed that public sector procurement in Namibia continues to struggle to
become efficient and still operate under thick clouds of controversy. While the Public
Procurement Act of 2015 was supposed to change public procurement governance, by mid-2018
all the evidence pointed to a system still in deep crisis. The government still has a shortage of
experienced personnel who can handle the entire transition from the manual procurement
environment to the electronic procurement platform. Most of the skilled work force is imported.

31
Sustainable Public Procurement Practices is the way forward in a lot of organization, a lot of
organization are moving away from the traditional way of abandoning sustainable practices to
the modern way of Implementing SPPP. In the case study of NAMCOR, it is evident that the
procurement committee is currently working hard to ensure that all goods or products utilized by
the company are sourced within an environmentally friendly manner.

4.0 Recommendations

Findings and recommendations derived from this study can be used by policy makers to
implement reforms that embrace effective and efficient use of public resources and mostly
improve on the current state of public procurement in Namibia. The improvements in the
procurement process can help reduce government operation costs, thus saving resources that can
be used to contribute to growth, equity, and overall national development.
a) As the Tender board act was revised to what is known today as the Public Procurement
Act, it is recommended that the we, as a country try and bench mark some sections of
the Public Procurement Act of other countries whose procurement system is very
effective and quite advanced. For example, in Georgia, the introduction of e-procurement
through the Georgian Electronic Government Procurement (Ge-GP) system is a good
example of how strong political will and commitment can be critical in the context of
reforming public procurement. The State Procurement Agency of Georgia (SPA)
designed, developed, and tested the e-procurement system and eventually moved to the
mandatory use of e-procurement, fully replacing paper-based tenders within a short time
span of only one year. By doing so, they have realized huge saving as the time taken to
do procurement admin enormously reduced and efficiency and effectiveness improved.
b) Should the government fully move from the manual based procurement to e-procurement,
there would be a great improvement in the way how procurement is conducted. Less time
is required when using e-procurement compared to the current process manual process.
There will be better accountability and transparency of systems when things are done
electronically then when it is done with papers that can get lost or destroyed, not to
mention corruption that is at the centre of public entities. Hadden (2016) confirms that
the introduction of e-procurement can enormously improve transparency, efficiency and
contribute to a more effective allocation of public resources and spending. The world is
moving to a digital way of doing things, the government should follow suit.
c) It is recommended that the government invests in human capital with the right skill sets
to do away with improper planning and discrepancies with tender processes within the
country.
d) The government is also recommended to incorporate the Sustainable Public Procurement
Policies into the Public Procurement Act for all public entities. This will ensure that all
the three pillars (economic, social and environmental) framework is included in the act to
promote sustainable use of public resources.

32
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