Brothers banned from govt tenders for five years

Four years after allegations of collusion and irregularities rocked a N$388 million government food supply tender, three companies linked to the Nekomba brothers have been barred from participating in public procurement for the next five years.

In a ruling delivered on 5 June and seen by Namibian Sun, a public procurement review panel found that Stream Two Properties CC, Degrande Investment CC and Degree Power Investment CC engaged in collusive conduct and submitted materially false or misleading information during the procurement process.

“Having regard to the seriousness of the misconduct, the extent of the coordination established by the evidence, the need to preserve the integrity of the public procurement system, and the objectives of deterrence and accountability, the panel is satisfied that a period of debarment is justified and proportionate,” the ruling states.

The three companies are controlled by brothers Herman Nekomba, Erastus Nekomba and Jacob ‘Jacky’ Nekomba.

The contract involved the supply of protein, sugar, salt and transportation to blenders’ warehouses.

The decision comes after a procurement saga was first exposed in 2022, when questions were raised over the involvement of family-linked companies in the multimillion-dollar tender.

The Central Procurement Board of Namibia (CPBN) had applied to have the three companies debarred under Section 68 of the Public Procurement Act, claiming that the firms coordinated their bids while presenting themselves as independent competitors.

The review panel concluded that the "evidence establishes that the respondents acted in concert and coordinated aspects of their bid submissions in a manner inconsistent with the principles of fair and competitive procurement".

The panel found that they "furnished materially false or misleading information and engaged in collusive conduct during the procurement process", undermining the principles of fairness, transparency, competition and equal treatment "that form the cornerstone of the public procurement regime".

How the brothers bid

Two of the brothers won tenders in April 2022 to supply food to police officers and trial-awaiting prisoners for three years.

Through their separate companies, they also tendered three separate bids for an education ministry contract to supply, blend, pack and transport maize and other food items to schools. They supported each other's bids by providing transport to each other or using the same administrative official.

The food for schools tender, advertised in October 2020, attracted 22 bids and was valued at N$280 million.

Erastus tendered through Degrande Investments CC at N$186 million, Herman through Stream Two Properties CC at N$209 million, and Jacky through Degree Power Investment CC at N$188 million. All three bid to supply maize meal to 14 regions.

The CPBN stepped in during the evaluation process between 18 February and 27 July 2021 and disqualified the companies controlled by the three brothers, deeming it a "conflict of interest".

“Bidders had the same surname, physical and postal address in their founding statements as bidder number 2 and bidder number 15," the CPBN said in 2022.

"This is regarded to be a conflict of interest…which is to have a relationship with each other, directly, through common third parties, that puts them in a position to have access to information or influence on the bid of another bidder or influence the purchases regarding this bidding."

Shared personnel, coordinated bids

Part of the review panel’s findings is that the brothers' three companies relied on the same staff while portraying themselves as separate bidders.

“The evidence establishes that the same individuals were reflected as key personnel in the bid submissions of the three respondents… All the three respondents did not provide any letters of appointment, letters of intent, employment agreements, or other documentary evidence,” the ruling states.

The panel rejected the argument that the overlap merely reflected future staffing arrangements.

It found that the companies relied on identical laboratory reports originating from one bidder, shared transport assets, warehouse facilities and documentation.

“The repeated use of common personnel, common technical documentation, common logistical resources, common facilities, and common supporting documentation points to a pattern of coordination rather than independent participation in a competitive procurement process,” the ruling reads.

According to legal documents, the brothers argued that as family-owned businesses, sharing addresses or facilities did not automatically amount to collusion. The review panel disagreed, finding that the evidence demonstrated coordinated conduct rather than coincidence and that, while family relationships alone do not prove collusion, they provided "important contextual evidence".

Having found the allegations proven, the review panel ordered all three companies debarred from public procurement for five years, effective 5 June, and directed that their names be entered into the national debarment register maintained by the Procurement Policy Unit.

The brothers maintained they never intended to mislead procurement authorities and that the information relied upon by the CPBN did not constitute lawful grounds for debarment. They did not respond to questions from Namibian Sun by the time of going to print.