NSSF explains why local companies miss out on Fund’s multibillion contracts

NSSF Managing Director Richard Byarugaba urged local companies to have long-term growth strategies.

NSSF Managing Director Richard Byarugaba urged local companies to have long-term growth strategies.

KAMPALA: The National Social Security Fund (NSSF) has expressed concern over the limited capacity of Ugandan companies to bid for contracts from the Fund.

Speaking at the NSSF Suppliers Forum held in Kampala on Monday, 27 June 2022, the Fund’s Head of Procurement, Mr Gerald Mugabi, said they conducted a survey which revealed that whereas 90% of their contracts are given to local companies, most of the profits go to foreign companies.

“It’s important to note that 10% of all business at NSSF is done by foreign firms while 90% are local firms. Although, local firms are the majority suppliers, foreign firms take 80% of contracts value. We need to improve our competitiveness,” Mr Mugabi said.

He explained that some of the issues found with the local contractors included high mistrust from international firms inhibiting joint ventures with local firms, high tendering requirements and under-pricing by fellow bidders.

“We lack the in-house expertise to realistically estimate the project costs and fare prediction of market dynamics. We engage in cutthroat competition and consequently, we have lost capital to do more business,” he explained.

He explained that NSSF wants to organize procurement clinics to address vendor knowledge gaps in tendering.

Mugabi said they are also committed to breaking down larger packages of works to make them manageable by local vendors.

“Business Competitiveness is where a business has an advantage over its competitors by offering superior products and services hence driving customer preference. Our purpose today is for you to see how you can improve your product and brand,” he said.

“For you to be competitive as a supplier to NSSF, you need to invest in technology, merge to pull resources to take on even bigger contracts, update your legal documents and invest in research and development,” he emphasized.

NSSF Managing Director Richard Byarugaba urged local companies to have long-term growth strategies.

“Stop importing and selling as a strategy (commission agents). Have a long-term strategy, if you lose a tender today, don’t be discouraged, because your strategy should be to create a relationship with us,” he explained.

“We need low-cost offerings. We need businesses to give us houses that we can sell to our members at affordable prices. We also need ways to speed up the real estate procurement process to help us address speed, liquidity, cost and scale,” he added.

Mugabi revealed that for the Financial Year 2022/23, Shs546.9 billion has been allocated to real estate projects, Shs21.1 billion will go to IT systems and computer equipment, Shs2.4 billion to furniture and office equipment and Shs0.51 billion to motor vehicles.

“The Annual Suppliers Conference has 3 main objectives: To get feedback from suppliers on how we should improve, To give you hints on how you can do better, To create a platform for suppliers to network and create business opportunities,” he said.

“Our business as the Fund thrives on you, when you employ more people, we collect more. When you build your capacity and do better in business, we have positive results as well,” he added.


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