CASE FOR BOTSWANA
GOVERNMENT TO
ADOPT UNSOLICITED
PROPOSALS
An evaluation of the case for Botswana Government to adopt unsolicited
proposals
POLICY BRIEF
Table of Contents
1.0 INTRODUCTION .......................................................................................................................... 2
2.0 PURPOSE ..................................................................................................................................... 2
3.0 NATURE OF THE PROBLEM ......................................................................................................... 3
4.0 THE IMPACT OF ADOPTING UNSOLICITED PROPOSALS IN BOTSWANA ..................................... 5
5.0 CURRENT PROCUREMENT ENVIRONMENT ................................................................................ 5
PUBLIC PROCUREMENT AND ASSET DISPOSAL (PPAD) ACT ....................................................... 5
PRIVATISATION POLICY OF 2000 AND THE DIRECTIVE ON THE REVISED PEEPA MANDATE ......... 7
PUBLIC PRIVATE PARTNERSHIP (PPP) POLICY AND IMPLEMENTATION FRAMEWORKOF 2009 ...... 9
PUBLIC FINANCE MANAGEMENT ACT ..................................................................................... 11
CITIZEN ECONOMIC EMPOWERMENT POLICY OF 2012 (CEE) ................................................... 12
ECONOMIC DIVERSIFICATION DRIVE (EDD) MEDIUM TO LONG TERM STRATEGY (2011-2016) .. 13
BOTSWANA INNOVATION HUB
.............................................................................14
6.0 OVERVIEW OF INTERNATIONAL BEST PRACTISE ..................................................................... 16
6.1 Philippines ................................................................................................................. 17
6.2 Republic of Korea ........................................................................................................ 17
6.3 Chile ............................................................................................................................. 17
6.4 South Africa ................................................................................................................. 17
6.5 China ............................................................................................................................ 18
6.6 Steps To Follow Upon Receipt Of An Unsolicited Proposal In South Africa ............... 18
7.0 HANDLING UNSOLICITED BIDS PROPOSALS ............................................................................ 20
8.0 TIME ALLOCATIONS FOR BIDDING AND APPROVAL ................................................................. 21
9.0 SECTORS PRONE TO UNSOLICITED BIDS .................................................................................. 22
10.0 CONCLUSION ......................................................................................................................... 22
11.0 RECOMMENDATIONS ............................................................................................................ 23
12.0 BIBLIOGRAPHY ....................................................................................................................... 24
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1.0
INTRODUCTION
1.1
Government procurement is normally done publicly for any interested party to
participate. Proponents of Government reform have viewed government
activities, including procurement, as rigid, overregulated, and leading to
inefficiencies and diseconomies. The reformers advocate eliminating
administrative regulations that interfere with productivity, while maintaining
those that further essential procurement policies. However, such policies or
procedures for Unsolicited Bids/Proposals should not be incompatible with
Government fulfillment of its roles, and must be designed to fit within existing
structures.
1.2
The National Economic Diversification Council (NEDC) at its 3rd meeting held
in September 2012 resolved that a Task Team be formed to explore ways of
adopting both solicited and unsolicited bidding process within the Government
procurement framework in order to leverage on innovativeness, and also
guard what is developed locally without necessarily compromising on the
country’s governance and procurement procedures.
1.3
Unsolicited proposals are those proposals that are not requested by a
government and usually originate within the private sector. These proposals
typically come from companies with ties to a particular industry—such as
developers, suppliers, and financiers—that spend their own money to develop
project specifications, then directly approach governments to get the required
official approvals. Unsolicited bids can offer innovative ideas and offer
solutions to infrastructure problems that governments are experiencing.
However, unsolicited bids need to be managed properly as they have the
potential to compromise transparency, serve special interests, suppresses
competition and to deliver poor value for money.
2.0
PURPOSE
2.1
This report has been drafted in order to provide the Government of Botswana
with a framework within which unsolicited proposals may be considered. It
proposes how unsolicited bids should be dealt with by setting out procedures
that must be followed. It also demonstrates unsolicited bids best practices
from all over the world. These procedures will eventually create an
environment whereby Government will eventually take advantage of private
sector’s ability to innovate and their capacity to conceptualize and develop
projects and by so doing create employment and economic growth.
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3.0
NATURE OF THE PROBLEM
3.1
Private sector often proposes projects with the objective of avoiding
competition and if successful the project champion usually negotiates with
government directly behind closed doors. In some cases Government feels
compelled not to go out on tender because of the Intellectual Property Rights
that if they were to go out to tender would be revealed to the other bidders
and therefore violated. Some governments are often easily confused by these
arguments of Intellectual Property Rights and the fact that they can save
money from negotiating with a single company or entity and reduce the cost
that they would incur by tendering. Governments often think that by
negotiating with a single company, the project would be developed much
faster than negotiating with multiple companies or entities. In some countries,
sole negotiation has proven to take longer than anticipated when compared
to open bidding processes.
The diagram below shows various unsolicited bids scenarios.
Solicited proposal
Solicited proposal
awarded through
awarded through
sole-source negotiations
open tendering process
Unsolicited proposal
Unsolicited proposal
awarded through
awarded through
sole-source negotiations
open tendering process
Increased
Transparency
Increased competition
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4.0
THE IMPACT OF ADOPTING UNSOLICITED PROPOSALS IN
BOTSWANA
4.1
Any reform promoting the use of unsolicited proposals must ensure
competitive opportunities for comparable proposals from alternative suppliers.
They also promote efficiency because they may allow a consideration of
alternative suppliers whose typically small size may allow them to develop and
market innovations more quickly than their rivals. The private sector also
employs more cost-effective methods than the Government; in this case, the
Government can save and divert the resources to other projects that can
improve the lives of its citizens. For example, some infrastructure projects are
more costly to the Government hence the involvement of the private sector
can reduce government spending.
4.2
Countries which allow for unsolicited bidding give opportunity for formation of
new industries. As companies come up with innovative and creative ideas
which are different from the norm, their knowledge and ideas can result in
creation of new industries. The development of these industries will lead to
creation of new job opportunities.
4.3
Unsolicited proposals can lead to developments in business activities such as
the use of new technology. Furthermore, current technology can also be
improved and through the use of unsolicited bidding, these developments of
technologies can come from any individual. Allowing innovation and creativity
to be part of Government bidding process give way for an expansion of
sectors that contribute to economic growth. As compared to depending on the
normal sectors of the economy, citizens are given freedom to present ideas
that can help government in solving some of the problems which could
otherwise have not had a resolved. The introduction of new sectors can also
lead to development of new products and services.
Methodology
In considering the adoption of unsolicited proposals, the Task Team looked
into several issues;
a) Risks Associated with Adopting Unsolicited Bids
The risks of not getting value for money; to curb this risk, the proposals
will be subjected to open bidding process once the proposals have been
considered to be of Government/ public interest. They will also be
subjected to a feasibility study as well as before an agreement can be
made with the proponent.
b) Transparency and Fairness; once the proposal has been submitted and
evaluated, they will follow the PPAD Act procedures for tendering.
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c) No Competition; unsolicited Bids; once the proposal has been received,
and evaluated and deemed to be beneficial to the Government, it will then
be subjected to PPAD Act.
d) Intellectual Property Rights Violated; In a situation where the
proponent has submitted a proposal to a Government or Public Entity and
feels that the information might be licked to a third party, a Confidentiality
None Disclosure Agreements indicating that confidential and proprietary
data will not be made public must be signed.
e) Reimbursement by the Government (Budget Constrains); The
reimbursement to the proponent when they do not win the tender will be
absorbed by the contractor who will win the tender.
f) Motivate Corruption; it is possible that unsolicited proposals can fall in
the hands of inside traders who are involved in corrupt practices. In this
case, the Directorate on Corruption and Economic Crime will be engaged.
g) Unsolicited Proposals benefiting only those on Medium and Large
Scale; The government should ensure that all policies adopted will cater
for such and proposals can also be categorized to allow companies to
compete with those in the same capacity level.
5.0
CURRENT PROCUREMENT ENVIRONMENT
5.1
The PPAD Act and its Regulations do not provide for unsolicited bids hence
they fall outside the scope of the public procurement and asset disposal legal
framework. The Act does not explicitly prohibit the unsolicited bids but from
the processes entailed therein, it can be inferred from the reading of the
provisions of the Act and the Regulations that the intention of the legislature
was to make provision only of the solicited bids.
Below is the current policy and legal environment as it relates to unsolicited bids.
A. PUBLIC PROCUREMENT AND ASSET DISPOSAL (PPAD) ACT
Public procurement and asset disposal in Botswana is regulated by the Public
Procurement and Asset Disposal Act [CAP. 42:08] and its implementing Public
Procurement and Asset Disposal Regulations.
Under this legal framework, the following methods of procurement are provided for:
I.
Open Domestic bidding;
This is a procurement or disposal method which is open to participation by all
providers through advertisement of the procurement or disposal opportunity. In
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terms of the Act, the open domestic bidding is the preferred/ default method of
procurement
II.
Open International Bidding;
This is a method of procurement which may be used where it is determined that
foreign bidders’ participation may enhance competition and also where the
procurement requirement’s technical complexity requires participation of nonresident foreign bidders. Whenever this method is used, it must also be reasonably
anticipated that foreign bidders would increase value for money. This method
therefore specifically seeks to attract foreign bidders.
III.
Restricted International Bidding;
This method is used where items to be procured are available only from a limited
number of suppliers and where there is insufficient time for open bidding due to an
emergency situation. The departure from the open bidding must be justified. In this
method, foreign providers are included in the list of bidders.
IV.
Restricted Domestic Bidding;
This method may be used where supplies are available from a limited number of
providers and where there is insufficient time for an open bidding procedure due to
an emergency situation. It may also be used where exceptional circumstances justify
a departure from open bidding.
V.
Quotations Proposal Procurement;
This method of procurement is used where there is insufficient time for an open or
restricted bidding procedure due to an emergency situation and where the value of
the procurement does not exceed the threshold stated in the Guidelines. It may also
be used where exceptional circumstances justify a departure from open or restricted
bidding. In this method, a written bidding document is addressed to a limited
number of potential bidders without publicly advertising the opportunity. At least five
bids should be obtained.
VI.
Direct Procurement;
Direct procurement method may be used where the selection of a supplier is
conducted on a sole supplier basis without competition such as where there is
insufficient time for any other procurement method to be used due to an emergency
situation or where the supplies are available only from one provider. This method is
used where exceptional circumstances prevent the use of competition.
VII.
Micro Procurement;
Micro procurement may be used where the estimated value of the procurement does
not exceed the threshold stated in the Guidelines. The Board regularly reviews the
thresholds and currently the threshold for micro-procurement is P30.000.00.
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In line with Section 26 of the PPAD Act, procurement must be based on the following
principles:
5.2

Open economy

Transparency and accountability

Integrity and public confidence in the procurement and disposal process

Fair and equitable treatment of contractors

Competition among contractors

Standardization of procurement items.
In terms of the PPADB legal framework, open domestic bidding method is the default
method of procurement hence the use of any other method that is not consistent
with the above-mentioned principles must first be approved by the Board upon the
necessary justification being provided. Regulation 55 provides that a procuring
or disposing entity may request the Board for permission to use a
procurement procedure other than the open domestic bidding method
where the circumstances for the bid are not provided for under the
provisions of these Regulations.
5.3
Procurement process means the successive stages in the procurement cycle
including planning, choice of procedure, measures to solicit offers from
bidders, examination and evaluation of such offers, award of contract and
contract management. This clearly requires that all procurement processes
should have been planned by the Procuring Entity.
B. PRIVATISATION POLICY OF 2000 AND THE DIRECTIVE ON THE REVISED
PEEPA MANDATE
I.
Privatisation in Botswana is defined broadly to encompass all the measures and
policies aimed at strengthening the role of the private sector in the economy.
The privatisation policy has a number of objectives outlined as follows:





Promotion of competition, improvement of efficiency and
enhancement of productivity of enterprises
Increasing direct citizen participation in ownership of national assets
Accelerating rate of economic growth by stimulating entrepreneurship
and investment,
Withdrawing from commercial activities which no longer need to be
undertaken by the public sector.
Reducing size of public sector;
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

Relieving the financial and administrative burden of Government in
undertaking and maintaining a constantly expanding network of
services and investments in infrastructure.
Broadening and deepening capital market.
II.
The Policy is flexible on the choice of privatisation modalities. The choice
depends on several factors including the objectives of the government; financial
conditions and performance record of the entity and the ability to mobilise
private sector resources, particularly through the domestic capital market. It
also recognises alternative forms or methods of privatisation such as
commercialisation, corporatisation, management contracts, franchises, leases,
concessions and stock market floatation
III.
To achieve the objectives of the Privatisation Policy, there is need for flexibility,
standard procedures, processes and sound legal framework to safeguard the
principles of privatisation. The principles of privatisation amongst others are
that;





IV.
Unsolicited proposals can be used as a means to achieve the objectives of
privatisation. They can also initiate other privatisation modalities mentioned
above through private sector ingenuity and reduce the burden of implementing
agencies to prepare projects for bidding. The method can also benefit
government to;



V.
it should be done to benefit all,
make utilities and industries efficient and competitive,
be transparent,
stimulate the growth of financial and capital markets,
consider different and appropriate modalities of privatisation for improving
the efficiency of different enterprises or units.
access exclusive rights, either worldwide or regional.
access design, methodology or engineering concept for which the proponent
or association possesses intellectual property rights
improve cost efficiency and speedy project development
In summary, the privatisation Policy acknowledges that the role of Government
in providing marketable goods will diminish and will rather seek to facilitate and
where necessary regulate the operation of the business by the private sector. It
further states that the drive will not be easy and needs commitment from the
private sector and public sector. In addition, the drive towards the diversified
8|Page
economy should be led by the private sector, which is expected to display
qualities of good corporate citizenship. Thus, unsolicited proposals will be
testament to the determination of Government towards transforming the
interaction of the Government sector into a “smart partnership” of cooperation
and a win–win situation for both parties.
C. PUBLIC PRIVATE PARTNERSHIP (PPP) POLICY AND IMPLEMENTATION
FRAMEWORK OF 2009
I.
The Government of Botswana formulated the PPP policy in order to use PPP as
a form of procuring and of financing infrastructure projects in the public sector
to ensure sustainable investment in infrastructure as well as to restore
soundness in public finances and bring down the budget deficit to a
manageable level. The policy provides a platform to promote the efficient
allocation and use of economic resources of Government and the private sector.
II.
In developing the policy, an assessment was undertaken in order to establish
whether the policies, laws and suitable sponsoring institutions existed to
facilitate PPP projects as well as to determine additional measures that may be
required to create a necessary conducive environment. The review revealed
amongst others, key findings to be;

III.
IV.
V.
that the general policy and legal framework in Botswana was
considered to be less enabling to deal efficiently with PPPs.
 That there are no standardised approaches and process guidelines
to deal with the structure of PPP projects and no uniform
framework to guide the treatment of tendered and unsolicited
proposals.
The Policy followed the recommendations of the foresaid assessment of
creating a stable policy framework and development of detailed PPP procedures
and guidelines for project conception, preparation, procurement and
management.
In dealing with unsolicited bids, the policy does not exclude the method but
rather requires that the fundamentals of a competitive transparent procurement
process be preserved. It embraces that such an approach might demonstrate
substantial technical or financial innovation; or meet an unidentified need.
However, the processes and procedures outlined in the Policy do not envisage
unsolicited proposals though the PPP procurement.
Furthermore, the PPP guidelines appended as Annexure 3, are;
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


to provide a best practice guide for PPP practitioners in both the public
and private sectors;
structured sequentially, from project inception and registration to
contract management and the implementation at the expiry of a PPP
contract; and
to be used by all public entities of the Government of Botswana when
assessing the procurement alternatives for any infrastructure project,
whether listed in the NDP or not.
VI.
The guidelines therefore do not allow unsolicited proposals, subject to the
policy. The unsolicited proposals are envisioned to present a risk of entering
into obligations that do not demonstrate affordability, transfer of significant risk
to the private sector and value for money and may violate the principles of
transparency, fairness and competition.
VII.
In summary, the Policy;
 appreciates the possibility of unsolicited bids and their associated
benefits.
 does not outline the processes and procedures for the form of
procurement.
 provides guidelines for implementing PPP which do not allow for
unsolicited proposals
VIII.
The policy therefore does not provide standardised approaches and process
guidelines to cater for unsolicited bids as initially determined by the assessment
that gave way for the PPP Policy. The risks envisaged for allowing unsolicited
bids can be dealt with in several ways which will be discussed later in the
paper. It is also important to be mindful that unsolicited bids can be used for
non PPP ventures.
D. PUBLIC FINANCE MANAGEMENT ACT
I.
The Public Finance Management Act (PFMA) was established to regulate
financial management in the Central Government and local authorities to;



II.
ensure that all revenue, expenditure, assets and liabilities of those
governments are managed efficiently and effectively;
provide for the responsibilities of persons entrusted with financial
management in those governments; and
provide for matters connected therewith.
Under the Act, the Minister of Ministry of Finance Development Planning
(MFDP) is responsible for the supervision of finances of Botswana, control and
management of the Consolidated Fund, the Development Fund and all other
public funds, and the overall control and direction of all matters relating to the
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financial affairs of Botswana. Therefore, the Minister is charged with the cause
of establishment of systems throughout Government for planning, monitoring,
allocating and budgeting for the use of public moneys and supplies in order to
attain efficiency and effectiveness of the economy.
III.
The Minister is also mandated to instigate the review of all requests for the
issue of moneys from the Consolidated Fund and, where the Minister considers
it appropriate approve their inclusion in the estimates of the expenditure
submission to the National Assembly. Furthermore, the Minister shall provide a
framework for the scrutiny and control over the utilisation of public supplies
and moneys by maintaining clear reporting methods and systems which
amongst others;


IV.
comprehensively set out the applicable hierarchy and procedure for
accountability
ensure the exercise of regularity and propriety in the handling and
expenditure of public money and, in particular demonstrate that goods
or services are procured in a fair, equitable, competitive and cost
effective manner in accordance with the law providing for public
procurement.
In addition, the Minister has to safeguard public assets by acting under and
complying with statutory authority and control when conducting the following
financial transactions on behalf of the Government;





borrowing of money
issuing securities
investing public moneys
giving guarantees and indemnities, and
operating bank accounts
V.
In light of the foregoing, the Minister of MFDP is responsible for causal of the
promulgation of policies, laws, frameworks and systems for adopting
Unsolicited Proposals. Unsolicited proposal are a form of public procurement
and can have varying implications on public moneys, government budgeting,
fairness, equity, cost effectiveness, competitiveness and delivery of public
services only to name a few. It is therefore prudent to put in place adequate
systems that will ensure accountability, regularity and promote transparency
and competitiveness.
VI.
Unsolicited bids are unique in nature and are bound to differ in how the Private
Sector wants to deal with the Government or the general public. Therefore,
variations of the proposals for partnership with Government might include
requests for the government to borrow money, issue securities, invest public
money, give guarantees or indemnities or operate bank account.
Consequently, the government has to clearly state its position on which
modalities will be accepted. For example, the Philippines Government does not
11 | P a g e
allow direct sovereign guarantees, equity, or subsidies. It does not include
market risks or revenue streams.
VII.
The Government has adopted a comprehensive Public Financial Management
Reforms Programme (PFMRP) in July 2010. The programme addresses issues of
budget credibility, comprehensiveness and transparency; policy based
budgeting, predictability and control in budget execution, accountability and
reporting as well as external scrutiny and auditing. As such, the programme can
also assist in assimilating the new dispensation of accepting unsolicited
proposals into the current government procurement systems.
VIII.
In summary, the Minister of Finance and Development Planning has to
champion and own the consideration of allowing unsolicited bids. Furthermore,
ensure adequacy of frameworks and systems that deal with allowing unsolicited
bids. It is also important to amend the PFMA where necessary to safeguard
public finances and the general public.
E. OTHER POLICIES AND STRUTEGIES
1) CITIZEN ECONOMIC EMPOWERMENT POLICY OF 2012 (CEE)
a. The main objective of the Citizen Economic Empowerment (CEE) Policy
is to develop skills and knowledge of Botswana Citizens to enable them
realize their full potential, build capacity for the private sector to grow
through technical and managerial skills and to infuse entrepreneurial
culture in order to build a foundation for global competitiveness. The
adoption of unsolicited bids will in this case promote entrepreneurial
culture as well as promote citizen participation at all levels of the
economic.
b. According to the CEE Policy, it is also the role of the Government to
inculcate entrepreneurship culture amongst citizens and encourage
business to business support within the private sector. Citizens and
the private sector can benefit from the adoption of unsolicited bidding
under the CEE pillars “enhancing global competitiveness through
empowerment and partnership, encouraging Non-state Actors to play a
role in the delivery of public sector programmes, procurement and
licensing to promote empowerment.”
Section 34 of CEE Policy states; “Mechanisms will be developed for
accreditation of companies wishing to do business with the State or
Organs of the state. The Policy will encourage suppliers of items such
as medical equipment, education products etc, to work in partnership
with local businesses to impart skills, most particularly, to assist
citizens to achieve quality standards.”
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2) ECONOMIC DIVERSIFICATION DRIVE (EDD) MEDIUM TO LONG TERM
STRATEGY (2011-2016)
a. The Economic Diversification Drive (EDD) is a national strategy aimed
at accelerating diversification of the economy. The major aim of the
initiative is to diversify the economy into sectors that will continue to
grow long after the minerals have run out. The EDD Strategy also aims
to facilitate production of goods and services that comply with
domestic and international standards; development of a diversified
vibrant technologically driven knowledge economy that creates
sustainable employment; as well as development of entrepreneurial
culture for business growth by enhancing citizen participation.
b. The Botswana Government is continuously advocating for procurement
of locally produced goods and services hence the use of unsolicited
bidding will create opportunities for small and medium companies to
present their innovation for Government consideration. Through this,
Government resources are shared by all players in the economy. Equity
may also be improved by opening the Government’s contracting
process to firms that are not as large or well-established as traditional
competitors.
c. Technological development, adaptation and innovation are core
elements for competitiveness under the current globalised economic
environment. The Global Competitiveness Report categorizes countries
according to their level of development and competitiveness. Countries
at the lower level of global competitiveness (the factor driven stage)
compete on the basis of abundant factors of production such as labour
and land; those at the medium or middle level of competitiveness (the
efficiency driven stage) compete on the basis of efficiency of their
labour markets, goods markets and financial markets sophistication;
while those at the leading edge of global competitiveness (the
innovation driven stage) compete on the basis of cutting edge
technological development and innovation, creation of new products
and cost reduction through efficient modes of production and upward
movement in the technology and product ladder.
d. In the medium to long term, the Botswana Government aims to
develop sustainable enterprises that will compete in the domestic and
international markets. Its specific objectives are to develop globally
competitive sectors; diversify exports and export markets through a
vibrant and globally competitive private sector; develop goods and
services that comply with local and international standards; and
develop an entrepreneurship culture for business growth and enhanced
citizen participation in the economy. As such, the Technology
Development, Innovation and Transfer thematic group facilitates the
development of Botswana to become a vibrant technology driven
economy through the involvement of the private sector development.
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3) BOTSWANA INNOVATION HUB
a. The Botswana Innovation Hub (BIH) is a product of the Botswana
Excellence Strategy of 2008 which proposed a three-pronged national
strategic goal; being economic diversification, job creation, and moving
the country towards a knowledge-based economy. BIH, which is also
aligned to the National Vision 2016’s pillar of achieving a prosperous,
productive and innovative nation was incorporated as a company to
develop and operate Botswana’s first Science and Technology Park.
The company is mandated to support new ventures and existing
companies as well as attract companies, universities, research and
advanced training institutes to establish in the Science and Technology
Park. This is intended to help transform Botswana into a technologydriven and knowledge-based economy, by promoting a culture of
innovation and competitiveness among its associated companies and
knowledge-based institutions
A. CleanTech Center

The Botswana Innovation Hub (BIH) has partnered with Lund University
and Krinova Science Park in Sweden to establish a CleanTech Centre of
Expertise programme within the Botswana Innovation Hub, with support
from the Swedish government through the Swedish International
Development Agency (SIDA). The programme is meant to establish a hub
for research and business development on Clean Technologies with
relevance to Botswana, Swedish partners, and their stakeholders.

CleanTech business cuts across the four focus areas of BIH as it entails
coming up with innovations and technologies for a greener, cleaner, lowcarbon, resource efficient and socially-inclusive development path. The
programme promotes innovation that answers environmental concerns to
global challenges such as water and air pollution, biomass and water
depletion, and climate change.
B. The Southern Africa Innovation Support (SAIS) Programme

Through the BIH, the Southern Africa Innovation Support (SAIS)
Programme promotes collaboration within the innovation systems of
African countries in order to provide greater impact on economic and
social development. The programme, which aims to address challenges
found within the innovation systems of each country by enhancing
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their innovation capacity, both individually and collectively is currently
being piloted in four countries: Botswana, Mozambique, Namibia and
Zambia from 2011 – 2015.
4.

Through SAIS guidance and facilitation, it is envisaged that by 2015
there will be the beginning of a robust, well-functioning and
illuminative innovation ecosystem across the four participating
countries. This ecosystem will stimulate the operational elements of
innovation to contribute to economic growth and poverty reduction,
within a sustainable regional innovation development framework.

To unlock innovative potential, it is important to establish and sustain a
holistic and interconnected environment, which has a foundation built
on both knowledge and practice. SAIS contributes to developing this
environment by bringing together the elements of the systems of
innovation in each country, and strengthening the capacity of platforms
that enable product, service and social innovations. Additionally, SAIS
provides a strategic approach to raising funds for innovative projects
by using a combination of both local and international sources.
ISSUES OF INTELLECTUAL PROPERTY
Intellectual Property refers to the creations of the mind or a body of law
whereby the government awards exclusive economic rights to artists and
inventors in their creations, in order to stimulate technically and socially
valuable and innovative contributions to society. It includes such things as
inventions, literary and artistic works, symbols, images, names, and designs.
IP creations can be sold, bought, hired or rented like all other mainstream
property.
Intellectual Property is divided into two categories:
 Industrial Property - relates to Trademarks, Patents and industrial designs
 Copyright
Industrial Property
Trademark: A Trade/Service mark is a word, symbol, logo or combination of
both, which distinguishes goods/services of one party from those of the other.
A trademark’s main use is to be an identifier of source
Patent: is an exclusive right granted by the State for the protection for an
invention for a limited period of time. (In Botswana protection is 20 years
from the date of filing of the application) It gives its owner the exclusive right
15 | P a g e
to prevent or stop others from making, using, offering for sale, selling or
importing a product or a process, based on the patented invention, without
the owner’s prior permission.
To be patentable an invention should be new, involve an inventive step
and be industrially applicable.
Industrial Designs: refers to the ornamental/ aesthetic appearance of an
article or a product. To be registered, the design must not be similar to the
existing designs (must be new and original) Must have an individual character
which distinguishes it from prior designs.
**New legal provisions have been introduced with regard to geographical
indications, unfair competition, traditional knowledge and
handicrafts.
Copyright
The Copyright and Neighbouring Rights Act CAP 68:02, defines copyright in
relation to work as an exclusive right, by virtue and subject to the provisions
of the Act, to do, and authorize other persons to do, certain Acts in relation to
that work in Botswana and in any other country to which the relevant
provisions of the Act extends.
Neighbouring Rights (Section 23) are the rights of those who assist right
holders to communicate their works to the public. Such rights include the
rights of performers in their performances, the rights of producers of sound
recordings in their sound recordings and the rights of broadcasting
organizations in their radio and television programs.
The Copyright and Neighbouring Rights Act and its amendments recognize
protected works as literary or artistic works which are original intellectual
creations:





Literary and artistic works include the following- books, pamphlets, articles,
computer programmes and other writings.
Speeches, lecturers, addresses, sermons and other oral works.
Dramatic, dramatic musical works, pantomimes, choreographic works and
other works created for stage productions
Stage productions, musical works audiovisual works, works of visual art’
photography and others.
Derivative works such as translations, adaptations, arrangements and other
transformations or modifications of works
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
Collection of works, collection of mere data (databases) whether in machine
readable or other form and collections of expression of folklore.
Intellectual property consists of items that one has created, are unique and
provide economic benefit. Intellectual property includes inventions, designs,
original works of authorship and trade secrets. Protection of intellectual
property depends on their types and have to be registered for one to claim
ownership.
Intellectual Property (IP) encourages innovation and rewards entrepreneurs,
drives economic growth and competitiveness, creates and supports
competitive jobs, protects consumers and families, and helps generate
breakthrough solutions to global challenges.
6.0
OVERVIEW OF INTERNATIONAL BEST PRACTISE
The table below shows a list of different countries and how they approach unsolicited bids.
The table shows the legal framework used type of system and reimburse of project
development costs and intellectual property bidding process.
Country or
State
Legal Framework
Type of
system
Reimbursement of
development costs?
Intellectual property rights
Andhra
Pradesh
(India)
AP Infrastructure
Development Enabling
Act No. 36, 2001
Swiss
challenge
Yes, by
government
After reimbursement proposal
becomes property of
government
Argentina
Presidential Decree
966, 2005
Bonus and
best and final
offer
Yes, by the winning bidder,
1% of estimated project
cost
After 2 years proposal
becomes property of
government
Chile
Supreme Decree
956, 1999
Bonus
Yes, by winning bidder
Reimbursement costs
approved at the initial stage
*
Costa Rica
Decree 31836, July
2004
None
Yes, by winning bidder
Reimbursement costs
approved at the initial stage
After reimbursement proposal
becomes
property of government\
Guam
(U.S.
territory)
Public Law 24-294
1998
Swiss
challenge
No
*
Gujarat
(India)
Gujarat Infrastructure
Development Act No.
11, 1999
Swiss
challenge
Yes, by
government
After reimbursement proposal
becomes
property of government
Indonesia
Presidential Regulation
No. 67,
2005
Bonus or
purchase of
proposal
Yes, when bonus is not
granted. Costs paid by
government or by winning
bidder.
*
Korea, Rep
Act on private
participation in
infrastructure
Bonus
No
*
The
BOT law
Swiss
No
*
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Philippines
challenge
South Africa
PFMA & MFMA
None
Yes, by winning bidder Cost
to be audited by an
independent finance expert
Institution takes appropriate
action to protect confidential
and intellectual property rights
South Africa
Policy of SANRAL in
respect of unsolicited
proposals
Best and final
offers
Yes, by winning bidder
reimbursement costs
approved at the initial stage
*
Sri Lanka
Guidelines on private
sector
infrastructure
Same as
solicited
projects
No
No
Taiwan
(China)
Guidelines for
Evaluation of
Unsolicited Proposals,
2002
Combined
bonus and
Swiss
challenge
No
*
Virginia
(United
States)
Public-Private
Transportation Act of
1995. Va. Code Ann.
§§56-560
Same as
solicited
projects
No
Public entity shall take
appropriate action to protect
confidential and proprietary
information
6.1
* Philippines
The Philippines allows third parties to make better offers for a project
during a designated period. The original proponent then has the right
to counter match any superior offers.
6.2
* Republic of Korea
The governments of Chile and Korea support unsolicited proposals by
awarding a bonus in a formal bidding procedure to the original
proponent. The original proponent’s offer is then selected as long as it
falls within a stipulated percentage of the best offer. In Korea the
maximum value of a bonus is 10 percent, with the exact value
determined by other characteristics of the tender process. Projects are
usually awarded on the basis of a complete evaluation covering the
financial plan, construction plan, operation plan, and social
contribution. Of the two projects in which a counterproposal was
successful, only in one did the bonus make a difference in the
outcome.
6.3
* Chile
The governments of Chile and Korea support unsolicited proposals by
awarding a bonus in a formal bidding procedure to the original
proponent. The original proponent’s offer is then selected as long as it
falls within a stipulated percentage of the best offer. In Chile most
unsolicited projects involving a bonus for the original proponent have
been airport concessions. Surprisingly, receiving a bonus in the airport
privatizations provided little advantage to the original project
proponent in the bidding. The bonus may have scared away other
potential bidders, but in no case did it determine the award of the
project: in the absence of the bonus, the same bidder would have
won. Chile reimburses the original project champion its development
costs in a case where they loose the final bid.
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6.4
* South Africa
The regulation initially made no provision for unsolicited bids, and
National Treasury was not in favour of them. The government has
seince developed an unsolicited bid framework (2009). National
Treasury encourages institutions to listen to innovative ideas from the
private sector but, in so doing, not to acquire associated intellectual
property rights, and issued as National Treasury PPP Practice
Note Number 02 of 2004 11 not to make any commitments that will
undermine competitive procurement. If the 9ideas seem promising,
institutions should register the project with the relevant treasury in
terms of Treasury Regulation 16 and follow the project cycle as
regulated. South Africa modeled its regulations on the Philippine
system. But it recently adjusted them to increase the possibility of a
successful challenge1. SA reimburses the original project champion its
development costs in a case where they loose the final bid or states in
the bidding document the cost of reimbursement by the winning
bidder.
6.5
* China
Another major issue is the increasing numbers of unsolicited proposals
presented to governments in both developing and developed countries.
While in many cases the origin of a project is not clear, the percentage
of overall PPI projects that originate as unsolicited proposals is also
estimated to be significant in some countries (for example,
approximately 43 percent in Taiwan [China]). Because unsolicited
proposals are beginning to represent a significant share of overall
projects in many countries and these proposals can create negative
public perceptions, many policy makers have begun to realize the need
to directly address them in PPI legislation.
6.6
STEPS TO FOLLOW UPON RECEIPT OF AN UNSOLICITED PROPOSAL IN
SOUTH AFRICA
6.6.1
The unsolicited bid framework in South Africa gives a lot of power to the
accounting officer. If the accounting authority decides not to consider
the unsolicited bid, the process ends. If the accounting officer decides to
reject the unsolicited proposal, he or she must follow the following
process;
I.
notify the authorized representative of the proponent by
registered post, that the institution has rejected the unsolicited
proposal;
II.
ensure that the institution does not make use of any of the
intellectual property or proprietary data in the unsolicited
proposal; and
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III.
return to the proponent by registered mail, all documents
received in the unsolicited proposal.
6.6.2
If the accounting officer decides to consider the unsolicited proposal, he
or she must send a registered letter to the project proponent confirming
the decision to consider the unsolicited proposal. The accounting officer
will then have to send a letter to the National Treasury to register the
project as a PPP. The diagram below shows steps to follow upon receipt
of an unsolicited proposal in South Africa.
6.6.3
Depending on whether the project is a municipal or a provincial/national
PPP, it would have to follow the PFMA and MFMA legislations. All PPPs
have to comply with Treasury Regulation 16. The National Treasury then
takes the lead and invites parties to the inception meeting. In South
Africa, unsolicited bids are evaluated in such a manner as any bids
submitted in response to a tender. Such bids will be subjected to a
feasibility study and Treasury Approvals/Treasury View and
Recommendations to test for affordability, value for money and risk
transfer to the party best able to handle it. The bid will have to comply
with PPP procurement policy until the successful bidder is appointed.
6.6.4
With regards to Intellectual Property Rights, it is important to note that
institutions take appropriate action to protect confidential and
20 | P a g e
Intellect6ual Property Rights. If the unsolicited bid is rejected, the
accounting officer has to ensure that the institution does not make use
of any of the intellectual property or proprietary data in the unsolicited
proposal. If the unsolicited bid is accepted, the accounting officer has to
ensure that the institution does not use any data, concept, idea, for a
solicitation or in negotiation with any other firm. Institution requirements
to use intellectual property during and after the termination of the PPP
agreement and after the expiry of the PPP agreement should also be
specified in the RFP where appropriate.
7.0
HANDLING UNSOLICITED BIDS PROPOSALS
7.1
Governments could use several approaches to handle unsolicited proposals.
7.2
Option one:
-
prohibiting unsolicited projects
Some governments disallow unsolicited bids because they have the potential to
compromise transparency, serve special interests, suppresses competition and
to deliver poor value for money.
7.3
-
Option two:
purchase the project concept and then award the project through a
competitive bidding process
The advantage of this option is that there is no bidder with a pre-defined
advantage.
7.4
Option three:
Offer the original project champion a predefined advantage in a competitive
bidding process
a. Bonus system
This process involves a competitive tender where the original project
champion is given additional value to the bid. 5
b. II. Swiss challenge system
The original proponent has the right to counter-match any superior
offers. By contrast, a challenger may have as little as 60 days in some
countries (such as the Philippines) to prepare a counterproposal. Many
21 | P a g e
potential challengers may be unwilling to compete without sufficient time to
prepare.
c. Best and Final Offer System
Recently, variations of the bonus and Swiss challenge systems have been
developed in several countries. The key element of many of these is multiple
rounds of tendering, in which the original proponent is given the advantage of
automatically participating in the final round. Bids are received, evaluated,
and ranked. In South Africa, the two most advantageous bids are selected in
the first round, from which a final round of bidding will take place. If the
original proponent is not one of these two selected, it will then automatically
be allowed to compete in the final round as well. In South Africa, the winning
bidder is also required to compensate the proponent for project development
costs, which are stipulated in the public bid documents.
The table below shows the advantages and disadvantages of offering
reimbursements for development costs
Advantages






Disadvantages
Legal respect for Intellectual Property
Rights are essential to private sector
development
Reimbursement maintains private
sector interest in the project
development phase
Project ideas will not be limited only to
large companies or developers who
have deep pockets
The amount of financial compensation
for project development costs can be
determined through the estimated
market value for the project proposal
or an independent audit
Developers will allocate the necessary
resources to make sure that the
project is developed professionally
Reimbursement encourages innovation




The number of meaningless projects
may increase because developers
might not intend to bid in the tender
process, but only to profit from a
project concept
Original project proponents may
exaggerate project development costs
to discourage challengers once a
project is given formal approval
Challengers are at a financial
disadvantage because reimbursement
adds extra project finance expenses
into calculation of tariff
Government will have to allocate
additional resources to determine if
requested reimbursement is accurate
8.0
TIME ALLOCATIONS FOR BIDDING AND APPROVAL
8.1
In some countries challengers of bids have as little as 60 days to challenge or
prepare for counter proposal and may be unwilling to compete without
sufficient time to prepare. The table below shows a group of sampled
countries’ time allocation for bidding and approval.
Preliminary
approval
Final
approval
Call for open
tenders
Challenge or
counter
Additional
time
Total
time
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Argentina
90 days
60 days
Undetermined
n.a
n.a.
Chile
45 days
12 months
12 months
Approximately
2–4 months
n.a.
33–35
months
Costa Rica
45 days
4 months
12 months
Not
applicable
n.a.
17+
months
Guam
(U.S.
territory)
Undetermined
Undetermined
Undetermined
60 days
n.a
Italy
4 months
2 months
3 months
n.a
n.a
n.a.
Korea, Rep
15 days
4 months
Undetermined
Approximately
2–4 months
n.a.
6.5–
8.5+
months
Philippines
2 months
3 months
Undetermined
2 months
1 month to
counter
match
8+
months
South
Africa
1 month
9 months
3 months
2 months
2 months
to
evaluate
17
months
n.a.
9.0
SECTORS PRONE TO UNSOLICITED BIDS
9.1
Allowing the private sector to present proposals in sectors that are part of
Government strategic objectives or priorities could be cause for concern. In
theory, the private sector’s only concern is making a return on its investment
without consideration for the general welfare or overall economic benefit of
the country. In order to address such concerns, some countries such as Chile
and Costa Rica only allow unsolicited proposals for projects that are part of its
strategic plans. The Botswana Government can consider the following sectors
as priority for consideration of unsolicited bids but other developers of
proposals not in the identified industries which may be beneficial to the
Government will also be considered.
a) Collection, purification and distribution of water
b) Construction of Infrastructure Projects such as roads, dams, Social and
welfare facilities
c) Transportation facilities
d) Information and Communications Technology and ICT enabled services
e) Biotechnology and Applied Sciences.
f) Energy and Environment (Clean Technology)
g) Mining Technologies and Beneficiation
h) Agro-processing (dairy, horticulture, meat, etc.)
i) Recreational, cultural and sporting activities
j) Renewable Energy
k) Power generation facilities
l) Construction/Building Materials
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m) Major facilities for tour sites
n) Major commercial facilities
10.
CONCLUSION
10.1
Unsolicited bids can give rise to new approaches to infrastructure delivery
problems that the government may be facing. The project champions usually
develop the project idea with their own funds however; they usually expect
this cost to be reimbursed if the project is awarded to someone else or
another party. Calculation of development costs usually requires an
independent audit firm to verify and government usually has to allocate
additional resources to determine if requested reimbursement is accurate.
The biggest challenge is to assess and control this cost and ensure that silly
projects which require government capacity to manage are discouraged. In
some cases where government reimburse for development cost, the number
of meaningless projects increase because developers might not intend to bid
in the tender process, but only to profit from a project concept. Overall the
biggest challenge of unsolicited bids is to ensure that there is a genuinely
effective competitive process and that alternative bidders are given enough
time to prepare competitive bids.
11.
RECOMMENDATIONS
i.
The best approach of managing unsolicited bids is for Government of
Botswana to allow them with a clear framework and procedures to follow on
where to submit proposals, information required, steps to follow and time
frames for decision making process.
ii.
In the short term, it would be ideal to adopt an unsolicited bid framework that
favours local entrepreneurs in terms of the CEE Policy. It may be ideal for the
Government to target only sectors that are part of Government strategic
objectives as listed below and amend the Public Procurement and Asset
Disposal Act (PPAD Act) to incorporate the unsolicited bid framework.
iii.
In the medium to long term the Government could look into amending the
Public Finance Management Act (PFMA) to accommodate unsolicited bids.
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12.0 BIBLIOGRAPHY
1. Privatisation Policy for Botswana, Government Paper No. 1, Ministry of
Finance and Development Planning, 2000.
2. Public Private Partnership Policy and Implementation Framework, Ministry of
Finance and Development Planning, June 2009.
3. Public Finance Management Act, 2011.
4. Economic Diversification Drive Medium to Long Term Strategy (2011-2016)
5. Citizen Economic Empowerment Policy of 2012
6. Directive on Revised Roles and Responsibilities (PEEPA extended mandate).
7. Hodges, John. March 2003. “Unsolicited Proposals: Public Policy for the
Private Sector” Viewpoint 258. World Bank,Private Sector and Infrastructure
Network, Washington, D.C.
8. World Bank PPIAF (Public Private Infrastructure Advisory Facility)
9. UNCITRAL (United Nations Commission on International Trade Law), 2001,
New York
10. National Treasury, PPP Guidelines, Module 5 PPP Procurement
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