That's just bizarre to me. You are the procurement department. Presumably you're supposed to have some expertise in this area, yet you're taking none of the responsibility in the case of indigenous procurement.
The way to prevent shell companies from giving all of the work to non-indigenous companies is to have subcontracting requirements. That's why the rules require that a certain proportion of subcontracts in the indigenous set-asides go to indigenous companies.
Are these subcontracting rules enforced?