Tribunal cancels P1.8bn tender
Innocent Selatlhwa | Monday November 25, 2024 14:34
As if that is not enough, the ministry and its leadership will be investigated for corruption as the Tribunal was left shocked at the discoveries that a lot of irregularities were discovered. Sadly for Ghanzi South and Kgalagadi North residents, it means further dry taps. The applicants in the matter, G4 Civils (Pty) Ltd, Landmark Projects (Pty) Ltd and Asphalt Botswana (Pty) Ltd collectively referred to as Tawana JV, stood aggrieved by the decision of the then Ministry of Lands and Water Affairs, not to award the JV Tender No. POU/ MLWA/ DTS/ NCOJANE WATER SUPPLY WORKS/ 0158/ 09102023, a Works Contract for Detailed Designs and Construction of Ghanzi South & Kgalagadi North Villages Water Supply Project. This was on the sole reason that the JV was disqualified during cost evaluation because the Accounting Officer determined that the JV's proposed price for establishment (P&Gs) exceeds 22.5% of the total tender amount (excluding any amount allowed for contingencies and escalation).
The applicants aver that they only proposed as their price for establishment the total sum of P191, 107, 939.64 and the accounting officer was wrong to use the total tender amount in the sum of Pl, 577, 362, 030.33 when the relevant formula in the ITT required that he uses the sum of Pl, 170, 106, 472.56, which in their view is the correct amount of the total tender amount (excluding any amount allowed for contingencies and escalation). Tawana JV further contended that following receipt of their complaint, the ministry did not afford them a hearing thereby breaching Section 104 (3) of the PP Act. They submitted that the Accounting Officer hastily rendered a decision on the complaint without affording them a hearing, wholly breaching Regulation 174. They approached the tribunal seeking the setting aside of the award decision and replacing it with an award decision awarding the Tender to their JV.
In response, the ministry said the ITT in clear terms required that the applicants must reflect their price for establishment (P&Gs) and such costs should not exceed 22.5% of the total tender sum otherwise the bid would be automatically disqualified. In the ministry's view, it is common cause that the applicants' P&Gs stand at 24.5% which is above 22.5%. They were therefore liable to be disqualified and were so disqualified in accordance with the terms of the ITT. “The decision arrived at by the Accounting Officer was both factually and legally correct in disqualifying the applicant under the authority of the requirements set out in the ITT,” they argued. China Civil submitted that the Applicants simply failed to meet item 3.14 of the ITT as set out at page 27 thereof and failed at the cost evaluation stage. “The advanced methodology is clearly wrong, therefore, the decision of the accounting officer did not contravene the tendering procedures set out at page 27 of the ITT. On the Preliminary and General Bill, Section 1 to 6 all form part of the total cost of the P&Gs bill of the project, and not as the Applicants contend,” they stated. The Tribunal proceeded to hear the merits, with the tender suspended until a decision on the merits. The matter turned to determining whether the ministry applied the financial evaluation criterion of the ITT, properly. Tawana JV and China Civil progressed to the financial evaluation stage, which is the stage at which Tawana JV contend the ministry misreckoned their P&G's, to their detriment.
The Tribunal found it important at this stage to consider the issue of progression of the parties to the financial evaluation stage, albeit in a limited context. At the close of the hearing on the merits of this matter, the Ministry was ordered to file the evaluation reports, as well as the composite ITT with the Bill of Quantities (BoQ). According to the Tribunal, having received arguments on the merits, it was reasonably expected that the documents ordered to be filed after the hearing would align to the submissions made. It had been accepted in principle by all parties, at this stage, that the locus for the contest between the parties was the financial evaluation stage, both parties having progressed beyond the technical evaluation stage. The technical evaluation reports, however, revealed that China Civil should never have progressed to the financial evaluation stage, as they failed to meet the minimum threshold set for progression to the financial evaluation stage, on the criteria that required a minimum pass mark of 60% for each category evaluated. China Civil failed to meet the 60% threshold under category 1 of the technical evaluation criteria, twice. A re-evaluation had been ordered because of some concerns, it however, did not result in a pass mark for China Civil. In both instances, the evaluation team recommended that only Tawana JV proceed to financial evaluation stage, a recommendation that was rejected by Baipoledi both times, with the support of the Director, Procurement Oversight. At this stage that, the Tribunal, with this revelation, decided to subpoena Baipoledi and the Director- Procurement Oversight, to explain the patently irregular decisions made to override the clear outcome of evaluation, China Civil. The matter was set down for a third hearing, for the ministry to deal with issues emanating from the evaluation reports. Although the Tawana JV case was based on the financial evaluation stage, the Tribunal state they could not close its eyes to the issues that suggested a pattern of illegality starting at the technical evaluation stage, tinted with the possibility of bias in favour of a bidder, which were not apparent until the evaluation report was produced.
The Tribunal did not re-open the case. The hearing was only limited to an explanation of evaluation by the Ministry, who is charged with the duty to evaluate tenders in terms of Section 40 of the PP Act. All the bidders had not made any application for discovery of the parts of the evaluation reports relevant to the issues. “After much prevarication, evasiveness and outright falsehoods, the Accounting Officer finally admitted that China Civil ought never to have proceeded to the financial evaluation stage, as they failed the technical evaluation criterion on a very simple arithmetic threshold,” the Tribunal states in their judgment. In the end, The Tribunal found that Tawana JV have enjoyed partial success in their appeal, to the extent that their finding is that in the context of assessment of reasonableness for front loading and back loading, it does not make sense, and might even be prejudicial to bidders, to have regard to amounts provided by the procuring entity, and it is only some, and not all amounts proposed, with no rationale provided by the ministry for this segregation. The Tribunal determined the financial evaluation criterion is ambiguous. “None of the parties has successfully managed to apply their proposed criterion with a correlating arithmetic outcome.
The Applicant's ground on the breach of Section 104 as alluded to at paragraph 55 and 56 of this judgment is well founded and I find merit in it. The Tribunal is empowered to order cancellation, and I so order. Additionally, the conduct of the Ministry deserves censure. An order for costs is appropriate,' reads the judgment. In the circumstances, the Tribunal made the following orders: The appeal by Tawana JV partly succeeds in that the award decision of the Accounting Officer is hereby set aside. The tribunal further cancelled the tender and referred the matter to the Directorate on Corruption and Economic Crime (DCEC) for further investigation in terms of Regulation 17 of the Public Procurement (Tribunal) Regulations. The Registrar was also directed to refund the Applicants' complaint fee within 30 days of the date of the order. The ministry shall bear the costs of the appeal. Parties were advised of their right to appeal the judgment to the High Court within 30 days from the date of delivery, if aggrieved, in terms of Regulation 17 of the Public Procurement (Tribunal) Regulations 2023.