High Court rebuffs RBM on ICT tender case

RBM, SPARC Limited

The High Court in Lilongwe had ordered Reserve Bank of Malawi to cancel the contract for the supply and delivery of ICT hardware which was awarded to Market Insights Tracking (Mitra) Systems Limited.

Sparc Systems Limited lodged a complaint over the irregularities in the tender for the supply of Flexcube Upgrade and ICT hardware for Automated Transfer System process by the Central Bank.

Judge Kenyatta Nyirenda, in his ruling dated August 23 August, under civil case 13 of 2021 has also ordered the Bank to bear the costs as it challenged the decision made by the Public Procurement and Disposal of Assets Authority (PPDA) which asked for retendering first.

Another Court Ruling in July this year ordered the Central Bank to produce and disclose a Forensic Audit Report which was prepared for the claimant by Deloitte, an Audit and Advisory Firm, after Sparc Systems requested for its disclosure in their supplementary sworn statement to the court.

According to Judge Nyirenda, the report faulted RBM’s procurement process, which was deliberately done to favor Mitra Systems Limited and nullified the award of the third lot to Mitra, which means all the lots must be retendered.

"The Claimant must re-tender both contracts, that is, the contract for the supply and delivery of Lot 1, Lot 2 and Lot 3 of the ICT Equipment for ATS (Procurement reference number RBM/ICT/008/20) and the contract for the supply and delivery of ICT Equipment for Flexicube Upgrade (Procurement reference number RBM/ICT/007/20).

"The order by the defendant that the claimant should proceed with the recommendation to award to the 2nd Interested Party the contract relating to the supply and delivery of ATS Procurement reference number RBM/ICT/008/20 Lot 3 cannot stand. The award is, accordingly annulled. This means that all the Lots have to be re-tendered. I so order.

"On the authority of the decision of the Supreme Court of Appeal in Mutharika and another v. Chilima and another, Constitutional Appeal No. 1 of 2020, the re-tendering will only be open to the qualifying bidders which participated in the previous procurement proceedings. It is so ordered," added Judge Nyirenda.

The requirement that one of the suppliers in the tender should have operated more than five years, which Mitra could not meet, did not please Judge Nyirenda.

"By way of illustration, in the present case the claimant had stated that the bidder should have at least five years’ experience. As such, the purpose or goal of preliminary screening exercise would have been to confirm if the bidders met this requirement.

"A bidder having less than the stipulated experience had to be disqualified at this stage. This is clear from regulation 132 of the Regulations as read with Desk Instruction 13: General Evaluation Procedures For Goods, Works And Routine Services. The upshot of this is that the 2nd Interested Party should have been disqualified at the preliminary screening stage because it did not have the requisite experience, that is, 5 years in supplying office machines.

"There should have been no need therefore, to engage in a detailed evaluation of its bids. The Defendant ignored its own qualification requirements and allowed an ineligible bidder to continue to participate in the procurement proceedings. This was not only grossly irregular but also a violation of the principles of fairness set out in the Act," Nyirenda said.

Wisely Phiri
Wisely Phiri's Sparc reported the tender flaws- photos courtesy of internet 

Going forward, the Court has ordered RBM to involve independent evaluators for the retender and that all the future tenders should include electronic copies (CDs) in the submission to avoid any suspicion of tampering with documents.

He also ruled that the new bidding process will only involve those that bid last time, with all bidders covering their own costs.

A sworn statement by Sparc Limited Managing Director to the Court read: "I invite the Court to take into account the unreasonable conduct of the Claimant in defending what is clearly indefensible and in seeking to uphold that which is clearly irregular in considering the question of costs of these proceedings.

"I pray, therefore, that not only should the application be dismissed but that the dismissal should be with costs on an indemnity basis.”

The ruling exonerates Sparc Systems Limited which fought tooth and nail to expose the irregularities in the tendering process.