PPDA orders RBM to retender supply of ICT equipment

Sparc Systems Limited

The Public Procurement and Disposal of Assets Authority (PPDA) has ordered the Reserve Bank of Malawi (RBM) to retender the supply of ICT equipment after discovering anomalies in the bidding process which was awarded to Mitra Systems Limited.

This follows an appeal by Spark Systems Ltd to the Director of PPDA after observing a series of omissions including that the successful bidder only existed for two years when one of the bidding requirements was that the firm should have operated for a minimum of five years.

According to the documents, RBM invited bids from eligible bidders to tender for supply and delivery of ICT Hardware for Flexicube Upgrade reference number RMB/ICT/007/02, and Hardware for Automated Transfer System (ATS) reference number RMB/ICT/008/20 from which three companies responded to both tenders.

Mitra Systems were announced successful because according to RBM, they were the lowest evaluated.

Sparc Systems, then sought permission to the Head of Procuring entity to provide access to the entire record of the procurement proceedings, including evaluation report of bid evaluators, minutes of the meetings of RBM's Internal Procurement and Disposal Committee and all correspondence with the PPDA as per Access to Information law, but were turned down by the respondents.

The bank responded that Sparc Systems Limited were not successful in the bid for failure to submit Manufacturer's Authorisation from Dell as per requirement as presented in section 3 of the bidding document, instead proposed to supply, and deliver equipment manufactured by IBM, Dell and Kemp but did not submit Manufacturer Authorisation from Kemp.

However, during the review proceeding, Sparc Systems Limited showed that it had matched the requirements to all the criteria including the Manufacturer Authorisations and technical details as requested in the bidding document, refuting RBM's accusations that the company did not qualify at eligibility stage.

Sparc also refuted RBM claims that it had indicated only one traceable reference in the bidding document which RBM showed as a basis for disqualification.

Sparc systems wondered how the submitted documents would have disappeared from their submission, and the inconsistency from RBM submission in that they responded to PPDA that Sparc did not submit Manufacturer Authorisation letters which is on eligibility stage and yet the same central bank talked of lack of compliance for laptops which is on the technical phase which would only mean Sparc had met the eligibility for it to proceed to technical phase.

The company then accused RBM of not following the procedure at bid opening by failing to go through the bid opening checklist to verify if the requested information was available in the bids, a normal trend that ensures that the availability of documents like Manufacturer' Authorisation, bid security and bid validity period are checked and verified in the presence of representatives of bidders.

Sparc also accused RBM of unfair treatment, breaching section 30 of the PPD Act of 2017 which requires that all public procurement proceedings be conducted in a manner which promotes transparency, accountability, non-discrimination, fairness, open completion, anonymity, economy, efficiency and responsiveness to modern information and communications technology.

"The decision to recommend Mitra Systems for the award violated Regulation 133 of the Public Procurement Regulations. This Regulation provides that only those who qualify may be awarded the contract. Mitra Systems had only two years post registration therefore did not qualify as per the requirement of 5 years of experience," reads part of the submission from Sparc Systems Limited to PPDA.

In its determination, the PPDA Review Committee said RBM erred to award the contract to a company that had two years’ experience contrary to their bidding requirement.

“The consideration beyond the firm was inappropriate because the understanding of the committee is that the meaning of a bidder under Section 2 of the PPDA Act 2017 is the firm and not the individual owners or stakeholders. Mitra Systems was therefore not supposed to be awarded the contract on this basis,” PPDA said.

The bank was ordered to retender the supply and delivery of ATS Procurement reference number RMB/ICT/008/20 of Lot 1 and 2, and to retender the supply and delivery of Flexicube Procurement reference number RMB/ICT/007/20.

RBM has also been advised to engage independent evaluators for the procurement, with the tender be published at a reduced period of 21 days, while all bidders who participated in the initial bids have been advised to bid again.

Last year, Human Rights Defenders Coalition (HRDC) penned the Anti-Corruption Bureau (ACB) to investigate possible corruption in the matter.

According to HRDC Chairperson, Gift Trapence, his organisation had received allegations that three companies bid for the procurement of ATS equipment: namely, Mitra K1,068,732,141.30; Sparc Systems Ltd K 989,865,480.39 and Move Secure K 874,980,291.80.

He added that bids for the procurement of ICT hardware for Flexicube upgrade were as follows: Oranux K1, 049,631,250.82; Sparc System Ltd K 976,851,674.00; and Mitra Systems K 757,133,881.49.

“It is further alleged that Sparc Systems came first in this evaluation. It is, however, alleged that RBM has a policy that states that two big contracts cannot be given to one company and thus to hedge the risk, the evaluation team recommended splitting the awards.

“It is further alleged that this resolution was made even though Mitra has been in operation for less than three years and therefore does not have enough experience,” Trapence said in the letter.