Court rebuffs Reserve Bank of Malawi in K1.8 billion ICT case


The High Court sitting in Lilongwe on Monday rebuffed the Reserve Bank of Malawi (RBM) and ordered it to retender the K1.8 billion ATS equipment and ICT Hardware for Flexicube procurement deals.
Late last year, RBM offered the ICT deals to Mitra but, on February 9 this year, a PPDA Review Committee (RC) faulted the way the central bank handled the tender and ordered RBM to retender part of the ICT contracts.
The development prompted RBM to seek the intervention of the court to ascertain the correctness, legality and propriety of the RC’s determination.
In judgement delivered on Monday, High Court Judge Kenyatta Nyirenda upheld the decision of PPDA and also nullified the award of all lots of the deal, ordering RBM to retender them.
Kenyatta also ruled that only firms that tendered bids last time should bid and that only those that qualify should be evaluated.
“In the interest of clarity and avoidance of doubt, the court orders the following: (a) the Claimant [RBM] 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).
“(b) the Claimant must engage independent evaluators in respect of both contracts; (c) the re-tender (s) in respect of both contracts must be published at a reduced period of 21 days; (d) bidding for the contracts to be re-tendered will only be open to the qualifying bidders which participated in the previous procurement proceedings,” the judgement reads.
The court also directed that future tender submission should include an electronic copy (compact disk) from the bidders to avoid suspicion of tempering with bids.
The court has also slapped RBM with the costs of the case.
“Costs are the discretion of the court: See section 30 of the Courts Act. It is also commonplace that costs follow the event. An instructive authority is Order 31(3)(2) of the CPR, which provides that, where the court decides to make an order about costs, the unsuccessful party should be ordered to pay the costs of the successful party.
“In the present case, the Claimant [RBM] is the unsuccessful party. In the circumstances, the costs of these proceedings shall be borne by the Claimant. It is so ordered,” the judgement indicates.
On November 13 last year, RBM published a notice of intention to offer the deal to Mitra based on being the lowest evaluated bidder, which another bidder, Sparc Systems, objected to as it was allegedly quoted on the higher side.
This resulted in PPDA setting up an Adhoc Review Committee to look into the matter. The Review Committee then ordered RBM to re-advertise both the ATS and Flexcube tenders.
In its determination, the PPDA RC said RBM committed a mistake in awarding the contract to a company that had two years’ experience when the bidding document specifically required a period of five years.
“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,” Kalembo said.
On November 12 last year, Human Rights Defenders Coalition Executive Director Gift Trapence wrote the then Anti-Corruption Bureau director-general Reyneck Matemba to investigate possible corruption in the matter.
In an interview Tuesday, Trapence said HRDC was happy with the judgement.
“HRDC was vindicated by the reserve Bank Audit report and also court ruling. HRDC would want to see public institutions following procurement procedures but also making sure that they have value for money at the centre of procurement processes,” Trapence said.
Lawyer for Sparc Systems, Khumbo Soko, Tuesday said he was satisfied with the judgement.
“I think that this is justice served. And, if I were to be honest, I would say that the correct result, in this case, has never been in doubt.
“The procurement proceeding was riddled with some irregularities it simply could not stand. I hope the bank and other procurement entities will learn a thing or two from this debacle and improve their act,” Soko said.

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