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PPDA faults RBM in ICT materials deal

Reserve Bank of Malawi headquarters

The Public Procurement and Disposal of Assets Authority has faulted the Reserve Bank of Malawi (RBM) for mishandling the procurement of ICT equipment for Automated Transfer System (ATS) and Flexcube Systems last year.

PPDA has since ordered the retendering of the contracts.

The two deals were offered to Market Insights Tracking (Mitra) despite not meeting the eligibility criteria, which required that the firm should have a minimum of five years experience as stipulated in terms that would apply to the preferred bidder. It was also the highest priced bidder, at K1,068,732,141.30, in the ATS deal.

On November 13 last year, RBM published a notice of intention to offer the deal to Mitra on the basis of being the lowest evaluated bidder, a point another bidder, Sparc Systems, objected to as it was quoted on the higher side.

Sparc then sought RBM explanation on the matter, including an evaluation report of the bid evaluators, minutes of the meetings of RBM’s Internal Procurement and Disposal Committee at which the evaluation reports were presented and considered as well as all correspondence with PPDA relating to the procurement proceedings, including the letter of No Objection.

Sparc, which claims to have over five years of being in the business and was the lowest bidder, wondered how the two deals were awarded to another firm.

This resulted in PPDA setting up an Adhoc Review Committee to look into the matter.

In a letter communicating the outcome of the review, PPDA has since ordered RBM to re-advertise both the ATS and Flexcube tenders.

The letter, which the then PPDA acting Director General Timothy Kalembo signed, says, upon interrogating the central bank on the matter, RBM indicated that Sparc Systems failed the bid because it did not submit manufacturers’ authorisation in the tender documents.

RBM argued, among other grounds, that Sparc Systems, in its bid documents, proposed to supply and deliver IBM, Dell EMC Storage and Kemp Load Balancer but submitted Manufacturers’ Authorisation from IBM only.

RBM further said the Sparc Systems bid was considered incomplete as specifications of Cisco switches were not included and were, therefore, not priced, saying the firm’s application could not have been considered the lowest as it did not include the cost of the switches and a laptop.

These explanations were objected to by Sparc Systems, which maintained it had supplied the required documentation for eligibility and technical specifications as per RBM tender document.

On why it bent the rules to award a firm with two years’ experience, RBM argued that the evaluators considered the fact that Mitra’s beneficial owners were known to the central bank to have experience of more than five years despite the firm being only two years old.

In its determination, the PPDA Review Committee said RBM blundered 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.

The letter further says the review committee doubted if Sparc really did not submit the manufactures’ authorisation letter, saying it felt that, with the type of binding used, it was easy for someone to remove the page from the bid.

In its determination, the PPDA committee has ordered that both the Flexcube and ATS tenders be re-advertised.

It, however, says lot 3 of ATS bid— which was for Kemp load balancer— should not be re-advertised since Sparc did not object to its award.

“The committees’ determination is therefore that if the application accepted for ATS on Lot 3 they [sic] really did not submit the authorisation letter then this lot should be considered to be in line with the respondent [RBM]’s view that the respondent should proceed to award lot 3 to Mitra Systems.

“But [for] the rest of the tenders, the respondent should retender the procurement,” the letter reads.

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