Reserve Bank of Malawi goofs on ICT procurement deal

The Public Procurement and Disposal of Assets Authority (PPDA) has ordered the Reserve Bank of Malawi (RBM) to re-tender the supply of ICT equipment to the central bank which was awarded to Mitra Systems Limited after finding irregularities in the bidding process.

The decision was arrived at when Sparc Systems Limited lodged an appeal to the Director General of PPDA following a series of mistakes in the bidding process. One big questionable anomaly was that the central bank awarded the contract to the alleged successful bidder with a record of only two years existence when one of the bidding requirements stipulates that a successful firm should have operated for a minimum of five years.

According to documents made available to Nyasa Times, RBM invited bids from eligible bidders to tender for supply and delivery of ICT Hardware for Flexible Upgrade reference number RBM/ICT/007/02, and Hardware for Automated Transfer System (ATS) reference number RBM/ICT/008/20. Three companies responded to both tenders.

The central bank announced that Mitra Systems Limited were the successful bidders as they were the lowest evaluated. This prompted Sparc Systems Limited to seek permission from the Head of procuring entity to provide access to 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.

The request was turned down by the respondents who said they were not allowed to disclose information relating to the examination, clarification, evaluation, comparisons of bids and approvals made on particular tender to bidders or any person.

When Sparc Systems Limited appealed to the PPDA, the bank responded that Sparc Systems Limited were not successful in the bid for failure to submit Manufacturer’s Authorization from Dell as per requirement as presented in Section 3 of the bidding document. The bank further alleged that Sparc Systems Limited proposed to supply and deliver equipment manufactured by IBM, Dell and Kemp but did not submit Manufacturer’s Authorization from Kemp.

However, during the review proceedings, Sparc Systems Limited showed that it had matched the requirements to all the criteria including the Manufacturer’s Authorizations and technical details as requested in the bidding document, refuting RBM’s accusations that the company did not qualify at eligibility stage. Sparc Systems Limited also refuted the claim by RBM that it had indicated only one traceable reference in the bidding document which RBM showed as basis for disqualification.

Sparcs Systems Limited wondered how the submitted documents would have magically disappear from their submission. The Malawi leading ICT firm also wondered the inconsistency from RBM submission in that they responded to PPDA that Sparcs Systems Limited did not submit Manufacturer’s Authorization letters which is on eligibility stage and yet the same central bank talked of lack of compliance for laptop and Lenovo 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 important documents are checked and verified in the presence of representatives of bidders.

The company also accused the central bank 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 competition, anonymity, economy, efficiency, and responsiveness to modern information and 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.

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, after hearing from both sides, the PPDA Review Committee said RBM errored to award 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 of 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,” said Timothy Kalembo who is Acting Director of Public Procurement and Disposal of Assets Authority (PPDA).

The PPDA Review Committee has faulted the bank and ordered it to re-tender the supply and delivery of ATS Procurement reference number RBM/ICT/008/20 of Lot 1 and 2, and to re-tender the supply and delivery of Flexicube Procurement reference number RBM/ICT/007/20.

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

The Human Rights Defenders Coalition (HRDC) wrote the Anti-Corruption Bureau (ACB) in November last year to investigate possible corruption in the matter.

HRDC Chairperson, Gift Trapence, observed some anomalies in the bidding process in the letter that was written to ACB.

“It is 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.

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