Sunday, May 26, 2024

Accountant General tender pits Jamali against Nshakazhogwe

In an unusual three-way legal fight, Varsha Enterprises, a company offloaded from a bidding process, has gone to the Gaborone High Court seeking an order to reverse a decision that favours Zambezi Motors, its competitor. This being a big-money tender, Varsha has also cited the Public Procurement and Asset Disposal Board (PPADB) which awards tenders of this nature. The former is owned by real estate and media mogul, Said Jamali, while the latter is owned by motor magnate, Ishmael Nshakazhogwe.

The case began with Justice Dr. Zein Kebonang asking T. Motsumi, the lawyer representing the Ministry of Finance and Development Planning to clarify some issues pertaining to the tender. PPADB rules say that where there is “ambiguity” in relation to a tender, the procuring entity (PE) can write a bidder to seek clarification. What emerged from this exchange was that without consulting the PPADB, the Deputy Permanent Secretary, Jacob Momene, wrote a letter to Zambezi Motors asking the company to reconfigure its bid. Similar courtesy was not extended to Varsha Enterprises.

“Was there any confusion?” Kebonang asked Motsumi.

“No, my Lord.”

“Why did the Deputy Permanent Secretary have to write a letter?” the judge pressed on.

“My Lord, that is a question I am unable to answer,” the lawyer replied.

Motsumi didn’t have an answer to other questions that Kebonang put to her and at one point, the latter offered to adjourn court so that she could familiarise herself with contents of the thick file in front of her. She declined the offer but a short while later, the judge suggested that she should consult with her clients. At this point, an MFDP official with knowledge of the case bounded to his feet from two benches behind and made his way to the lawyers’ desk. Now and then he would whisper something in her ear when Kebonang asked a question.

The plot outline that emerged from the judge-lawyer exchange was that Zambezi and Varsha responded to an August 2015 MFDP tender to provide office accommodation for the Accountant General last year. Varsha offered more space than Zambezi and quoted a lower price. The invitation to tender (ITT) called for “about 400” parking bays and it turned out that while Varsha offered close to 400, Zambezi could only provide “about 300.” Past a point where both parties had put in bids, the Department of Building and Engineering Services (DBES) conducted a fit-for-purpose inspection whose purpose, as Motsumi explained, is to determine whether a building is suitable for the purpose it is required. At the Zambezi building, the inspectors found that among other defects, lights were not working in some toilets, that there were no floor coverings on the first to the seventh floor, that the electrical distribution boards did not have covers and that a smoke extraction system in the basement had not been certified. The MTC expressed concern about these defects.

In a development that the judge found to be most unusual, the Zambezi building passed the inspection. He asked Motsumi to explain the basis upon which a building with such defects could be said to be fit for purpose. The answer was that subject to the defects being fixed, the building would be fit for purpose. In response to another question, she also revealed that the fit-for-purpose standards were not specified in the tender document.

The scoring was done by the ministerial tender committee, which is a sub-committee of the PPADB. On the amount of parking space that was available, one member, Felicity Bogatsu, gave Zambezi a score of 40 and Varsha 32. Another member, whom the judge only identified as Julia, scored the companies 35-30 in favour of Zambezi. Having established from Motsumi that parking space was one of the requirements, Justice Kebonang observed with some astonishment that a building with less space was scored more than one with more space. One explanation that the lawyer tendered was that the Varsha building was found to have “more pillars.” Asked whether the ITT required that a building with more pillars should be marked down, Motsumi responded in the negative.

The judge also got the lawyer to concede that the pricing in terms of rental rates being offered by the two companies was as important a factor in the scoring. Varsha quoted a lower price while Zambezi quoted a price that was “above the market rate.” In explaining what happened, Motsumi said that the MTC deemed what Zambezi was offering to be value for money.

At the end of the financial evaluation, the committee awarded Zambezi the highest marks and recommended it as the preferred bidder. At this point, MFDP ÔÇô or “PE” in procurement language, wrote to Zambezi asking it to reconfigure its bid and consider lowering the price it had quoted. The Public Procurement and Asset Disposal Act expressly forbids pre-negotiation before a tender is awarded and quizzed over the propriety of this letter, Motsumi said that the ministry was not negotiating but merely seeking clarification.

Summing up her case, the lawyer said that Zambezi met the requirements of the tender, an assertion Justice Kebonang said he found “baffling” because the documents before the court said otherwise.

Next up was Advocate Schalk Burger from South Africa who represented PPADB. As he had done with Motsumi, Kebonang wanted Burger to illuminate certain issues regarding the role his client in the matter. Some two or so into their exchange, the advocate declined to answer one question on the oversight role that the Board is supposed to play, saying that he was not in court on any matter relating to such role. This phase of the questioning revealed that while the MTC had raised concerns about the Zambezi building, it nonetheless greenlighted the approval of the company as a preferred bidder. Burger countered by stating that PPADB itself was never involved in the selection of Zambezi as a preferred bidder. The Board had given the ministry the go-ahead to negotiate with Zambezi which the judge interpreted as involvement. Burger countered by stating that giving such go-ahead is not the same as giving approval.

The advocate also challenged some of the assertions earlier made by Motsumi. The latter had stated that all along the ministry had consulted with PPADB but Burger pointed out that such consultation was not part of the court record. It is the Board that awards tenders and with the tender not having been awarded, Burger raised the contention that there was no legal issue that his client had to be brought to court for.

Varsha’s own advocate, John Peter would argue that PPADB was trying to “sidestep any liability” when it had in fact played a key role in the process. It turns out that once before Peter has represented PPADB in an almost similar matter at the Court of Appeal. Scrolling on the iPad in his hand, the lawyer read an excerpt of a judgement in which the latter court held that the Board is supposed to exercise “skeptical and penetrating scrutiny of what a procurement entity does.” Kebonang asked him if concerns raised by the MTC in its report bind the Board.

“Yes, the Board signs off on the report,” said Peter, adding that the Board should have exercised oversight at the technical stage.  

Countering Burger’s point about PPADB never having been involved in the tendering process, Peter said that the Board merely wanted to “avoid its responsibility of the Act and was escaping accountability.”

Varsha wants the court to set aside the MTC’s decision as well as for MFDP to open talks with it about proceeding with the tender. Judgement will be delivered on or before August 26.

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