Taxpayers may part with more than P14 million for a tender that was never executed by government. The Office of the President, it has emerged, has terminated a contract it had signed with a company owned by businessman and Botswana Congress Party (BCP) activist Motlhaleemang Moalosi.
In a letter dated 21 January addressed to the Attorney General, Moalosi’s company Precision Vehicle and Asset Tracking said on 6th July 2020, it was awarded a tender for to supply electronic movement tracking devices to the Ministry of Health and Wellness -tender no 19-01-2020. The lawyers, Modimo and Associates, stated that a contract was signed on the 18th August 2020 with the government part being signed by the Permanent Secretary of the Presidential Affairs Governance and Public Administration at the Office of the President Thato Raphaka.
“Client duly performed in terms of the contract and procured the tracking devices and customized them according to the government’s needs and requirements… In the process client naturally incurred expenses and is still legally obliged to pay for the said devices,” stated the lawyers. Ironically, the lawyers stated, on the 17th November 2020, Moalosi’s company was served with a letter terminating the contract. This letter came at a time when his company was awaiting to be provided with a Government Purchase Order (GPO) by the Ministry which the Ministry had promised and undertaken to provide, the lawyers said.
The lawyers said at the time of the termination the devices were ready for delivery and were only awaiting the “GPO” so that Precision Vehicle and Asset Tracking could source funds to pay for the balance outstanding at the supplier. The lawyers said the company was still liable to pay the supplier a balance even with the termination as the devices were designed specifically for this tender and cannot be sold to anyone.
“In an attempt to procure an amicable settlement in terms of the contract in particular Clause 39, client served a letter dated 18 November 2020 on the relevant ministries and a reminder dated 08 December 2020. The Office of the President responded through a letter dated 11th December 2020 requesting for certain documents which were duly received through a letter dated 15th December 2020. No response was received within the time as stipulated by the agreement and a reminder was on 12th January 2021 also in terms of the agreement which was also ignored,” the company’s lawyers stated.
They added: “Our instructions are therefore to put you on the requisite 30-day notice of our client’s intention to invoke Clause 39.3 of the contract to seek the relief being payment in the sum of BW 14 300 000 00 plus 10% collections commission and any other relief it may find fit when that time arrive.” In a letter dated 13th January 2021, the Attorney General wrote to the Permanent Secretary in the Ministry of Wellness and Health informing it about the statutory notice from Moalosi’s company adding that “kindly furnish us with instructions to enable us to respond to contents therein.” In a letter dated 11th December 2020, addressed to the company’s lawyers, Raphaka stated: “Please note that, as we indicated in our previous correspondence, the termination of the contract between Government and your client involved the exercise of a right in terms of clause 28 of the Agreement that was signed on 18 August 2020.
“Government is therefore, committed to honouring all of its obligations that existed at termination, including settlement of all expenses due to your client in terms of Clause 28 above, subject of course to submissions of documentary proof showing all items procured, dates of procurement and sums of money incurred thereon. However, please note that provision specifically excludes liability for any damages that may have resulted from termination under the clause,” said Raphaka.
In another letter dated 22 February 2021, addressed to Modimo and Associates, Raphaka stated: “Please note that, as previously indicated, expenses payable to your client are strictly in terms of Clause 28 of the contract and any damages that it might have incurred are excluded. “Ideally, your client should have awaited the issuance of a GPO to avoid some of the costs that it alleges that it incurred. Further note that we also stated that we dispute the sum claimed. However, we are available at a mutually convenient date and time for discussions with a view to finding an amicable resolution of the matter.” In another letter addressed to Raphaka, the company’s lawyers stated that “We note at paragraph of your letter that the government accepts liability to pay our client all expenses due in terms of clause 28 subject to production of documentary proof.”
He added: “We attach to this letter documentary evidence of expenses incurred by client following from the contract for your consideration. On the document labelled “1” client has prepared a summary of all the expenses incurred making a total of BW 14 118 878.78,” said the lawyers. They added that as you are aware, government could not issue a GPO to enable the company to source funds for the tender. “Client had to obtain loans from third parties to enable it to perform its obligations in terms of the contract. These loans came at a cost (interest) as demonstrated in the documents attached as it our view that these are due as expenses payable by the contractor,” Modimo and Associates stated.
The lawyers further indicated that Moalosi had included documents demonstrating the balance due to be paid to the manufacturer for the gadgets and the demands from them and also attached the bank statements demonstrating the payments to the manufacturer for the gadgets.