2009-11-24 07:54:00 Tanesco broke law in Sh3.6bn tender award By Bernard James THE CITIZEN Tanzania Electric Supply Company (Tanesco) flouted public procurement rules in awarding a Sh3.6 billion medical insurance tender, according to the Public Procurement Appeals Authority (PPAA). The PPAA has thus ordered Tanesco to carry out the tendering process afresh after initially awarding the tender to the consortium comprising Alexander Forbes (T), Strategis Insurance Company and PharmAccess International last May. The authority earlier heard that the Tanzania Consortium of Hospitals and Clinics (TCHC) was last January recommended for the tender award after a vigorous tendering process. However, the TCHC was surprisingly dropped even before it started providing its services to Tanesco, prompting the consortium to appeal to the PPAA. Documents filed with the PPAA show that Alexander Forbes (T), Strategis Insurance Company and PharmAccess International had initially been disqualified from the tender process. The PPAA observed in its verdict that the decision by the power utility amounted to a "gross violation of public procurement procedures". "Having considered all the facts and evidence, the authority concludes that the tender process was marred by irregularities, and that the award of the tender in favour of the consortium of Alexander Forbes (T) Ltd, Strategies Insurance Company Tanzania Limited and PharmAccess International contravened the law and hence is a nullity." Tanesco floated the tender last November, and five bidders submitted their applications. They were TCHC (Sh4.9 billion), Medical Express Tanzania Company Limited (3.8 billion); Alexander Forbes (T) Limited, Strategies Insurance Company Limited and PharmAccess International (Sh2.7 billion); Jubilee Insurance Co (Sh2.7 billion) and TMJ Hospitals Limited (Sh1.6 billion). Following an evaluation, it was recommended that the TCHC be awarded the tender, and the evaluation report was submitted to the tender board secretary on January 19, 2009. But just three days after the recommendation was made, the tender board secretary wrote to the chairman of the evaluation committee, asking for a re-evaluation on the grounds that the previous evaluation had some "shortcomings". The committee carried out the re-evaluation, but stood by its earlier decision. Four further re-evaluations were carried out at the behest of the tender board, but the evaluation committee came up with the same conclusion on all occasions. The tender board secretary finally decided to present before the tender board his own analysis of the evaluation report, and substituted recommendations of the evaluation committee with his own that apparently were in favour of the consortium that was eventually awarded the tender. The tender board later met and adapted the secretary's recommendations. The PPAA observed in its verdict that the four re-evaluations ordered by the tender board contravened the law, and rejected Tanesco's perception of the circumstances that led to the re-evaluations. The authority expressed its surprise at the secretary's decision to replace recommendations of the evaluation committee with his own, contrary to the law. "The authority is concerned by the turn of events which may be construed to mean that the recommendation made by the evaluation committee did not suit the interests of the tender board or that (the recommendation) made by the secretary was what was intended by the tender board. "The authority observes that the conduct of both the Procurement Management Unit (PMU) and the tender board, in this regard, leaves a lot to be desired." The authority also noted that there was "a lot of interference between the evaluation committee, the PMU and the tender board during tender process", contrary to the public procurement law, which require the bodies to work independently. Two months ago, our sister paper, Mwananchi, reported that a member of the Tanesco board of directors, Mr Adollah Mapunda, who participated in the tender process, also served as a director with Strategis Insurance Company, one of the three companies forming the consortium which was awarded the tender. Public procurement regulations require a board member who has an interest in a company or institution bidding for a tender to declare his or her interest in writing, and that he or she should not be involved in the procurement process involving the company he or she has links with. Mr Mapunda was accused of failing to disclose his interest in the company that won the tender despite actively taking part in the procurement process. Mr Mapunda also allegedly chaired the board meeting that approved the contract when he was acting chairman of the Tanesco board of directors. The contract between Tanesco and the consortium was signed by outgoing Tanesco managing director Idris Rashidi and Mr Sanjay Suchak, on behalf of Strategies Insurance Limited and Alexander Forbes (T) Limited. But Mr Mapunda has strongly denied any involvement in approving the contract when Mwananchi sought his comments on the matter. "The contract was endorsed by the tender board. I didn't influence the process in any way whatsoever. The tender was floated and Strategis Insurance Limited was awarded after going through all the required procedures," he said. Another issue that featured in the appeal was the eligibility of PharmAccess International, which has been known as a donor organisation, to bid for a commercial tender. The TCHC suspected that the organisation was involved in the disputed tender in order to use donor funds to support its collaborators to tender artificially low bids and influence the tender process in their favour. "The authority is of the view that since one of the partners, namely PharmAccess International, was not eligible to submit its tender, the consortium to which the firm was a party was not proper," the authority said. It added that the appellant could have been disqualified from the tender in the preliminary stages had the evaluation committee done its job properly. The appellant was cited as having a low volume of service, which meant that its annual income was below the required minimum of Sh100 million.