Topic: Notice of Best Evaluated Bid – Powers of the Public Procurement and Disposal of Public Assets Authority (PPDA), Mandate of Contracts Committee, Mandate of Accounting Officer, Correction of Arithmetic errors in Financial Proposals in the Bidding Process
Date of Judgment: 20 June 2024
Court: Public Procurement and Disposal of Public Assets Appeals Tribunal of Uganda
Case Number/Citation: Application No. 27 of 2024 [2024] UGPPDPAAT 30
Before: Chairperson: Francis Gimara S.C, Members: Nelson Nerima, Eng. Thomas Brookes Isanga, Geoffrey Nuwagira Kakira, Paul Kalumba, Charity Kyarisiima, and Keto Kayemba.
Summary Facts of the Case
The respondent National Council for Higher Education (NCHE) initiated a tender on 25 January 2024 for the construction of its main building offices.
Six bids were received, with the Applicant company CRJE (East Africa) Limited being the Best Evaluated Bidder (BEB).
A whistleblower in a complaint to the PPDA raised concerns about irregularities in the procurement process.
The PPDA investigated the complaint and recommended a re-evaluation of the bids.
The NCHE’s Contracts Committee canceled the issued notice of the Best Evaluated Bidder and decided that the bids be evaluated.
The Accounting Officer of the NCHE communicated this decision to the Applicant who later would file a complaint with the Accounting Officer challenging the decision.
The Accounting Officer dismissed the Applicant’s complaint, prompting the Applicant to file the instant application before the Public Procurement and Disposal of Public Assets Appeals Tribunal of Uganda to review the decision.
Legal Issues Before the Tribunal
- Whether the Tribunal has jurisdiction to determine the application.
- Whether the decision of the Respondent’s Accounting Officer was made within statutory timelines.
- Whether the investigation by the PPDA was lawful.
- Whether the Respondent’s decision to cancel the Best Evaluated bidder notice was lawful.
- What remedies are available to the Parties.
The Decision of the Tribunal
Jurisdiction: The Tribunal ruled that it has jurisdiction to determine an Application of this nature where the decision of the Contracts Committee of the Procuring or Disposing entity, in this case NCHE was arrived at illegally.
The Tribunal examined Section 911 (3)(a) of the Public Procurement and Disposal of Public Assets Act 2003 (the Act) which states that decisions to reject or cancel bids prior to awarding a contract under Section 75 (1) of the Act are not subject to review by the Tribunal.
The Tribunal found that the NCHE’s Contracts Committee, having already decided on March 28, 2024 to award the contract to the Applicant CRJE (East Africa) Ltd it became functus officio (had completed its role) and could not therefore lawfully revoke its decision later on May 9, 2024 in a “special sitting.”
Secondly, the Tribunal found that the Contracts Committee sat on May 9, 2024 in its “special sitting” without any submission or request to review the Applicant’s Notice of Best Evaluated Bid from the Procurement or Disposal Unit of NCHE but instead relied on recommendations of the Public Procurement and Disposal of Public Assets Authority (PPDA).
The Tribunal held that: A contracts committee can not initiate its own requests regarding a procurement process. The Contracts Committee must and only acts on requests made to it by the Procurement and Disposal Unit using the appropriate forms specified in the Regulations.
Thirdly, the Tribunal found that the Contracts Committee cancelled the Applicant’s Notice of Best Evaluated Bid when there was no decision to cancel the bid by the procurement or disposal unit of NCHE as envisaged under Section 75(1) of the Act.
The Tribunal held that: A decision to revoke a notice of Best Evaluated Bidder (BEB) is different from a cancellation of the Bidder’s Bid and therefore the Contracts Committee in its decision to cancel the notice of Best Evaluated Bid acted without legal basis.
Statutory Timelines: The decision by the Respondent’s Accounting Officer to dismiss the Applicant’s complaint was made within statutory timelines having been reached on May 25th 2024 well within the 10 day period provided for in the law for a complaint received on May 15th 2024.
Lawfulness of PPDA Investigation: The investigation by the PPDA at the instance of the whistle-blower was found to be unlawful as it overstepped its mandate under the Act.
The Tribunal held that the PPDA does not have a legal basis to investigate a procurement process when there is no ongoing audit.
The regulatory function of the Authority to investigate a procurement process provided for under Section 8(1) of the Act can only be exercised when it falls into the “four corners” contained in Section 7 (J) (i) – (iii) of the Act.
The Tribunal held that the Jurisdiction to determine any complaints arising out of a procurement process is vested in the Accounting Officer of the Procuring or Disposing Entity via an Administrative Review of the Process and that even when the PPDA conducts a lawful investigation into a procurement process, its role is “advisory” and therefore its recommendations cannot be the basis for altering the outcome of the procurement or disposing process unless a complainant has successfully challenged the process in the Administrative Review.
Thus, in the determination of the Applicant’s complaint, the Accounting Officer of the respondent erred when she held that the PPDA has powers to receive, investigate, and recommend a corrective action in the instant procurement process.
She failed in her statutory duty to independently review the Applicant’s complaint and “chose to rubber stamp” the guidance from the PPDA.
Correction of Arithmetic Errors in Financial Proposals
By way of an orbiter dictum, the Tribunal addressed the issue of correction of arithmetic errors in the Applicant’s financial proposals.
The respondent argued that the correction of the Applicant’s bid price from UGX 19,581,257,271 to UGX 23,089,038,802 (representing a 17% adjustment) by the Evaluation Committee was procured by connivance between the Applicant and the Evaluation Committee, and constituted “a material deviation” prohibited under the current Public Procurement and Disposal of Public Assets (Evaluation) Regulations 2023.
The Applicant CRJE (East Africa) Ltd argued that the Evaluation Committee acted within its mandate by correcting arithmetic errors in its proposals and that such corrections are standard practice in procurement processes and are necessary for accurate bid evaluation.
The Tribunal examined the Public Procurement and Disposal of Public Assets (Evaluation) Regulations 2023 and compared them with the prior 2014 Regulations.
It noted that while the 2014 Regulations explicitly allowed for arithmetic corrections, the 2023 Regulations are less express.
The Tribunal said that the 2023 Regulations permit the Evaluation Committee to make adjustments for non-material deviations under Regulation 21 (1) (c) and ensure completeness of financial bids under Regulation 7.
That the broad discretion given to the Evaluation Committee under the 2023 Regulations is “wide enough” to cover the correction of arithmetic errors.
Key Quote: “It therefore follows that the guidance from the Authority did not absolve the Accounting Officer of her statutory responsibility for the execution of the procurement and disposal process in the procuring and disposing entity, in accordance with the law, and also to independently investigate the complaint by the Applicant. The Accounting Officer failed in her duty to independently investigate the complaint by the Applicant and instead chose to rubber stamp the guidance from the Authority.” – Public Procurement and Disposal of Public Assets Appeals Tribunal of Uganda.
Law Applied By the Court
- Public Procurement and Disposal of Public Assets Act 2003: Sections 7, 8, 26,28, 29, 75, 89, 91
- Public Procurement and Disposal of Public Assets (Evaluation) Regulations 2023
- Public Procurement and Disposal of Public Assets (Administrative Review) Regulations 2023: Regulation 8,
- Public Procurement and Disposal of Public Assets (Procuring and Disposing Entities) Regulations 2023: Regulation 11
- Kingdom Kampala versus Judicial Service Commission Application 34 of 2022: Jurisdiction of the Tribunal
- Impiger Technologies Pvt Ltd Versus Higher Education Students Financing Board Application No. 45 of 2022: A Contracts Committee cannot initiate its own requests regarding a procurement process.
- Achelis Uganda Ltd Vs Ministry Of Lands, Housing And Urban Development Application No. 25 Of 2024
Counsel on Record
For the Applicant: (CRJE (East Africa) Ltd): Mr. Odele Anthony
For the Respondent (NCHE): Mr. Ali Kankaka
Conclusion
This decision highlights the extent of the PPDA’s investigative powers of a procurement process, the Jurisdiction of a Contracts Committee of a procuring or disposing entity, the nature of the duty of an Accounting Officer of a procuring or disposing entity in the procurement process, and the application of the principle of “material deviation” in the correction of arithmetic errors under the Procurement Regulations of 2023.