PPAA nullifies Sh7.5 billion Mv Magogoni ferry tender

Dar es Salaam. The $3.2 million (about Sh7.5 billion) tender for major rehabilitation of Mv Magogoni ferry has come under spotlight.

This follows the nullification of the award to a Mombasa based firm, three months ago by the Public Procurement Appeals Authority (PPAA).

The authority has ordered fresh evaluation of tenders after discovering that the Tanzania Electrical, Mechanical and Electronics Services Agency (Temesa) flawed rules during evaluation of bidders.

The decision comes following an appeal by the Mwanza based ship building company, Songoro Marine that was disqualified from the lucrative deal over alleged failure to meet requirements set in the tender document.

The tender was awarded to Mombasa based marine services provider, M/s African Marine and General Engineering Company Limited at the contract price of $3.2 million.

“The Appeals Authority finds that the respondent (Temesa) did not treat the appellant (Songoro Marines) fairly in this tender. The decision to disqualify the appellant is nullified. The respondent is ordered to re-evaluate the tenders in compliance with the law,” said PPAA in its recent decision.

Temesa floated the disputed tender on April 13 this year through the Tanzania National e-Procurement System (TANePS) where two tenderers including that of Songoro Marines were received by May 19 this year’s deadline.

The tenders were evaluated with African Marine recommended for the award of the tender by the evaluation committee.

Temesa gave reasons for disqualification of the appellant as including failure to submit Ship Builder Certificate as required under instruction to tenderers.

The second reason for disqualification was that the company’s power of attorney was not notarised as per requirements of instructions to tenderers.

Songoro disputed the disqualification as unfair and unsuccessful applied to Temesa for administrative review of the decision. Left with no option, the company rushed to PPAA to challenge disqualification.

Songoro’s case

Counsel for the company, Mr Gracian Mali submitted at the hearing of the appeal that Temesa erred in law and fact for disqualifying the appellant on the ground of failure to submit Ship Builder Certificate.

“According to Clause 27.6 (vi) of the ITT, tenderers were not required to submit Ship Builder Certificates,” the lawyer contended.

He argued that the requirement did not specify particularly where the certificates were to be obtained or what was the issuing authority.

Said the counsel: “In Tanzania, the certificate of ship building is issued by the Contractors’ Registration Board (CRB). In compliance of Clause 26.7 (vi) of the ITT, the appellant submitted certificate issued by CRB which certifies it has been registered as specialist contract, class one, local category in the field of marine structures.

The counsel referred the Appeals Authority to an article by Prof. Yucheng Li and Linpu Li titled “Marine Structures and Materials”, Oceanography Journal, Vol. III, Dalian University of Technology, China.

In the article, the term marine structures are defined as “…engineering facilities constructed and installed in coastal zones or open ocean for exploitation of marine resources and the maintenance of its continuous operations,”

According to the article, marine engineering structurers can be divided into three types; fixed, movable (floating structures) and complimentary structures.

It was Mr Mali’s proposition that MV Magogoni Ferry falls under the category of movable structures.

Based on the definition of the terms “marine structurers” and “Ship” the appellant contended that CRB certificate suffices to requirement of Clause 27. 6 (vi) of the ITT.

Making reference to section 4 A (3) of the Public Procurement Act which requires procuring entities to execute their duties in observance of the principles of fairness and equal treatment of tenderers.

“In order to ensure that tenderers are treated equally and fairly, the respondent should not have confined itself to the wording of the tender document. It should have rather considered the meaning of the word marine structures in the certificate submitted by the appellant,” argued the counsel.

According to the counsel, his client is a registered local company operating under the laws of Tanzania and has executed several projects of a similar nature, some with Temesa and other government entities.

The most disturbing aspect of disqualification, according to the appellant, was that the requirement to submit Ship Builder Certificate existed in previous tenders floated by Temesa and the same CRB certificate was accepted by Temesa and the appellant qualified for the award.

Temesa’s response

Ms Nancy Mpiri, a legal officer with Temesa said the appellant was fairly disqualified over failure to submit Ship Builder Certificate.

“The fact that the appellant is registered by CRB as a specialist contractor class one in the field of Marine Structurers is not disputed. However, the certificate issued by CRB to the appellant is not a Ship Builder Certificate which was required under Clause 27.6 (i) and (vi) of the ITT

“The term “marine structurer” is too general, while the term “ship” is more specific. Thus, the appellant ought to have complied with the requirement of the tender document,” contended the officer.

It was her further submission that in Tanzania, there is no known institution which issues Ship Builder Certificate.” However, since the tender was international, tenderers were expected to comply with the requirement,” he added.

Unfair disqualification

Before deciding on the appeal, PPAA reviewed tenders submitted by the tenderers and found that both tenderers had submitted ship building proofs.

“The Appeals Authority agrees with the preposition by the learned counsel for appellant that Magogoni Ferry falls under the category of movable (floating) structures. The appellant having submitted CRB certificate which certifies that it is a specialist contractor, class one, local category in the field of marine structurers should not have been disqualified,” said PPAA. It said further that even the proposed successful tenderer did not submit a ship builder certificate.

“Having accepted a Bureau Veritas Certification as submitted by the proposed successful tenderer as a Ship Builder Certificate, the respondent (Temesa) ought to have equally accepted the certificate issued by CRB submitted by the appellant.

Therefore, the appeal Authority finds the respondent’s act of disqualifying the appellant and qualifying the proposed successful tenderer while not of them submitted a certificate titled ship builder certificate to have contravened section 4 A (3) of the Public Procurement Act.

The section requires procuring entities undertake to achieve the highest standard of equity in execution of their duties, taking into account, among other things, fairness of treatment to all parties.