Captured: RBM wants to be allowed to award contract to foreign-owned firm

Reserve Bank of Malawi

Reserve Bank of Malawi (RBM) has asked the High Court to allow the bank to award two contracts to a foreign-owned firm that did not meet RBM’s own set evaluation criteria during bidding process.

The Central Bank has asked the High Court to review the decision of the Public Procurement and Disposal of Assets Authority (PPDA) ordering it to re-tender the bids for Flexcube and ATS systems, contracts which the bank wants to award to Mitra systems.

This is despite Mitra not having the required skills and experience as per the evaluation criteria for the two tenders.

The decision by the Bank to appeal to the High Court follows SPARC’s complaint to PPDA which came after a series of mistakes in the bidding process. Among the irregularities was that RBM awarded the said contracts to the alleged successful bidder despite the company only existing for two years when one of the bidding requirements was that the firm should have operated for a minimum of five years plus have traceable three referees.

PPDA review committee had agreed with SPARC’s submission that there was disregard for the procedures on the tenders and ordered a retender.

According to documents which Malawi24 has seen, RBM want a stay of enforcement of the decision of the PPDA committee claiming that the judgement from the committee did not provide enough reasons for ordering RBM to retender.

RBM also argues that the bank looked at the beneficial owners of the firm Mitra in awarding the contracts to them hence want the Hight Court to stay the decision of the PPDA.  The bank further argues that the court should stay the decision on the retender as the equipment for the Flexcube and ATS tenders are needed urgently for running of the critical systems for the bank.

Furthermore, the RBM argues that the decision of the committee was in conflict as it allowed for Mitra to be awarded lot 3 of the ATS tender although the same committee found them not to be qualified.

The civil case number 13 of 2021 which is before Judge Kenyata Nyirenda shows RBM as claimant and Sparc Systems as defendant.

The Bank wants a stay of the enforcement of the decision by PPDA which was in favor of SPARC Systems Limited. However, the bank has not added the Review Committee as a party to the hearing.

In its submission, Sparc has asked the Court to dismiss RBM argument with costs on an indemnity scale, claiming it is an utter waste of the Court’ time as the right procedure was not followed to award the contracts to Mitra Limited.

It has also asked the court to add PPDA as a responded to account for deliberations that resulted into their decision to retender.

“The application for a review is against the decision of a quasi-judicial tribunal which even in the absence of section 60 (10) of the Act would be subject to the review jurisdiction of the High Court pursuant to its powers under section 108 (2) of the Constitution.

“Under Order 19 of the Civil Procedure Rules, the public functionary whose decision is sought to be reviewed is added as a Respondent so that during the review proceedings, it can account of the exercise of its powers and duties under public law. The omission of the Review Committee in this case is, therefore, a glaring omission. It will result in injustice as the Committee may be condemned without a hearing and this would result in offending the rules of natural justice and section 43 of the constitution,” reads part of the documents.

Mitra system which is jointly owned by a Rwandan, Robert Beninimana and a Zimbabwean Martin Masawi, was only registered in October 2018.

Despite insisting that Mitra Systems Limited had existed for eight years, our investigations have shown that before opening the company, the two owners were working for a company called Southern Business solutions, which has never been part of Mitra Systems Limited.

As per the Certificate of Registration which Malawi24 has seen, Mitra Systems Limited was registered on 22nd October 2018 with the registration number MBRS1040966 and is set to expire this year on 21st October.

The decision by RBM also goes against the declaration by the state president for government entities to be awarding businesses to local Malawians and on merit.

Despite the Bank’s decision to appeal to the Court, the review proceedings with PPDA clearly discovered more errors in awarding the contract to Mitra Systems Limited.

The issue of failing to provide Manufacturers Authorization, which was one of the reasons why RBM turned down SPARC Systems Limited bid, was dismissed by the company which showed that it had matched the requirements in all the criteria, including the Manufacturer Authorization and technical details as requested in the bidding document.

During the bidding process, RBM failed to follow the procedures by failing to go through the bid opening checklist to verify if the requested information was available in the bids, a normal trend that ensures that the availability of Manufacturers Authorization, bid security and bid validity period are checked and verified in the presence of representatives of bidders.

SPARC Systems Limited also had accused the Central Bank of unfair treatment thus breaching section 30 of the PPDA Act of 2017 which requires that all public procurement proceedings be conducted in a manner which promotes transparency, accountability, non-discrimination, fairness, open completion, anonymity, economy, efficiency and responsiveness to modern information and communications technology.