We blundered, SPB admits

Source: We blundered, SPB admits | The Herald April 28, 2016

Lloyd Gumbo Senior Reporter
The State Procurement Board has acknowledged that it erred in awarding a 120 megawatt emergency Mutare Peaking Plant to Helcraw Electrical after the company provided two units instead of between three and four units with generation capacity of between 30MW and 40MW per unit.

The board has promised to rectify the error as a matter of urgency.

SPB board chairperson Ambassador Buzwani Mothobi told the Parliamentary Portfolio Committee on Mines and Energy chaired by Masvingo Urban MP Daniel Shumba (Zanu-PF) that they would revisit the tender submissions and rectify the error.

The SPB appeared before the committee yesterday to explain why it awarded the tender to Helcraw Electrical instead of Pito Investments which had been recommended by the Zimbabwe Power Company on the strength of its submissions that they would supply between three to four units of either 30MW or 40MW per unit to guarantee at least 80MW in the event of one unit failing.

Submissions before the committee were that while Helcraw Electrical was technically compliant at the initial stages where they indicated they would meet the requirement of at least three units, the firm allegedly changed to two units of about 58MW each at the financial stage.

The committee argued Helcraw Electrical was supposed to be disqualified after discovery of the variation.

SPB acting principal officer Mr Samson Mutanhaurwa said five of the nine bidding companies, including Helcraw Electrical and Pito Investment, were technically-compliant.

“The natural process from there was to proceed with the five technically-compliant bidders to the next stage of evaluation,” he said.

“Of the three envelopes, two envelopes were considered at the first stage, which is the funding and technical. At the financial stage, the challenge was that, when evaluating prices, there are basic rules that we have to follow.

“First is to list the tender sums in order of hierarchy from the lowest to the highest.

“It’s the rule of the thumb. The next thing is to see whether the price is compliant to tender requirements.

“In this instance, the price of the lowest was seen to be based on the wrong quantities of certain units. They had quoted in their financial proposal two instead of three units, which were in their technical report.”

Board member, Engineer Martin Manuhwa, added: “The information that we have on the technical results and the threshold that ZPC evaluators had set, they (Helcraw Electrical) met at the stage of the technical envelope.

“The problem came when the commercial envelopes were opened. That is where there were discrepancies in what was offered in the technical specifications and what was offered in the commercial envelope.

“The bidder had offered those units that you are referring to. If the commercial envelope was completely different then there was a call for disqualification or call for due diligence or contract negotiation that would comply with the units required.”

Another board member, Mr William Kurebgaseka, said Pito Investments’ bid was “ambiguous, contradictory, hence could not be considered for financial evaluation.”

He said the firm’s price schedule indicated that their grand total of $120 million included duty and value added tax while on the same page, the company also said the price did not include duty and value added tax.

But Cde Shumba queried why they did not seek clarification from Pito Investments instead of giving the tender to Helcraw Electrical that did not meet the units requirement.

“The recommendation was on Pito, both technical and commercial. The bid of the one you recommended (Helcraw Electrical) was conflicted between its technical and commercial, calling for its disqualification.

“You put it first purely because of price when you turned a blind eye at the technical specifications.

“You do not come here and assume that we don’t know processes. It is very wrong.

“This is where you are compromising the integrity of the SPB because you start to adjudicate.

“The recommendation was to a company that had lowest bid to specification. The other four, one wasn’t to specifications while the other three were to specifications, but were even more expensive by up to $224 million.

“You went ahead and awarded the tender to a company which you preferred, which you are aware was out of specifications, inconsistent with the specifications you had approved and what the company had approved. The SPB unilaterally awarded that tender,” said Cde Shumba.

Another board member, Mr Davison Norupiri, said: “Those are some of the challenges of trying to rectify or to find out what might have transpired during the time of the previous board. I strongly believe that with your support we will be in a position to scrutinise and handle these things in a proper way as a new board.”

Cde Shumba asked Ambassador Mothobi to confirm whether the SPB had overstepped its mandate by unilaterally giving the tender to Helcraw Electrical.

Responded Ambassador Mothobi: “I think I can say yes and we undertake to re-look at the submissions and come up with the right decision.”