Chinese firms fight over M380 million Mpilo tender
TWO Chinese firms, SCIG-SMCS and Unik Construction, have taken their fight over the lucrative M380 million tender to upgrade the Mpilo Boulevard road in Maseru to the Court of Appeal.
SCIG-SMCS, which had initially been awarded the tender alongside its local partner, Tim Construction, is challenging Chief Justice Sakoane Sakoane’s November 2020 High Court judgement which ordered that the tender process should be redone.
Justice Sakoane handed down the judgement after an application by Unik who had argued that it had been wrongfully disqualified for failing to submit a signed power of attorney document along with the rest of its tender bid.
Not satisfied with the High Court verdict, SCIG-SMCS then appealed to the apex court for Justice Sakoane’s judgement to be set aside.
On Thursday, the Court of Appeal bench comprising of its president Justice Kananelo Mosito (presiding) as well as judges Petrus Damaseb (Namibia) and Johann Van Der Westhuizen (South Africa) heard arguments from both sides’ lawyers before reserving judgement to 14 May 2021.
SCIG-SMCS’s lawyer, Attorney Qhalehang Letsika, argued that Unik had been rightly disqualified because it had not submitted the power of attorney document which he said was a basic requirement in the tendering process.
He said Justice Sakoane had erred by ruling in favour of Unik on a point of law which had not been argued by Unik.
“The High Court in dealing with the tender process relied on a point not pleaded by the respondents (Unik) which is Regulation 28(4) of Public Procurement Regulations. The regulation states that the procurement unit should give reasons why it has disqualified a particular bidder. But the court was not entitled to rely on that point because it had not been argued by Unik and it cannot be said that it is a point of law,” Mr Letsika argued.
“Furthermore, the High Court said the power of attorney was just a formality which the respondents (Unik) could not have been disqualified on account of. However, the law requires that if the bidder does not meet any of the requirements (including submitting the power of attorney document), the procurement unit may invoke Regulation 28(3) and disqualify the bidder.
“The power of attorney is not a mere formality in respect of the bidding company. It speaks into authority of the officials to act on behalf of the bidder. The court a quo (previous court) erred in suggesting that it was a question of mere formality. That (Unik’s) application should have been dismissed. The power of attorney was required at the stage of tendering and again during the signing of the contract.”
Mr Letsika argued that in any event, Unik had been given reasons why it had been disqualified during the debriefing process which was done after the tender had been awarded to SCIG-SMCS.
Therefore, the procurement unit within the Local Government and Chieftaincy Affairs ministry had fulfilled its obligation to inform Unik about the reasons why it had been disqualified in terms of Regulation 28(4), Mr Letsika argued.
However, Unik’s Lawyer, Advocate Motiea Teele, counter-argued that his clients should have been notified from the beginning that they were disqualified due to an “unsigned power of attorney”.
“The court was right to consider Regulation 28(4). The regulation was mentioned by the (second) appellants (procurement unit) who pleaded that they acted on it to disqualify Unik. However, Unik was not told that its bid had been rejected for non-compliance during the opening of tenders. At no point before the evaluation was Unik told they did not qualify.
“The issue of disqualification must be raised at the appropriate stage to allow the affected party to take action. In terms of Regulation 54(5), a tenderer dissatisfied at any stage may submit a complaint and the procurement process may not proceed before the complaint is dealt with. We are learning for the first time through the court papers that we were disqualified.
“The power of attorney document becomes relevant when one has won a tender and needs to sign a contract. The regulations do not explicitly require the power of attorney. The matter must be referred back to the procurement unit to rectify their mistakes,” Adv Teele argued.
After hearing both sides’ arguments, Justice Mosito adjourned the proceedings and reserved judgement to 14 May 2021.
In November 2020, Justice Sakoane set aside the procurement unit’s decision to disqualify Unik’s bid and ordered it to redo the tender.
Justice Sakoane said the disqualification of Unik should have been communicated in the manner stipulated by Regulation 28 (4) of public procurement regulations, which states that the procurement unit ought to have informed a bidder (in this case Unik) of its disqualification within 10 working days of being rejected.
Justice Sakoane also ruled that the power of attorney document was only supposed to be submitted by the winning bidder shortly before the signing of the contract for the tender.
“The omission to sign a power of attorney is not so fatal an omission as to disqualify Unik. The bid was rejected because of the formal omission of the signature and not the failure to provide a mandatory document,” Justice Sakoane said in his judgement.
He added that Unik had been disqualified for “immaterial and innocent mistakes” which undermined the policy objectives of cost-effectiveness and competitiveness in public procurement.