Chinese firm loses appeal in Sh329 billion Kidunda dam deal

Kidunda Dam Project in Morogoro

Dar es Salaam. Sinohydro Corporation Limited will now execute the Sh329.5 billion tender for construction of Kidunda Dam Project after the Public Procurement Appeals Authority (PPAA) dismissed an appeal that sought to stop award of the work to a successful bidder.

China Gezhouba Group Company Limited had gone to the quasi-judicial body to block the Dar es Salaam Water Supply and Sanitation Authority (Dawasa) from awarding the tender to Sinohydro after claiming unfair disqualification from the tender process.

After hearing the parties, the authority finally has sided with Dawasa that the disqualification of Gezhouba was justified since the company failed to comply with design and construction experience requirements.

Kidunga Dam project located in Morogoro Rural District has for many years failed to kick off over various reasons including procurement setbacks.

The project is designed to improve water supply, control floods, improve irrigation, fishing and other issues.

Dawasa, through Tanzania National Electronic Procurement System (TANePS) invited on February 14, this year, eligible tenderers to participate in a tender for construction of Kidunga Dam Project (Design and Build Contract) where four bids were received by May 20 this year.

The four tenderers including that of Gezhouba Group were subjected to evaluation after which the evaluation committee recommended award of the tender to Sinohydro at a contract price of Sh329.5 billion.

Gezhouba protested the move, claiming the evaluation process was tainted by irregularities including failure by Dawasa to reply to their queries.

The sanitation authority informed the company that its bid failed to sail through on two grounds including failing to comply with design experience as required in the tender documents.

It was alleged that the company submitted design experience of another contractor, China Water Resources Beifang Investigation Design and Research Company Limited who was not in any contractual relationship with it.

The bidder was also disqualified over alleged failure to comply with construction experience requirement.

The bidder was dissatisfied with the reasons for disqualification and on 25 August this year, it applied for administrative review of the decision to Dawasa. The application was dismissed, prompting the company to take its case to the PPAA.

Gezhouba’s case

The company was represented by the firm’s inhouse lawyer Nina Mabiba and advocate Philbert Msuya.

The lawyers submitted that the tender process did not comply with Regulation 4 of Public Procurement Regulations because the respondent (Dawasa) failed to respond to all clarification it sought.

The appellant claimed it submitted to Dawasa six letters seeking clarification on various issues on the tender document in vein.

Although Dawasa claimed to have issued clarification, the Chinese firm insisted the response were not received directly as they were sent through a link which was not accessible to all tenderers.

“The appellant was informed by other tenderers that the respondent has issued clarification, however, there was no direct reply by the respondent on the appellant’s raised queries.

It also complained that it was denied access of viewing the record of tender opening through TANEePS without justifiable reasons. Clause 25.7 of the invitation to tender required the respondent to publish tender opening results on TANePS.

“The respondent has failed to do so,” said the lawyer, adding that they obtained the tender opening results from other tenderers who participated in the tender.

They also question why Dawasa wanted to award the tender to Sinohydro at a tender price of Sh449.8 seen through TANePS instead of tender price of Sh332.4 billion which was relatively lower compared to the successful bidder.

Dawasa alleged through its statement of defence that the change of price was caused by correction of errors and deduction of VAT.

But the appellant disputed Dawasa’s contention of the issue as no matter how many correction of errors were made, the same would not have led to the change of price from Sh449.8 billion to Sh329.4 billion.

Regarding reason for disqualification over failure to meet design experience requirements, the firm contended that it complied with the design experience requirement by attaching to its tender the name of subcontractor China Water Resources Beifang Investigation Design and Research Company Limited who is an expert in dam designing.

Dawasa defence

Dawasa was represented by senior state attorney Neema Mugassa who was assisted by state attorney Ayoub Sanga.

Mr Sanga started by submitting that the respondent regulations which require the procuring entity to respond to all queries raised tenderers within three days and to communicate the same to all tenderers participating in the tender

“If the appellant did not receive clarifications for all the raised queries, it ought to have invoked Section 95 (1) and (4) of the Public Procurement Act and submit a complaint to the respondent within seven working days. To the contrary, the appellant proceeded to participate in the tender and raised the issue of clarification after receipt of the notice of intention to award,” claimed the lawyer.

Regarding the tender opening record, the lawyer submitted that the bid opening results were available on TANePS and any registered tenderer can access the information.

“It is strange that the appellant did not see the tender opening results and kept quiet without making any inquiry. If the opening summary were not public how did the appellant manage to attach the same on its statement of appeal?” He asked.

On the appellant’s submission on the tender price of the proposed successful bidder, the Dawasa admitted the tender opening record indicated that the read out price for the successful proposed tenderer was Sh449.8 billion.

However, the body claimed that the discrepancy in price was due to the fact that the quoted prices were entered manually during the tender opening and it was indicated by mistake that the proposed successful bidder quoted Sh448.8 billion instead of Sh329.4 billion.

Dawasa submitted that Sh59.3 billion was deducted from the price of the successful bidder since water projects are VAT exempted.

“After correction of errors and deduction of VAT the price of the proposed successful tenderer was adjusted to Sh329.4 billion, thus lower than the price quoted by the appellant,” argued the lawyer.

Gezhouba’s appeal fail

In its recent decision, the authority, concurred with Dawasa that the appellant failed to timely exhaust the available remedy after failing to file application for administrative review regarding clarifications on the tender document.

“Since the appellant failed to exhaust the available remedy at the appropriate time, it cannot raise issues relating to clarifications when challenging the reasons for its disqualification issued through the notice of intention to award,” said the authority.

On the appellant’s contention that it was denied access to view the record of tender opening through TANePS, the authority said: “If the appellant faced the said challenge as it contended, it ought to have contacted the relevant authorities for further guidance

The authority also observed that respondent’s act of disqualifying the appellant for submitting the design experience of another firm whose legal status was not disclosed to be proper.

“The appeals authority is of the considered view that even if the contracts executed by MS China Water Resources Beifang Investigation Design and Research Company Limited cold have been accepted, the same would have not complied with design experience requirement, since the said firm executed the contracts as a subcontractor and not as a lead design engineer as required by the tender documents,” said the authority.