PUBLIC PROCUREMENT AND DISPOSAL OF PUBLIC ASSETS AUTHORITY
REPORT ON APPLICATION FOR ADMINISTRATIVE REVIEW BY LIGATION
INTERNATIONAL LTD IN RESPECT OF THE PROCUREMENT FOR THE REVENUE
COLLECTION IKI – IKI WEEKLY MARKET NO. BUDA571/SRVCS/16-17/00002
ENTITY:
BUDAKA DISTRICT LOCAL GOVERNMENT
APPLICANT:
LIGATON INTERNATIONAL LTD
SEPTEMBER 2016
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1.0
BACKGROUND
1.1
On 24th March 2016, Budaka District Local Government initiated a procurement for the
revenue collection from Iki – Iki weekly market. The bid notice was published in the
New Vision Newspaper of 19th May 2016 with a closing date was 21st June 2016.
1.2
The Contracts Committee approved the
Committee:
following members of the Evaluation
Table 1: Members of the Evaluation Committee
No. Member
Designation
1. Mr. Moses Kwajja
Personnel Officer
1.2
2.
Mr. Joseph Masolo
3.
Mr. Paul Kioro
4.
Ms. Florence Ariokot
Organization
Budaka
District
Local Government
Senior Medical Clinical Budaka
District
Officer
Local Government
Senior Labor Officer
Budaka
District
Local Government
Population Officer
Budaka
District
Local Government
According to the record of issue of bids, two (2) providers were issued with the bidding
documents and both submitted bids. The bid prices read out at the bid opening held on
21st June 2016 are indicated in Table 2 below:
Table 2: Bidders who submitted bids
No
Name of Bidder
1.
Ligaton International Ltd
2.
Mr. Wilson Masajja
Bid Price read out (UGX)
1,050,000 (Per week)
1,000,000 (Per week)
1.3
The Evaluation report dated 20th July 2016 indicated that Ligaton International Ltd was
eliminated at technical evaluation stage for not having experience in the related services
and hence did not qualify for the financial evaluation.
1.4
On the same day, the Evaluation Committee recommended award of tender to Mr. Wilson
Masajja as the best evaluated bidder at a contract price of UGX 1,000,000 per week. This
was approved by the Contracts Committee on 26th July 2016.The notice of best evaluated
bidder was displayed from 26th July 2016 to 3rd August 2016.
2.0
ADMINISTRATIVE REVIEW PROCESS
2.1
On 27th July 2016, Ligaton International Ltd applied to the Accounting Officer, Budaka
District Local Government for Administrative Review.
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2.2
On 4th August 2016, the Accounting Officer appointed a Committee to conduct the
Administrative Review investigation as per Regulation 139 of the Local Governments
(Public Procurement and Disposal of Public Assets) Regulations, 2006.
2.3
On 4th August 2016, the Committee submitted the Administrative Review Report to the
Accounting Officer in which they found it fitting for the Contracts Committee not to have
awarded the contract to Ligaton International Ltd on grounds of questionable integrity and
lack of experience.
2.4
On 8th August 2016, Accounting Officer responded to the complainant - Ligaton
International Ltd with a decision not to revoke the award to Mr. Wilson Masajja based on
the grounds raised by the Administrative Review Committee.
2.5
On 10th August 2016, Ligaton International Ltd applied for Administrative Review to the
Authority.
3.0
LAW APPLICABLE
i.
ii.
4.0
The Public Procurement and Disposal of Public Assets Act, 2003.
The Local Governments (PPDA) Regulations, 2006.
METHODOLOGY
In investigating the application for Administrative Review, the Authority adopted the
following methodology:
4.1
Analysis was made of the following documents:
a)
b)
c)
d)
e)
f)
g)
h)
i)
4.2
The invitation for bids to the various bidders
Bids submitted by the bidders
Copy of detailed bidding document issued to bidders
Record of issue and receipt of bids
All PP Forms related to this procurement;
The evaluation report;
Contracts committee minutes for this procurement;
The administrative review report by the Accounting officer Budaka DLG
All correspondence and another documentation related to this matter
On 30th August 2016, PPDA convened an Administrative Review hearing which was
attended by the following people .
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Table 3: Persons who attended the Administrative Review hearing
No. Name
Designation
5.0
Budaka DLG
1. Roseline Adongo
2. Noah Kutta
Chief Administrative Officer
Senior Procurement Officer
Ligaton International Ltd
1
John Michael Mulalaka
Director
GROUNDS RAISED BY THE APPLICANT
Grounds raised at Entity and PPDA level
1. That there was much communication between Mr. Wilson Masajja and the procurement
department which resulted in a consideration for him to include an Income tax
clearance certificate in his submitted bid. This had not been provided at the time of
submitting his bid on 21st June 2016.
Mr. Wilson Masajja’s Income tax clearance was submitted on 6thJuly 2016 after bid
closing and bid opening.
2. That there was a conflict of interest by the procurement officer as it had been keenly
observed with investigation that Mr. Wilson Masajja is one of the procurement officer’s
in-law. A possible reason for the drifted favor of Mr. Wilson Masajja evidenced in his
9 years’ experience in the same market.
3. That Budaka DLG used wrong rules to administer payment of administrative review
fees of UGX 500,000 instead of UGX 30,000.
4. That in review of the administrative review committee report, it’s stated that Ligaton
International Ltd should try in the next quarter which is against the bid document and
advert which seemed annual.
5. That Budaka DLG neither confirmed the reserve price in the advert nor in the bidding
document.
6. That the advert didn’t state whether service providers whose legal documents are still
under process shall be considered even after bid closure as it was reported and applied
in the administrative review committee report of a consideration of a late tax clearance.
7. That the appointed review team was incompetent as they disowned the LC1
Chairperson – Mr. Mingwa Peter who was paid a wage of UGX 120,000 in June which
was meant for the LC1 Chairperson of the area in question.
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8. That following the advert, only the sub-county chief was responsible to sign on the
recommendation letter but not the Chief in charge of local revenue.
9. That Budaka DLG stated in its report that it had sole decision to reject or accept bids
of either the highest or lowest price. Ligaton International Ltd was the highest bidder
but Mr. Wilson Masajja was evaluated as the best bidder.
10. That shall new firms dully registered and legally compliant like Ligaton International
Ltd not enter into business due to lack of experience.
6.0
PPDA FINDINGS ON THE GROUNDS RAISED BY THE APPLICANT
Ground One:
That there was much communication between Mr. Wilson Masajja and the procurement
department which resulted in a consideration for him to include an Income tax clearance
certificate in his submitted bid. This had not been provided at the time of submitting his bid on
21st June 2016.
Mr. Wilson Masajja’s Income tax clearance was submitted on 6thJuly 2016 after bid closing
and bid opening.
Findings:
i.
Section 6 in the bidding document on terms of reference for the revenue collection
centers no: 2, provided that “whereas firms were required to submit a Tax Clearance
Certificate amongst many other documents, individuals were only required to submit a
Certificate of Taxpayers Identification Number among other documents.”
ii.
According to Ligation International Ltd, Mr. Wilson Masajja submitted an income tax
clearance certificate after bid after bid closing on 21st June 2016.
iii.
At the hearing before the Authority, the Accounting officer submitted that the Entity
requested for Tax Clearance Certificates from bides following guidance from Uganda
Revenue Authority (URA).
iv.
The Authority noted that on 22nd June 2016, URA requested Budaka DLG to submit to
it the list of contractors awarded tenders in the FY 2015/16 and those bidding for FY
2016/17 with an objective to ensure that the contractors are properly registered for taxes
and are compliant before being awarded tenders. Budaka DLG responded to this on
24th June 2016.
v.
Following the request by URA, all individual bidders were requested to process and
submit Income Tax Clearance Certificates and accordingly Mr. Wilson Masajja
submitted a Tax Clearance Certificate on 6th July 2016.
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Decision of the Authority
The Authority finds no merit in ground one as initially Mr. Wilson Masajja who is an individual
was not required to submit a tax clearance certificate and only submitted it after request by
Budaka DLG which was acting in accordance with the request by URA.
Ground Two
That there was a conflict of interest by the procurement officer as it had been keenly observed
with investigation that Mr. Wilson Masajja is one of the procurement officer’s in-law. A
possible reason for the drifted favor of Mr. Wilson Masajja evidenced in his 9 years’
experience in the same market.
Findings:
i.
The applicant alleged that Mr. Noah Kutta the procurement officer is an in-law to the
best evaluated bidder Mr. Wilson Masajja and therefore had a conflict of interest in the
procurement and should not have participated in the procurement process.
ii.
The Accounting Officer’s decision indicated that this allegation was investigated at
Entity level and the purported relationship was not established.
iii.
During the hearing, Mr. Noah Kutta the procurement officer submitted that he is not
related to Mr. Wilson Masajja. He stated further that much as Mr. John Michael
Mulalaka - Director of Ligaton International Ltd claimed that he was neighbors with
him, there are 3 LCs between them but both reside in the same Sub-County.
iv.
The Authority found that the applicant was not able to substantiate the allegation of the
relationship and therefore the conflict of interest was not established. Ligaton
International Ltd did not adduce any evidence to show that there is a relationship
between Mr. Wilson Masajja and Mr. Noah Kutta.
Decision:
The Authority finds no merit in ground two.
Ground Three:
That Budaka DLG used wrong rules to administer payment of administrative review fee of
UGX 500,000 instead of UGX 30,000.
Findings:
i.
The Applicant submitted that the Entity was wrong to require payment of Administrative
Review fees of UGX. 500,000 instead of the UGX. 30,000 as stipulated in the Local
Government (PPDA) Guidelines.
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ii.
The Authority established that on 1st August 2016 the applicant paid UGX 500,000 as
Administrative Review fee to Budaka DLG was issued a receipt no. 17017.
iii.
The Accounting Officer in her response stated that she rightfully administered the
administrative review fee to the applicant in accordance with Local Government (PPDA)
Guidelines.
iv.
The Authority noted that the Applicant based his allegation on the PPDA Guidelines for
schools where the Administrative Review fee is UGX 30,000.
v.
The Local Government (PPDA) Guidelines No. 5 of 2008 on Administrative Review fees
provides for a fee of UGX 500,000 (25 currency points) in respect to an application for
Administrative Review for a service under the Open Bidding method. The Entity therefore
was acted in accordance with the PPDA Guidelines in requiring payment of UGX. 500,000
as Administrative Review fess.
Decision:
The Authority does not find merit in ground three.
Ground Four
That in review of the administrative review committee report, it’s stated that Ligaton
International Ltd should try in the next quarter which is against the bidding document and
advert which seemed annual.
Findings:
i.
The Applicant stated that the Administrative Review Committee indicated that the
bidder should bid in the next quarter yet the bid notice was annual.
ii.
The Authority reviewed the bid notice and the advert and noted that they were both
silent on the contractual period.
iii.
During the hearing at the Authority, the Accounting Officer submitted that the decision
for the quarterly award of the procurement for revenue sources was dependent upon the
Entity at contracting.
iv.
The Authority established that in the absence of an express contractual period in the
bidding document, the allegation cannot be sustained.
Decision:
The Authority finds no merit in ground four.
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Ground Five
That Budaka DLG never indicated the reserve price on the advert nor in the bid document.
Findings:
i.
The applicant stated that the reserve price was neither indicated in the bidding
document issued to bidders nor in the bid notice that was advertised in the New Vision
newspaper of 19th May 2016.
ii.
Regulation 51 of the Local Governments (PPDA) Regulations 2006 provides that the
Entity will only maintain the reserve price approved by the Contracts Committee where
applicable for comparison purposes when awarding bids.
iii.
The Authority found that there is no requirement to state the reserve price but it is good
practice. The Entity was therefore not in breach of any provision of the law.
Decision:
The Authority does not find merit in ground five since the failure to disclose the reserve price
did not breach any laws governing the procurement process.
Ground Six:
That the advert didn’t state whether service providers whose legal documents are still under
process shall be considered even after bid closure as it was reported and applied in the
administrative review committee report of a consideration of a late tax clearance.
Findings:
The Authority found that this ground is similar to ground one above.
Decision:
The Authority does not find merit in ground six.
Ground Seven:
That the appointed review team was incompetent as they disowned the LC1 Chairperson – Mr.
Peter Mingwa who was paid a wage of UGX 120,000 in June which was meant for the LC1
Chairperson of the area in question.
Findings:
i.
The Applicant stated that the review committee disregarded the recommendation letter
from Mr. Peter Mingwa the LC 1 Chairperson.
ii.
The bidding document required bidders to submit a recommendation letter from the
LC1 of the locality in which the revenue collection facility if located.
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iii.
The bid submitted by the applicant included a recommendation letter from Mr. Peter
Mingwa as LC 1 Chairperson for Iki-Iki Market.
iv.
At the hearing before the Authority, the applicant stated that the denounced LC1
Chairperson Mr. Peter Mingwa, had been paid a wage meant for the LC1 Chairperson
of the area in question.
v.
In response, the Accounting Officer stated that Mr. Peter Mingwa was not the LC1
chairperson of Iki-Iki sub-county. The Accounting Officer submitted a list of L.C 1
Chairpersons which indicated that Mr. John Tasebula was the LCI Chairperson of IkiIki Sub County and not Mr. Peter Mingwa.
vi.
The Authority finds that the Applicants bid was not responsive to the requirement of
submission of a recommendation letter from the LC 1 chairperson. The review team
properly evaluated this requirement.
Decision:
The Authority does not find merit in ground seven
Ground Eight:
That following the advert, only the sub-county chief was responsible to sign on the
recommendation letter but not the Chief in charge of local revenue.
Findings:
i.
The Applicant stated that the bid notice required only the Sub-County Chief to sign the
recommendation letters and not the chief in charge of local revenue.
ii.
Section 6 of the bidding document (terms of reference) for the revenue collection
centers no: 2, required both firms and individuals to provide a recommendation from
the LC1 Chairperson and the Sub County Chief where the revenue was to be collected.
iii.
The Authority found that the requirement was in the bidding document and not in the
advert / bid notice as claimed by the applicant
iv.
The Administrative Review Report dated 4th August 2016, indicated that two different
recommendations by LC1 Chairpersons for the same village were submitted by the
applicant in their bid. The review team established that the best evaluated bidder Mr.
Wilson Masajja’s recommendation letter was signed by the right Chairperson for the
village (Mr. John Tasebula) while Ligaton International Ltd.’s recommendation letter
was signed by Mr. Peter Mingwa who is not the LC1 Chairperson.
v.
In light of the above, the Authority found that the applicant’s bid was not responsive to
the requirement and was properly evaluated.
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Decision:
The Authority does not find merit in ground eight.
Ground Nine:
That Budaka DLG stated in its report that it had sole decision to reject or accept bids of either
the highest or lowest price. Ligaton International Ltd was the highest bidder but Mr. Wilson
Masajja was evaluated as the best bidder.
Findings:
i.
The bid notice in the New Vision newspaper of 19th May 2016 stated that Budaka
District Local Government reserved the right to accept or reject any bid either the
highest or the lowest.
ii.
Ligaton International Ltd.’s bid price was UGX 1,050,000 per week while Mr. Wilson
Masajja’s bid price was UGX 1,000,000 per week.
iii.
The Evaluation methodology in the bidding document was the highest priced
technically responsive bid would be the best evaluated bid
iv.
The decision by the Entity to award the contract to the lowest bidder as opposed to the
highest bidder was within its legal rights.
Decision:
The Authority finds no merit in ground nine.
Ground Ten:
That new firms duly registered and legally compliant like Ligaton International Ltd shall not
be contracted due to lack of experience.
Findings:
i.
The applicant stated that the requirement of experience disadvantages newly registered
and compliant firms since they are not awarded contracts by the district.
ii.
The Accounting Officer in response stated that the bidding document required prior
experience in revenue collection which the applicant did not have.
iii.
The Applicant confirmed at the hearing before the Authority that Ligaton International
Limited did not have past experience as a firm.
iv.
The bidding document required prior experience in revenue collection and the
evaluation committee found that the bid submitted by the applicant did not provide
any document on past experience and hence was found non responsive to the
requirement.
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v.
The Authority finds that the Entity was justified to require prior experience and
properly evaluated the bid submitted by the applicant
Decision:
The Authority does not find merit in ground ten.
7.0
DECISION OF THE AUTHORITY
In accordance with Section 91(4) of the PPDA Act, 2003 and in light of the findings and
observations of the Authority during the Administrative Review process, the application for
Administrative Review by Ligaton International Ltd is rejected.
The Entity is advised to proceed with the procurement process to its logical conclusion.
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