PUBLIC PROCUREMENT AND DISPOSAL OF PUBLIC ASSETS
AUTHORITY
REPORT ON ADMINISTRATIVE REVIEW APPLICATION IN
RESPECT TO THE PROCUREMENT OF A CONTRACTOR TO
CONSTRUCT THE NATIONAL DRUG AUTHORITY
Reference No: NDA/WORKS/16-17/00005
ENTITY
:
NATIONAL DRUG AUTHORITY
APPLICANT
: CHINA NATIONAL COMPLETE PLANT IMPORT
& EXPORT CORPORATION LIMITED (COMPLANT)
MARCH 2017
Table of Contents
Acronyms ...................................................................................................................................................... 2
1.0
BACKGROUND .............................................................................................................................. 3
2.0
LEGAL PROVISIONS APPLICABLE ............................................................................................ 4
3.0
METHODOLOGY ........................................................................................................................... 5
4.0
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APPLICATION FOR ADMINISTRATIVE REVIEW AT PPDA LEVELError! Bookmark not
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DECISION OF THE AUTHORITY ................................................. Error! Bookmark not defined.
Page 1 of 11
Acronyms
AAR
BEB
BOQ
M
NDA
NOBEB
PDU
PPDA
UGX
USD
-
Application for Administrative Review
Best Evaluated Bidder
Bills of Quantities
Million
National Drug Authority
Notice of Best Evaluated Bidder
Procurement and Disposal Unit
Public Procurement and Disposal of Public Assets Authority
Uganda Shillings
United States Dollars
Page 2 of 11
1.0
BACKGROUND
1)
On 13th September 2016, National Drug Authority (NDA) initiated a procurement for
Construction of the NDA Tower Phase 1 – Block A and the basement for Phase 2- Block
B) Reference No: NDA/WORKS/16-17/00005.
2)
On 7th October 2016, the Contracts Committee approved the open international bidding
procurement method, the bidding document and bid notice.
3)
On 13th October 2016, the procurement was advertised in the New Vision Newspaper with
deadline for bid closing of 28th November 2016.
4)
Twenty three (23) firms purchased and were issued the bidding document.
5)
On 3rd November 2016, a pre-bid meeting was held which was attended by representatives
of the twenty three (23) firms that had purchased the bidding document.
6)
On 28th November 2016, bid submission was closed. The record of bid opening indicated
the following information:
Table 1: Prices read out at bid opening
No Bidders
1.
CRJE (East Africa) Limited
2.
Seyani Brothers and Company Uganda Limited
3.
China National Aero Technology international
Engineering Corporation
4.
China National Complete Plant Import & Export
Corporation Limited (Complant)
5.
Yanjian Group Company Limited
6.
7.
Roko Construction Limited
Cementers Uganda Limited
Bid Price
USD 7,787,718.31
USD 8,138,295.69
USD 8,525,667.26
USD 7,593,031.48
USD 8,496,412.91
USD 7,707,223.44
USD 9,209,700.45
7)
The evaluation report signed on 17th January 2017 indicated that three firms, China
National Complete Plant Import and Export Limited (COMPLANT), Yanjian Group
Company Limited and Cementers Uganda limited, did not pass the preliminary and
technical stage and did not qualify for further evaluation.
8)
Four firms, CRJE (East Africa) Limited, Seyani Brothers & Co. (U) Limited, China
National Aero Technology International Engineering Corporation and Roko Construction
Limited passed the preliminary and technical examination and therefore qualified for
financial evaluation
9)
The Notice of Best Evaluated Bidder (NOBEB) was displayed from 23rd January 2017 to
6th February 2017.
3
10)
No.
1
The reasons for the disqualification of China National Complete Plant Import and Export
Limited (COMPLANT) were detailed out in the NOBEB as follows:
Table 2: Reasons for disqualification of COMPLANT
Name
Reason for being unsuccessful
China
National
a) The bidder submitted a bank facility in form of a credit
Complete Plant Import
agreement from Beijing East Third Branch Bank to confirm the
and Export Limited
source of funding. This credit agreement expired on 30th
(COMPLANT)
December 2016 yet the bid validity period stated in the bidding
document is 28th April 2017.
b) The bidder submitted contradicting documents. The contract
executed between the bidder and AFRI Properties Limited had a
total sum of USD 5,350,000 yet the recommendation letter from
AFRI Properties Limited for the same project indicated that the
cost of the building was USD 9,180,783.
c) The bidder submitted contacts and recommendation letters that
did not meet the minimum requirements of the three buildings
with 9 floors executed at a cost of USD 9,000,000 each within
the last five years as specified in the bidding document.
d) The bidder submitted an Electrical Engineer, tang Tiefu as one
of the key personnel for the construction project. However, the
bidder did not provide evidence to confirm that the said Engineer
was a registered Engineer with an Engineering Professional body
as required in the bidding document.
e) The Degree Certificate in Engineering from Huashan Water
Conservancy and Hydro Electrical College of China submitted
by the bidder to support the academic qualifications and
experience of the Foreman - Civil works or the type of
engineering degree obtained by this key personnel.
11)
On 27th January 2017, China National Complete Plant Import & Export Corporation
Limited (COMPLANT) applied for Administrative Review which was rejected by NDA
on 10th February 2017.
12)
On 20th February 2017, COMPLANT applied for Administrative Review before the
Authority.
2.0
LEGAL PROVISIONS APPLICABLE
i)
ii)
iii)
The Public Procurement and Disposal of Public Assets Act, 2003.
The Public Procurement and Disposal of Public Assets Regulations, 2014.
Bidding Document issued.
4
3.0
METHODOLOGY
In investigating the application for Administrative Review, the Authority adopted the following
methodology:
3.1
3.2
Review of the following documents:
i)
Bid notice;
ii) Bidding document issued to bidders;
iii) Pre-bid minutes;
iv) Bids submitted by bidders;
v) Record of bid opening;
vi) Evaluation report;
vii) Application for Administrative Review to the Accounting Officer, NDA by
COMPLANT
viii) Administrative Review decision by the Accounting Officer, NDA; and
ix) Application for Administrative Review to the Authority by COMPLANT
Administrative Review Hearing
An Administrative Review hearing was held on 7th March 2017. The hearing was attended by the
following persons:
Table 3: Attendance at the Administrative Review hearing
No Attendee
Title
NDA - Entity
1.
Moses Kirungi
HPDU
2.
Ronna Kusemererwa
SA
3.
Mark Kamanzi
Head Legal Services
4.
Kiguli Peter Kitooke
Chairperson Evaluation Committee
5.
Happy Moses Were
Member of the Evaluation Committee
6.
Cyprian Mwesigwa
Contracts Committee Chairperson
COMPLANT - Applicant
1.
Xu Xinslei
Marketing Manager
2.
Wang Jionmet
Country Director
3.
David S. Kaggwa
Advocate
Seyani Brothers and Company Uganda Limited - BEB
1.
Manish P. Siyani
Managing Director
2.
Sarfaraz Jiwani
General Manager
FINDINGS OF THE AUTHORITY ON THE GROUNDS RAISED BY THE APPLICANT
Ground One
Wrong and irregular treatment of arithmetic errors and adjustments
5
1. ITB 33.2 (b) of the bidding document issued provided that “to financially compare bids,
the Employer shall correct any arithmetic errors in accordance with ITB Sub Clause 29.4”.
ITB 29.4 provides for the basis of correction of the arithmetic errors where there are
discrepancies between the unit price and the total prices, or errors in total corresponding to
the addition or subtraction of subtotals, and where there is discrepancy between the words
and figures.
2. The Evaluation report indicated the following adjustments/corrections to the bid prices of
the four firms that reached financial evaluation:
Table 1: Comparison between read out and corrected prices after arithmetic adjustments
Bid Prices in USD
Item
CRJE
SEYANI
CATIC
ROKO
Price read out at bid opening 7,787,718.31 8,138,295.69 8,525,667.26 7,707,223.44
Arithmetic errors
Corrected Amount
657,122.44
24,907.07
707,681.35
470,499.11
8,444,840.75 8,163,202.76 9,233,348.61 8,185,722.55
3. Regulation 14(3) of the PPDA (Evaluation) Regulations, 2014 provides that a bidder shall
be promptly notified of an arithmetic correction and requested to agree to it within five
working days, in accordance with the procedure in regulation 10.
4. The Authority reviewed the arithmetic errors identified by the Evaluation Committee in
the four bids at financial comparison and found that they were properly corrected in
accordance with the bidding document. The requirement to notify the bidders is provided
under the PPDA (Evaluation) Regulations and not the bidding document issued.
5. The Authority found that the Evaluation Committee did not communicate the arithmetic
corrections made to the respective bidders contrary to Regulation 14(3) above.
Decision of the Authority on Ground One
The Authority finds merit in Ground One due to failure of the Entity to adhere to Regulation 14
(3) of the PPDA (Evaluation) Regulations.
Ground two
The degree certificate in engineering from Haushan Water Conservancy and hydro Electrical
Collage of China does not show specialty in civil works or other type of Engineering.
6
Findings:
1. Part 6.1.1 of Section 3 of the evaluation methodology and criteria on personnel required
the bidder to demonstrate that the foreman - civil works had a minimum of a Higher
Diploma in building and civil.
2. In response to this requirement, COMPLANT proposed Mr. Lang Wanxi, as the Foreman
– civil works and attached a copy of degree certificate in engineering from Haushan Water
Conservancy and hydro Electrical Collage of China. The bidder also submitted a translated
version of the degree certificate which did not indicate any specialization of engineering.
3. The Evaluation Committee evaluated proposed personnel for foreman – civil works as
non-compliant since the certificate did not meet the criteria in the bidding document.
4. During the hearing, COMPLANT stated that the translated version of the certificate had an
omission of the word “civil” but this was after bid submission.
5. The Authority found that the qualifications for the proposed personnel for foreman – civil
works by COMPLANT were properly evaluated and did not meet the requirement in the
bidding document.
Decision of the Authority on Ground Two
The Authority finds no merit in Ground Two.
Ground 3
That the bidder submitted contradicting documents. The contract executed by the bidder and AFRI
properties Limited had a total sum of USD 5,350,000 yet the recommendation letter from AFRI
properties Limited indicated USD 9,180,783.
1. Paragraph 5.2 (d) of Part C on the detailed evaluation criteria (commercial) of the bidding
document required bidders to submit:
“(d)
Evidence by the bidder that they have constructed a minimum of 03 (Three)
buildings each with a minimum of 9 floors in the East African Region during the last 05
(five) years. At least 01 (One) building among the three buildings should be of phased
construction. The contract value of each building should be a minimum of USD 9,000,000
or 30,000,000,000. The bidder should provide evidence by submitting
completion
certificates and copies of signed contracts clearly stating the values.”
2. In response to the above requirement, COMPLANT submitted the following documents
with respect to the construction of commercial building project (Lugogo House):
7
a) Contract dated 18th June 2011 between AFRI Properties Limited and COMPLANT
worth USD 5,350,000;
b) Recommendation dated 17th February 2016 by AFRI Properties Limited stating the
final project sum as USD 9,180,782.50;
c) A completion certificate for the Project with no contract value.
3. The Authority found that:
a) The contract for the Lugogo House had a sum of USD 5,350,000 which was
different from what was stated in recommendation by Afri Properties Ltd of USD
9,180,782.50 yet the certificate of completion did not have a contract value.
b) The Evaluation Committee properly evaluated the Project for Lugogo House when
it found that it did not meet the criteria provided in the bidding document.
Decision of the Authority on Ground Three
The Authority finds no merit in Ground three
Ground 4
That the bidder submitted a bank facility in form of a Credit Agreement from Beijing East Third
Branch. This agreement expired on 30th December 2016 yet the bid validity period stated in the
bid document was 28th April 2017.
1. Paragraph 5.2 (f) of Part C on the detailed evaluation criteria (commercial) of the bidding
document provided that:
“(f) The Bidder should provide evidence that they have a minimum working capital of USD
1,765,000 or UGX 6,000,000 at the time of bidding. The documents required to show
evidence of working capital shall be bank statements signed and issued by authorized
signatories of the bank”
2. In response to the above requirement in the bidding document, COMPLANT submitted a
Credit Agreement from Beijing East Third Branch instead of the bank statements signed
and issued by authorized signatories of the bank as required by the bidding document.
3. The Authority found that :
a) The Credit Agreement had expired in December 2016 and did not amount to bank
statement as required by the bidding document.
8
b) The Evaluation Committee properly evaluated the requirement of the minimum
working capital of COMPLANT.
Decision of the Authority on Ground four
The Authority finds no merit in Ground four.
Ground 5
That the bidder submitted contracts and recommendation letters that did not meet the minimum
requirements of three buildings with 9 floors executed at a cost of USD 9,000,000 each within the
last 5 years as specified in the bidding documents and there was no evidence that the Electrical
Engineer Tang Tiefu was registered.
1. Part 6.1.1 of Section 3 of the evaluation methodology and criteria on personnel required
the bidder to propose an Electrical Engineer registered by the Engineers Registration Board
or equivalent professional body with a total experience of 8 years.
2. In response to the requirement in paragraph (i) above, COMPLANT submitted the
following six projects:
Table 2: Projects submitted by COMPLANT
No. CONTRACT
TOTAL CONTRACT
IDENTIFICATION
AMOUNT
1.
Construction of (Lugogo UGX 33,509,857,950
House)
Multi-Storey USD 9,180,783
Commercial Building
2.
Hotel
Azul
Mahogany UGX 462,000,000,000
Project
USD 140,000,000
3.
Design-ConstructionUGX 58,186,816,589
Equipment of the New UGX 32,147,412
Attorney General Buildings
and the New Residences for
Deputy Attorney Generals,
Magistrates and Senior
Officials in Maputo
4.
Sam Lord’s Castle Hotel UGX 547,200,000,000
Project
USD 200,000,000
5.
Construction
of
office UGX 34,656,000,000
building for Uganda Bureau USD 9,600,000
Ending
month/year
September
2014
LOCATION
To date
Jamaica
June 2016
Republic of
Mozambique
To date
Barbados
August 2007
Uganda
Uganda
9
No. CONTRACT
TOTAL CONTRACT Ending
IDENTIFICATION
AMOUNT
month/year
of Statistics and Uganda
Computer Services
6.
National Theatre of Senegal UGX 95,650,000,000
April 2011
USD 38,260,000
LOCATION
Senegal
3. COMPLANT proposed Tang Tiefu among the proposed personnel as the electrical
engineer. However, they did not submit proof that Mr. Tang Tiefu was registered by the
Engineers Registration Board or equivalent professional body.
4. The Authority found that:
a) The Evaluation Committee properly evaluated the Applicant’s experience with
respect to having constructed three buildings with 9 floors executed at a cost of
USD 9,000,000 each within the last 5 years.
b) With respect to the requirement of the proposed Electrical Engineer, the Applicant
did not submit evidence that Mr. Tang Tiefu was registered by the Engineers
Registration Board or equivalent professional body.
c) The Evaluation Committee properly evaluated the Applicant’s proposed Electrical
Engineer with respect to the requirement of being registered by the Engineers
Registration Board or equivalent professional body.
Decision of the Authority on Ground five
The Authority finds no merit in Ground five.
Decision of the Authority
In accordance with Section 91 (4) of the PPDA Act, 2003 and in light of the findings of the
Authority during the Administrative Review process, the Application for Administrative Review
by COMPLANT is rejected with respect to Grounds 2, 3, 4 and 5. Since the non-communication
of the arithmetic error in Ground 1 was a procedural anomaly, the Authority advised the Entity to
proceed with the procurement process and caution the Head, Procurement and Disposal Unit and
Evaluation Committee members for failing to communicate the arithmetic corrections made to the
respective bidders contrary to Regulation 14(3).
10