THE Central Procurement Board’s review panel and the Rundu Town Council have been taken to court for allegedly bending tender laws to accommodate a Chinese-owned company that was six months old when it submitted its tender bid.
The review panel and the town council also disqualified one of the bidders, but only after they questioned the legitimacy of the award.
Netvend Metering Solutions has now approached the High Court in a bid to nullify the review panel’s decision and to compel the Rundu Town Council to re-evaluate the tender.
Netvend also wants their disqualification to be revoked, and wants the court to interdict the town council from entering into a contract with Lwayaha Trading, which was preferred by the town council.
The company also declared in its court application that “the bid process was carried out in a manner that is incompatible with the rule of law and the doctrine of legality”.
High Court Judge Orben Sibeya postponed the matter to 21 June, when he will make a ruling.
ODD PROCESS
Netvend’s grievance stems from a restricted bid invitation by the council to provide a prepaid water metre system for the town for five years.
In January, an invitation to bid was sent to four companies identified as having the required capacity, experience and skills.
Restricted bidding is by invitation and is mainly used when only a few select companies in the country can provide a particular service, and/or the services sought are highly specialised and not readily available.
The town council invited four companies – Netvend Metering Solution, ABC Investment, Aqua Services Engineering and Item Engineering – to bid for the contract. They have done similar work before, and were identified by the council as being able to deliver the required quality.
However, during the bidding process, ABC Investment asked if it could bid as Lwayaha Trading because ABC Investment was allegedly going through a restructuring process.
The council allegedly allowed this because the two entities are owned by the same person, Chinese businessman Yunhai Guo.
On 12 April, the town council decided to award the tender to Lwayaha Trading, primarily based on its bidding price being the lowest.
It then notified the other contenders that the tender had been awarded to Lwayaha, and said no bidder was disqualified.
Netvend received its notification four days later, on 16 April. They wrote to the council on the same day to complain about the process and why Lwayaha was allowed into the process.
The council responded on 19 April and, for the first time, told Netvend they were actually disqualified because their bid quotation was valid for 90 days, as opposed to the 180 days stipulated in the tendering documents.
Dissatisfied, Netvend raised the issue with the procurement board’s review panel.
On 14 May, the panel dismissed Netvend’s application to order the Rundu Town Council to re-evaluate the tender and include them in the process this time around.
The panel found the council erred by inviting only four participants instead of five in that it was not compliant with the Public Procurement Act.
The town council also failed to properly stipulate that the tender was based on a restricted bidding process only. The review panel found that it also stated, in the tender documents, that it was a sealed quotation process.
The panel dismissed Netvend’s application, saying it submitted a 90-day quotation instead of the stipulated 180 days.
However, the panel cleared the owners of ABC Investment and Lwayaha Trading, stating that Section 48 of the Public Procurement Act allows for the modification, substitution and withdrawal of bids before the submission deadline.
COURT BATTLE
The review panel’s decision to not entertain Netvend’s application led the company to take its fight to the High Court.
In his founding affidavit, Netvend managing partner Pejaomati Hans Hamukoto attacked the review panel for not seeing anything wrong with the council allowing ABC Investment to pull out of the tender process to be replaced by its sister company, Lwayaha Trading.
He said the review panel misinterpreted the part in the procurement act that provides for bids to be modified, substituted, or withdrawn prior to the submission deadline, stating “this is limited to bids and not bidders or entities making the bid”.
Hamukoto called this practice odd and said it was not allowed.
“It would mean that entities that are unable to obtain tax or social security good standing certificates are likely to resort to this odd practice,” his affidavit said.
Hamukoto noted that because of the nature of restricted bidding, Lwayaha does not qualify for this tender because it has no track record of similar work in its six months of existence.
He said the company was formally registered on 22 June 2023, while the invitation for bidding went out in January 2024.
Hamukoto said central to his argument is the fact that the companies invited or approached to submit their bids were selected based on their previous experience.
He said a benchmark exercise was carried out to determine the quality of the product as well as the service provider who offered the product.
“The benchmarking exercise yielded the name ABC Investment, not Lwayaha. Why? Because ABC Investment must have done work,” he pointed out.
Lwayaha’s owner, Guo, maintained that his company submitted the cheapest bid and that his company was lawfully authorised to participate in the bidding process.
He insisted Netvend’s court application has no grounds. “I submit that the applicant (Netvend) did not establish a prima facie right for such an interdict,” Guo said in his affidavit.
Guo said ABC Investment never submitted a bid, but that he sought the town council’s permission to bid with Lwayaha before any bid was submitted. The town council gave him permission to rather bid with Lwayaha instead of ABC already during February.
DISQUALIFIED
Hamukoto is also contesting Netvend’s disqualification. He said the disqualification was an afterthought because he complained and questioned the award to Lwayaha Trading. He added that initially, the 12 April notice stated that none of the bidders were disqualified.
Hamukoto also clarified that his entity made an error by referring to the bid being valid for 90 days. But it had never said its quotation was valid for 90 days.
He said Netvend’s bid documents clearly state that its quotation will be valid for 180 days from the date of the submission deadline. He also notes that in another section of the bidding documents, Netvend clearly stated its “bid proposal is valid for 180 days, to ensure sufficient time for consideration and decision making”.
Hamukoto added that his company provided the second lowest price compared to Lwayaha, which was not a valid bidder. He said in the absence of Lwayaha, which was oddly smuggled into the tender process and the questionable disqualification, Netvend would have been the successful bidder.
Hamukoto added that his company has had a good track record since 2008, when it opened for business, and has had major clients like NamPower, Nored, the City of Windhoek, the Okahandja Municipality, Mariental Municipality, and Rehoboth Town Council, among others.
