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Judgement expected in PMTCT tender row

SHARE   |   Tuesday, 21 March 2017   |   By Ditiro Motlhabane
Justice Dambe Justice Dambe

Two years after Creative Business Solutions (CBS) interdicted the Department of HIV/AIDS Prevention and Care and the Public Procurement and Asset Disposal Board (PPADB) from signing contracts for the supply of 3.4 million units of infant formula, the High Court is yet to deliver judgement. Some parties in the lawsuit have expressed concern about delays in delivering the judgment, which has been pending before Justice Leatile Dambe, after arguments in the matter were completed a long time ago. Two weeks ago lawyers representing the litigants were turned away empty handed after they were invited to note the judgment by officers in Justice Dambe's court. The recent postponement followed another earlier in January. "After the latest postponement we were promised that we will be contacted by telephone soon, but nothing is forthcoming," one of the contractors vented out, clearly frustrated. An interdict, obtained by CBS in October 2015, has frozen contracts awarded to winning bidders in September 2015 to sign and commerce supply of the PMTCT formula to the Ministry of Health (MoH) at a cost of P98 740 310.08. CBS approached court to review the decision by the tender evaluation committee to disqualify its bid for the supply of infant formula to Department of HIV/AIDS Prevention and Care PMTCT Programme, ruling that it was non-compliant with the requirements of the invitation to tender. At the centre of the tender dispute is the requirement for bidders to provide, together with other documents, "free sale certification for the product tendered for issued from the country of manufacturers by a commercial authority (e.g. chamber of commerce) from the country of origin, and that a free sale certificate from the manufacturer will be rejected". In its bid, CBS submitted a certificate issued by Nutribio Feeding Life, a manufacturing company in France where infant formula 400 grams tin Lobebe is freely sold and used for infant feeding. The certificate contains a signature and address from chamber of commerce and industry for the Paris region, and for this CBS are adamant that it was issued in conjunction with and with the endorsement of the commercial authority in France. "CBS' free sale certificate was substantially compliant in that it certified that the product is freely sold and used for infant feeding in France as indicated in the certificate which is endorsed by both the manufacturer and the commercial authority in France, being the chamber of commerce in Paris," argued CBS Managing Director Mosupi Masomosomo. PPADB argues to the contrary, saying the certificate was clearly not issued by a commercial authority in the country of origin of the product but by the manufacturer, Nutribio. All that is given in it is the commercial authority's address and a signature with a statement "seen exclusively to certify the above signature", PPADB pointed out. Further, PPADB argues that neither does that the commercial authority certify that it is an official commercial authority where the said infant formula is manufactured nor is there certification from the commercial authority that the infant formula is freely sold and used for infant feeding.  For these reasons, which point to non-compliance, PPADB wants the matter dismissed with costs.


On the other hand, most of the bidders including those who were awarded the tender submitted free sale certificates issued by Ekurhuleni Metropolitan Municipality, which stated that it is an official commercial authority in neighbouring South Africa where infant formula 400g Melegi is manufactured. The municipality further certifies that the infant formula is freely sold and used for infant feeding. Notwithstanding that, Masomosomo argued that the certificates did not comply with tender requirements because they originate from the Environmental unit of the municipality not the commercial unit or authority and ought to have also been disqualified. In June 2015, upon discovering that they had been disqualified from going into the evaluation stage of the tender, Masomosomo wrote to the Permanent Secretary in the MoH Shenaz-El-Halabi complaining that the decision smacks on corruption. He said although CBS met all requirements of the tender they were never invited to provide samples for quality testing and that evaluators were biased towards bidders who source their products from South African manufacturers particularly Nestle. Masomosomo also made the point that Nestle SA prices are way above European manufacturers, which could cost government millions of Pula. The bone of contention, by CBS, is that the tender evaluation committee acted unfairly, irrationally and made irrelevant considerations in contravention of the PPAD Act and the tender documents. "The other bidders whose free sale certificates were defective ought to have been similarly rejected because their free sale certificates were more non-compliant than CBS' in relation to the principle of fairness and equitable treatment of contractors," argued Masomosomo, accusing the adjudicating committee of bias. Masomosomo argues that government stands to lose over P6.3 million if the tender is allowed to continue in its current form because CBS bid was lowest at P86 092 500.00. After CBS bid was disqualified, the tender was subsequently awarded to Extra Vision (P49 234 527.69), Bonanza Equipment (32 929 534.79) and Rebels Fruit and Vegetables (P16 576 247.60). In a curious turn of events CBS did not obtain an interdict against Extra Vision, who have been carrying out their portion of the contract since December 2015, despite that they submitted in their bid an identical free sale certificate to that of Bonanza Equipment. Responding to the lawsuit Bonanza dismissed allegations that the free sale certificate they submitted from Ekurhuleni Metropolitan Municipality was non-compliant. In support of the certificate submitted with Bonanza bid, Ekurhuleni Metropolitan Municipality wrote to certify that it is a commercial authority in South Africa where infant formula 400 grams Melegi One manufactured by Aspen Nutirtionals, is freely sold and used for infant feeding. Bonanza, therefore, argued that CBS failed to prove that the municipality or its environmental department is not a commercial authority, and therefore its allegation is a bald assertion with no evidence to support it. "The award insofar as it relates to Bonanza is unimpeachable. Bonanza is an innocent party who was awarded the tender properly, and there is nothing to show that it should not have had the award made to it. It will be greatly prejudiced should the award be set aside," argued Bonanza lawyers Akheel Jinabhai & Associates.