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MoH wins P98 m tender row

SHARE   |   Monday, 28 August 2017   |   By Ditiro Motlhabane 
MoH wins P98 m tender row

Local supplier Creative Business Solutions (CBS) has lost with costs, a lawsuit in which it sought cancellation of a decision by Department of HIV/AIDS Prevention and Care PMTCT Programme (Ministry of Health -MoH), disqualifying them from a tender to supply 3.4 million units of infant formula, two years ago. Bidders had been required to provide, together with other documents, "free sale certification for the product tendered for issued from the country of manufacturers by a commercial authority from the country of origin, and that a free sale certificate from the manufacturer will be rejected". 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). CBS interdicted contracts awarded to winning bidders in September 2015 to commence supply of the PMTCT formula, arguing that their free sale certificates were also not compliant. CBS, whose bid stood at P86 million, then approached court to review the decision by the tender evaluation committee to disqualify its bid due to non-compliance. Delivering judgment three weeks ago (July 2017) following a protracted legal battle spanning two years, Justice Leatile Dambe ruled that: "CBS arguments have no merit. Their free sales certificate was prepared by the manufacturer against clear instruction on the tender documents. The purpose of free sales certificate is to give assurance that the product being considered is legally sold in open market and without restriction and that it has approval from statutory authorities in the country of origin. Clearly a certificate issued by the manufacturer would never be a satisfactory source of such information". Documents perused by The Patriot on Sunday show that in its bid, CBS submitted a certificate issued by Nutribio Feeding Life, a manufacturing company in France where infant formula 400 grams in 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 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. 

To the contrary, PPADB argued that the certificate was 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 argued 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 those reasons the bid was declared non-compliant and disqualified. 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 certified 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 and ought to have also been disqualified. After being disqualified Masomosomo complained to the Permanent Secretary in the MoH Shenaz-El-Halabi claiming that the decision smacks on corruption, and that evaluators were biased towards bidders who source their products from South African manufacturer, Nestle who are very expensive. He argued that government stood to lose over P6.3 million if the tender was allowed to continue. CBS contended that the tender evaluation committee acted unfairly, irrationally and made irrelevant considerations in contravention of the PPAD Act and the tender documents.