Wakilii

Rhema Engineering Company Limited v Arua City (Application 13 of 2023)

Tribunal · [2023] UGPPDPAAT 15 · 2023 Application Granted — Procurement Cancelled AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Administrative review application challenging procurement decision following unsuccessful bid evaluation
Decision
Procurement cancelled; entity may re-tender

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Tribunal held that the Accounting Officer's administrative review decision was a nullity for failing to state reasons and being made outside the statutory ten-day timeframe. Both bidders were non-compliant with bidding requirements. The evaluation committee misapplied evaluation criteria and used criteria not stated in the bidding document. The bidding document's criterion for selecting the lowest price in a revenue collection tender was against public policy as it curtailed revenue enhancement. The entire procurement was cancelled.

Outcome

Procurement cancelled; entity may re-tender

Facts

Arua City advertised a tender for revenue collection services for Arua City Main Market with a reserve price of UGX 100,000,000 per month. Two bidders submitted bids: Rhema Engineering Company Limited and Marraka Investment Limited. The Applicant was disqualified for lacking experience and past performance. Marraka Investment Limited was named Best Evaluated Bidder at UGX 105,000,000 per month. The Applicant requested administrative review on 22 June 2023. The Accounting Officer appointed a review committee and communicated findings on 13 July 2023. The Applicant filed this application challenging the procurement process and the Accounting Officer's decision.

Issues

  1. Whether the Respondent's Accounting Officer erred in law and fact when he failed to give reasons for his decision?
  2. Whether the Respondent's Accounting Officer made a decision within the statutory timeframe?
  3. Whether the impugned procurement was conducted in accordance with the law?
  4. What reliefs are available to the parties?

Orders

  • Application allowed.
  • Decision of the Accounting Officer dated 13 July 2023 declared a nullity and set aside.
  • Procurement process cancelled.
  • Entity advised to re-tender if it so wishes.
  • Tribunal's suspension order dated 14 July 2023 vacated.
  • Entity must refund the administrative review fees paid by the Applicant.
  • Each party to bear its own costs.

Rules and key headnotes

Administrative Review — Duty to Give Reasons — Public Procurement
An Accounting Officer conducting administrative review under section 89(7) of the Public Procurement and Disposal of Public Assets Act 2003 must state reasons for the decision taken and corrective measures to be taken, if any. A letter that merely communicates the findings of an Administrative Review Committee without indicating the final decision of the Accounting Officer or advancing reasons is not a decision properly so called and is a nullity.
Administrative Review — Statutory Time Limits — Public Procurement
An Accounting Officer must make and communicate an administrative review decision within ten days of receipt of an application under section 89(7) of the Public Procurement and Disposal of Public Assets Act 2003 as amended in 2021. This provision supersedes regulation 139(5) of the Local Governments (Public Procurement and Disposal of Public Assets) Regulations 2006 which allows fifteen working days. A decision made outside the statutory timeline is a blatant breach of the law and is no decision at all.
Public Procurement — Evaluation Criteria — Misapplication
Evaluation of bids using criteria not stated in the bidding document is contrary to section 71(3) of the Public Procurement and Disposal of Public Assets Act 2003. Misapplication of administrative compliance criteria as commercial and technical criteria, or application of criteria not listed in the evaluation methodology, renders the evaluation erroneous and unlawful.
Public Procurement — Waiver of Non-Compliance — Substantial Matters
Non-compliance by a bidder that is substantial cannot be waived where doing so would amount to departure from the evaluation criteria and would substantially alter matters of experience which form a crucial and deciding factor in evaluation, contrary to section 71(3) of the Public Procurement and Disposal of Public Assets Act 2003 and regulation 74(2)(c) of the Local Governments (Public Procurement and Disposal of Public Assets) Regulations 2016.
Public Procurement — Revenue Collection Tenders — Best Evaluated Bidder Criteria
In a revenue collection tender, a bidding document that provides that the bid with the lowest evaluated price shall be the best evaluated bidder is against public policy. It is prudent and logical that the bid with the highest quoted price, from among those which are eligible, compliant and substantially responsive, shall be the best evaluated bidder, as this is consistent with the objective of enhancing local government revenue collections and achieving value for money under sections 46 and 48 of the Public Procurement and Disposal of Public Assets Act 2003.
Public Procurement — Cancellation of Procurement — Tribunal Powers
Where evaluation of bids was conducted irregularly using criteria not stated in the bidding document, and the criteria for determination of the Best Evaluated Bidder is against public policy, the Tribunal as a merits review tribunal with power to substitute its own decision is duty-bound to cancel the entire procurement.

Legislation cited (10)

Cases cited (5)

  • Abasamia Hwolerane Association Ltd v Jinja City Council (Application No. 11 of 2021)
  • Coil Limited v National Housing and Construction Company Limited (Application No. 23 of 2023)
  • Prudential Assurance v Busitema University (Application No. 12 of 2023)
  • JB United Civil Engineering and Building Contractors Limited v Adjumani District Local Government (Application No. 7 of 2023)
  • Gat Consults Limited v National Water and Sewerage Corporation (Application No. 30 of 2021)

Full judgment

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Rhema Engineering Company Limited v Arua City (Application 13 of 2023) 2023 UGPPDPAAT 15 (3 August 2023)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.