The Public Procurement And Disposal Of Public Assets Tribunal has cancelled the procurement process by the Uganda National Airlines Company (Uganda Airlines) for the supply of aviation fuel and inflight support over among other reasons, over, what it called the “discriminatory treatment of bidders and unfair favouring of the best-evaluated bidders”.
Vivo Energy (U) Limited was the Best Evaluated Bidder in Lot 1 of Procurement Reference Number UNACL/SUPLS/22-23/00020 for the supply of aviation fuel valued at USD12,254,758 and Associated Energy Group, LLC was the Best Evaluated Bidder for Lot 2 (inflight support), at a total contract price of USD17,278, 287.
Mixjet Flight Support FZE, which was bidding in both lots but was disqualified at the preliminary stage, appealed the award to the two best-evaluated bids. Mixjet Flight Support FZE was disqualified for Lack of evidence of payment of business taxes in the Country of Origin/ Operation; Non-submission of a Registered/ Notarised Power of attorney); non-submission of a 3rd party aviation liability insurance; lack of a copy/ statement of bidder’s Health Safety and Environmental (HSE) policy; no evidence of current participation in the AFRAA Joint Fuel Supply Project; and no proof of authorisation to supply Jet A-1 fuel in Entebbe International Airport.
The tribunal, comprises Francis Gimara, S.C; Nelson Nerima; Eng. Thomas Brookes Isanga; Geoffrey Nuwagira Kakira; Paul Kalumba; And Charity Kyarisiima.
Mixjet Flight Support FZE, initially challenged the award to both Vivo Energy (U) Limited and Associated Energy Group, LLC through an administrative review application to the Accounting Officer of the Uganda National Airlines Company on January 27, 2023. However, in a decision dated the 9th day of February 2023, the Accounting Officer of the Airlines dismissed the complaint on the grounds that the complaint although received within the prescribed period, did not comply with the provisions of section 89 (3)(a) of the PPDA Act, and that the Complaint was not dated, had no addressee and the name of the person representing the bidder and that the complainant did not pay the prescribed fees.
Unsatisfied with this response Mixjet Flight Support FZE lodged an application with the tribunal on February 13, 2023, disputing the reasons for disqualification and the dismissal of administrative review.
In response to the appeal Tribunal Uganda Airlines, through its Legal Department filed a response on February 21, 2023, reiterating that the Mixjet Flight Support FZE’s bid failed at the preliminary stages because it lacked evidence of payment of taxes in the country of origin and also required notarised Powers of Attorney. Uganda Airlines also said the Mixjet Flight Support FZE bid lacked third-party insurance for fuel suppliers in aviation of up to USD 1 Billion as well as lacked a Health Safety and Environment policy. There was also no evidence of current participation in the African Airlines Association (AFRAA) joint fuel supply project and proof of authorisation to supply fuel at Entebbe from the Uganda Civil Aviation Authority (UCAA).
Uganda Airlines prayed that the Mixjet Flight Support FZE appeal be dismissed for lack of merit and that the recommendations of the Evaluation Report and decision of the Contracts Committee and that of the Accounting Officer be upheld.
Discriminatory treatment of bidders and favouritism
Having considered the Application, response and submissions, the Tribunal ruled that Mixjet Flight Support FZE’s application for review was in the right format and reiterated that “The Tribunal has earlier on held that non-conformity with a particular form does not render a document void. Regard must be made to considering the substance rather than the form”.
On whether there was a valid complaint before the tribunal ruled that since the complaint was sent by email on January 27 2023 at 1.04 p.m from Mixjet Flight Support FZE to relevant Uganda Airlines officers, and receipt of the email was acknowledged on January 27, 2023 at 3:42 pm by Owere Becholas, the complaint was valid. On the non-payment of administrative review fees, the Tribunal ruled that “an Accounting Officer is duty-bound to advise a complainant on the prescribed Administrative Review fees and where to pay the said fees, upon receipt of a complaint”.
“The Respondent’s Accounting Officer automatically ought to have guided the Applicant on how to have the prescribed administrative review fees paid and the mode of payment thereof. This Tribunal has been consistent on the principle that late payment of administrative review fees is not necessarily fatal, and that even actual non-payment of court fees has been held not to be fatal so long as the proper fees can be assessed and paid,” the Tribunal ruled.
How Stanbic Bank CFO Ronald Makata Blends Governance, Technology and Human Leadership to Drive Performance“The Tribunal, therefore, does not agree with the dismissal of the complaint by the Respondent’s Accounting Officer on the ground that the Complaint was not dated, has no addressee and name of the person representing the bidder and that the Complainant did not pay the prescribed fees,” the Tribunal further ruled.
The Tribunal also found that the Uganda Airlines Accounting Officer had made a response to the request for administrative review outside the mandated 10 days, which made the response a nullity.
“The Accounting Officer of the Respondent (Uganda Airlines), therefore, erred in law when she failed or omitted to make and communicate a decision on the Complaint filed by the Applicant within the timelines set by law,” the Tribunal ruled.
The tribunal also found that Uganda Airlines “erred when it disqualified the Applicant’s bid on account of non-submission of registered/notarised powers of attorney; 3rd party aviation liability insurance (USD 500 million -USD 1 billion); and evidence of participation in African Airlines Association (AFRAA) Joint Fuel Supply Project under the eligibility requirements”.
Above all, the Tribunal found that Uganda Airlines, “did not treat the bidders equally when applying the purported eligibility requirements” when it evaluated the best bidders as compliant on key requirements they fell short of.
For instance, the Tribunal found that while Item 3.2 (h) of the Evaluation Methodology and Criteria required the bidder to submit 3rd party aviation liability insurance (USD 500 million- USD 1 billion), the best-evaluated bidders, Vivo Energy (U) Limited submitted a public liability insurance policy with an occurrence and aggregate limit of USD 5,000,000 while Associated Energy Group, LLC’s insurance was up to a maximum of USD 25,000,000. Similarly, Vivo Energy (U) Limited did not submit evidence of current participation in the AFRAA Joint Fuel Supply Project. Associated Energy Group, LLC did not submit Evidence of payment of business taxes in the Country of Origin. Associated Energy Group, LLC also did not also submit evidence of experience in supplying similar or related products.
“The discriminatory treatment of bidders and unfair favouring of the best-evaluated bidders was contrary to the provisions of Part IV of the Public Procurement and Disposal of Public Assets Act, which requires all public procurement and disposal must be conducted in accordance with the basic principles of (a) non-discrimination; (b) transparency, accountability and fairness; (c) maximisation of competition and ensuring value for money; (d) confidentiality; (e) economy and efficiency; and (f) promotion of ethics,” the Tribunal noted.
“The Tribunal has determined that the Respondent (Uganda Airlines) erroneously stipulated eligibility criteria which do not belong to the eligibility requirements. The Tribunal has also determined that there was unequal treatment of the bidders in the impugned procurement. Even the purported best-evaluated bidders did not qualify for the awards made,” the Tribunal observed and ordered: “In the circumstances, the procurement will be cancelled”.
“The procurement for supply of aviation fuel and inflight support under Procurement Reference Number UNACL/SUPLS/22- 23/00020, is cancelled,” the Tribunal ruled, adding: “The Respondent may re-tender the procurement if it so wishes”.
Each party shall bear its own costs.
