THE FIGHT FOR P6BN ORPHANS FUND

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  • Local gov’t Ministry sued over P 6 billion social grant
  • Ministry admits pending crisis of over 75 000 beneficiaries
  • Ministry cancels tender under dubious circumstances
  • Court documents accuse Ministry officials of conniving
  • Beaten Smart Switch company has been serving the orphans since 2008

TEFO PHEAGE

Over 75 thousand orphans, destitute and community home based care beneficiaries will suffer untold harm and be left without financial support as the Ministry of Local Government and Rural Development failed to resolve a dispute over how funds used to support government beneficiaries are to be disbursed. The Ministry has warned that should the circumstances remain as they are people on government support will experience the biggest crisis ever in the history of Botswana.
The warning comes as a result of a legal battle between Prinsan Group, Smart Switch,  the Ministry, PPADB and Chairperson of the Ministerial Tender Committee amid accusations of corruption arising from the stalled 2013 ill-fated tender for the “design, supply, implementation and maintenance of the electronic food coupon system for destitute, old age persons, orphans and community home-based care beneficiaries.”
For over a decade, government had outsourced the disbursement of funds to a company called Smart Switch Botswana which managed millions of Pula on behalf of the government. In 2013 Government retendered for the contract. Three companies Prinsan Group, Signarite Investments and Smart Switch submitted bids. Prinsan won the recommendation stage beating out the other bidders.
The tender required a two envelope procedure. A system that separates the technical proposals and intended to meet the financing or cost proposals in two separate and sealed envelopes. During the tender evaluation, the technical proposal is required to be opened and evaluated first, followed by the financing proposal. The objective of the system seeks to ensure a fair evaluation of the proposal. The technical proposal would be evaluated purely on its technical merits and its ability to meet the requirements set forth in the Invitation without being unduly skewed by the financial proposal.
The Ministry officials however opened both proposals at the same time, breaching the evaluation procedure as set out by PPADB Regulations. In a letter to the PPADB and Competition Authority, the Department of Social Protection Director, Ruth Radibe acknowledges the error, and notes that “we were however informed that it was not supposed to be done this way.”
As a result of the error, the tender was canceled and an undertaking was made by the Ministry that in the re-tender, only the three bidders would be considered. The second phase however came with a change in condition as it excluded the long-time service provider-Smart Switch through the introduction by the PPADB of code number 203. Smart Switch successfully opposed this requirement on the grounds that it was irrelevant. The Ministry removed the code, which in turn angered other bidders who perceived the removal as giving an unfair advantage to the longtime service provider Smart Switch which was unable to meet the requirement.
Prinsan wrote a letter dated 7th April 2015 petitioning the Ministry against the removal of the code saying there was no way Smart Switch could fulfill the demands of the tender without meeting the requirements imposed by the 203. The Ministry in its response to the petition advised that the inclusion or exclusion of the code would make no difference to the tender process and would not in any way jeopardize the bidders.
Prinsan responded to the Ministry, noting that if the Ministry was correct in its position then it should not make any difference to reinstate the code. Prinsan addressed an additional correspondence to the PPADB arguing that the principles espoused in the PPAD Act had to be followed. “[m]ore particularly, a fair and equitable treatment of all contractors in the interest of efficiency and the maintenance of a level playing field, integrity, fairness, in the procurement and disposable process,” reads documents written by Prinsan.
PPADB in a letter dated April 2015 informed Prinsan that the board was investigating the matter but instead referred the case to the Ministries Ministerial Tender Committee-MTC.
A month later the Ministry wrote a letter to the complainant advising that a decision has been taken to suspend the tender process to avail government ample time to address the complaints. The bidders were left shocked on June 5th, 2015 when the received notification from the MTC that it had resolved to cancel the tender as the addendum issued by the procuring entity to remove the code 203 as a compliance requirement was improper.
The tender was reintroduced and Prinsan emerged victorious, passing the evaluation stages, but their woes were far from over. According to court papers the tender later suffered another setback as a fresh complaint was lodged by Prinsan group leading to another suspension of the tender by the Ministry.
According to court papers, once the latest suspension was lifted, and at the financial stages, Prinsan quoted for a price of P60 million for the project. Prinsan was requested through a letter dated January 2016 by Radibe to attend the pre-award meeting which was aimed at negotiating the cost to government.
Prinsan, in the court papers, says that it emerged that “the ultimate plan was to ensure that an agreement is not reached and that the whole process is deliberately collapsed by citing failed negotiations. In the follow up meeting the Ministry had changed all its representatives.”
The Ministry, following the pre-award meeting indicated that government could only pay P19 million in mobilization funds while they source for the balance- an undertaking that was never met.
Prinsan ,in their papers, say they had learnt through their sources that the Ministry’s Permanent Secretary was seeking advice from the Attorney General on how to cancel the tender. “In the said correspondence, the Permanent Secretary gave false information to the AG regarding my pricing,” argued Prinsan group. Prinsan further says they were later informed by the Ministry that the available budget for the project is P59.7 million-a figure they heard for the first time as it was never disclosed during negotiations.
“Owing to the wrongful information given to the AG, it would appear that the request for advice was not genuine, but meant to achieve or facilitate a certain outcome, being cancellation of the tender and extending the contract for Smart Switch Botswana,” charges Prinsan Group in their court papers.
Ministry defends itself-
The Ministry says the tender was cancelled due to failed negotiations. “At the opening of the financials, the applicant had quoted Sixty Nine Million one hundred and seven thousand, four hundred and thirty five and fourteen Thebe (69,107,435,14). It transpired that Prinsan group had quoted some items for the project as a unit cost instead of the total number of units required for the duration of the project.”
The Ministry counters the allegations against it by saying that “Prinsan group was requested to re-quote all the components of the project costs and also to furnish payment options of the same. The total bid cost for four years came out to be P210 million. An agreement on the price could therefore not be reached.”
Ministry warns on court case ramification
In several letters to other government agencies, the Ministry warned that the court case could deepen the crises. In a letter to the Competition Authority and PPADB, the Ministry warned that “Orphans, destitute, and community home based care beneficiaries would be adversely affected if it is to be dragged to the courts.”
It is not yet clear what implications are pending to these vulnerable groups as the case is now before the courts. The budget for these groups is at 6 Billion Pula.

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