KAMPALA – The Public Procurement and Disposal of Public Assets (PPDA) tribunal has cancelled the aviation fuel supply contract that Uganda National Airlines had awarded to Vivo Energy, citing procurement irregularities.
On November 8, 2022, Uganda Airlines, through a newspaper advertisement, invited sealed bids for the procurement of supply of aviation fuel and inflight support using the open international bidding method.
In a hearing at the PPDA headquarters in Kampala on March 6, the tribunal ruled the day after (March 7) that Ms Jenifer Bamuturaki, Uganda Airlines chief executive officer, who also doubles as the entity’s accounting officer, did not treat all the bidders equally, rendering her decision to award the contract null and void.
The ruling was passed by a six-member tribunal comprising; Francis Gimara, Nelson Neima, Eng. Thomas Brookes Isanga, Geofrey Nuwagira, Kakira, Paul Kalumba and Charity Kyaisiima.
“The tribunal has determined that the respondent (Uganda Airlines) erroneously stipulated eligibility criteria which do not belong to eligibility requirements. The tribunal has also determined that there was unequal treatment of bidders in the impugned procurement. Even the purported best evaluated bidders (Vivo Energy Uganda Limited and Associated Energy Group LLC) did not qualify for the awards made. In the circumstances, the procurement will be cancelled,” the members ruled.
The tribunal further explained that the discriminatory treatment of the bidders and unfair favouring of the best evaluated bidders was contrary to the provisions of the PPDA Act, which require all public procurements and disposals to be conducted in a fair and transparent manner.
The tribunal sitting came after an appeal lodged by Mixjet Flight Support FZE after Bamuturaki dismissed its complaint in regard to the bidding process which it argued was opaque.
On January 27, Mixjet Flight Support lodged a complaint to Ms Bamuturaki, contesting the award of the contract to Vivo Energy and Associated Energy Group, respectively. However, on February 9, Ms Bamuturaki dismissed Mixjet Flight Support’s complaint on grounds that it did not comply with the provisions of section 89 (3) (a) of the PPDA Act. Aggrieved with the decision, Mixjet Flight Support appealed to the PPDA tribunal on February 13, 2023, seeking a review of the decision.
About the bidding
The bidding document was issued to 10 bidders, including; Norble Petroleum and Logistics Limited, Associated Energy Group, Mixjet Flight Support FZE, SKA International Group and Tistar Energy Limited. Others include; Vivo Energy Uganda Kencor Petroleum Limited, Puma Energy (Aviation) South Africa, Zenith Oil Terminals Limited and Global Aviation Energies.
On November 29, 2022, the 2022, the bidding process was closed with only Norble Petroleum and Logistics, Mixjet Flight Support, Vivo Energy Uganda, Puma Energy (Aviation) South Africa and Zenith Oil Terminals Limited responding to lot 1 of the invitation.
For lot 2, there were four bidders who responded to the invitation, namely; Norble Petroleum and Logistics Limited, Mixjet Flight Support, Puma Energy (Aviation), Associated Energy Group and Zenith Oil Terminals.
Upon conclusion of the evaluation process, the best evaluated bidder notice was displayed on January 25, 2022 with a date of removal indicated as January 27. The notice indicated that Vivo Energy was the best evaluated bidder at a total contract price of $12,254,758 (Ugx45.3bn) for lot-1, while Associated Energy Group was the best evaluated bidder at a total contract price of $17, 278, 287 (Ugx 63.9bn) for lot-2.
The notice indicated that Mixjet Flight Support FZE was disqualified at the preliminary stage for lack of evidence of payment of business taxes in the country of origin/ operation, non-submission of a registered/notarised power of attorney, third party aviation liability insurance and statement of bidder’s health, safety and environmental policy, among other grounds.
Way forward
The tribunal advised Uganda Airlines to re-tender the procurement if it so wishes, after setting aside Ms Bamuturaki’s decision, dated February 9, 2023. It also vacated the suspension order, dated February 14, 2023, which it had earlier placed on the process.
On the alleged unlawful modification of the standard bidding document issued by PPDA in the cancelled procurement process, the tribunal said there was insufficient material and arguments to enable it to decide on the matter.
In regard to non-payment of complaint fees, undated complaint fees, undated complaint, lack of addressee and name of the person representing the bidder, the tribunal said it was not fatal to render the complaint invalid as Ms Bamuturaki had resolved.
