’Marafaele Mohloboli
THE Minister of Agriculture and Food Security has cancelled a tender for the supply of fertilizers for the summer agricultural season program due to budget cuts.
Although budgetary constraints are at play, the ministry’s procurement unit also identified other factors including non-compliance of the technical specifications with the set tender notice regulations, which rendered the process a failure.
The cancellation comes after two companies which had also bid for the tender, Cubana Shells and Alfa Agro Chem lodged a complaint challenging the earlier decision by the ministry to award the tender to Machache Trading.
Cubana Shells’ complaint was on the basis that Machache Trading’s tender document was initially set aside arguing that its price was too high.
On the other hand, Alfa Agro Chem’s complaint was that its fertilizer met the ministry’s stipulated technical specifications and had supplied the same product with the set specifications for two consecutive financial years of 2014/15 and 2015/16). The company further argued that it had the capability and experience to supply large quantities while its price difference with Machache Trading was over M9million more expensive.
In the ministry’s response to the complaints raised, the procurement unit said it had applied principles of integrity and value for money before cancelling the tender.
The statement read, “Although Machache Trading had met the tender requirements, the issue was whether the tender notice really enabled competitive environment for all tenders in accordance with Public Procurement Rules.
“After thorough consultations, the Unit established that the technical specifications set in the tender notice did not comply with Regulation 13(1) (a) in that they led exclusively to a specific tenderer and thereby failing to afford genuine competition in the process. In that way, the very purpose of open-tendering was defeated and this rendered the procurement a total failure,” read part of the statement.
The Unit also had to reconsider the quantities of fertilizer which were anticipated under the “allocated budget versus the quantities of fertilizer that would be received under the contract in issue and concluded that the awarding of the contract would not be economically sound.”
“It is also important to note that there had been so many budget cuts hence the need to strike a balance between honouring the claims on mechanical operations of the last financial year and procuring fertilizer for this financial year. We then discovered that in practical terms, the changes in our budget are such that there would be no sufficient funds available to cover the desired quantity under the proposed contract,” the statement read.
The Unit further said that proceeding with the award would mean farmers will be faced with high prices such that the primary purpose of the program, which is to subsidize agricultural inputs in order to improve productivity, would be defeated.
In its explanation, the unit said it was at the pre-contractual stage and had not yet entered into a contractual undertaking with Machache Trading. As a result, the company will not suffer any prejudice following the cancellation of the tender.
“We also wish to point out that we are now in the summer cropping season and the country is experiencing rainfalls, and therefore there is a high demand of fertilizer. Allowing the matter to drag would prejudice the farming communities and the country.”
The Unit emphasized that the cancellation was purely on good faith observing professional principles of loyalty and respect for rules and regulations, integrity, impartiality and fairness, transparency and due diligence.
This tender had six bidders and only one was compliant though its price was way above the lowest with over M9million as its price was.
