United Africa Pension Tender Appeal Fails

A LEGAL challenge of a Tender Board decision to award a contract for the cash payment of State grants and allowances to a rival company has ended in a final defeat for United Africa Group in the Supreme Court.

United Africa Group (UAG) received the defeat in the form of a Supreme Court judgement in which three judges of appeal on Tuesday dismissed the company’s appeal against a High Court judgement that Acting Judge Petrus Unengu delivered in June 2011.

Acting Judge Unengu dismissed an application in which UAG asked the High Court to review and set aside a decision of the Tender Board, taken on 29 October 2010, to award the tender for the cash payment of State grants and allowances from December 2010 to November 2015 to a rival tenderer, Epupa Investment Technology.

UAG had been handling the payment of the State grants from 1999 until it lost the contract late in 2010. Epupa Investment Technology won the tender after its bid of about N$135,5 million was the lowest received by the Tender Board. UAG’s bid of N$144 million was the second lowest.

UAG claimed its tender bid complied with a requirement that it had to provide the Tender Board with a letter of good standing from a bank confirming its financial viability to execute the tender, as well as a written guarantee to the value of N$5,5 million. UAG claimed Epupa Investment Technology’s bid did not include such a bank guarantee, but only included a letter of intent in which a bank stated that it would provide such a guarantee if the tender was awarded to Epupa.

In his judgement, Acting Judge Unengu said he found nothing wrong or untoward in the Tender Board’s opinion that the letter of intent provided by Epupa was sufficient proof that the bank would provide the guarantee once the tender has been awarded to the company.

Acting Judge of Appeal Simpson Mtambanengwe, who wrote the appeal judgement, commented that UAG and Epupa both provided the Tender Board with a letter of intent from a bank, in which it was stated that the bank undertook to issue a performance guarantee if the tender in question was awarded to UAG or Epupa respectively.

On a correct reading of the terms and conditions of the tender it was clear beyond any shadow of doubt that a tenderer was only expected to furnish a performance guarantee to the Tender Board once the tenderer’s bid had been accepted by the board, Judge Mtambanengwe stated in his judgement.

Epupa furnished that guarantee on 16 November 2010, he recounted.

Judge Mtambanengwe also noted that the minutes of the Tender Board meeting in which the decision to award the contract to Epupa was taken clearly indicated that the board’s decision was based on the lower cost of Epupa’s bid.

An argument from UAG that the board acted with ulterior motives when it supposedly based its decision on an opinion that it would not be in the best interest of equal wealth distribution to award the contract to UAG again, “is wholly unpersuasive and must be dismissed without further ado”, Judge Mtambanengwe stated.

Judges of Appeal Gerhard Maritz and Sylvester Mainga agreed with his judgement.

Senior counsel Theo Frank, instructed by Andrew Theunissen, represented UAG. George Coleman, instructed by Elize Angula, represented Epupa.

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Source : The Namibian