IFMIS concerns continue as second company disputes process

Controversy has erupted since one of the bidders in the latest Integrated Financial Management Information Systems (IFMIS) rollout project filed a complaint against the winning company in the bid evaluation process.

However, the project owner, the Ministry of Finance and Economic Cooperation (MoFEC) rejected the company’s request asking the ministry to reconsider awarding the project to the winner.

The Indian based Tech Mahindra Ltd India, who participated in the bid with its partners, was the runner up in the bid evaluation.

In its letter to the Head of Finance & Procurement Services Directorate of MoFEC, Tech Mahindra with its partners, Fairfax Technologies and INTRASOFT International stated that it had a grievance with the bid evaluation process. It also stated that the winning company, Techno Brain Tanzania Limited, should be investigated to ensure that all relevant facts were taken into consideration in order to protect the best interest of the government of Ethiopia and the ministry.

The letter sent to Sihin Gobena, head of the bid evaluation team, claimed that the evaluation process should give more priority to a technical evaluation than the financial offer.

“It is common practice (policy) in public tenders in Ethiopia, including previous MoFEC tenders, that technical proposals are opened first and financial proposals are opened only after the completion of the technical evaluation,” the letter argued. “This process is designed to maintain the integrity of the technical evaluation. In fact, during all other government tenders we have participated in Ethiopia, bidders have been disqualified for not complying with the ‘two envelope’ bid submission process,” the letter elaborated.

It added that despite this common policy and practice, the IFMIS bid opening was totally contrary. “To everyone’s surprise and without any advance warning, both technical and financial proposals were opened on the bid submission day, potentially undermining the transparency and integrity of the technical bid evaluation process,” Tech Mahindra argued in its three page claim.

Only four companies participated in the August 28 bid.

Two companies (Tech Mahindra and Techno Brain) were shortlisted after their financial offer. The other company who bought the bid document, Transnational Computer Technology (TCT),  that undertook the pilot project argued that the technical evaluation should be 70 percent. Technical evaluations historically have  taken priority, usually at the stated percentage especially the most recent rollout bids IFMIS bids that were previously annulled and the pilot bidding process.

Experts that Capital talked to said that technical evaluations should get the most consideration in such big and technologically sophisticated projects.

But the latest request for proposals (RFP) has reduced the technical evaluation to a 50-50 split with the financial aspect. Experts asked if Tech Mahindra’s request for a technical evaluation should take priority when the company participated in a bid that gives equal priority to both.

In its letter the company severely ridiculed the bid winner, Techno Brain, who competed with its Tanzanian based branch and its partner in Ethiopia.

The letter stated that Techno Brain is involved in a legal battle with its employees and is being accused of tax evasion. Tech Mahindra’s letter further stated that Techno-brain is fighting court cases in Ethiopia accused of illegally transferring out of Ethiopia more than 270 million Birr (USD13.0 million) to its offshore bank accounts. It has accused the company of misinforming MoFEC to win the bid.

The company also mentioned several ‘negative reputations’ of Techno Bain in other African countries.

The letter also lobbied to be awarded the bid magnifying the capacity of Tech Mahindra and its partners.  In a response, however, Alemayehu Gujo, State Minister of MoFEC, refuted most of the points that Tech Mahindra made.

The State minister wrote that according to information to bidders (ITB) 43.1 ‘Public bodies shall award the contract to the bidder whose bid has been determined to be the lowest evaluated bid and is substantially responsive to the bidding document, provided further that the bidder is determined to be qualified to perform the contract satisfactorily.’

The state minister’s letter affirmed that the procurement was undertaken as per the bidding document’s instruction.

The letter ridiculed the accusation of Tech Mahindra on the awarded company. It said that the ‘consortium agreement’ submitted by the ‘successful bidders’ with which the contract is to be signed was not included ‘Techno Brain IT solution plc’. “Since Techno Brain IT solution plc is not the member of the consortium of the successful bidders and its role is local support. Therefore, no valid reason to review the cases and to go to the level of reconsideration of the previous award notification,” the letter discards the Indian company claim.

“According to ITB 29.3 the opening of financial and technical proposals were conducted to all bidders proposals with the presence of interested bidders representatives and others, so, it is not possible to claim the issue of transparency,” it elaborated.

“We can’t get specific matters or aggrieved action to reconsider the award notification already made for the subjected procurement,” the letter concluded.

In its reply letter to Alemayehu, Fairfax Technologies, who is one of the partners of Tech Mahindra, on Tuesday October 18 argued that Techno Brain IT solution plc is part of the consortium under Techno Brain Tanzania.

“It appears that MoFEC did not verify the ownership of ‘Techno Brain IT Solution plc’ before responding to our complaint. Had MoFEC done even a cursory check on the ownership structure, based on publicly available information at the Addis Ababa Documents Authentication and Registration Office and Ministry of Trade, it could have confirmed that Techno Brain IT Solution plc is owned by Techno Brain Tanzania (and Dubai), the consortium bidders of the IFMIS tender,” it said.

“Furthermore, Techno Brain IT Solution plc’s general manager and his local staff attended the IFMIS bid opening and were the ones who provided explanations to MoFEC’s staff at the bid opening on behalf of Techno Brain Tanzania,” Fairfax’s letter copied to Debretsion Gebremichael (PhD), Deputy Prime Minister for Finance and Economic Cluster, and Minister of Communication and Information Technology and Abdulaziz Mohammed, Minister of MoFEC, added.

Fairfax asked MoFEC to rescind its decision to award the project to Techno Brain.

As per the award letter Techno Brain will manage the project at a cost of 419 million birr (USD 19 million). Tech Mahindra offered USD three million (over 66 million birr) more than the winner.

In the evaluation Techno Brain received an 83 percent score and 50 percent in the financial evaluation result.

The Indian company received 79 percent overall and 42 percent in the financial evaluation.

Mekonnen Tesafye, Country Director of Techno Brain Ethiopia, declined to comment on Tech Mahindra’s letter.

Sihin told Capital that it was not correct to submit the letter about the Indian company’s concerns about the bid evaluation process to the evaluation team. “Claims have to be submitted to a higher body in MoFEC or the Public Procurement Agency,” she explained. “I received their letter so it was copied to the Minister and his deputy who are responsible for considering their claim in the legal procures,” she said.

She declined to comment on Tech Mahindra’s claim because she does not have a legal mandate.

The IFMIS project has been controversial since TCT claimed there are several inconsistencies in the company and the RFP.

IFMIS is an automated method that enhances efficiency in planning, budgeting, procurement, expenditure management and reporting in Ethiopian government offices