Local companies lose grain bid despite offering lowest prices

Bidders are complaining about being disqualified suspiciously from the Ethiopian Trading Businesses Corporation’s (ETBC) 400,000 metric tons of milling wheat bid which is being done in an attempt to stabilize the local market.
There were 11 international bidders participating in the procurement of 400,000 metric tons of milling wheat. The wheat was divided into four lots each amounting to 100,000 metric tons.
The bid document opened during the last week of November. It showed that Hakan Agro DMCC offered the lowest rate for the first two lots and Agrocorp International the cheapest price for the 3rd and fourth lots.
According to the information that Capital obtained, Hakan has offered USD 214.44 for the first lot and USD 218.44 for the second lot per metric ton for the first two lots that manages 100,000 metric tons each, while for the same lots Agrocorp has offered the second least price that are USD 218.47 and USD 219.97 respectively.
For the same lots the third least price offer come from Gem Corp DMCC, who offered USD 221.31 and USD 222.34 respectively.
At the same time Agrocorp has offered the least price for the third and fourth lots that are USD 221.47 and USD 222.97 per metric ton respectively and Gem Corp follows by USD 224.41 and USD 225.45. Hakan has also competitive price of USD 225.44 for lot three.
However, the companies of the first two were disqualified from the bidding process and were given the explanation that a minor mistake had been made and a correction was needed to benefit the country, according to sources.
In the amendment’s description of the procurement the bidders are expected to come up with an additional specification letter that would give a guarantee to assure the certification that the grain is free from Aphlatoxin and other pesticide residue levels and microbiological loads in order to comply with Ethiopian standards.
However, Hakan and Agrocorp, who offered a better price, failed to attach the guarantee letter for the Aphlatoxin certificate, according to a source who wanted to be anonymous.
Sources added that such kind of errors are very minor and that the bid performer, Public Procurement and Property Disposal Service that undertakes huge purchases for every federal procurement, shall ask the bidders to fulfill the documents within a single day if they are interested.
“This is the usual trend in the bid system that is also for the benefit of the country to save millions of birr,” sources argued.
“However the public body preferred to disqualify the companies that offer the least price and to award it to the third company,” they said.
Sources, who closely followed the case, said that the country will lose more than 47 million birr if the bid is awarded to companies other than Hakan or Agrocorp, both offered the lowest rate for the first two and the last two lots respectively.
The corporation via the Public Procurement and Property Disposal Service is in the process of buying 600,000 metric tons of milling wheat to stabilize the market. On the other hand other government agencies are also buying wheat through the same government body for reserves. Currently Gem Corp which won 900,000 metric tons from one million tons to supply to the Ministry of Agriculture is supplying the product and so far 300,000 metric ton remains.