Review Of Some Legal Aspects In Public Procurement In Tanzania

Transcription

1 Review Of Some Legal Aspects In Public Procurement In Tanzania 1

2 REVIEW OF SOME LEGAL ASPECTS IN PUBLIC PROCUREMENT IN TANZANIA Papias Njaala Department of Postgraduate Studies, Institute of Accountancy Arusha, P.O. Box 2798, Arusha, Tanzania Didas Malekia Department of Informatics, Institute of Accountancy Arusha, P.O. Box 2798, Arusha, Tanzania ABSTRACT Public procurement in Tanzania is governed by the Public Procurement Act 2011 and its regulations of The objective of this paper is to study the public procurement flaws in Tanzania in recent years and suggest the improvements/corrective actions. The methodology used is a desk-work research whereby some cases before PPAA are studied, procurement flaws are established and recommendations/corrective actions are suggested. It has been found that some procuring entities undertake procurement activities contrary to the requirements of the law, some of procuring entities officers and tenderers do not comprehend legal requirements governing public procurement. In order to reduce the procurement flaws, it is recommended that more training programmes be offered, heavy penalties be levied and e-procurement system be established. 1. INTRODUCTION The public procurement process aims at finding an entity that will supply goods, construct works or provide services (both non-consulting and consulting) to the procuring entity. Before embarking on supply of goods, construction of works or provision of services, the supplier, constructor or service provider must enter into a contract with procuring entity. In Tanzania contracts in general are governed by the Law of Contract Act, Cap 345 [R.E 2002]. 2

3 Public procurement in Tanzania from planning stage through contract signing and contract administration is a legal process governed by Public Procurement Act No. 7 of 2011, Public Procurement Regulations, Government Notice 446 of 2013, Public Procurement Amendments Act of 2016 and Public Procurement Regulations Amendments of Before these legislations, public procurement in Tanzania was governed by Public Procurement Act, 2001 and then PPA of 2004 and its regulations of A contract is defined in different ways some of which are provided here. Contract is essentially an agreement that is freely entered into on terms that are freely negotiated. If there is a statutory obligation to enter into a form of agreement the terms of which are laid down, at any rate in their most important respects, there is no contract (Stone, 2002). Adukia (2012) defines a contract as an agreement enforceable by law whereas every promise and every set of promise forming the consideration for each other in an agreement. Agreements are contracts if they are entered into by the free consent parties competent to contract for a lawful consideration and with a lawful object and are not hereby expressly declared to be void. Kim (2017) defines a contract as an agreement between parties creating mutual obligations enforceable by law. The basic elements required for an agreement to be a legally enforceable contract are: mutual assent, expressed by a valid offer and acceptance; adequate consideration; capacity and legality. The formation of a contract requires existence of key elements for it to be enforceable before the courts of law or quasi-judiciary organs. These key elements are offer, acceptance, consideration, capacity, free consent, legality, (United Republic of Tanzania, 2002), Oughton et al (2000), Suff (1997). 3

4 An offer must be made willingly; its terms must be clear and certain; it must be a final expression of the offeror. (Oughton et al, 2000). An offer may be terminated through revocation of the offer by the offeror, acceptance by offeree, counter offer by offeree, rejection of offer by offeree, lapse of time, death or disability of either party, or failure of pre-condition or performance of the contract becomes illegal after the offer is made (United Republic of Tanzania, 2002: Section 6 of Law of Contract), (Oughton et al, 2000), (Suff, 1997). An offer must be distinguished from an invitation to treat. An offeree cannot make an acceptance to an invitation to treat because invitation to treat does not constitute an offer (United Republic of Tanzania, 2002), (Oughton et al, 2000), (Suff, 1997). Examples of invitation to treat are displays of goods in stores; advertisements; auction sales; and invitations to tender, (Oughton et al, 2000). The party responding to the invitation to treat is the one who makes an offer to the party issued an invitation to treat. Acceptance is a free assent to the offer and it is regarded to take place if it is absolute and unqualified, that is an offer is accepted as made without any change. If any change is made to the offer it becomes a counter offer - not acceptance, (United Republic of Tanzania, 2002: Section 7 of Law of Contract), Oughton et al (2000), Suff (1997). An acceptance must be in response to the offer; must have knowledge of the offer before accepting (No knowledge of offer - no acceptance); in exchange for the offer/ proposal, acceptance must be communicated; must be complete; and can be made to an agent instead of the offeror, (United Republic of Tanzania, 2002: Section 7 of Law of Contract). 4

5 Section 4 of the Law of Contract of Tanzania provides that an offer is complete when it comes to the knowledge of the person to who it is made (offeree) and communication of acceptance is complete (United Republic of Tanzania, 2002): (a) As against the proposer (offeror), when it is put in the course of transmission to him, so as to be out of the power of the acceptor (offerree); (b) As against the acceptor (offerree), when it comes to the knowledge of the proposer (offeror); Section 4 of the Law of Contract of Tanzania (LCO) also provides that the communication of revocation of an offer or acceptance is complete: (a) As against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; (b) As against the person to whom it is, made when it comes to his knowledge. Section 5 of LCO provides that an offer may be revoked at any time before the communication of its acceptance is complete, as against the offeror, but not afterwards and acceptance may be revoked at any time before the communication of the acceptance is complete as against the offerree but not afterwards. Consideration is defined as what is actually given or accepted in return for a promise as part of an agreement in the form of a right, interest, profit or benefit accruing to one party. In order for a promise to be enforceable the promisee must show that he paid a price for it [the promise]. Consideration must be lawful. Consideration is said to be lawful unless it is forbidden by law, is of such a nature that, if permitted, it would defeat the provisions of any law, is fraudulent, involves or implies injury to the person or property of another, or court regards it as 5

6 immoral or opposed to public policy (United Republic of Tanzania, 2002: Section 23 of Law of Contract). For an agreement to be enforceable before the court of law or quasi-court it must be entered by parties with capacity to enter into contract (competent parties). A party is regarded as competent to enter into contract if he is of the age of majority, is of sound mind; and is not disqualified from contracting by any law to which he is subject (United Republic of Tanzania, 2002: Section 11 of Law of Contract). Section 12 of Law of Contract of Tanzania stipulates that a person is of sound mind if at the time of entering into contract is capable of understanding it and forming a rational judgment as to its effects upon his interest, (United Republic of Tanzania, 2002). Another key element of contract is free consent from both parties to the contract. Section 13 of the law of Contract stipulates that two or more persons are said to consent when they agree upon the same thing in the same sense (United Republic of Tanzania, 2002). Consent is said to be free when it is not as a result of coercion, undue influence, fraud, misrepresentation and mistake (United Republic of Tanzania, 2002: Section 14). A contract should also contain a key element of legality. A contract which contravenes with the requirements of any law is null and void. Major (1996) provides some examples of illegal contract: contracts prohibited by statues, contracts to defraud the revenue, contracts involving the commission of a crime or tort, contracts with a sexually immoral element, contracts against the interest of a state/country or a friendly state, contracts leading to corruption in public life and contracts which interfere with the course of justice. 6

7 A contract comes to an end, obligations on parties to it are discharged and all rights are thus extinguished, by way of performance, frustration, acceptance of breach by the other party, mutual agreement (Major, 1996). 2. OBJECTIVE OF THE PAPER Overall objective of this paper is to study the public procurement flaws in Tanzania and suggest the remedies/corrective actions. Specific objectives of this paper are as follows: (a) To provide an insight to the legal requirements governing public procurement in Tanzania with a view to enable both procuring entities and prospective tenderers make appropriate decisions; (b) To suggest improvements/corrective actions in order to have better public procurement legislation. 3. METHODOLOGY This paper adopts a descriptive approach using the desk-work research. Authors study legal requirements governing contracts (that is contract law), Public Procurement Act, 2011 of Tanzania and its regulations of 2013 as amended in They also study some cases before the PPAA in order to get an insight of flaws related to public procurement and recommend for improvements/corrective action. 4. PROCUREMENT PROCESS IN A NUTSHELL 4.1 Procurement Process for Goods, Works and Non-consulting Services Procurement cycle can be described as the sequential procedures and steps beginning with identification of a need and ends with contract management. It involves the following sequential 7

8 steps: need identification, procurement planning, bid invitation, receiving and opening of bids, evaluation of bids, negotiation, approval and award of contract and contract management. User department is mandated with the function of identification of needs in terms of what, how much and when goods, services and works are needed. In identifying the need, user department will specify technical inputs to statement of requirements or terms of reference, propose technical specifications and submit them to Procurement Management Unit (PMU) (Section 39 of Public Procurement Act (PPA), 2011). Procurement plan is a systematic approach that clarifies procurement objectives, makes strategic decisions and checks progress towards the objectives. Section 49 of PPA of 2011 provides for approval of annual procurement plan (APP) and requires a procuring entity (PE) to prepare it in a rational manner, to avoid emergency procurement wherever possible, to aggregate its requirements wherever possible, both within the PE and between PEs, to obtain value for money and reduce procurement costs, to avoid splitting of procurement to defeat the use of appropriate procurement methods unless such splitting is to enable wider participation of local consultants, suppliers or contractors and to integrate its procurement budget with its expenditure programme. PEs are also required to observe the approved APP and any unplanned procurement shall get a prior written approval of the accounting officer. APP must be integrated with PEs budget since sufficient funds are needed to pay for the goods, works and services to be procured (Krasniqi, 2012). It is a practice in Tanzania to prepare APP in three templates: template of APP for Internal Use, template of APP for External Use and Template of APP for Submission to Public Procurement Regulatory Authority (PPRA). 8

9 Emergency procurements as the term suggests are not in the APP. According to Section 65 PPA of 2011 and PPR 63 of 2013 emergency procurement may be made if it is in public interest and it meets the following criteria: (a) Compelling urgency that creates threat to life, health, welfare or safety of public by reason of major natural disaster, epidemic, riot, war, fire or other reasons of similar nature; and (b) situation whereby without the urgent procurement, the continued functioning of PE would suffer irreparable loss, the preservation or protection of irreplaceable public property, or the health or safety of public will be threatened. Upon satisfying the criteria for emergency procurement, the PE shall seek approval of Government Procurement Services Agency (GPSA) before proceeding on with procurement, PPA 65 (3) and PPR 63 (2). Under emergency procurement PE may waive the conditions related to procurement limits, methods, tender processing periods and advertisement (Section 65 (6) of PPA of 2011). However, PE cannot waive the conditions related to tender evaluation and approval by tender board. PPR 65 prohibits tender board to grant retrospective approval for emergency procurement. This means that all emergency procurements must be approved by the tender board before goods, works or services are procured. PPR 63 requires the Accounting Officer to: (a) evaluate the need for emergency procurement and decide the preferred procurement method in order to guarantee economy and efficiency, (b) ensure criteria for emergency procurement are complied with, (c) identify, specify and prioritize the immediate procurement activities which may be used in the period of emergency, (d) where possible identify other government bodies that can provide assistance, and (e) specify the timeframe within which the emergency procurement will be undertaken. 9

10 According to PPR 63 (3), upon receiving an application for emergency procurement from Accounting Officer, GPSA shall consider the merits of the application and grant approval within five working days. If the nature of emergency makes it impracticable to apply to GPSA for approval of emergency procurement, PPR 63 (5) allows the Accounting Officer to proceed with emergency procurement with chosen procurement method and he shall immediately notify GPSA and PPRA. The Accounting Officer is required by PPR 63 (6) to apply to the Paymaster General for retrospective approval of emergency procurement within seven working days from the date of contract award. PPR 64 requires the Accounting Officer to prepare a report of emergency procurement and submit it to Paymaster General, PPRA, Controller and Auditor General (CAG), Internal Auditor General (IAG), and GPSA. According to PPR 66 (1) PE shall not use emergency procurement method if: (a) goods or services fall under common procurement arrangement, or (b) the specific event was anticipated and planned. However, if the procurement is reasonably and justifiably necessary and it is inadvertently not included in the APP but within the authority of Accounting Officer to approve reallocation within the PE s budget, the value of such procurement shall not exceed limits for minor and micro values prescribed under the Sixth and Tenth Schedules of PPR. Invitation to tender and advertisement is governed by Sections 67, 68, 69, 70, 71 and 72 of PPA, 2011 and PPRs 181, 182, 183, 184, 185, 186, 187, 188, 189, 190, 191, 192, 193 and 194 of PPR. Section 67 of PPA requires PE wishing to use competitive tendering to provide all eligible prospective tenderers with timely and adequate notification of the PE s requirements, an equal opportunity to tender. PPR 181 requires that all invitations to tender to be in writing. Section 68 10

11 (1) requires PE to prepare tender notice inviting priced offer for supply of goods, works and nonconsulting services and submit the notice within reasonable time before the planned issue of the tender to the tender board for approval. S. 68 (2) requires that approved notice to be advertised and to ensure widest reach of potential tenderers and S. 68 (3) requires that tender notice to be published in sufficient time to enable prospective tenderers to obtain tender documents and prepare and submit their tenders before deadline. Before the deadline for tender submission the PE may modify the tender document and extend the submission deadline. S. 69 of PPA requires PE to issue the same information (and additional information if any) to all tenderers. Also requirements and terminologies which discriminate unfairly against participation by tenderers should be avoided. S. 70 and PPR 182 requires PEs to use standard model tender documents and tender document is required to set clear and precise information. S. 71 requires a tender document to specify the validity period to enable evaluation committee and tender board to make decisions on valid tenders. S. 72 and PPR 184 requires tender evaluation criteria (price and others) to be clearly specified in tender document and in case alternative materials and completion schedules are permitted, terms and conditions for their acceptability, method of evaluation need to be clearly specified. PPR 185 requires all tender documents to be approved by tender board before being advertised. PPR 187 requires that tender period be specified in the tender document and it will not be altered after tender advertisement unless it is approved by tender board and the alteration related to extension of the period should be for fostering fair competition, fairness and enhancing economy 11

12 of PE. PPR 189 allows a PE to convene a Pre-bid Meeting and provide Minutes of Pre-bid meeting to all those whom the solicitation documents were issued within three working days. Receipt of tenders and tender opening is provided for under S. 73 of PPA, 2011 and PPR 195, 196, 197, 198, 199, 200 and 201 of S. 73 and PPR 195 requires a Secretary to the tender board to issue a receipt (showing date and time received) for each tender document received and return unopened all tenders received after the deadline. All tenders received before the deadline shall be opened in public immediately after the deadline, in the presence of tenderers or their representatives and other parties with legitimate interest in procurement proceedings. S. 73 and PPR 196 also requires the name, address, total amount of each tender or and any alternative tenders if required or permitted to be read out and recorded during the tender opening. According to S. 73 (5) and PPR 200 information related to examination, tabulation, clarification and evaluation of tenders and the recommendations for award of contract shall not be disclosed to tenderers or other persons not officially concerned with the procurement process until notice of intention to award a contract is notified to tenderers who participated in the tender. PPR 198 requires all tenders received to be numbered consecutively the last one being endorsed and the last and initialled by the members of the tender opening committee in the presence of tenderers or their representatives. PPR 199 requires the Secretary to the tender board to prepare the minutes of the tender opening and he may provide the signed minutes to the tenderers upon their request. 12

13 According to PPR 201 any tenderer who attempts to influence the PE in the process of examination, clarification, evaluation and comparison of tenders, and in decisions concerning the award of the contract shall result in rejection of his tender. Evaluation of bids is provided for under S. 74 of PPA of 2011 and PPR 202, 203, 204, 205, 206, 207, 208, 209, 210, 211, 2012, 213, 214, 215, 216, 218, , 222, 224 of S. 74 (1) and PPR 202 require evaluation committee to carry out evaluation of tenders on common basis in order to determine the cost to PE of each tender in a manner that permits a comparison to be made between tenderers on the basis of the evaluated costs. However, the lowest submitted price may not necessarily be the basis for selection of for award of a contract. According to S. 74 (2), PPR 203 and PPR 208 PE may specify in the tender document any relevant factor(s) in addition to price in determination of lowest evaluated tender. These will be expressed in monetary terms to the extent they are practicable. PPR 204 requires tenders to be checked for substantial responsiveness to commercial terms and conditions and all tenders with material deviations to commercial terms shall be rejected. Material deviations in this regard include: (a) failure to sign bid form and price schedules by the authorized person(s), (b) failure to satisfy eligibility requirements, (c) failure to submit tender security specified in the tendering documents, (d) failure to satisfy the tender validity period, (e) inability to meet the critical delivery schedule or work schedule specified in tendering documents, (f) failure to comply with minimum experience criteria specified, (g) conditional tenders which limit the tenderer s responsibility to accept award, (h) inability to accept price adjustment formulae, (i) stipulating price adjustment when tender invited is fixed price one, (j) subcontracting in a substantially different amount or manner than that permitted, and (k) failure 13

14 to submit major supporting documents required by the tendering documents to determine substantial responsiveness of a tender. PPR 205 requires tenders that are substantially responsive to commercial terms and conditions to be subjected to checking of substantial responsiveness to technical requirements and all tenders which are technically non-responsive to be rejected. Non-conformity to technical requirements include: (a) failure to tender for required scope of work as specified in the tendering document, (b) failure to quote for a major item in the package, (c) failure to meet major technical requirements, such as offering completely different types of material or a plant of lower capacity than specified, (d) presentation of absolutely unrealistic and inadequate implementation plans and schedules of performance, technical or service factors. PPR 206 (2) stipulates that nonresponsive tenders may not be subsequently corrected or withdrawn. According to PPR 207 (1) a PE may request a tenderer to make a clarification of his tender in order to assist in the process of examination, evaluation and comparison of tenders. However, the clarification sought should not give an advantage to a respective tenderer and the clarification should not make a non-responsive tender to be responsive. According to PPR 207 (2) a PE shall correct arithmetic errors and promptly notify the respective tenderer about the correction made. PPR 207 (2) also stipulates that minor deviations from specified characteristics, terms and conditions and other requirements shall not make a tender to be non-responsive. Minor deviations in this regard shall be quantified to the extent possible and appropriately taken account of in the evaluation and comparison of tenders. S. 74 (4) and PPR 220 require a tender evaluation committee to submit a detailed evaluation report to the PMU which specify reasons on which its recommendations are based. According to 14

15 S. 74 (5) PMU is required to review the evaluation report and submit it to the tender board with his recommendations. S. 75 provide the tender board with powers to approve the evaluation report and PMU s recommendations or may refuse to approve them and order for either reevaluation or re-tendering or other appropriate action. PPR 212 stipulates that a successful tender shall be the tender with lowest evaluated tender price in case of goods, works or services, or the highest evaluated tender price in case of revenue collection, but not necessarily the lowest or highest price, subject to any margin of preference applied. PPR 215 stipulates that where tender prices are expressed in two or more currencies, the tender prices of all tenders shall be converted to common currency using the rates indicated in tendering documents for the purpose of evaluation and comparison of tenders. According to PPR 218 a PE may require a tenderer who is successful to demonstrate again its qualification even if PE has engaged in pre-qualification proceedings. The criteria and procedures to be used in post-qualification proceedings shall be specified in the solicitation document and in case a PE has engaged in pre-qualification proceedings the criteria used in postqualification shall be the same as those used in pre-qualification. When a tenderer who submitted the successful tender is required to demonstrate again its qualification and it refuses to do so the PE shall reject its tender and shall select another successful tender accordingly or may reject all the remaining tenders. According to PPR 224 (2) post-qualification criteria include: (a) experience and past performance on similar contracts, (b) knowledge of local working conditions, (c) personnel capabilities, (d) equipment and construction or manufacturing facilities, (e) Financial capability 15

16 to perform the contract, (g) legal capacity to make binding decisions on its rights, duties and obligations, (h) compliance with health and safety laws, tax and employment laws, (i) litigation record, and (j) any other relevant criteria. According to PPR 224 (3) a PE may seek independent reference of a tenderer and the results of reference received may be used in determining award of contract. In case a tenderer is a foreign entity a PE may seek the independent reference of legal existence of a tenderer from Tanzania diplomatic mission abroad or from other reliable source. Negotiation of tender is provided for under S. 76 of PPA of 2011 and PPR 336 of According to S. 76 a tenderer who wins the tender shall be invited for negotiations and requires that negotiations shall not focus: (a) to change the specifications or details of requirements, (b) to materially alter the terms and conditions of contract included in tender document, (c) to reduce price for procurement of goods, works or services, (d) to increase prices in disposal of assets, and (e) to substantially alter anything which is crucial or deciding factor in the evaluation of tender. S. 76 (4) provides that when negotiations fail to result into acceptable contract, the PE shall terminate the negotiations and invite the next ranked firm for negotiations after consultation with the tender board. PPR 336 (4) provides that a negotiation team shall be recommended by PMU and approved by the Accounting Officer and it shall base on the appropriate level of seniority and experience. According to PPR 336 (5) the number of members to the negotiation team shall as a minimum be three and as a maximum of five and may include members of original evaluation committee or different officers. According to PPR 336 (14) results of approved negotiations shall be included in tender acceptance letter and incorporated in the contract. 16

17 Approval and award of contract is provided for under S. 75 of PPA, 2011 and PPR 57 and 58 of According to S. 75 of PPA and PPR 57, the tender board shall review the evaluation and recommendation made by PMU and may either: (a) approve the recommendation and authorize acceptance of tender and award a contract in a form specified in tender document, or (b) refuse to authorize recommendation for award of contract and direct for re-evaluation or re-tendering or any other action. According to PPR 58 award decision may be made through circular resolution. Contract management is provided for under PPR 242 to 252 of According to PPR 242 (1) a PE shall obtain a report on goods delivered against contracts and authorize payment to the supplier. PPR 242 (2) provides that when the supplier delay to deliver the goods the PE shall seek a report from such a supplier or agent and may institute liquidated damages as may be provided for in the contract. According to PPR 243 PE shall monitor the service provider or contractor s performance against the statement of requirements or schedule of works stipulated in the contract daily, weekly or monthly from PE s supervisor responsible for the service or works. In case of under-performance the PE shall notify the service provider or contractor and may refuse to authorize payments until the requirements are met. PPR 243 (4) provides that a PE may institute the dispute resolution proceedings spelt out in contract in case of failure to agree with a service provider or contractor on a remedy for non-performance or under-performance. According to PPR 243 (5) when a service provider or contractor fails to perform or underperform a PE may (a) withhold payment of any retained moneys, or (b) call for performance security. 4.2 Procurement Process for Consultancy Services The procurement cycle for consulting services is mostly the same as that for goods, works and non-consulting services in the sense that it starts with user department s need identification, 17

18 invitation for prospective consultant, opening & evaluation of bids, negotiations with first ranked consultant, award of a contract and contract administration. However, there are some differences between the two in terms of methods of procurement and limits of their application; minimum procurement processing time, application of reference scheme. More details on the procurement cycle for consultancy services are provided in part 5.2 of this document. 5. PROCUREMENT METHODS AND THEIR CONDITIONS FOR USE 5.1 Procurement Methods for Goods, Works and Non-consultancy Services A PE may use international competitive tendering, national competitive tendering, restricted tendering, competitive negotiations, single source, shopping, minor value procurement, micro value procurement, force account and community participation procurement. According to PPR 149 (1) a PE shall consider international competitive tendering and national competitive tendering in procure goods, works or non-consultancy services before any other method. PE may use other procurement method provided it may establish that the use of the method may ensure transparency, economy and efficiency in the implementation of the project and if: (a) the competitive tendering is not considered to be most economic and efficient method, (b) the nature and estimated value of the goods, works and non-consultancy services permit, PPR 149 (2) and PPR 149 (4). According to PPR 150 (2) a PE shall use international competitive tendering if: (a) a payment or part of it is made in foreign currency, and (b) it is desired to attract bidders from widest range regardless of their nationality. First Schedule of PPR provides that a PE using international competitive tendering should advertise TPA Journal and Tender Portal 18

19 maintained by Public Procurement Regulatory Authority, PE website and/or Notice Board and at least one local news paper and one international news paper. National competitive tendering method for procurement of goods, works and non-consultancy service shall be used if: (a) payment is made in Tanzanian shillings, (b) goods, works and services are available locally at prices below the international market, (c) the estimated cost does not exceed the threshold for international competitive tendering spelt out in the Seventh Schedule of the PPR (d) works or services are scattered geographically or spread over time, (e) works are labour intensive, and (f) administrative or financial burden exceeds the advantages of international competitive tendering. First Schedule of PPR provides that a PE using national competitive tendering should advertise in TPA Journal and Tender Portal maintained by Public Procurement Regulatory Authority, PE website and/or Notice Board and at least one local news paper of wide circulation. Under restricted tendering a PE restricts the issue of tender documents to a limited number of specified tenderers and it may do so if: (a) suppliers, contractors or service providers have already been pre-qualified, (b) goods, works or non-consultancy services are of a specialized nature, (c) there is an urgent need for the goods, works or services and there is insufficient time to a PE to use international or national competitive tendering and that the circumstances giving rise to urgency could not be foreseen and are not caused by dilatory conduct by PE, (d) there is a need to achieve certain social objectives by calling local communities or local firms to participate, PPR 152 (1). According to PPR 153 (1) PE may apply a two-stage tendering if: (a) PE establishes that prior discussion with suppliers or contractors are needed to refine description of the subject matter and 19

20 (b) tendering procedures have been used but no tenders were submitted or all tenders were rejected and PE judges that re-tendering would not result in procurement contract. PPR 159 provides that a PE may apply single source procurement for goods or services under the following circumstances: (a) the goods or services are available only from one firm and reasonable alternative or substitute exists, (b) there is an urgent need and use of tendering proceedings or other procurement methods would be impracticable provided that the circumstances giving rise to urgency were neither not foreseeable nor the result of dilatory conduct by PE, (c) a PE needs additional supplies goods or services from a supplier who supplied the same under international or national competitive tendering method, (d) a PE seeks to enter into contract for research, experiment, study, or development except where the contract includes the product of goods in quantities to establish their commercial viability or to recover research and development costs, (e) procurement involves national defence or national security and where it is determined that single source is the most appropriate, (f) where critical items need to be purchased from a specified supplier to ensure that the output of a process plant shall be guaranteed by the contractor responsible for process design, (g) where standardization of equipment is essential for economic and technical reasons and it has been proved that compatibility of the existing equipment with another make of equipment cannot be established (h) where standardization of spare parts is required in order to be compatible with existing equipment or spare part or stock item related to specific and specialized equipment or machinery, (i) where additional items need to be purchased for the completion of on-going project. PPR 163 (1) provides that PE may invite quotations through request for quotations at international or national level if: (a) goods to be procured are so diversified to the extent that it 20

21 would be of no commercial interest for any single supplier to tender for them, or (b) the goods are readily available off-the-shelf or commodities with standard specifications. According to PPR 165 a PE may procure goods, non-consultancy services or minor works by using minor value procurement if: (a) the value does not exceed the limit for minor value procurement spelt out in the Seventh Schedule of PPR, (b) the price quoted is reasonable, (c) no advantage to the PE is likely to be obtained by seeking further quotations or by using other methods of procurement, (d) the contract for minor value procurement may be by a way of Local Purchase Order. Micro value procurement is provided for under PPR 166 and stipulates that a PE may procure directly from established supermarkets, shops or drug stores or similar establishments if the value does not exceed the limit spelt out in the Seventh Schedule of PPR. According to PPR 166 (4) a PE may use petty cash, imprest or purchase cards to effect payment under micro procurement. PPR 167 stipulates that the use of force account or direct labour may be justified and hence used if: (a) the required works are scattered or are in remote locations for which qualified construction firms are unlikely to tender at reasonable prices, (b) work is required to be carried out without disrupting on-going operations, (c) risks of unavoidable work interruption are better shouldered by a PE or public authority that by a contractor, (d) there are emergencies which require a prompt attention, (e) the PE has qualifies personnel to carry out and supervise required works, or (f) maintenance or construction is part of the routine activity of the PE. Community participation procurement is provided for under PPR 168 and stipulates that a PE may use this method of procurement for the interest of project sustainability or to achieve certain 21

22 specific social objectives of the project. In this case a PE may: (a) call for local communities or farmers groups to participate, (b) increase utilization of local know-how and locally manufactured products, or (c) employ labour intensive and other appropriate technologies. 5.2 Procurement Methods for Consultancy Services Procurement methods for consultancy services in Tanzania are provided for under PPRs 254, 255, 256 and 257. According to PPR 254 a PE shall use international competitive selection inviting national and international consultants if the following conditions are present: (a) payment may be made wholly or partly in foreign currency; (b) it is desired to attract expression of interest from the widest range of consultants regardless of the estimated value of the services to be procured. According to PPR 255 national competitive selection of consultants shall be used by inviting consultants regardless of their nationality and the method is appropriate if: (a) payment may be made wholly in Tanzanian shillings; (b) the services can be obtained locally at prices below the international market; (c) the estimated cost of the services does not exceed the threshold for national competitive selection spelt out in the eleventh schedule to PPRs; or (d) the advantages of international competitive selection are clearly outweighed by the administrative or financial burden involved. Under restrictive competitive selection of consultant (PPR 256) a PE may restrict the issue of request for proposal to a limited number of firms if: (a) those consultants are pre-qualified; (b) the services required are within the competence of a limited number of specialised consultants; or (c) there is an urgent need for the services such that there would be inadequate time for a PE to use open national or international tendering, and that the circumstances giving rise to the 22

23 urgency could not have been foreseen by a PE and have not been caused by dilatory conduct on its part. Under PPR 257 a PE shall use a single source selection of consultants provided it is in the overall interest of that PE and a project and a tender board is responsible to ensure economy and efficiency. Single-source selection of a consultant may be appropriate only if it provides a clear advantage over competition. The method is justified: (a) for tasks that represent a natural continuation of previous work carried out by the firm; or (b) under emergency operation; or (c) where only one firm is qualified or has experience of exceptional worth for the assignment. According to PPR 258, there are four principal selection methods that shall be used depending on the characteristics of the consultancy services required. These are: (a) selection based solely on technical quality; (b) selection based on technical quality with price consideration; (c) selection based on the compatibility of technical proposal and least cost consideration; and (d) selection based on quality and fixed budget. According to PPR 274 a PE shall follows the following process in consultant selection: (a) preparation of the terms of reference; (b) preparation of cost estimate and the budget; (c) advertising the request for expression of interest or pre-qualification of the consultancy services; (d) preparation of the short list of consultants; (e) determination of the selection procedures and criteria for selection; (f) preparation and issuance of the request for proposals; (g) inviting the consultants to submit proposals; (h) receipt of proposals; (i) evaluation of technical proposals; (j) evaluation of financial proposal; (k) final evaluation of quality and cost; (l) post qualification where necessary; (m) negotiations; (n) award of the contract to the selected consultant; and (o) signing the contract. 23

24 PPR 275 (2) 0f GN 446/2013 stipulates that a PE shall prepare the terms of reference for the procurement of consultancy services that shall contain the following: (a) a precise statement of the objectives and goals of the assignment; (b) a clear description of the nature and scope of services required, their context and the duration in which they are provided; (c) a description of the duties and responsibilities of the consultant; (d) a description of the duties and responsibilities of the PE; (e) information on any counterpart staff and its role; (f) information on training and the transfer of technology, where necessary; (g) a summary of the data, a list of all available studies and information on the assignment, facilities and services which the PE will provide to the consultant; and (h) a clear statement of the criteria to be used in the selection procedure. 6. DISCUSSION OF SOME LEGAL FLAWS IN PUBLIC PROCUREMENT IN TANZANIA In this part of the paper authors visit some legal flaws in public procurement in Tanzania at each stage of procurement of goods, works, non-consultancy services and consultancy services. The source of flaws discussed here are decided cases at the courts of law and Public Procurement Appeals Authority (PPAA) of Tanzania. PPAA is a quasi-court following the same procedures as those used in under the courts of law. Case No.1: Appeal Case No. 20 of : Before the PPAA M/s Equity Aviation Services (T) Ltd (Appellant) versus Tanzania Airports Authority (Respondent) M/s Mwanza Ground Handling Services Co. Ltd joined the case as an interested party 24

25 Facts of the Case: Respondent invited Class I ground handling licensed tenderers to submit bids under the restricted tendering procedures of PPA The Appellant, interested party and two other firms submitted their bids. Technical and financial proposals were evaluated. M/s Mwanza Ground Handling Services Co. Ltd (interested party) was ranked the first thus Evaluation Committee recommended them for award of the contract and the tender board approved the award of contract to the interested party for ten years subject to pre-contract negotiations. On 15/10/2015 the Respondent issued the Notice of Intention to Award the tender to the interested party and the same was addressed to all four bidders. Being aggrieved, the Appellant on 3/11/2015 requested the administrative review by the Respondent s Accounting Officer citing five grounds namely: (i) The Intention to Award Letter referred to a different tender i.e. tender NO. AE-027/ /JNIA/N/41 which was for Provision of Ground Handling Services at Julius Nyerere International Airport TB III while the tender was for Provision of Ground Handling Services at Julius Nyerere International Airport- Dar es Salaam. (ii) Tender opening process was tainted with massive irregularities of the law in that the Secretary of the Tender Board neglected and/or refused to prepare minutes of the bid opening and ensure that all bidders representative signs the same. (iii) The successful bidder neglected to submit Bid Form which formed the fundamental part of the document constituting its bid. The said information was realized during the tender opening ceremony. 25

26 (iv) The Notice of Intention to Award letter was tainted with fundamental error of law since bidders bid separately but the letter from the Respondent addressed three unsuccessful bidders with no reasons attached. (v) The proposed successful bidder neglected to abide with mandatory requirement of ITB Clause 11 and 13 of which no bidder was at liberty to dispense with. On 13/11/20155 Respondent s Accounting Officer dismissed the Appellant s application for lack of merit and also gave reasons for not being successful. On 23/11/2015 Appellant applied for another administrative review by Respondent s Accounting Officer stating that a letter dated 3/11/2015 was a mere inquiry into the reasons for their disqualification and not an application for administrative review. The Respondent did not act on the second letter. On 30/12/2015 the Appellant filed the appeal against the Respondent to PPAA, whereby the PPAA notified all firms which participated in the tendering process. The Respondent supported by the Interested Party filed a Preliminary Point of Objection (PO), objecting the appeal on the ground that it has been filed out of legally allowed time. The Appellant replied to the PO in that the letter dated 15/10/2015 (the Notice of Intention to Award) did not comply with the requirements of PPR 231 (4) of GN 446/2013 which requires that the Notice of Intention to Award to contain the following: (a) name of the successful tenderer; (b) the contract sum and completion or delivery period; (c) reasons as to why the tenderers were not successful. The Appellant stated that she could not have complained based on that letter. The Appellant also submitted that Respondent used a private and unknown address of her employee contrary to Instructions to Bidders (ITB Clause 36) hence she (the Appellant) could not have acted on it. Therefore, the official communication from the 26

27 Respondent to them was that made on 23/10/2015 and that on 3/11/2015, they requested to be given the reasons as to why their tender was unsuccessful and not the request for administrative review as contended by both the Respondent and the Interested Party. They argued that counting from 23/11/2015 they were within the time prescribed by law. It was further argued that since Clause 42 of the ITB part G, provided for an appeal to be lodged within twenty eight (28) days, the Appeal was filed within time. The Appellant called on the PPAA to disregard the prescribed period of fourteen (14) days stated under the Act and the Regulations. Ruling: The PPAA determined the PO before addressing the merits of the case. The PO centred on the main issue whether the appeal was properly before PPAA. The controversy is whether the Appellant s letter dated 3/11/2015 addressed to the Respondent can be regarded as an application for administrative review as stated by the Respondent and Interested Party or a mere request for reasons for disqualification as stated by Appellant s learned counsels. PPAA also ruled out that the use of a private by the Secretary of the Respondent s Tender Board to send a letter to the Appellant on 16/10/2015 was proper since the name of the Secretary was mentioned on the Clause 8 of the Bid Data Sheet (BDS). The PPAA ruled out that given the sub title/subject and details/contents of the Appellant s first letter to the Respondent (dated 0n 3/11/2015), the letter is treated as the application for administrative review. Therefore, counting of days within which to take action started to run from 4/11/2015. According to Clause 42 of the ITB and S. 96 (7) of PPA 2011 the Respondent s Accounting Officer was supposed to deliver a decision on Appellant s second letter (dated 23/11/2015) 27

28 within fourteen days and thus a decision should have been made on or before 6/12/2015. PPAA observed that under S. 97 (2) of PPA 2011 the Appellant was under obligation to file his appeal straight to PPAA within fourteen days from the date the Respondent s Accounting Officer ought to have been issued a decision. The said fourteen days lapsed on 28/12/2015 while the appeal to PPAA was filed on 30/12/2015. PPAA also ruled on the Appellant s submission that his appeal was within time since Clause 42.1 of the Tender Document provided for twenty eight days for aggrieved party to appeal. The ruling was that the said Clause was applicable in case the letter of intention to award a contract had not been communicated to bidders. The PPAA ruled also that even if the said Clause 42 of ITB was for the Notice of Intention to Award it cannot be relied to override the specific provision of the law, i.e. parties cannot enter into agreements which are contrary to the specific provisions of the law. Case No.2: Appeal Case No. 01 of : Before PPAA M/S Transsys Solutions Fze (1st Appellant) M/S Macro Software Systems (T) Limited (2nd Appellant) versus Tanzania Ports Authority (Respondent) Twenty Third Century Systems joined the case as Interested Party Facts of the Case: On 17/2/2015 Respondent invited tenderers to submit their bids for Supply, Installation, Testing and Commissioning of Enterprise Resource Planning (ERP) System for TPA. Eight tenderers 28

29 including the 1 st Appellant, 2 nd Appellant and Interested Party submitted their tenders. Tenders were evaluated in three stages namely preliminary, technical and detailed evaluation before evaluation of financial proposals. During preliminary evaluation seven tenders were found to be non-responsive in terms of completeness and eligibility criteria. Interested Party was found to be responsive hence his tender was subjected to subsequent evaluation stages. During technical evaluation a tender from the Interest Party was found to meet technical requirements and therefore, it was subjected to evaluation of financial proposal. On 27/5/2015 the Tender Board approved the Evaluation Committee recommendations to award a contract to the Interested Party subject to post-qualification and upon submission by the Interested Party of a warranty from a software manufacturer. On 1/6/2015 the Respondent informed all the tenderers on Intention to Award the contract to the Interested Party. On 3/6/ st Appellant received the said letter and on the same date he wrote the Respondent requesting for reasons for disqualification of his tender. On the same date (3/6/2015 Respondent replied to the 1 st Appellant citing the reason for disqualification of the tender was that the Bid Security submitted was if favour of M/s Transsys Solutions of Dar es Salaam and not for M/s Transsys Solutions FZE of UAE who was the tenderer. On 10/6/ st Appellant lodged a complaint with the Respondent challenging the reason for his disqualification as well as the intention to award the contract to the Interested Party citing that the Interested Party does not have two references in port industry. The said letter was received by the Respondent on 11/6/ st Appellant did not receive any reply on his complaint thus on 1/7/2015 he filed an appeal with PPAA. The 1 st Appellant raised three grounds for his appeal which are as follows: 29