The Federal High Court has dropped a case based on a complaint that a bid process for procurement of broadcast equipment initiated two years ago, had been unfairly concluded.
In conducting the bid for the 34.3 million dollar purchase of Digital Video Broadcasting – Second Generation Terrestrial (DVB-T2) for the Information Network Security Agency (INSA), the Public Procurement & Property Disposal Service’s financial evaluation was procedurally incorrect.
INSA had delegated the Service in September 2014, to procure network rollout solutions to transform Ethiopia’s television and radio services into a digital system.
The bid was tendered with responses from two competitors. GatesAir, an American company’s offer was 861 million Br, while Chinese Star Software Technology Ltd,’s offer was 680.5 million Br. Accordingly, the October 2014, announcement favoured Star. Headquartered in Beijing, Star first came to African in 2007. The company has expanded its outreach in the continent to 23 branches. Having four million subscribers it is now among the leading TV operators in Africa.
It ‘s bid rival, GatesAir contested and lodged a complaint to the Service’s Complaint Hearing Board, claiming that at that stage, the Services’ financial evaluation was not limited to lowest price on items and rather involved three other elements making up total project cost. These were, outstanding debt, interest rate and maturity period of the provision of loan which suppliers were required to come up with, as well as vendor financing.
It argued that the bidders were to be evaluated on basis of the original price of the solution that is carriage & insurance paid. Following this manner of evaluation, GatesAir got the advantage over the Chinese Star, as the price offer on items was 856.8 million Br and 950.8 million Br respectively.
On the basis of GatesAir’s complaint, the Board ordered the Service to revise the evaluation process limiting it to lowest price offer in items only.
“We have decided to revise the evaluation basis after the Board took a stand that total project cost approach was not clearly stated in the bid document,” Yigezu Daba, director of the Service told Fortune. “we were ordered to stick to the general lowest price offer basis of evaluation.”
Following the reversal of the decision, Chinese Star took the case out of administrative jurisdiction, protesting that it had made the lowest bid and the decision should not have been reversed. It took the matter to court, seeking judicial remedy. The Service and GatesAir were joint plaintiffs in the case.
Responding to the sue in writing, the Service argued against the case on procedural and substantial grounds. It raised a procedural objection arguing that the Court had no jurisdiction over decision of the Board, citing precedence in a Cassation Bench decision. On the substantial front, it raised the argument that it should be the Board that ultimately decided on the case and therefore it, not the Service, should be the plaintiff to the case.
The First Instance Court ruled in favour of the Service on February 24, 2016, accepting the jurisdictional objection. Based on this ruling, the Service revamped the process, signing a contract with GatesAir on February 29, 2016, for the supply of the equipment.
But China Star had not given up. It presented its plea for justice to the Federal High Court, on February 26, 2016.
The arguments included were further refined extending to a point where it questioned the authenticity of offers by GatesAir. Issues included inaccurate information about corporate arrangements in the US, indicating that GatesAir may not have met the minimum 10 years maturity period stated in the bid document.
However, without the need to call the plaintiffs to the witness stand, the High Court’s Fifth Bench dropped the case on grounds of lack of jurisdiction on March 4, 2016.
Meanwhile, INSA is furthering its plan for the transmission system to be installed throughout the country via the existing 74 television transmitter sites and 26 new complete DVB-T2 transmitters in UHF band upon receiving the hardware from GAtesAir. Established in 1922, GatesAir has specialized in air to air analogue and digital tv and radio broadcasting.
To this end, the software system, which was Lot two of the bid process, is to be supplied by Giga Communication, a UK-based company made an offer of 214.7 million Br. Giga, is a subsidiary of Ultra Electronics Group. Its clients include such media institutions as BBC, CNN and Al Jazeera, according to its website. Upon finalizing the process, the transmission quality of the country is expected to be more robust, flexible and 50pc more efficient than the present quality.
The whole project and full migration to digital transmission will be finalized in three years time.
Leave a Reply