NetOne accused of unfair tender process

Netone building

Netone building

Business Reporter

A losing bidder in the tender for a new mobile financial services technology platform for NetOne’s OneWallet platform has raised the red flag over the adjudication process which are being cited as flawed and corrupt. The tender was awarded to Chinese company Huawei. Last month Aura Group (Private) Limited, whose technology solution was 38,2 percent cheaper, appealed against the decision by NetOne and the State Procurement Board to award Tender No NetOne—MFS2015—1 for the provision, implementation and support of mobile financial services technology platform to Huawei International Company Limited in January this year. The appeal is still pending.

The appeal against the decision by NetOne and the SPB naturally suspends the procurement proceedings and or the operation of a procurement contract for seven days unless such period is extended by a judge, prompting Aura to seek an extension of the suspension until its appeal is dealt with.

In papers filed at the High Court last week, Aura now wants an extension of the suspension of procurement proceedings and/or the operation of the procurement contract as continuation would render the appeal proceedings merely academic.

It said it would be wrongful deprivation of its right to a fair hearing, access to courts and equal protection and benefit of the law as provides for by law if the procurement proceedings are to proceed before the appeal is heard.

But in his opposing affidavit, suspended NetOne chief executive officer Reward Kangai said the noting of the appeal shall not have the effect of suspending the procurement and therefore the application for the extension of the suspension of the procurement must be denied.

Aura expressed concern at the manner the adjudication was conducted arguing that its solution was 38,2 percent cheaper than Huawei and NetOne having confirmed in writing that the group had met the technical requirements sought.

“This assumption is based on the fact that NetOne would most likely procure our solution at a cost of $1,04 million against the $1,7 million Huawei cost, since NetOne currently has 500 000 mobile money customers (as per Clarification 14 issued to prospective bidders on October 14 2015), meaning that NetOne would most likely select the 0-2 million customers option presented in our tier based costing,” Aura managing director Samuelle Dimairho said in a letter to Eng Kangai dated February 4.

Aura appealed against the whole of the decision to award the tender to Huawei and is seeking a reversal and setting aside of that decision on the grounds that NetOne misinterpreted certain aspects of its proposal and wrongfully found that the proposal was not compliant with the requirements as set out.

Engineer Kangai said Aura’s appeal was purely to delay the procurement proceedings but out of public interest, the procurement was supposed to proceed as NetOne had been engaged to disburse significant amounts of drought relief through the OneWallet platform especially in areas where the mobile network operator is the dominant network.

“A new platform is urgently required to carry out this mandate. A delay in the procurement will prejudice the distribution of the drought relief funds.”

He said NetOne through OneWallet is involved in some Government initiatives that include the disbursements of National Social Security pensions in outlying areas where there are no banks.

“The project has been temporarily frozen due to challenges and constraints of the current platform, hence the need to urgently deploy a new platform. Delaying the procurement will be prejudicial to pensioners and other beneficiaries of the NSSA pensions,” said Eng Kangai.

He said the limitations of OneWallet’s current platforms have diminished its performance resulting in losses of more than $3 million the 2015 financial year, a trend that the shareholder wants reversed urgently.

He said delaying the procurement will further financial prejudice to a company that is a sizeable employer in Zimbabwe.

“OneWallet is operating in a competitive environment where other privately owned competitors have an edge due to their higher and efficient speed to market. Any further delay to roll out the new platform will render OneWallet uncompetitive,” said Eng Kangai.

In its appeal, Aura said that the adjudication process was conducted in breach of its fundamental rights to administrative justice in that there was no lawful prompt, efficient, reasonable and procedurally fair adjudication.

“The 1st Respondent (NetOne)’s decision to award the contract to the 3rd Respondent (Huawei) at a cost of $1,7 million against Appellant (Aura)’s offer of $1,04 million for the volumes as provided in the 1st Respondent’s clarifications to the tender, was grossly unreasonable given the fact that both the Appellant and the 3rd Respondent had their administrative and technical proposals accepted by the 1st Respondent,” Aura argued.

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