Malanris Articles and commentaries that identify allAfrica. PPDA, which is the principal regulator of public procurement, is mandated by law to monitor compliance of procuring and disposing entities. I thank the organizers and ppds of this event and wish us all a successful Anti-Corruption Week. Chivayo Allegedly Squandered U. The key findings revealed that the perception index about existence of corruption in public procurement was Mr Ojambo singled out common challenges or breaches of PPDA law as prolonged procurement process in the public entities, payment before delivery of goods, especially around June when the financial year is ending. PPDA has also constituted a task force to closely monitor procurements in the High Spend Entities HSEs drawn from the key sectors with the pdpa procurement budgets with the aim of preventing ugsnda incidences of corruption by undertaking more frequent oversight on the risk areas vulnerable to corruption, improving the budget absorption rate and ultimately resulting into better procurement outcomes.
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The Supreme Court exercised its jurisdiction as a second appellate court in the appeal against the decision of the Court of Appeal over a public procurement dispute originally adjudicated by the High Court as the trial court. In addition, the Court fortified its position by holding that the objectives of the PPDA Act cannot be met without due compliance with the provisions of the law. The judgment addresses the question of whether an award to the best evaluated bidder BEB constitutes a binding contract between the BEB and the procuring and disposing entity PDE prior to the signing of the procurement contract.
The Supreme Court answered this question in the negative. Therefore, whereas the Supreme Court pronounced its decision in April , the Court applied the law as it stood at the time when the dispute arose in adjudicating the appeal. Case Background: Galleria sued UEDCL in the High Court for lost profit as special damages, general damages, interest and costs of the suit in an action for breach of contract.
It was contended that the parties entered into a contract by a letter of bid acceptance dated 6th June issued by UEDCL to Galleria, to which the later responded by a letter dated 11th June confirming receipt and verified to proceed with the supply of creosote oil.
Galleria had been selected as the best evaluated bidder following the submission of bids in response to an advert by UEDCL in two newspapers in March and April By a letter dated 21st August , UEDCL cancelled the procurement on the ground that the bid had expired among other grounds.
Galleria appealed to the Court of Appeal. Galleria was dissatisfied with the amount of damages awarded by the Court of Appeal and appealed to the Supreme Court. They are for all purposes and intents mandatory and noncompliance with them makes the proceedings fatal.
Overturning the position of the High Court in Finishing Touches Ltd v Attorney General of Uganda, the Supreme Court in the Galleria case expressly dismissed the argument that a procurement can be valid where the objectives of the PPDA Act are met notwithstanding the noncompliance with the provisions of the law. That notwithstanding, the learned Justice disagreed with the conclusion reached by the High Court in the Finishing Touches case in respect of the effect of noncompliance with the provisions of the PPDA Act to public procurement processes.
The High Court in answering the question in the negative held that third parties should only be held liable for breach of relevant statutory provisions in procurement process where it is shown that the third party provider participated in the said breach. Whereas the Engineer Investments Ltd case is distinguishable from the facts under the Galleria case, the cross-cutting issue in both cases is the effect of noncompliance with the provisions of the law in the procurement process on the procurement.
In the Engineer Investments Ltd case, KCCA refused to pay the balance of the contractual sum under a contract for the provision of solid waste management services by the Plaintiff. Part payment of the contractual sum had been made to the Plaintiff following the issuance of a certificate of completion as required by law.
The Court found that the first requirement was not applicable to the contract between the parties. It is important to note that whereas the Galleria case addresses the question of the rights of a successful bidder prior to signing of a procurement contract, the Supreme Court expressly emphasized the requirement of strict compliance with the provisions of the law on public procurement.
The Engineer Investments Ltd case propounds the position that a provider can recover under the quantum meruit principle a pay which is proportionate to the work, service or goods done or supplied under a procurement contract , where the contract is rendered void after satisfactory execution. However, the binding decision of the Supreme Court on the effect of noncompliance with the provisions of the law will now be a looming obstacle to recovery of damages by a provider, especially where no procurement contract was signed between the PDE and the provider in accordance with the prescribed procedures.
PDEs and private stakeholders bidders and consultants participating in public procurement processes must therefore fully comply with the prescribed procedures and requirements under the law or desist in participating in any breach whatsoever.
The Award, Notice to Best Evaluated Bidder NOBEB and Contract: After the rigorous bidding process and beating of the cut throat competition to emerge the best evaluated bidder to whom the Contracts Committee decides to award the contract, the Galleria case underpins the indispensable importance of following the proper procedure in executing a valid procurement contract.
The best evaluated bidder as illustrated under the Galleria case cannot therefore claim breach of a contract on the basis of the award decision or receipt of the notice to the best evaluated bidder or letter of bid acceptance without having executed a written contract with the PDE. It is worth noting that the Supreme Court emphasized the observance of the requirement for the lapse of a ten days period from the date of publication of the NOBEB before a contract can be signed.
The only exceptions under the Regulations relate to micro and direct procurements, or procurement in emergency situations irrespective of the procurement method used. The ten days period is among others intended to allow any bidder aggrieved by the decision of a PDE to make a complaint to the Accounting Officer. A procurement contract laying out the terms of the procurement must be signed by the PDE Accounting Officer and bidder or consultant prior to implementation of the contract.
The procuring entity on the other hand should ensure full and strict compliance with the provisions of the PPDA Act, and the regulations and guidelines made and issued under the Act. According to the decision of the Supreme Court in the Galleria case, failure to comply with the procedures and processes under the law renders the procurement void. The decision of the Court further reaffirms the position that an award decision of the Contracts Committee and the notice to the best evaluated bidder or a letter of bid acceptance do not amount to a contract between a PDE and a successful bidder.
Last modified on Friday, 22 February
Public Procurement and Disposal of Public Assets Authority
The Supreme Court exercised its jurisdiction as a second appellate court in the appeal against the decision of the Court of Appeal over a public procurement dispute originally adjudicated by the High Court as the trial court. In addition, the Court fortified its position by holding that the objectives of the PPDA Act cannot be met without due compliance with the provisions of the law. The judgment addresses the question of whether an award to the best evaluated bidder BEB constitutes a binding contract between the BEB and the procuring and disposing entity PDE prior to the signing of the procurement contract. The Supreme Court answered this question in the negative.
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