Court puts ZIMDEF software tender on ice over ‘anti-competition’ clause

HARARE – A tender for the supply of SAP software services to the Zimbabwe Manpower Development Fund (ZIMDEF) has been put on ice by the High Court after a losing bidder challenged the process as “anti-competitive.”

Tano Digital Solutions (Private) Limited was awarded the tender but not before Twenty Third Century Systems (Private) Limited lodged a complaint over a “restrictive” clause which they felt was inserted to favour Tano.

In a March 30 judgement, Justice Owen Tagu of the Harare High Court granted an urgent application by Twenty Third Century Systems stopping the execution of the tender pending the finalisation of its main application, before the same court, in which it wants the awarding of the tender to Tano nullified.

Justice Tagu ruled: “Pending determination of HC1737/22, the execution of a tender award made by the ZIMDEF in favour of Tano Digital Solutions dated the 9th of December be and is hereby stayed.

“In the event that Tano Digital Solutions has initiated the tender process, that the same be stayed pending determination of HC1737/22.”

Tagu further ordered the respondents – ZIMDEF, the Procurement Regulatory Authority of Zimbabwe (PRAZ) and Tano – to show cause why a final order should not be made cancelling the tender.

In its urgent application, Twenty Third Century told the court that in October last year, ZIMDEF published a notice calling for an informal tender for the provision of SAP software services. The software helps organisations to manage nearly every aspect of the business, from finances to human resources, procurement and logistics.

On November 9, after firms submitted their bids, Twenty Third Century submitted a notice to PRAZ challenging as “restrictive, unreasonable and anti-competitive” a condition inserted by ZIMDEF requiring bidders to be holders of an SAP licence.

Twenty Third Century, which had been providing the same software solutions to ZIMDEF since 2015, said the clause was designed to take away competition in breach of the spirit of competition law legislation.

While the challenge was pending, ZIMDEF went ahead and awarded the tender to Tano, prompting Twenty Third Century to approach the High Court.

“According to the applicant, this was unlawful and is an irregularity that may not stand as the decision of PRAZ was blatantly unlawful, irrational, and unreasonable,” Justice Tagu said in his judgement.

“On a balance of probabilities, I find the applicant to have managed to prove its case warranting the order suspending the operation and execution of a tender award made by ZIMDEF in favour of Tano pending the determination of an application for review filed by Twenty Third Century under HC1737/22. If Tano has already commenced tender works in terms of the award, the same should be suspended forthwith.”

A senior official at PRAZ welcomed the ruling saying they hoped it would bring sanity and stop manipulation of tenders by unscrupulous businessmen.

He said: “In this particular case, we received allegations that there is one unscrupulous dealer who has been misleading the market to believe that to implement and support SAP applications, a contracted firm should be licensed by SAP SE, the German multinational which makes the software.

“In the true spirit of competition and fair play for quality delivery, we can’t have one firm influencing the inclusion of clauses that foreclose the participation in tenders by other firms.”

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