Tender Nullified: Public Procurement Appeals Authority Orders Fresh Process for Fuel Marking Contract

Tender Nullified: Public Procurement Appeals Authority Orders Fresh Process for Fuel Marking Contract

Dar es Salaam, The Public Procurement Appeals Authority (PPAA) has overturned the awarding of a fuel marking tender to Switzerland-based company M/S SICPA SA and directed the Tanzania Bureau of Standards (TBS) to initiate the tender process anew. The decision, reached by Chairperson Justice (rtd) Sauda Mjasili and members Advocate Rosan Mbwambo and Pius Mponzi, stems from an appeal lodged by American company M/s Authentix Inc against TBS’s decision to grant the tender to M/S SICPA SA.

In a ruling delivered on August 11, 2023, the Appeals Authority declared, “The Appeals Authority nullifies the (TBS) award to (SICPA SA). The TBS is ordered to re-start the tender process in accordance with the law. This decision is binding and can be enforced in accordance with section 97 (8) of Public Procurement Act.” The decision reflects the Authority’s scrutiny of the evaluation process for the supply of fuel marker plastic cylinders, metal jerricans, fuel dosing systems, and fuel marker detection systems, involving Authentix Inc, SICPA SA, and Global Fluids International (T) Limited.

Errors in the Evaluation Process

The Appeals Authority identified errors in TBS’s evaluation of the tender submissions. In particular, it noted that SICPA SA, despite being awarded the tender, had not fulfilled the requirement of disclosing its litigation history. The Authority uncovered that on April 2, 2023, the Attorney General’s office in Switzerland issued a summary penalty order against SICPA SA, imposing a penalty of CHF 81 million (over 216 billion Tanzanian Shillings) due to the company’s involvement in corrupt practices with foreign officials.

The Appeals Authority critically assessed whether SICPA SA’s acceptance of the summary penalty order could be considered part of its litigation history. SICPA SA argued that the penalty order shouldn’t be deemed a court order or an arbitral award, therefore not qualifying as part of its litigation history. However, the Authority delved into the Swiss Criminal Procedure Code, revealing that an accused party or anyone affected by the summary penalty order has the right to file a written objection.

The Appeals Authority’s examination showed that SICPA SA had not contested the penalty order and hadn’t filed any valid rejection. As a result, the Authority asserted that the unchallenged penalty order had solidified into a final and enforceable criminal judgment.

Chronology and Disclosure Period

SICPA SA contended that the summary penalty order was connected to an investigation spanning from 2008 to 2025, and thus fell beyond the disclosure period outlined in the tender document. The Authority carefully considered this proposition against the backdrop of the case.

The decision to nullify the tender award and order a fresh process showcases the PPAA’s commitment to transparency, fairness, and adherence to procurement regulations. As the TBS embarks on restarting the tender process, the outcome of this high-stakes procurement will undoubtedly be closely watched by industry stakeholders, competitors, and the public alike.