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LETTER ACCEPTANCE FIGURE VS WOULD BE ACTUAL CONTRACT PRICE

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Re: LETTER ACCEPTANCE FIGURE VS WOULD BE ACTUAL CONTRACT PRICE

Post  GadielCM on Wed Apr 13, 2011 10:00 pm

I advise the PE to discipline all parties who were involved in th process of that tender. Secondly, I concur with RSM, that the PE can invite other two remained to negotiate (especially the second lowest evaluated) and enter into contract after re-evaluation has been made to other two so that to ascertain the irregularities may be found including corrections of errors.This could be found because in the previous event the EC were not serious in such a way that even other figures may contain errors.

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Re: LETTER ACCEPTANCE FIGURE VS WOULD BE ACTUAL CONTRACT PRICE

Post  RSM on Wed Mar 30, 2011 8:33 pm

Odilo you wrote

Let me conclude by advising the PE to terminate (withdraw) the contract and call for a new tender. The reason is simple, that is there is every smell of cheating(corruption) in this particular tender including the awarded bidder.
YOUR VIEWS wrote
The read out result one of the bid – Spot Improvement for Rejea – Rudi Road indicated that ; M/s Rambo Enterprise quoted Tshs. 142,000,000, M/s Zimbe Company Ltd Shs. 125,000,00 and M/s Dado Ltd Tshs. 140,000,000.
RSM wote
To me I think this is a case of mistake which in contract law can make the contract void. According to http://a-level-law.com/contract/vitiating_factors/mistake_lecture.htm
"Where one party is mistaken as to the nature of the contract and the other party is aware of the mistake, or the circumstances are such that he may be taken to be aware of it, the contract is void".

In this case I think the PE is mistaken as to the nature of the contract i.e. the contract amount, and the other party M/s Zimbe Company Limited is aware of the mistake bacause it is included in his/her bid which he submitted to the PE.
Since there other two bidders, whom I think the purpose of those doing evaluation and PMU not to see errors in M/S Zimbe Company Limited, was to ensure that they are seen to be more expensive. Can't we advise the PE to take the lowest evaluated of the two i.e. M/s Rambo Enterprise who quoted Tshs. 142,000,000, M/s and M/s Dado Ltd who quoted Tshs. 140,000,000.

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Re: LETTER ACCEPTANCE FIGURE VS WOULD BE ACTUAL CONTRACT PRICE

Post  Odillo on Wed Mar 30, 2011 3:22 pm


The straight forward advise is that the PE should not sign the contract as the claimed to be corrected suspicious contract figure is above the offers (amount) offered by other two bidders. More importantly is that arithmetical errors can not be entertained after the contract award.

One could ask very important question as to what convinced PMU to go back to BOQ to do correction of erreors during the contract preparation while they were not convinced to do so when they received the evaluation report from the evaluation team?. Failure by PMU to do a thorough review of evaluation report before submitting the same to tender board for adjudication is contrary to the provision of the PPA and its Regulation( PMU is mandated to do, it is compulsory not optional)

PMU should submit the evaluation report to tender board for adjudication when they are sure that they own the evaluation report. Owning means that they went through the same to ensure that it was evaluated in accordance with the evaluation criteria stipulated prior in the bidding documents and that arithmetical errors were corrected accordingly.

I would like to concur with RSM that all members of evaluation committee plus PMU staff who was given the responsibility of reviewing the evaluation report should be held responsible and disciplined accordingly by the Accounting Officer.

Let me conclude by advising the PE to terminate (withdraw) the contract and call for a new tender. The reason is simple, that is there is every smell of cheating(corruption) in this particular tender including the awarded bidder.




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Re: LETTER ACCEPTANCE FIGURE VS WOULD BE ACTUAL CONTRACT PRICE

Post  RSM on Wed Mar 30, 2011 12:55 pm

Your views

This sounds quite interesting. Before saying what a PE should do about the tender figure I propose that all members of the evaluation team should be disciplined.

They did not do the evaluation - according to you the read out figure for M/s Zimbe Company Limited was Tshs 125,000,000/-. Therefore this new figure of Tshs. 145,000,000/- could have been established during the correction of errors in the evaluation process.

To me I think this is a case of mistake which in contract law can make the contract void. According to http://a-level-law.com/contract/vitiating_factors/mistake_lecture.htm
"Where one party is mistaken as to the nature of the contract and the other party is aware of the mistake, or the circumstances are such that he may be taken to be aware of it, the contract is void".

In this case I think the PE is mistaken as to the nature of the contract i.e. the contract amount, and the other party M/s Zimbe Company Limited is aware of the mistake bacause it is included in his/her bid which he submitted to the PE.

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LETTER ACCEPTANCE FIGURE VS WOULD BE ACTUAL CONTRACT PRICE

Post  YOUR VIEWS on Mon Mar 28, 2011 11:25 pm

Procuring Entity advertised five (5) bids for Spot Improvement in various roads. During opening of bids ceremony, three bids were received in each bid. The read out result one of the bid – Spot Improvement for Rejea – Rudi Road indicated that ; M/s Rambo Enterprise quoted Tshs. 142,000,000, M/s Zimbe Company Ltd Shs. 125,000,00 and M/s Dado Ltd Tshs. 140,000,000.

The Evaluation Committee [EC] of three experts was constituted according to the legislation to evaluate the submitted bids [Total of 15 bids]. The evaluation of bids was done according to the terms and conditions stipulated in the bidding documents [SBD for Procurement of Smaller Work Contracts] and Evaluation Guidelines issued by PPRA. In this respective bid, after evaluation EC recommended that M/s Zimbe Company Ltd to be awarded the contract at the contract price of Tshs. 125,000,000. The Tender Board approved EC recommendation and eventually the notification of award was communicated to M/s Zimbe Company Ltd. The Letter of Acceptance indicated the contract price of Tshs. 125,000,000.

During compilation of contract documents for signature the Procurement Management Unit [PMU] discovered that the actual/correct contract price for M/s Zimbe Company Ltd was Tshs. 145,000,000 and not Tshs. 125,000,000 was indicated in the letter of acceptance.
The Procuring Entity is in dilemma whether to continue signing the contract or not – because of this different figures.

What is your advice to the Procuring Entity?

YOUR VIEWS

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