THE REPUBLIC OF VANUATU
HELD AT PORT VILA
(Civil Jurisdiction)
Civil Case No. 87 of 2000
BETWEspan>
MR GILBERT DINH
(Plaintiff)
AND:
The Minister for Infrastructure and Public Utilities
(First Defendant)
The Attorney Gl
(Second Defendant)
JUDGMENT
In April 1999 thlic Works Department issuedssued invitations to make bids
for a contract under the Vanuatu Urban Infrastructure
Project, specifically
for the Rehabilitation of Urban Roads.
A document entitled Invitation
for Bids was sent to enquirers (64, defendants’ bundle). By). By letter
dated 9th April 1999 the plaintiff was sent a copy. The
Invitation gave outline details of the process, and how full particulars
might be obtained A pre-bid meeting was fixed for 30th April at
10.00 am at the office of the Public Works Department.
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There were two stages, a
pre-qualificatione and then the bid for the contract itself. Applicants
were required to
send in two sealed envelopes, one containing the answers to
the pre-qualification questionnaire, the other containing the bid.
Both had
to be sent in concurrently and before 11-30 a.m. on 31st May
(page 69-70, defendant’s bundle). Paragraph 8 of the “Invitation for
Pre-qualification” states “Only bids from contractors
and joint ventures
pre-qualified under this procedure will be opened”.
There is no dispute the
plaintiffs had all these documents. The plaintiff says that their
pre-qualification and bid envelopes
were lodged before 31st May.
On 3rd June they say Mr. John Herbert telephoned Mr. Alex Palavi,
the general manager of the plaintiff SMET (Mr. Gilbert Dinh trading
as
Societe Melanesienne D’Entreprises et de Travaux) to tell him SMET was
disqualified. Mr. Palavi sought an explanation.
On 22 June formal
notification was sent and SMET’s tender bid was returned unopened, (letter
of the Acting Director,
PWD, dated 22 June 1999, page 28 plaintiff’s
bundle).
<
By a letter dated 14 June 1999
to the Director General of Public Works Mr. Palavi sought to have SMET’s
tender bid re-included
in the process, (Page 18, plaintiff’s bundle). The
reason apparently for the request being so that the Government could support
a local company. Mr. Palavi said SMET, if succe, would then meet meet the
ADB screening criteria, and said how this
could be done. The ADB, Asian
Development Bank, was providing most or all of thds for the project.
Mr. Manasseh Tari the Director
General, replied by letter dated 17 June 1999 (plaintiff’s bundle, page 19).
He set out
why SMET failed to qualify, and suggested, in future, SMET
considered going into “a joint venture with foreign companies if
you think
that your company may not meet all the requirements outlined in the
criteria”.
Mr. Palavi sent a further
letter dated 21st June 1999, stating they weren’t aware the bid
meeting was scheduled for 10th June, and again stating they could
meet ADB criteria.
The plaintiff alleges their
der bid was some VT 40-50 million lower than the company awny awarded the
contract. The plaintiff
further says the defendants failed to set
competitive and transparent pre-qualification requirements for the tenders,
in breach of Section 3 (3) (f) of the Government Contracts and Tenders Act,
No. 10 of 1998. Section 3 (3) (f) states
“ to entering into a
Government Contract a minister must first
span lang="EN-GB" style="font-size: 12.0pt">(f) &nnbsp;; &nsp; &nsp; &&nbp;; &nnsp;&
use a competitive and transparent process when deciding who to
award the contract to incg wheplicaa tender procesmay b prbed
by this oris or any any otherother Act Act or reor regulatgulations”.
The plaintiff says the Tender
Board itself wa properly constituted. Damages are claimed for these
alleged breaches
of statutory duty. It was said SMET was being deliberately
excluded.
A constitutional claim under
paragraph 18 of the statement of claim was left aside at the start of the
trial.
The defendants responded that
the whole process was open, clear and fair. They say the plaintiffs made
errors in submitting
their pre-qualification questionnaire. These could not
be remedied afterwards.
<
Alex Pa the general
manager of SMET, was the only witness for the plaintiff. He was responsiponsible
for putting in SMET’s
documents. In cross-examination he accepted he
understood company dany did not pre-qualify then its tender bid would be
returned unopened. He accepted he had the Pre-qualification documents and
instructions.
The Pre-qualification docum set out in full the procedure. At paragraph 2.2 of the Evaluation it states
“The “The applicant
is required to provide evidence that he has had an average
annual income from civil engineering construction works carried
out over the
previous five years of not less than three times the total estimated annual
construction costs of the contract
for which it has applied… If an applicant
fails to satisfy this condition it will not be considered for further
evaluation”.
Taintiff simply failed to
meet this requirement. By their own arithmetical error they they thought they
had.
Mr. Pafilled in the “
Assessment of Financial History of Applicants.” Turnover figures for for two of
the five years
required were not available due to factors beyond the
plaintiff’s control. This does not affect the issue even if one assumes
for
the lost years the best or even double the sum of the years when a sum is
available.
An average turnover was
calculated. A contract estimate was inserted and a period of 9, meaning
months, was iwas inserted.
The document stated “ore a
pass the average annual turnover… for the preceding 5 years must be equal to
to
or greater
than three times the estimated annual total cost of the
contract…” (page 23 plaintiff’s bundle).
Mr. Palavi multiplied the
estimatehree and divided by nine. That figure of nine referred to
to
months, and not years.
He should have divided by nine-twelfths. The document
referred to the estimated “annual” total cost of the contract. Had he
made
the calculation properly, then SMET would have required an average annual
turnover in excess of US$12.4 million.
On its own figures the average was
US$1.24 million. On that basis the pre-qualification criteria were not met.
It was
clear on the face of the document that the company could not qualify.
This was pointed out verbally and in writing to the plaintiff.
Further complaintmade that
no opportunity was given to rectify this error and allow the plaintiff to
to
include his
other business interests when qualifying or provide bank
guarantees.
First, were the Board and the
defendants to have deviated fre procedures they had set tset to allow a
bidder a secondnbsp;
other companompanies might well have had justifiable claims
of favoritism. If SMET made errors in its reading of the documents
and
filling in of the forms, nothing has been cto me or adduced in evidencidence
to shew any obligation of any kind upon
the defendants to help a bidder
correct those errors. The errors were clearly a failure by the plaintiff to
read and
understand the pre-qualification documents.
Tis no evidence to suggest
Vanuatu companies were excluded. There was specific provisiovision for bank
guarantees if a
company considered it could do the work but its financial
capacity was insufficient (paragraph 3.3 – Instructions page 72,
defendant’s
bundle). Pre-qualification was open to “ Contractors and voluntarily formed
joint ventures”. Indeed it is
the plaintiff’s evidence that had had he put
together a consortium of his companies the financial capacity qualification
might have been met on their own or possibly with others. It was too late to
suggest this after rejection upon failing
to pre-qualify.
<
A pre-bid meeting was fixed for
30th April. Had the plaintiff had queries about pre-qualification
they could have raised them then or in the month to the closing
date. M.
avi frankly acceptecepted he overlooked the pre-bid meeting. There is no
suggestion any queries were made up
to 31st May.
The plaintiff, throounsel,
suggests an artificial financial barrier was raised which was not capable of e of
being met
by local contractors. However, the evidence of Mr. Palavi is that
with the plaintiff’s other companies and/or bank guarantees
the plaintiff
could well have qualified. His frustration was that having made the initial
errors he was not permitted,
when he did understand the range of available
qualifying criteria, to have a second chance.
Further, I have had no evidence
the plaintiff that the pre qualification documents on thei their face in any
way supported
the plaintiffs’ contentions. Indeed, they appear to be a
practical, commercially sensible procedure for awarding contracts
of this
kind. There is no “barrier” of US$ 12 million dollars. The pre qualification
turn over figure is directly dependent
upon the value of the contract. The
“barrier” did not preclude six firms or joint ventures submitting
applications and
four of them passing the prequalification test. It was
clear on the face of the documents that there could not be a second
opportunity to pre-qualify.
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The plaintiff asserted SMET was
capable of carrying out the work in any event. Mr. Palavi only referred to
one contract
of similar size which SMET had undertaken, and that was as a
sub-contractor. I need not make any ruling on whether SMET was
capable of
carrying out these works.
I have looked at all the
evidence in the light of se 3 of the Government Contracts and Tenders
Act. I canI can find nothing on the evidence before me to suggest the process was
other than competitive and transparent.
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Reference was made to the
Tender Board not being properly constituted whe bid assessments were
e
made. Mr. Palavi said
he was told the Board was short of members and no
representative of the Attorney General was present, as is required by the
Act. That was hearsay. There was no other evidence. The stark fact is the
plaintiff’s bid did not get that far.
<
I do not reject the evidence of
Mr. Palavi when he refers to facthin his knowledge. However,ever, I cannot
act on or accept
his opinions about what should have happened. I make
allowance for the fact he gave evidence in English, although he is a
francophone. No interpreter was requested.
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I accept theence of
Manasseh Tari and Willie Watson. There was nothing contentious in their
evidence.
I can find nothing e
evidence to support the plaintiff’s claim. SMET’s difficulties stemmed not
fr from the prequalification
and tender bid documents and their terms, nor the
operation of the process, but from errors made by the plaintiff’s general
manager, Mr. Palavi. He must be commended for the honesty and frankness with
which he faced those matters in his evidence.
However, given the fact that
his was the only evidence adduced it is difficult to see on what basis this
case was brought.
I dismiss it.
The plaintiff will pay the
defendant’s costs on a party and party basis as agreed or taxed.
The tiff is to notify the
Court be 11 a.m. on Friday 2nd November if the “cons“constitutional”
claim under paragraph 18 is being pursued. If no notification is received,
it will
be struck out.
AT PORT VILA this 19th
October 2001.
R.J. COVENTRY
Judge
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