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2023 red flags

As NEC, PPCC in bidders’ row

The National Elections Commission (NEC) and the Public Procurement Concession Commission (PPCC) appeared to be entangled in bidders’ row with exchange of letters.

This follows a request from NEC seeking approval from the PPCC to award the joint venture of Ekemp International Limited, INITS Limited, and Palm Insurance Inc. contract to provide the software and equipment for the pending biometric voters’ registration process.

But the PPCC now headed by former NEC procurement Director Atty. Jargbe Roseline Nagbe-Kowo instead on September 9, 2022, wrote back to NEC instructing that the Commission do a re-evaluation of the bid and this time before the video camera for reference.

It appears that this response did not go down well with NEC and on September 13, 2022, NEC responded by raising series of questions.

The PPCC September 9 letter

In its four-page letter dated September 9, 2022, to the Chairperson of NEC, Davidetta Browne Lansanah, with copies to Justice Minister Cllr. Frank Musa Dean and Finance Minister Samuel D. Tweah, PPCC Chief Executive Officer, Attorney Jargbe Roseline Nagbe Kowo, among others, demand that a re-demonstration of the biometric enrollment and deduplication process be done by the bidders and must be video recorded to serve as a constant reference by the Evaluation Panel during the re-evaluation process since said demonstration is crucial evaluation determinant as per the NEC’s submissions.

“This must be done for the NEC to enable the principles of transparency and fairness in review of key performance requirements during its evaluation of the bidders; A video recording is key to showcase proof of moving depictions on the performance of Biometric Equipment and Systems demonstrated by the bidders”, the PPCC boss emphasizes.

She continues that future reference on a bidder’s obligations to the Biometric Equipment and System performance, in case of breach in the functionalities of the System during the conduct of the Voter’s Registration, and that Bidder’s PowerPoint presentations should also be reviewed by the Evaluation Panel.

“That the NEC should conduct overall evaluation considering mandatory requirements outlaid in its bidding document issued to the bidders, and the NEC must do its utmost to ensure fairness, and transparency of review in consonance with governing procedures”, the PPCC instructs.

The Commission also wants the NEC to promptly ensure adherence to the above counts to facilitate future expeditious and wholesome review, stressing that given the national and very sensitive nature of this procurement, as the First Biometric Voter Registration Exercise for Liberia, covering the entire country, it is very critical that the best company be selected via a fair, transparent and thorough review and evaluation process, to facilitate the conduct of the Biometric exercises void of material and major hurdles.

“That PPCC is willing to arrange a meeting with the NEC’s Board of Commissioners to discuss the above findings, given the national importance of this electoral procurement.”

Attorney Kowo: “The Public Procurement and Concessions Commission admonishes and deems it a priority that you remain primarily in compliance with the PPCA, 2010, as we jointly aspire to achieve transparency and accountability, value for money and ultimately public confidence in Liberia’s public procurement and concessions processes.”                

However, the NEC, among others, argued in its submission to the PPCC that Ekemp International Limited/INITS Limited/Palm Insurance Inc. assures that they are capable and able to prefinance the supply and delivery of biometric equipment, software and material for the voter registration exercises for the 2023 elections in Liberia.

“The three parties in the joint venture are direct service providers and/or original equipment manufacturers, which enable the partners to immediately begin the process and deliver to the Commission within the timelines required. Move over, the terms of the contract, as the PPCC is aware, will supersede and each member of the joint venture is individually and severally held responsible”, NEC maintains.

But PPCC warns that the NEC should note cogently that as per the Ekemp/INITS/Palm Insurance Joint Venture Agreement, Palm Insurance’s obligations to the contract are absent of expertise, knowledge, and experience on the actual biometric services, but rather is only prefinance and that the requirement the NEC indicated (Capacity to Prefinance) is for the budder to showcase in its proposal/offer proficiency and financial capability if such is declared.

“It is also important to point out that as per the PPCC’s review of the financial statements of all parties combined of the JV: Ekemp, INITS and Palm Insurance, there is no showing of financial capabilities and adequacy to prefinance this project, in the support of their commitment to prefinance as declared”, the Commission concludes.

The NEC response on September 13

However, in further response to the PPCC, NEC wonders why the PPCC did not comment on any other bidder’s expertise and/or capacity to pre-finance but concluded its communication with a request that the bidders be called again to do another physical presentation of their respective enrollment and de-duplication processes; that the presentation must be video recorded; and that the NEC must reevaluate the bidders’ proposals.

The electoral body then went on to give a chronology of the process beginning with the 6 bidders; Laxton Group limited; The joint venture of Waymark Infotech and Mwenata; Electoral Services International; The joint venture of Ekemp International Limited, INITS Limited, and Palm Insurance Inc.; The joint venture of Professional Services Inc. and HID Global; and Network Solution Liberia Limited.

The companies submitted bids were opened on July 29, 2022, in the presence of the bidders’ representatives and other observers. Information from bidders’ submissions, concerning financial responsiveness, and the capacity to pre-finance, was read out loud and documented on the Bid Opening Checklist, the NEC said.

It said after the public opening on July 29, 2022, a bid evaluation panel comprising five (5) NEC staff was constituted. The Panel worked for about three (3) weeks and on August 26, 2022, submitted its Report to the NEC Procurement Committee. The Report, signed by all five of the Panel’s members, recommended the joint venture of Ekemp, INITS, and Palm as the most responsive bidder. As the PPCC is aware, the term “Most Responsive bidder”, on the basis of which the contract shall be awarded to the corresponding bidder, means the bidder with the best value for money considering technical specification, delivery, etc., which are the benchmarks for the award of contract. With this in mind, the Procurement Committee reviewed the Panel’s Report, which includes the cards printed on the spot by three bidders during their presentations before the Panel; reviewed the submission of each bidder; and found that the Panel’s Report had factual support and met the legal requirements, the Procurement Committee endorsed the Panel’s report and on August 30, 2022, submitted same to the PPCC, requesting a “No Objection” to award the contract to the Joint Venture of Ekemp, INITS, and Palm. 

Thereafter, the PPCC on September 2, 2022, sent the NEC a communication in which the PPCC raised three observations:

PPCC Observation 1: “That the recommended bidder Ekemp International Limited/INITS Limited/Palm Insurance Inc. Joint Venture Agreement states that Palm Insurance: 3(c) vii: shall provide all pre-financing as may be required for the procurement of materials and services for the effective implementation of the Project, and 2 ( c ) vii: provide all prefinancing in support of the bid process: However, Palm Insurance’s Financial Statement showcasing its financial position, on the contrary, reflects total equity and liabilities of US$2,899,027.00 at the end of 2021 ( December 31, 2021 )”.

In response to PPCC Observation 1, the NEC stated as follows:

NEC Response: “Considering that some vendors, irrespective of the information contained in their financial statements, requested advance payment during the signing of the contract and do not prefinance as a matter of policy, the NEC wishes to inform PPCC that it views the joint pre-finance responsibilities of Ekemp International Limited/INITS Limited/Palm Insurance Inc. in its totality (including their commitment found on Page 2, Count 3 of the cover letter of its submission) as follows:

“3. We confirm that we are capable and able to Pre-finance the supply and delivery of biometric equipment, software & materials for the voter registration for the 2023 general elections….”

“With this, the NEC found that the Joint Venture can prefinance at its level of responsibilities. The three parties in the joint venture are direct service providers and/or original equipment manufacturers, which enables the partners to immediately begin the processes and deliver to the Commission within the timelines required. Moreover, the terms of the contract, as PPCC is aware, will supersede and each member of the joint venture is held individually and severally responsible/liable.”

PPCC Observation 2: “As per NEC’s Bid Evaluation Report, bidders were also evaluated and inspected on key demonstrations of required functionalities and criteria. The PPCC kindly requests videos of the indicated vendors’ demonstrations; and both hard and soft copies of PowerPoint presentations”.    

NEC Response: “The NEC wishes to inform the PPCC that the presentation of vendors was done physically before the Bid Evaluation Panel of which there were only physical demonstrations, no video recording was done, and the Bid Evaluation Panel did not request any PowerPoint presentations be turned over to it. Photos were taken during the presentation and said photos were submitted to the PPCC on September 2, 2022.”

PPCC Observation 3: “That the Joint Venture (JV) Ekemp/Palm Insurance Ltd./INITS Agreement is not notarized”.

NEC Response: “The NEC wishes to inform the PPCC that the standard bidding document did not require bidders to notarize their joint venture agreement.”

PPCC’s September 9th Communication

As stated earlier, after receipt of the above-cited responses, the NEC on September 9, 2022, received a communication from the PPCC in which the PPCC, among others, commented on the following:

  1. The pre-finance capacity, expertise, knowledge, and experience of Palm, a partner in the tripartite joint venture with Ekemp and INITS;
  1. A June 30, 2022, email exchange between bidder Laxton Group Limited and staff of NEC, wherein Laxton sought clarity on the removal of tripod requirement from the required tablet with fingerprint scanner; and
  1. That because the NEC did not video-record the bidders’ physical presentation of their respective enrollment and de-duplication processes, the NEC must call the bidders to do a new round of their respective enrollment and de-duplication processes;

For the reasons that follow, the NEC requests the PPCC to reconsider.

PPCC’s statement on the recommended bidder’s capacity to pre-finance. In its September 2nd communication, the PPCC, focusing on a provision in the joint venture agreement of Ekemp, INITS, and Palm, limited its review to the audited statements of Palm. Although the NEC’s response to PPCC observation 1 requested the PPCC to review the recommended bidder’s submission in its entirety, PPCC’s follow-up communication, dated September 9, 2022, shows that PPCC did not review the bidder’s submission in its entirety. Had that been done, the PPCC would have seen that page 6 of the audited financial statements of Ekemp shows Ekemp’s turnover from the past two years as follows: 

  1. January 1, 2020, to December 31, 2020: 55,552,785.13 HKD; and
  1. January 1, 2021, to December 2021: 95,527,850.13 HKD.

The NEC submits that if the audited financial statement is all that is required to determine a vendor’s capacity to pre-finance, then all would agree that Ekemp’s audited financial statements show that it is also financially capable of prefinancing. Moreover, the joint commitment of Ekemp, INITS, Palm to pre-finance (“We confirm that we are capable and able to Pre-finance the supply and delivery of biometric equipment, software & materials for the voter registration for the 2023 general elections”) as found on page 2, Count 3 of the cover letter, should put to rest any concern as to whether the selected bidder demonstrated its capacity to pre-finance a contract of about US$12,000,000.00, that will be performed in three stages with payment being made after successful completion of each stage.    

The NEC further submits that a procuring entity cannot require partners to a joint venture to submit their respective financial statements for evaluation only to have such statements ignored by the PPCC. The NEC, therefore, urges the PPCC to review the bidder’s submission in its entirety, and assess the overall joint financial capacity of the three partners; the fact that one is a manufacturer of the biometric equipment, the materials that will be used; and the fact that in case of a breach all three will be held jointly and severally responsible to the Government of Liberia, through the NEC.

Looking beyond the audited Financial Statements

NEC indicated that because some vendors, irrespective of the information contained in their financial statements, do not pre-finance as a matter of policy, the NEC’s review of the selected bidder’s capacity to pre-finance did not stop at the audited financial statements. The NEC noted that it reviewed the partners’ joint venture agreement, and observed that the respective obligations are in stages, with Ekemp’s obligation appearing first, followed by INITS’ and then Palm’s:

  1. Ekemp International Limited, based in China, develops, designs, and manufactures biometric terminals, and provides biometric registration and verification, and intelligent identification solutions. As per their joint agreement, upon the award of the contract, Ekemp shall be responsible for the following: Provision of goods and services; vis-a-vis; manufacture, test, delivery, installation, and customization of Voter Registration Kits and materials for the 2023 Liberia General Elections; will assist in providing training to NEC staff; will provide a sample kit of biometric voter registration equipment, materials, and software upon request by the NEC; and will execute the project as stipulated in the bid document and contract award.

The NEC notes that Ekemp’s obligation, as outlined in the partners’ joint venture agreement, does not say that Palm must pre-finance Ekemp’s obligations before Ekemp will perform. See page 4 of the joint venture agreement.

  1. INITS Limited, based in Nigeria, specializes in innovative custom-made biometric software development and services and manages same. INITS will be responsible for the technical support and technology, ensuring the completion of all technical-related services.  It is worth noting that the said obligation does not say that Palm must pre-finance INITS’ obligations before INITS will perform. See page 5 of the joint venture agreement.
  1. Palm Insurance is based here in Liberia.  Palm’s obligation follows INITS. In addition to Palm opening a bank account at a local bank in Liberia, Palm is to “provide all pre-financing as may be required for the procurement of materials and services…” See page 5 of the joint venture agreement.
  1. The Partners commit that they shall jointly and severally indemnify the NEC against any injury, damages, or loss attributed to the breach of their obligations. See page 7 of the joint venture agreement; and
  1. That any dispute or claims arising out of the subject matter shall be governed and construed in accordance with the laws of Liberia. See page 10 of the joint venture agreement.

In overlooking the above information, PPCC mischaracterizes the following statement contained in the NEC September 7, 2022 communication: “Moreover, the terms of the contract, as PPCC is aware, will supersede, and each member of the joint venture is held individually and severally responsible/liable.”

The NEC says that the above-referenced statement was not, and cannot, reasonably be construed as an admission of a bidder’s unresponsiveness. As shown in the Bid Evaluation Panel’s report, as well as in the NEC September 7th communication to the PPCC, the NEC concluded that the joint venture of Ekemp, INITS, and Palm met the requirement for pre-finance. The NEC further submits that the statement that the law will hold responsible all parties to an agreement — who undertake to provide Goods and Services — jointly and severally liable is a legal principle too settled to be denied.

PPCC’s statement on Palm’s expertise

The PPCC, in its September 9, 2022, communication, stated the following: “The NEC should note cogently that as per the EKEMP/INITS/Palm Insurance Joint Venture Agreement, Palm Insurance obligations are absent of expertise, knowledge, and experience on the actual biometric services….”

The NEC says that the standard bidding document did not require that all partners in a joint venture agreement must have expertise and knowledge of actual biometric services. Here, the PPCC is aware that the selected bidder is comprised of three companies: Ekemp, INITS, and Palm. Ekemp develops, designs, and manufactures biometric terminals, and provides biometric registration and verification, and intelligent identification solutions. INITS specializes in innovative custom-made biometric software development and will be responsible for technical support and technology, ensuring the completion of all technical-related services. These partners have expertise, knowledge, and experience in the actual biometric services as evidenced by their respective profiles found on pages 1 thru 46, under the letter “E’ and their references of having performed in a similar manner with other electoral management bodies, found under letter “G” of their joint submission. The NEC notes that the PPCC did not question Ekemp’s and INITS’ respective expertise, knowledge, and experience on the actual biometric services.

Accordingly, for all of the reasons stated above, the NEC requests that the PPCC reconsiders its position and grant a “No Objection” to award the contract to the joint venture of Ekemp, INITS, and Palm for being the most responsive bidder.

PPCC’s statement that the physical presentations had to be video-recorded

NEC noted that if the PPCC still believes that bidders should be called again to redo the presentation of their enrollment and deduplication processes, the NEC raises the following concerns and seeks clarity from the PPCC:

  1. Although the PPCC did not comment on the expertise and/or pre-finance capacity of any other bidder, it however commented on the expertise and pre-finance capacity of the selected bidder, the joint venture of Ekemp, INITS, and Palm. The NEC seeks clarity as follows: Is it the position of the PPCC that its September 9th statement on the expertise and pre-finance capacity of the joint venture of Ekemp, INITS, and Palm disqualifies this bidder from further consideration? If the answer is “yes”, should this bidder be invited to redo its enrollment and de-duplication processes as requested in the PPCC’s September 9th communication to the NEC?
  1. The Bid Evaluation Panel’s report, submitted to the PPCC on August 30, 2022, informed that three bidders were unresponsive to the pre-finance requirement. Question: Is it the position of the PPCC that these bidders be invited to redo their enrollment and de-duplication processes?
  1. Bidders, during their respective presentations of the enrollment/ registration process, were required to start and complete their enrollment and deduplication processes using one of NEC staff. Out of the five bidders, two were unable to complete the enrollment and did not print cards on the spot, as required in the standard bidding document. Question: Is it the position of the PPCC that the two bidders be given another opportunity to cure whatever defects or unresponsiveness they had in their submission and/or previous physical presentation? If so, would it be fair to the other bidders who were responsive during the previous physical presentation?
  1. Although the period for filing a protest has not accrued, at which time a bidder may refute the information the Evaluation Panel documented in its report, or refute the authenticity of the three cards that were printed during the physical presentations and submitted to the PPCC, the PPCC casts aspersion on the process by saying that the presentations should have been video-recorded, and ends by requesting a redo of the physical presentations. The PPCC did not, however, cite any provision from the Act that mandates that a bidder’s physical showing of its enrollment process must be video-recorded and that photos taken during such presentations cannot be honored. The PPCC is therefore requested to cite which provision of the Act or Regulations it is relying on to make such a request.
  1. The Evaluation Panel’s report shows that bidder Laxton Group Limited was unresponsive during the physical presentation in that it used a laptop rather than a tablet with fingerprint scanner as required in the standard bidding document. The PPCC, however, referenced a June 30, 2022, email exchange between Laxton and staff of NEC regarding the removal of tripod requirement from the tablets, and stated that such exchange “can be construed as an option that a laptop could also be provided by a bidder.” Having offered this statement, the PPCC concluded however that “there is no evidential showings that this clarification was conveyed to all bidders, as required by PPCA Section 33(2)”. The NEC views the quoted statements as contradictory and therefore seeks clarity from the PPCC: Is it the position of the PPCC that the June 30, 2022 email exchange — assuming but without agreeing that same could be construed as an option — takes precedence over the technical specification in the standard bidding document, requiring the use of tablet with fingerprint scanner?
  1. Should Laxton be invited to redo its enrollment/registration process? If Laxton is to be invited to redo its presentation and shows up with the required tablet this time around, should the NEC allow Laxton to use the tablet? If “yes”, would it be fair to the other bidders who are aware that Laxton used a laptop during the previous presentation and as such was evaluated as being unresponsive in this matter? Also, should the other bidders be given another opportunity to cure whatever defects or other unresponsiveness they had in their submission and/or previous physical presentation?

NEC concluded indicating that as a Commission that prides itself in conducting free, fair, and transparent elections, it has worked within the confines of the law to be fair to all bidders. Fairness to all bidders, including the joint venture bidder evaluated as most responsive, requires the NEC and the PPCC to act on the facts of the procurement process, and review a bidder’s submission in its entirety.

As shown in its joint submission and highlighted in this communication, NEC explained that the joint venture of Ekemp, INITS, and Palm has demonstrated the capacity to pre-finance and has the requisite expertise, knowledge, and experience to perform as required.

The NEC observed that the PPCC sent copies of its September 9, 2022, communication to the Ministry of Justice and the Ministry of Finance and Development Planning. Hence, the NEC copies these Ministries in its communication as well.

NewDawn

The New Dawn is Liberia’s Truly Independent Newspaper Published by Searchlight Communications Inc. Established on November 16, 2009, with its first hard copy publication on January 22, 2010. The office is located on UN Drive in Monrovia Liberia. The New Dawn is bilingual (both English & French).
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