Quality Inspection Services Inc. Japan v Uganda National Bureau of Standards (UNBS) and 2 Others (Civil Appeal 37 of 2024) [2024] UGHCCD 157 (4 October 2024)

### **REPUBLIC OF UGANDA**

### **IN THE HIGH COURT OF UGANDA AT KAMPALA (CIVIL DIVISION)**

**CIVIL APPEAL NO. 37 OF 2024**

*[Arising from the decision of the Public Procurement and Disposal of Public Assets Appeals Tribunal in Application No. 9 of 2024]*

### **QUALITY INSPECTION SERVICES INC. JAPAN----------APPELLANT**

### **VERSUS**

**1. UGANDA NATIONAL BUREAU OF STANDARDS (UNBS)-------------------------------------------------------1 ST RESPONDENT**

#### **2. CONSORTIUM OF EAA COMPANY LIMITED AND EAST AFRICA AUTOTECHNICAL TESTING---------2 ND RESPONDENT**

#### **AND**

#### **3. AUTO TERMINAL JAPAN LIMITED, PAL AUTO GARAGE LTD, AFRICA AUTOMOTIVE ANALYSIS LTD JV--------3 RD RESPONDENT**

#### **BEFORE: HON. JUSTICE SSEKAANA MUSA**

#### **JUDGMENT**

The is an appeal from the decision of the Public Procurement and Disposal of Public Assets Tribunal delivered on 11th March 2024. The appellant dissatisfied with the decision appealed to this court seeking to overturn the decision in its entirety.

The 1st Respondent initiated an emergency procurement of providers for pre-export verification of conformity to standards-service for used motor vehicles under procurement No. UNBS/NCONS/2023-2024/00052 for a period of one year using Restricted International Bidding Method on September 28, 2023.

The Appellant, 2nd and 3rd Respondents submitted bids in the tender process where the Appellant was determined to be the best evaluated bidder by the 1 st Respondent.

The award to the Appellant was successfully challenged through an Administrative Review application to the *Public Procurement and Disposal of Public Assets (PPDA) Appeals Tribunal* by the 2 nd and 3 rd Respondents through consolidated Application No. 31 and 32 of 2023. The PPDA Appeals Tribunal directed the 1st Respondent to re-evaluate the bids. The 1 st Respondent re-evaluated the bids as ordered by the PPDA Appeals Tribunal and awarded the Contract to the Appellant, the 2nd and 3rd Respondents.

The Appellant challenged the award of Contract to the 2nd and 3rd Respondents before the PPDA Appeals Tribunal in Application No. 9 of 2024. The Tribunal dismissed the Application.

The Appellant in the Notice of Appeal raised six grounds of appeal which include;

- *1) The Tribunal erred in law in holding that the bids of the 2nd Respondent and 3 rd Respondent were responsive to the requirements of the bidding document in as far as possession of a valid ISO/IEC 17020:20212 accreditation for inspection services for used vehicles was concerned.* - *2) The Tribunal erred in law in holding that the power of Attorneys issued by 3rd Respondent regarding the tender with reference No. UNBS/CONS/2023- 2024/00052, duly appointed Mamou Fujie as its lawful attorney.*

- *3) The Tribunal erred in law when it wholly relied on an unlawfully modified Instruction to Bidders (ITB) Clause 4.2 of the bidding document to determine responsiveness of the bids of the 2nd Respondent and 3rd Respondent, contrary to Regulations 25(3) of the Public Procurement and Disposal of Public Assets (Procuring and Disposing Entities) Regulations, 2023.* - *4) The Tribunal erred in law when it held that the bids of the 2nd and 3rd Respondents had passed the detailed stage of evaluation contrary to Regulation 19 of the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023.* - *5) The Tribunal erred in law when it held that the bids of the 2nd and 3rd Respondents were responsive to the requirements of the bidding document in the absence of a corresponding duly signed evaluation report and minutes for the impugned procurement contrary to Regulations 4(11-13) and 12(3) of the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023.* - *6) The Tribunal erred in law when it held that the 2nd and 3rd Respondents were rightfully determined as best evaluated bidders and recommended for award of contract in impugned procurement contrary to Regulations 2(1) of the Public Procurement and Disposal of Public Assets (Contracts) Regulations, 2023.*

The Appellant sought the following prayers

- 1. That this Honourable Court allows the Appeal - 2. Cancels the Contracts awarded to the 2nd Respondent and 3rd Respondent. - 3. A refund the administrative review fees paid by the Appellant to 1 st Respondent with interest, at a commercial bank rate of 24% per annum

- 4. Striking out the names of the 2nd and 3rd Respondents from the Notice of Best Evaluated Bidder issued by the 1st Respondent on January 31, 2024 - 5. Damages and Costs of the Appeal to be awarded to the Appellant.

The Appellant was represented by Counsel *Renato Kania,* the 1st Respondent was represented by *Counsel Doreen Nanvule,* the 2nd Respondent by *Counsel Richard Nsubuga* and *Monica Namuli.*

The Court ordered the parties to file written submissions which was done by respective counsel to the parties. The same have been duly considered in this appeal.

# *Determination*

The Appellant argued the Appeal by submitting on grounds 4, 5 and 6 jointly, followed by ground 1 and lastly grounds 2 and 3.

The Appellant argued that the 1st Respondent's Evaluation Committee did not conduct an evaluation of the bids of the 2nd and 3rd Respondent as envisaged by law. That the Evaluation Committee only evaluated the bids of the 2nd and 3rd Respondents on specific aspects of the eligibility criteria, but the evaluation did not extend to the successive stages of evaluation such as administrative compliance criteria and detailed evaluation criteria as required in Section 3, Evaluation Methodology and Criteria, pages 28-31 of the solicitation document, contrary to *Regulations, 4(11-13), 5(1), 12(3) and 19 of the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023 and Regulations 2(1) of the Public Procurement and Disposal of Public Assets (Contracts) Regulations, 2023.*

The Appellant submitted that it is the duty of the 1 st Respondent has a duty to maintain and archive records of the procurement and disposal process under section 33(o), 34(c) and 26(c) of the *Public Procurement and Disposal of Public Assets* Act Cap 205. That in the absence of an evaluation report on record to show how the bids were evaluated, there was no legal basis for the Tribunal's conclusion that the bids of the 2nd and 3rd Respondent were rightfully determined as best evaluated bidders and recommended for award of contract in impugned procurement.

The appellant argued that the 1st Respondent altered ITB 4.2 of the bidding document for non-consultancies without prior authorization of the PPDA Authority, violating regulation 25(3) of the Public Procurement and Disposal of Public Assets Regulations, 2023, and that the cited once brought to the attention of court overrides all questions of pleading, including any admission made thereon.

The 1st Respondent raised a preliminary objection and argued that grounds of appeal 4, 5, and 6 are matters of mixed law and fact, violating section 91M (3 of Public Procurement and Disposal of Public Assets Act 2003, which restricts appeals to the High Court to questions of law. The 1st Respondent argued that the references to the bid document, evaluation minutes, evaluation report, and minutes of the Contracts Committee are all factual matters.

The 1st Respondent argued that the Tribunal found no wrongdoing on their part and rightfully found no fault with the evaluation minutes, report, and decision of the Contracts Committee. That the bids of the 2nd and 3rd Respondents passed all stages of evaluation and prayed that the Appeal be dismissed.

In response to ground No.3, the 1st Respondent argued that it did not use the Standard Bidding Document for non-consultancies but instead used the Standard Bidding Document for Framework Contracts for Supplies and there was no unauthorised alteration.

The 1st Respondent however argued that should the Court find that there was any unauthorised alteration to the Standard Bidding Document, then the 1st Respondent should be directed to undertake a fresh procurement of providers for pre-export verification of conformity to standards-service for used motor vehicles.

The 2nd Respondent also raised a preliminary objection and argued that grounds of appeal 4, 5, and 6 are matters of mixed law and fact, violating section 91M (3 of Public Procurement and Disposal of Public Assets Act 2003, which restricts appeals to the High Court to questions of law. That the issues raised in the Appellant's grounds of appeal are a test of whether the facts of the case presented satisfy the legal test and this makes them a matter of mixed law and fact.

The 2nd Respondent submitted that the 1st Respondent having declared that it duly evaluated the bids of the 2nd and 3rd Respondents in accordance with the law and bidding document. The Tribunal having found the same demonstrates that the bids of the 2nd and 3rd Respondents passed all the stages of the evaluation.

In the alternative and without prejudice, the 2nd Respondent argued that should the Court determine that the 1st Respondent did not subject the bids of the 2nd and 3rd Respondents to all stages of evaluation, then the procurement process should be declared a nullity.

The 3rd respondent submitted that the objections made by the appellant are afterthought to impede conclusion of the procurement, because they fully participated in the procurement without any objection and they estopped from claiming that the Bid documents were defective.

The 3rd respondent further submitted that ground 3 of the appeal does not emanate from the proceedings during Administrative review or at the PPDA Tribunal. They contended further that the 1st respondent lawfully evaluated the bids and came up with the list of best evaluated bidders. There are no hard and fact rules for conducting an evaluation of bids. What the law requires is that the procuring entity conducts an examination of the Bids in view of the requirements in the bidding documents. The 1st respondent effectively discharged its duties and re-evaluated the Bids.

# *Duty of the High Court on appeals from decisions of the PPDA Appeals Tribunal;*

It is true that the duty of this Court as first appellate court is to re-evaluate evidence and come up with its own conclusion.

This position was reiterated by the Supreme in the case of *Kifamunte Henry v Uganda SCCA No. 10 of 1997*, where it was held that;

"*The first appellate court has a duty to review the evidence the evidence of the case and to reconsider the materials before the trial Judge. The appellate Court must make up its own mind not disregarding the judgment appealed from but carefully weighing and considering it*."

The decision of the High Court made on appeal from a decision of the Public Procurement and Disposal of Public Assets Appeals Tribunal is final and conclusive and is not subject to appeal to any other court under Section 118(6) of the Public Procurement and Disposal of Public Assets Act Cap 205.

The duty of this court is to decide whether the Public Procurement and Disposal of Public Assets Appeals Tribunal on approaching its task, applied, or failed to apply such principles of law.

I have taken the above principles into account as I consider the Appeal. I have considered the record of proceedings and the lower Court/tribunal and have considered the written submissions of all the parties.

## *Preliminary Objection*

The respondents in their submissions raised preliminary points challenging the grounds of appeal for being of mixed law and fact and in their view these grounds of appeal ought to be rejected. This court will determine this preliminary point before delving in the gist of the appeal. (*Whether grounds of appeal 4, 5 and 6 should be struck out)*

# *Analysis*

Under section 118(3) of the Public Procurement and Disposal of Public Assets Act Cap 205, *an appeal to the High Court may be made on questions of law only, and the notice of appeal shall state the question of law that forms the appeal.*

A court when faced with the task of determining whether a ground of appeal contained in the notice of appeal is one of law alone or mixed law and facts, it does not really depend on the label, appellation or tag given to it. The court must consider or give regard to the particulars and consider them together, so as to ascertain the category to which it fits into. There is no doubt that the question of determining whether a complaint in an appeal raises questions of law or mixed law and fact is a difficult one.

At times the difference between a ground of law and a ground of mixed law and facts can be very narrow. Labelling a ground of appeal as an error of law, or misdirection may not necessarily make it so. The appellation is irrelevant in determining whether a ground of appeal is of law or mixed law and fact. The court should examine the grounds and their particulars and identify the substance of the complaint. In that way the issue of whether a ground of appeal is of law or mixed law and fact would be resolved. Identifying a ground of appeal on facts is easier. *See N. N. P. C v Famfa Oil Ltd (2012) 17 NWLR (pt 1328) p. 148(SC)*

The Court of Appeal of Uganda has guided that an appeal on a point of law arises when the Court, whose decision is being appealed against, made a finding on the case before it, but got the relevant law wrong or applied it wrongly in arriving at that finding. The Court reaches a conclusion on the facts, which is outside the range that the said Court would have arrived at, had that Court properly directed itself as to the applicable law. The error must be because of misapplication or misapprehension of the law. A manifest disregard of the law is an error of law. See *Lubanga Jamada v Dr.* *Ddumba Edward (Civil Appeal No. 10 of 2011) 2016 UGCA 11(*Judgement of Hon. Mr. Justice Remmy Kasule, JA in)

The grounds of appeal being questioned are as follows.

- *4) The Tribunal erred in law when it held that the bids of the 2nd and 3rd Respondents had passed the detailed stage of evaluation contrary to Regulation 19 of the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023.* - *5) The Tribunal erred in law when it held that the bids of the 2nd and 3rd Respondents were responsive to the requirements of the bidding document in the absence of a corresponding duly signed evaluation report and minutes for the impugned procurement contrary to Regulations 4(11-13) and 12(3) of the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023.* - *6) The Tribunal erred in law when it held that the 2nd and 3rd Respondents were rightfully determined as best evaluated bidders and recommended for award of contract in impugned procurement contrary to Regulations 2(1) of the Public Procurement and Disposal of Public Assets (Contracts) Regulations, 2023.*

The 3 grounds of appeal question whether the Tribunal misapplied the law on evaluation of the bids of the 2nd and 3rd Respondents. The Appellant argues since a public procurement process is asynchronous and successive in nature, there was no legal basis for the for the Tribunal's conclusion that the bids of the 2nd and 3rd Respondent were rightfully determined as best evaluated bidders and recommended for award of contract in impugned procurement in the absence of a proper evaluation.

In my view, the Appellant in framing the 3 grounds of appeal, successfully pointed out the law and how it was allegedly misapplied by the Tribunal on the facts, which is outside the range that the said Tribunal would have arrived at, had that Tribunal properly directed itself as to the applicable law. The preliminary objection raised by the 1st and 2nd Respondents is therefore overruled.

The issue is resolved in the negative

## *Analysis for grounds of appeal 4, 5 and 6*

A procurement process is defined as *the successive stages in the procurement cycle including planning, choice of procedure, measures to solicit offers from bidders, examination and evaluation of those offers, award of contract, and contract management. See* Section 2 of the Public Procurement and Disposal of Public Assets Act Cap 205.

Accordingly, a contract shall be awarded to the bidder with the best evaluated offer ascertained on the basis of the methodology and criteria detailed in the bidding documents. Section 55 of the Public Procurement and Disposal of Public Assets Act Cap 205.

Further it is mandatory that a solicitation document fully and comprehensively details the evaluation methodology and criteria which shall apply and no evaluation criteria other than that stated in the bidding documents shall be taken into account. See section 76 (2) and (3) of the Public Procurement and Disposal of Public Assets Act Cap 205.

The evaluation Methodology and Criteria in impugned procurement was stated in Section 3. Evaluation Methodology and Criteria of the bidding document. The impugned procurement for Non-Consultancy Services as such, the evaluation methodology to be used for the evaluation of bids received was the Technical Compliance Selection methodology which recommends the lowest priced bid, which is eligible, compliant and substantially responsive to the technical and commercial requirements of the Bidding Document, provided that the Bidder is determined to be qualified to perform the contract satisfactorily.

The **Summary of Methodology 2.3** as prescribed in the bidding document specifically stated that the evaluation shall be conducted in three sequential stages –

- (a) a preliminary examination to determine the eligibility of bidders and theadministrative compliance of bids received. This was determined in accordance with the **Preliminary Examination Criteria 3.1 and 3.2,** - (b) a detailed evaluation to determine the commercial and technicalresponsiveness of the eligible and compliant bids. This was to be determined under two phases. One being **Administrative Compliance Criteria (4.1)** conducted in accordance with ITB Sub-Clauses 32.3 and 32.4. and secondly **Detailed Evaluation Criteria.**

The Detailed Evaluation Criteria was divided into 2 other sub criteria namely **Commercial Criteria (5.1) where** commercial responsiveness of bids shall be evaluated in accordance with ITB Clause 33 and **Technical Criteria (Conducted of a Pass/ Fail basis)**

(c) a financial comparison to compare costs of the eligible, compliant,responsive bids received and determine the best evaluated bid. This was stated to be optional.

## **Any bid(s) that Complied/ Passed the Technical Criteria was to be recommended for Contract award.**

Therefore, upon conclusion of the evaluation process, the evaluation committee is expected to duly complete evaluation report prepared using **Form 14** found in the **Schedule** to the *Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023* and signed by all the members of the Evaluation Committee. The said evaluation report must have minutes of the evaluation committee meeting duly annexed to it. See *Regulation 4 (9), (12), (13) and (14) of the Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023.*

Form 14 under paragraph 8 as provided for in the schedule to the *Public Procurement and Disposal of Public Assets (Evaluation) Regulations, 2023*, requires that while reporting on the detailed evaluation of bids, a brief narrative on the results of the detailed evaluation and detailed justification with reasons why any bids were declared non responsive including details of any nonmaterial nonconformities, errors or omissions waived or rectified by the evaluation committee and the way in which they were quantified for inclusion in the financial comparison, details of all clarifications requested and received from bidders should be made and summaries thereof be entered into Table 2 in the Form.

The said evaluation report with the annexed minutes is part of the submissions that the Head of a procuring and disposing unit makes to the Contracts Committee for adjudication under section 30(a) of the Public Procurement and Disposal of Public Assets Act Cap 205 and regulation 11 of the Public Procurement and Disposal of Public Assets (Procuring and Disposing Entities) Regulations, 2023.

Therefore, any other person reviewing a procurement action file should be able to understand how the evaluation committee duly conducted the evaluation of bids in a chronological manner by merely reading the evaluation report and annexed minutes.

The PPDA Appeals Tribunal at paragraph 38 and 51 of its decision states that clarifications were conducted, and correspondences exchanged amongst the 1 st, 2nd and 3rd Respondents and that bids of the best evaluated bidders were found to be responsive to the bidding document.

There was no evaluation report in the record of appeal detailing how the bids of the 2nd and 3rd Respondents were subjected to sequential evaluation at the detailed evaluation stage to determine the commercial and technical responsiveness of their respective bids. There is no narrative even in the minutes of the evaluation committee that sat on January 22, 2024, to show that bids of the 2nd and 3rd Respondents were evaluated and found to have complied/ passed the technical criteria to be recommended for Contract award.

Ironically, the re-evaluation report of January 11, 2024, together with annexed minutes of January 3, 2024, and January 11, 2024, all expressly state that the Evaluation committee unanimously recommended the appellant as the only best evaluated bidder in the impugned procurement. The Recommendation read thus; *"On the basis of the evaluation criteria it is recommended that the best evaluated bidder for the provision of pre export verification of conformity to standards-service providers for used motor vehicles be awarded to Quality Inspection Service Japan (QISJ)"*

The report also went ahead to state the reasons for disqualification and stage at which the bids of the 2nd and 3rd Respondent's bids were disqualified. *"On the basis of the evaluation methodology and criteria in the invitation, it is recommended that-*

*(1)the best evaluated bid for the procurement of provision of Pre Export Verification of Conformity to Standards-Service Providers for used Motor Vehicles is from M/s Quality Inspection Services Inc. Japan"*

The 1st Respondent did not offer any explanation for the lack of corresponding evaluation report following a meeting of the evaluation committee on January 22, 2024, if at all was ever conducted.

It therefore follows that the evaluation committee did not make any recommendation for the 2nd and 3rd Respondents to be awarded the Contract. This court would not get involved in speculations and conjectures to establish whether there was any re-evaluation of the 2 nd and 3rd respondent and its absence would only infer that the award was illegal and contrary to the procurement procedures.

The Supreme Court has guided that the provisions cannot be directory merely. They are for all purposes and intents mandatory and noncompliance with them makes the proceedings fatal. Procurement and Disposal activities are processes, one cannot move to another stage of the processes without fulfilling the first one. See *Galleria in Africa Limited v*

## *Uganda Electricity Distribution Company Limited Civil Appeal No. 8 of 2017.*

Therefore, where the 1st Respondent did not subject the bids of the 2nd and 3 rd Respondents to detailed evaluation and no evaluation report and corresponding minutes to espouse the recommendation to award contracts to the 2nd and 3rd Respondents. Evaluation in procurement is the process of assessing bids from suppliers and contractors to determine which one offers the best value for money. It equally involves considering a range of factors in order to assess which bidder provides the best response to the requirements.

In the absence of such an evaluation report replacing the one of January 11, 2024, there was no factual or legal basis for the Tribunal to determine that the bids of the 2nd and 3rd Respondents were found to be responsive to the bidding document.

The re-evaluation report of January 11, 2024, included in the record of appeal had recommended the Appellant as best evaluated bidder. It would logically follow that the Notice of Best Evaluated Bidder issued by the 1st Respondent on January 31, 2024, can only stand to the extent that the award of Contract is made to the Appellant.

Any reference in the Notice of Best Evaluated Bidder to the award of contract being made to the 2nd and 3rd Respondents is illegal and are accordingly struck off.

Grounds 4, 5 and 6 of the Appeal are therefore resolved in favour of the Appellant. The determination of this issue determines the rest of the issues in this Appeal.

This appeal succeeds and the decision of the tribunal is set aside.

The contracts consequentially entered by the 1st respondent with the 2nd and 3 rd respondent are set aside for the reasons set out hereinbefore.

The 1st Respondent is ordered to refund the administrative review fees in respect to the application for administrative review dated 1st February 2024 to the Appellant. The administrative review fees shall attract interest of 20% per annum from the date of judgment.

The Appellant is awarded costs of the Appeal against the 1st Respondent.

I so Order.

*SSEKAANA MUSA JUDGE 04th October 2024*