Zimdef in huge High Court setback over tender

PAN-AFRICAN technology and software firm, Twenty Third Century Systems (TTCS) has won its High Court case against Zimbabwe Manpower Development Fund (Zimdef), over a tender where the quasi-government institution had put restrictive clauses allegedly in favour of the software company's business rival Tano Digital Solutions.

According to a High Court application under Case Number 1886/22 filed on March 21, 2022, Zimdef floated a tender for the Provision of Systems Applications and Products (SAP) software in February last year, but said bidding companies had to be certified to carry out the service.

The clause was, however, flagged as restrictive and unjust by companies like TTCS who were not SAP certified but could render services required by the company. They questioned Zimdef's intentions. The tender was eventually awarded to Tano Digital Solutions.

TTCS then filed an urgent chamber application citing Zimdef as the first respondent, the Procurement Regulatory Authority of Zimbabwe (Praz) as the second and Tano Digital Solutions as the third respondent.

TTCS argued that the tender awarded to Tano Digital Solutions was contrary to law.

High Court Judge Justice Owen Tagu on Wednesday ruled in favour of TTCS saying: "Execution of the tender award to Tano Digital Solutions by Zimdef is contrary to law and could not be validly undertaken in the face of the challenge to the tender process.

"The interim relief requested by TTCS will be confirmed and Zimdef bears the cost of the suit."

This tender, according to court documents, contained a restrictive and unfair clause on page 19 of the 24-page tender document, which stated, "bidding companies should be SAP Certified Partners to carry out the required service".

According to the court application by TTCS, there was no reason for a licence for the SAP support tender, hence the software firm interrogating Zimdef's motivation in awarding the tender to Tano Digital solutions.

"This unduly restrictive clause planted in tender ZPCR 02/2021 was targeted to eliminate specific bidders like TTCS. The intention was to stifle fair competition," Justice Tagu's judgement reads.

"What baffles the mind is the fact that Zimdef was eager to plant this restrictive clause in 2021. Was it intended to eliminate TTCS from the race or was this premeditated, with a view to favour a particular firm?"

SAP is one of the producers of software for management of business processes, developing solutions that facilitate effective data processing and information flow across organisations.

TTCS rendered its services to Zimdef from 2014 to 2019. SAP terminated the TTCS Value Added Reseller (VAR) Partnership due to difficulties in remitting foreign currency to SAP South Africa for new software sales and annual maintenance fees.

The company consulted Zimdef on the changes, citing its capacity to continue providing services regardless of the partnership termination. However the tender was changed with a clause requiring certificates from companies providing SAP services.

In July 2019, SAP Africa managing director Catherine Smith met with SAP stakeholders, including TTCS and Zimdef executives, to clarify what the TTCS VAR termination meant. SAP also explained which services TTCS could and could not carry out post the VAR termination. TTCS's efforts to push Zimdef to remove the clause were in vain. Zimdef argued that the directive was guided by Praz as well as SAP Africa.

The matter was escalated to the procurement regulator in February this year.