THE Inspectorate of Government has ruled out compensation to Face Technologies, a South African firm, that won the bid to make national identity cards.
Face Technologies earlier this month served the Attorney General with a notice of intention to sue the Government for halting its contract to make national identity cards. It wants sh87b in compensation.
The company claims the Government committed itself when it offered them the tender to manage the National Population Databank and Identification Solution project.
But the IGG said the Government did not sign an agreement with the firm.
"They don't have any claim against the Government. The contract had not been signed. A notification of a post-evaluated bidder does not amount to a contract," Faith Mwondha told The New Vision.
The IGG probe report, obtained by The New Vision, says that the notice of award to the best-evaluated bidder, or a decision to award a contract, does not amount to a contract, according to the Public Procurement and Disposal of Assets Act and Regulation.
"The notice to award the contract to the best-evaluated bidder should be withdrawn and rescinded immediately pending other action by government," the IGG recommended.
The project, which has dragged on for two years, involves the production of 12 million national ID cards, 14 million registration certificates and one million Smart Cards.
The Government wanted to issue ID cards to all Ugandan citizens over 18 to help it verify people's identity and domiciliary and enable the provision of electronic government services.
The project, however, got embroiled into multiple scandals in February 2006, when former state minister for planning Isaac Musumba claimed that another company offered better terms than Face Technologies.
The IGG halted the process and started investigations after one of the losers, Contec Global, complained that they had been unfairly treated in the evaluation of the bids.
The investigation established that the procurement process of the vendor, who would implement the project, was riddled with illegalities. The probe also found that the process was characterised by patronage and in-fighting by public servants who had vested and even competing interests in the outcome.
"Consequently, the procurement process defeated the principles of objectivity and competitiveness through which the value for money could be achieved in implementing the project," the IGG said in her report.
The negotiation committee, according to the report, prematurely recommended that the contract be awarded to one of the vendors when critical issues on finance and revenue had not been concluded.
In addition, the committee did not disclose to the Uganda Bureau of Statistics (UBOS) contract committee that Face Technologies, whose proposal had been evaluated as best at $92m, had floated a recovery schedule.
It proposed to recover $151m during the five-year period when it would build and own the project before transferring it to the Government, $59m more than it invested.
The report further pointed out that the UBOS contracts committee was not involved in the initial stages of the procurement.
Instead, the report said, the procurement process involved the implementation committee, the steering committee and the bid preparation and evaluation committee, all established by Musumba.
The investigation further revealed that Musumba exerted undue influence on the evaluation committee to pass firms which had not met the set criteria, either during the pre-qualification or the evaluation stage.
Nabongo of UBOS, who was a member of the evaluation committee, revealed that included Contec Global due to pressure from Musumba, who had personally called him.
"From the evidence gathered, it can also be reasonably inferred and concluded that Musumba was fronting and lobbying for Contec Global."
The probe established that Musumba initially only wrote to Contec Global, inviting it for negotiations with the Government, yet it was ranked third bidder. When it was pointed out to him that his action was contrary to the PPDA regulation, he then wrote to Face Technologies and another bidder, Supercom.
The report also implicates the Minister of Information and Communication Technology, Ham Mulira, who was then executive director of the Uganda Computer Services.
"Mulira failed to disclose his prior interaction with Face Technologies and to safeguard the integrity of the process he was engaged in," the IGG's report says.
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